What Do Banks Actually Do With Your Money?

Описание: What do banks do with your money? Do they keep it safe and secure, or do they use it to make more money for themselves? And how can you grow your money faster and smarter than the bank?

In this video, I’ll reveal the shocking truth about what banks do with your money, and how you can stop LOSING money by keeping it in the bank.
I’ll also tell you about investing your money in the stock market with as little as $1.

Chapters:
00:00 What Banks Do With Your Money
01:01 Inflation
01:37 Investing
02:13 Why Use Banks?

Transcript:
Ever wondered what banks actually do with your money?
They don’t just keep it in a vault and protect it for you.
They use it to make more money for themselves.
How?
By lending it out to other customers at higher interest rates than they pay you.

Let’s say you deposit $100 in a savings account that pays you 1% interest per year.
This is the rate that the bank agrees to give you as a reward for trusting them with your money.
After one year, you’d have $101 in your account.
That’s a $1 profit.
Not bad, right?

But what if I told you that the bank made almost ten times that amount from your money?
Let me explain.
Suppose another customer walks in and wants to borrow $100 from the bank.
The bank lends them your money and charges them 10% interest per year.
After one year, this customer would owe the bank $110.
That’s a $10 profit for the bank, just from lending out your money.
And that’s not all.
If the borrower doesn’t spend the money and deposits it back into the bank, the bank can lend it out again to someone else, and charge another 10% interest.
This way, the bank can keep making money from the same $100 over and over again.
As you can see, banks are not the best place to grow your money.
In fact, you’re losing money by keeping it in the bank.
Why?
Because of inflation.
Inflation is the increase in the prices of goods and services over time.
It’s caused by many factors, but one of them is the government printing more money.
When there’s more money in circulation, each dollar becomes worth less.
If the bank is paying you 1% interest, and inflation is 3%, you’re effectively losing 2% of your purchasing power every year.
You're not getting any richer by using a bank!
At the end of the video, I'll reveal the most valuable use cases of banks, but first,
Have you considered cutting out the middle man, and doing exactly what the banks are doing?
Investing in the stock market is not as hard or as expensive as you might think.
You don’t need to be rich or an expert to do it.
You just need a smartphone, an app, and a dollar.
There are many apps and platforms that let you invest in the stock market with as little as $1.
You also don’t need to pick individual stocks or try to guess the best ones.
You can invest in hundreds or thousands of stocks, covering the entire US economy or even the global economy.
Historically, the average annual return of the US stock market has been around 10%. Way better than the interest rate you'd get at a bank!
So, why use a bank at all?
Money that's invested isn't immediately accessible.
You'll have to sell whatever you've purchased and then wait for the money to be transferred to you.
Banks will let you access your cash at all times and therefore the best use case for a bank is it's a safe place to keep 3 months' worth of your living expenses in cash that you can dip into it in case of emergency.

Tags:
#illustratedfinance #finance #economics #animated #education #money #banks #banking #bank #didyouknow #interesting #facts #explained #investing #invest

Thanks for watching!