Cash is King, Apparently
Some very interesting figures emerging in the last few days. It appears that we are now just short of €10bn, yes that’s BILLION, in savings stashed away in our beloved Banks. These sums have not been seen since January 2010 when everyone thought the world was coming to an end and if you didn’t hoard every cent you were going to be destitute.
Another interesting fact is that in 2010 interest rates were pretty attractive with returns of 5% per annum achievable whereas now interest rates are as low as they can go really. Some of our favourite Banks are charging depositors to hang onto their money for them. Nice!!!
Why do I say Nice!!!? Well it also transpires that Irish Banks have so much cash now that they can lend out funds to borrowers from their own resources and have no need to borrow from each other to satisfy demand. There is so much money around they are in the fortunate position to be able to offer nothing to depositors and then use those very depositors monies to lend to others and make a tasty margin for themselves. Oh yes the BANKERS are back at it folks and the fuel is provided by ourselves in the form of our own money.
Everyone has the legacy of 2008 hanging over them hence the still cautious approach to how we handle our money but why in a Bank when inflation is eroding the real value away, every day!!
I am not saying that cash is not important to hold because it is, but as individuals we should have a Financial Plan in place to be sure we are making the best use of our hard earned cash. That is where we at Metis Ireland can help. Even a tiny step up the ladder of risk can mean a better return, but advice before you do anything is vital.
The current cycle could end up looking something like this:
Huge money on deposit…Banks back in the lending market…Big margins available to help shore up their historical wounds…People desperate to get a mortgage…Property scarce in the marketplace…Demand drives the prices up…People over expand themselves…Slowdown in World Economies…CRASH BANG!!!!……Sound Familiar to anyone at all?
Get a Financial Plan in place today …. #STICKWITHTHEPLAN.
Karl Daly QFA FLIA
Co-Founder and Director
Metis Ireland Financial Planning Ltd t/a Metis Ireland is regulated by the Central Bank of Ireland.
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