Last Wednesday I shared 3 tips to develop confidence in trading. I hope the article was useful for traders. Today my post is addressed to a wider audience. I believe it’s important for everyone to get a clear understanding of how banks work and earn.
     Fixed bank deposit is one of the most popular ways of investing. But wait a minute is that real investment? The average interest rate offered to clients is 2 – 4 % per year. Yes, in some countries it’s much higher. But inflation in those countries is just ‘screaming’. So, to calculate the real return you should compare interest rate and inflation in your country. I bet you will be upset with the result. Sometimes people get 0% or even minus.
     Did you ever ask yourself where a bank gets money to pay you interest rate? Well, they use your funds to give loans and trade futures, stocks, currencies. Yes, they use your capital to build a huge fortune. But wait, what you get? – Nothing.
    What if meltdown happens? I remember 2008 when lots of people were standing all night and days long at the bank offices trying to get their money back. Some were lucky, some lost all they had. So, why people still willing to risk their funds and get ridiculous returns? Isn’t it better to take control of your finances? So take responsibility and learn to invest by yourself in real estate, stock market, etc or look for managed accountsIf you risk your money, you should be rewarded accordingly.

Wishing you a great week!

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