jeffery d
 |
Yes they are. Let me ask you a question, Have you ever heard of the rule of 72? Most people have not.
ROR/72=number of years it will take to double your money.
So.. with a $10,000 investment, you look at your options:
Let say the bank gives you 3% - 3/72=24; 6% - 6/72=12
3% 6% 12%
year 6 - $20,000
year12 - $20,000 $40,000
year18 - $80,000
year 24 - $20,000 $40,000 $160,000
year 30 - $320,000
year 36 - $80,000 $640,000
year 42 - $1,280,000
year 48 - $40,000 $160,000 $2,560,000
They give 3 or 6% with a guratee, but the only REAL guratee
is that you will lose buying power ( the ability to purchace things)
Then they charge 3-30% on credit cards, 4-15% on car loans, 5-12% home loans, 6-15% on personal loans, so it should be fair to assume they earn 10-12% on the money YOU loan them. Let's look back up at the difference.
$40,000 $160,000 $2,560,000
Which would you like at retirement? They want you to chose the least or the middle so they can enjoy the difference
It not the risk of losing money, it is the risk of running out of money. |
Jeanne R
 |
Yes, they are. They lend your money out to other people to buy houses or cards or things on their credit cards and they charge them interest on the purchase. The bank then pays you interest in return for you letting them lend out your money. If you have a substantial amount in savings then you may want to investigate more profitable alternatives such as mutual funds, REITs, CD's, tax free municiple bonds, etc. |
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