We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Having money in the bank is a dangerous thing!
Plater
Posts: 22 Forumite
When you have your money in a bank, you get no return. You essentially have no return. In fact I think it was expressed very well by the gentleman that runs UC Resources that you actually get a negative return at the end of the year because inflation’s higher than the return you’re getting on your money!
There is less risk of another Northan Rock if you have your cash under the bed. But it is still losing value as the currency supply of the world is expanding.
There is less risk of another Northan Rock if you have your cash under the bed. But it is still losing value as the currency supply of the world is expanding.
It does not matter how many people would like to live in a property all that matters is who can afford it.
0
Comments
-
No, wrong. Cahs sums in the bank may be earing less than inflation at the moment. But they also are a hedge against borrowing as they keep you from having to rely in expensive debt. And anre instantly liquid for the purpose as you can't take your gold coins to pay your electric bill and mtg can you?
But of course, no one but a real scaredy cat would have all their money in cash, I just have 9-12 months worth. Everything else is in other asset classes incl equtities.0 -
-
But much better to get a real return of -2% than -5% (assumed rate of inflation) by sticking your money in an account that earns something, don't you think?When you have your money in a bank, you get no return. You essentially have no return. In fact I think it was expressed very well by the gentleman that runs UC Resources that you actually get a negative return at the end of the year because inflation’s higher than the return you’re getting on your money!
So if we all go and withdraw our cash today, no banks will collapse?There is less risk of another Northan Rock if you have your cash under the bed.
If you say so.
But the depreciation in value can be mitigated by earning something in a savings account.But it is still losing value as the currency supply of the world is expanding.0 -
-
There is less risk of another Northan Rock if you have your cash under the bed. But it is still losing value as the currency supply of the world is expanding.
Which planet are you on?
You can easily get 2-3% interest on cash deposited with a "responsible" financial institution that is not involved in investment banking or speculation (Building Societies, Credit Unions, or an ethical-oriented bank)
This may be some way behind inflation but it is infinitely better than the return of mattress bank which is 0.00%
Once it's in such an institution it will never be stolen, destroyed by fire, or eaten by mice, all of which could happen under your bed.
Those institutions will use the funds mainly to lend to individuals wanting to buy a house, or organisations performing socially valuable works, so everyone wins!
I think you need to look here for some ideas on how to use your savings to do some good in the world without losing out yourself:
http://www.!!!!!!.uk/We need the earth for food, water, and shelter.
The earth needs us for nothing.
The earth does not belong to us.
We belong to the Earth0 -
And those who expect another pullback at some point this year and are confident in their judgement.But of course, no one but a real scaredy cat would have all their money in cash, I just have 9-12 months worth. Everything else is in other asset classes incl equtities.
Worth noting that some of the most successful managers of recent years are currently holding large lumps of cash or gold, such as Martin Gray of Miton Special Sits, with 36% in cash, and Sebastian Lyon of Troy Trojan now 21% in cash. Nor of course does it cost them the 2% some private investors pay for unit trusts to invest in equities. But then again, according to Hargreaves Lansdown it's a great time to invest apparently.0 -
When you have your money in a bank, you get no return.
If this statement is based on inflation, it should be noted that inflation is calculated on many things and as individuals we don't all spend money on the same things and in the same proportions.
e.g. the price of petrol and diesel has a weight of 4% in the calculation of RPI. so someone who doesn't own a car or doesn't avail much of public transport would be unaffected by rises in RPI resulting from increased fuel charges.
We're not all the same.0 -
TBH I don't even know why I am bothering to answer this post!It was avoided, but doesnt mean it will be avoided next time.
Under the bed is safer than in a bank in my opinion.
IMHO the chances of you losing your cash by hiding it under a bed are far greater than the likelihood of any British bank or savings institution covered by the FSCS being allowed to go bust.
If it got to the situation where the government was unable to keep a UK bank afloat your cash under the bed would become just worthless paper!
It would only need one bank or BS to go bust with customers losing their savings for panic to take over meaning savings being withdrawn from those banks remaining causing them to go down too, the result of the government allowing this to happen would be a total breakdown of life as we know it and anarchy.
0 -
The older you get the more you should keep in cash.
A fixed account for 5 years would probably give you around 4% net with very often the option of monthly interest.
As pointed out whilst inflation is a problem, it`s really "personal" inflation that counts.
The RPI is calculated using hundreds of items and how the prices change monthly.
If the result of that change means the figure is for instance 3.9%, this would only strictly apply if you bought all these items.
If the BoE is to be believed with their prediction of falling inflation, maybe long term savings rates have now peaked.0 -
When you have your money in a bank, you get no return. You essentially have no return. In fact I think it was expressed very well by the gentleman that runs UC Resources that you actually get a negative return at the end of the year because inflation’s higher than the return you’re getting on your money!
There is less risk of another Northan Rock if you have your cash under the bed. But it is still losing value as the currency supply of the world is expanding.
Yes indeed, why not put it all in the stock market where the sudden, unpredictable, unrecoverable losses can make inflation look like a minor blip ?No-one would remember the Good Samaritan if he'd only had good intentions. He had money as well.
The problem with socialism is that eventually you run out of other people's money.
Margaret Thatcher0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.2K Banking & Borrowing
- 253.6K Reduce Debt & Boost Income
- 454.3K Spending & Discounts
- 245.2K Work, Benefits & Business
- 600.9K Mortgages, Homes & Bills
- 177.5K Life & Family
- 259K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards