Savers should be rewarded.

ILW

Kohoutek wrote: »

Furthermore, there isn't anything like enough physical currency in existence for that to be possible.

I believe it would only take around 15 -20% of deposits to be withdrawn. It would never happen, but is an interesting thought.

Generali

ILW wrote: »

As far as I know there are no limits to cash withdrawals on most savings accounts. It is more the sentiment of a run on the banks that would cause the run. Look at NR a few years ago.

In the C19th when runs on banks used to happen, there were ways of slowing things down.

Opening hours would be cut.

Then there was the simple conversation, "I'd like to close my account".
"Certainly Sir, would you like the cash in ha'pennies or pennies?"

The banks would look to buy time and use it to raise assets to pay off more savers. The more savers were repaid, the less the panic. After all you can only spend so long in a bank queue before you have to get back to work.

whatyadoinsucka

Graham_Devon wrote: »

You are not doubling your money. And yes you are missing something.

You are simply saving some money on the repayments.

Doubling your money would be turning £1 into £2. Earn £1, turn it into £2.

You are not magically doubling your earnings. You are simply opting to keep more of them by paying off debt quicker.

Ultimately, you have lost money, as you will have paid some interest in the course of the mortgage. That interest has bought you nothing. This is standard practice for those who want to buy houses and need a mortgage to do it, but to start twisting it to the extreme of saying you are actually doubling your cash by paying less interest....well that takes some doing, and I never seen that before!

hang on if i didn't overpay now i would have to pay far more interest over the term of the mortgage (assuming inflation is irrelevant)

when the mortgage is paid off i will not have an outgoing, compared to still having the original mortgage payments or if renting, therefore
overpaying the mortgage is far better to me than saving money..

The interest has bought me something, its the ability to live in my house, if i was renting I'd be paying someone elses mortgage interest payment i pay far less on my mortgage interest than i used to pay in rent..

and if you can't make money from savings, its best to cut your future expenditure. or am i wrong with that too.. :rotfl::rotfl::rotfl:

whatyadoinsucka

DervProf wrote: »

Genius !

Right, I`m going to try and get a mortgage at the highest rate possible (one of those sub-prime ones, that we don't, or didn't have in the UK).

I expect the total repayments over the term will be well over double what I borrow. Now here's the clever bit..... I'm going to pay it all off within 1 year, therefore over doubling my money in the short term !

Thanks for the tip

taken totally out of context.. i am not investing to double my money, i am buying a home to live in. thats the difference. Therefore everytime i overpay my balance reduces as does the interest payable on the remaining balance. Therefore rightly or wrongly i am saving a hell of alot of needless outgoings.

"double my money" is a bad statement I'll admit..

I'll just get out my CAPM model and work out my cost of capital :0)

Graham_Devon

whatyadoinsucka wrote: »

hang on if i didn't overpay now i would have to pay far more interest over the term of the mortgage (assuming inflation is irrelevant)

when the mortgage is paid off i will not have an outgoing, compared to still having the original mortgage payments or if renting, therefore
overpaying the mortgage is far better to me than saving money..

The interest has bought me something, its the ability to live in my house, if i was renting I'd be paying someone elses mortgage interest payment i pay far less on my mortgage interest than i used to pay in rent..

and if you can't make money from savings, its best to cut your future expenditure. or am i wrong with that too.. :rotfl::rotfl::rotfl:

Still doesn't mean you have doubled any money.

Just means you have spent less.

I'm not sure what's difficult to understand about this, or, how you can see it any other way.

whatyadoinsucka

Graham_Devon wrote: »

Still doesn't mean you have doubled any money.

Just means you have spent less.

I'm not sure what's difficult to understand about this, or, how you can see it any other way.

ok, are you happy with
"by overpaying i will have saved over half on my mortgage total repayment"

Graham_Devon

whatyadoinsucka wrote: »

ok, are you happy with
"by overpaying i will have saved over half on my mortgage total repayment"

Yup. That makes complete sense.

whatyadoinsucka

some people would say i've doubled my money, i this time will not say that..

therefore in theory if i bought another house at the end of the half term (12.5 years), at the end 25 years
i would have 2 houses .. doubled my capital holdings..

Graham_Devon

whatyadoinsucka wrote: »

some people would say i've doubled my money, i this time will not say that..

therefore in theory if i bought another house at the end of the half term (12.5 years), at the end 25 years
i would have 2 houses .. doubled my capital holdings..

Whatever you are happy with

Either way, you save money, so it's all good.

Heyman_2

DervProf wrote: »

There have been a few people on this forum that have shown some disrespect for those of us who have savings. They have very little sympathy for those of us who had the discipline and sense to not spend every penny we earn, and now find that the returns on our savings isn't keeping up with inflation. Unless we spend a large proportion of our income on servicing mortgage debt, we are to be dismissed as "parasites".

What a load of rabble-rousing guff. Believe it or not, Mortgage holders such as myself do actually have savings as well, not like your West Side Story world of the Savers vs. Debtors.

I don't see anyone calling savers parasites but I DO see a lot of moaning and whinging about the returns on offer for doing nothing with your money but leaving it in a bank account.

Hmmm, maybe just maybe that's why you get 'very little sympathy'.