The Savings Trick Every Aussie Needs To Know: Barefoot Investor Reveals His Simple Hack To Protect Yourself From A Bank Collapse
- Scott Pape shared a tip on how to keep money safe
Barefoot investor Scott Pape has revealed his one simple trick Australians can use every day to keep their money safe during a recession.
The financial investment guru insisted there was a surefire way residents could protect their savings in case major banks failed.
It comes after concerned resident Jenny wrote to Mr. Pape asking how safe his money really was.
Barefoot investor Scott Pape has revealed his one simple trick Australians can use every day to keep their money safe during a recession.
It comes after Jenny, a concerned resident, wrote to Mr Pape asking how safe his money really was (file picture)
His fears about the stability of the banks stem from the collapse of Silicon Valley Bank and Signature Bank in the US in the last two weeks.
A new report by leading economists indicated that up to 190 more banks could do the same in the country.
The domino effect has raised fears that it could have major economic repercussions around the world, plunging the world into a 2008-like recession.
‘With the failure of another bank in the US, it starts to feel like 2008/2009 all over again. How safe are our banks and our money in the banks?’ Jenny wrote.
Mr. Pape assured Jenny that her money would be safe in the bank because of the financial protections that were in place.
It revealed that the Australian government had created the Financial Claims Scheme following the global financial crisis in 2008.
The scheme was designed to provide financial security in the unlikely event of the failure of a bank, credit union, building society or general insurer.
Mr. Pape noted that up to $250,000 will be protected in a single account.
He revealed that residents could protect the rest of their savings by following his simple trick.
“So if you have more than $250,000, you should think about distributing it among different institutions, so that it is covered by the scheme,” he wrote.
“Don’t worry, the money in our banks is safe,” Mr. Pape explained.
SVB, a California bank formed in 1983, was forced to close this week after its ill-timed investments in longer-term government bonds left it with heavy losses.
Robert Kiyosaki, author of the best-selling Rich Dad Poor Dad who predicted the 2008 Lehman Brothers collapse that helped exacerbate the GFC, warned that Credit Suisse could be next to go bust.
The US bond market is in “deep trouble” after SVB plunged on Friday, followed by Signature Bank on Sunday.
In 2008, similar collapses of overextended US banks and the subsequent massive taxpayer-financed bailouts precipitated the GFC, which had profound effects around the world, including in Australia.
The collapse of SVB – and the vulnerability of other small US banks after days of panic selling of shares – has raised fears of a repeat of 2008.
“The problem is the bond market, and my prediction, I called Lehman Brothers years ago, I think the next bank to go is Credit Suisse, because the bond market is crashing,” Kiyosaki told Fox News.
The collapse of SVB, and the vulnerability of other small US banks after days of panic selling of shares, has raised fears of a repeat of 2008.
