THE GLOBAL MARKET

Have you ever seen a Bank go out of business? ..Of course not...Banks never close down instead what they do is combine together to enforce power. From the last Post we discussed a the rule of 72. Now that you have an understanding of how money accumulates our next question should be how do banks manage to get a 10 to 12 percent interest. The most common false belief is that the government supports banks and withdrawals from Taxes, but the truth of the matter is Banks Invest as we do. When you open a Savings account and begin to put money into an account the Bank doesn't hold your money in a vault somewhere downstairs with your name on it. Instead your money is immediately shipped out the back door and invested into the Global Market. It is the Global Market where high percentages are earned. While the Banks are making 10 to 12% with your own money they give the hard working person not even half of what they make 2 to 3 percent is what is most common, therefore investing all or most of your money into a Savings account isn't a very good idea. Lets break down a example to make the understanding clearer. Lets use John as an example. John is 30 years of age whom invested 100k into a savings account at his local Bank with a 3% interest. Using the rule of 72 for Johns money to double to have 200k John would have to wait twenty four years now at age 54. Now lets take a look at the Banks perspective. 100k is invested into the Global Market gaining a 12% interest. Using the rule of 72 with a 12% interest the 100k would double in six years. Now we can break the math down John invested for 24 years and his money accumulated to 200k. If the Bank invest Johns money for the exact number of years the Bank will have 4 doubling periods meaning for the first six years the money will accumulate to 200k since the money doubles the second accumulation period the bank now makes 400k. There is still two more doubling periods six years later the money raises to 800k until finally the last periods the bank makes a total of 1,600,000 dollars!! John who invested for 24 years with 100k money accumulates to 200k while the bank whom used Johns money to invest in the first place makes 1,500,000 dollars. This is why Banks never go out of business and the average hard working person is foolish allowing Banks to take advantage. Do the smart thing. Don't invest large percentages into Banks.