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The bank is FDIC insured. If the bank loses your money and FDIC cannot make you whole, you would be in a serious problem even if you had a pile of cash, as that
by gizmo686 6y ago
The bank is FDIC insured. If the bank loses your money and FDIC cannot make you whole, you would be in a serious problem even if you had a pile of cash, as that is basically a 'the entire USD economic system has collapsed' scenario.
- lm28469 6y agoWell yes, but if you invest your own money without going through banks at least you have some choice in where it goes (oil companies, weapon companies, sustainable funds, &c.) and you get to cash out all the benefits (or loss) I'll take my 7%+ average over the last 100 years vs the "insured" 0.5% my bank proposes me (which doesn't even pay for what my bank charges me monthly)
- gizmo686 6y agoIn other words, you are exposed to approximately 0 downside risk and 0 upside risk when you give your money to a bank. That is practically the opposite of them gambling for you. It is a fine critism to say that the bank uses your money to invest for itself, and you would rather use your money to invest for yourself; or that you would rather have input in what your money gets invested in for reasons other than financial return. I'm not sure why you put "insured" in quotes. Do you have doubts about the FDIC?
- lm28469 6y agoThey make 7% average per year while you get none of the benefits and when they fail they get bailed out. You get nothing, they get everything