Many of you have probably heard me say this on more than one occasion: Wealth has to reside somewhere, so why not in your own banking system?
But, just exactly what do I mean when I say that to you?
When you accumulate wealth - whether it's through your job, your business, the sale of an asset like a home or office building, or other revenue-generating activity - you have to put it somewhere until you're ready to use it again.
Most people put it in CDs, savings accounts, IRAs, KEOGHs, 401Ks, stocks, bonds, mutual funds or other savings/investment vehicles. All of these are valid places to put wealth because we've been trained to think that these are the best places to 'park' your funds. But have you looked at interest rates lately on some of these?
A client/colleague was at her bank recently opening a checking account.* As usual, the banking officer was doing his job to sell her other services that the bank offers.
Now, as we know, the way banks really make money is by using the money you deposit with them to make loans to others. The more they lend, the more they make. So they want to get as much of your money as they can - through savings, money market accounts, credit cards, retirement accounts, annuities and whatever else they can convince you that you need.
As my client/colleague sat there and listened attentively to the banker's pitch, she just smiled quietly - a knowing smile, mind you. When the banker finished, she asked the first of two questions: "How much interest do these various accounts pay, like a basic savings account?"
The banker proudly pulled out his sheet with current interest rates that showed how various amounts pay different interest rates, depending on the type of account or investment instrument in which you want to place your money.
Right now, on a basic savings account with $0 to $9999 deposited, you'll earn .05 % APY; if you're depositing $5 million or above you're getting .50% APY. If you want to drop your money in a 5 year CD - you get to earn 1.75% APY but only if you have a checking account, too - otherwise, you only get 1.5% APY.
As you can guess, depending on the account in which you have your money, there could be fees and penalties for early withdrawals or for exceeding the number of withdrawals in a month. Now, some of these are waived if you have more than one account with the traditional bank - but we know why they want you to have more than one account, don't we?
"Hmmm ...," she thought. So then she asked her second question, "Why should I put my money in one of your savings or investment accounts when I can put it somewhere that I can earn seven (7) percent annually, tax-free, without doing a thing?"
The banker looked at her in mild shock and asked where was she parking her money to consistently earn that kind of interest? "In my own privatized banking system," she replied with a laugh. "I can't beat that deal with anything I have," said the banker.
So, where are you parking your money? Where does your wealth reside?
If it's in any of the traditional banking/investment accounts - unless you have a whole lot - like let's talk Warren Buffet or Bill Gates kind of a lot - you're wealth is not working for you. In fact, it may be working against you. What????!!!!
Most likely, you're giving your traditional bank a lot more than that traditional bank is giving you in return. Think about it - you're getting less than 1% on a savings account and you're paying 11% or more on most of your credit card accounts. Hmmm - they give me one (1), I give them 11 -- who's winning this race????
If you haven't used our Wealth Management Assessment Tool, today might be a good day to give it a test drive. What it's likely to show you, is that there's a better parking lot for your money - it's called a Self-Empowered Banking System and you can't get it at your traditional bank. You can only get it through National Private Client Group.
So, what are you waiting for? Contact Julie Ann Hepburn today and get started building a new parking lot for your wealth.
For more information, contact Julie Ann Hepburn by email or phone at 312.954.5700 x 403.
* The above story is true and happened on October 26, 2010 at a Chase branch in Chicago.