| What is meant by "safe?" |
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| Written by Wilfred Ling | |
| Friday, 09 April 2010 | |
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Someone told me that he prefers his family monies to be solely placed in fixed deposits and nothing else. The assumption is that the fixed deposit is very safe. I was quite shocked by that statement because the lessons of 2008 financial crisis appears to have forgotten. Some say it was the worst financial crisis for the past 100 years. It was such a waste to forgo such important lessons. For me, I will never forget it for the rest of my life. So much valuable lessons that crisis thought us. Anyway for those who suffers from dementia and cannot remember what happened in 2008, bank deposits are NOT the safest instruments in the world. In Singapore’s context, 100% bank deposits are currently guaranteed by our foreign reserves. However, this guarantee is targeted to be lifted by the end of 2010. After that, only $20,000 is insured by the Singapore Deposit Insurance Corporation. As I wrote I noticed that 19 banks in the United States collapsed in the month of March 2010 alone. See failed banks. Yesterday I read about how very famous and major banks have been giving the public the impression that their debt levels are lower than reality by timing their transactions prior to the reporting period. See Big Banks Mask Risk Levels. Welcome to the real world. For those who wishes to become financial independent, the only route is self-education and trust nobody (except yours truly of course)… |
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