The savings hack that every Aussie needs to know about: Barefoot Investor reveals his simple trick to protect yourself from a bank collapse
- Scott Pape shared tip on how to keep money safe
Barefoot Investor Scott Pape has revealed his one simple trick everyday Australians can use to keep their money safe during a recession.
The financial investment guru insisted there was a surefire way residents could protect their savings in the off-chance the major banks collapsed.
It comes after concerned resident Jenny wrote to Mr Pape questioning how safe her money really was.
Barefoot Investor Scott Pape has revealed his one simple trick everyday Australians can use in order to keep their money safe during a recession
It comes after concerned resident Jenny wrote to Mr Pape questioning how safe her money really was (stock image)
Her fears in the stability of the banks stem from the collapse of Silicon Valley Bank and Signature Bank in the US over the last two weeks.
A new report by leading economists indicated as many as 190 more banks could follow suit in the country.
The domino-like effect has raised fears it could have major economic ripples around the world and plunge the globe into a recession similar to 2008.
‘With another bank failing in the US, it’s starting to feel like 2008/2009 once again. How safe are our banks, and our money in the banks?’ Jenny wrote.
Mr Pape reassured Jenny her money would be safe in the bank thanks to financial protections that were in place.
He revealed the Australian government had created the Financial Claims Scheme following the global financial crisis in 2008.
The scheme was designed to provide economic security in the unlikely event of a failure of a bank, credit union, building society or general insurer.
Mr Pape pointed out that as much as $250,000 will be protected in one account.
He revealed residents could protect the rest of their savings by following his very simple trick.
‘So, if you’ve got more than $250,000 you should think about spreading it around different institutions, so you’re covered by the scheme,’ he wrote.
‘Don’t worry, the money in our banks is safe,’ Mr Pape explained.
SVB, a Californian bank formed in 1983, was forced to close this week after its badly-timed investments in longer-dated government bonds left it with heavy losses.
Robert Kiyosaki, author of bestseller Rich Dad Poor Dad, who predicted the collapse of Lehman Brothers in 2008 which helped exacerbate the GFC, warned Credit Suisse could be next to crumble.
The US bond market is in ‘serious trouble’ after SVB went under on Friday followed by Signature Bank on Sunday .
In 2008, similar collapses of over-extended US banks and the subsequent massive taxpayer-funded bailouts precipitated the GFC which had profound effects worldwide, including on Australia.
The SVB collapse – and the vulnerability of other small American banks following days of panic share selling – has aroused fears about 2008 repeating.
‘The problem is the bond market, and my prediction, I called Lehman Brothers years ago, is I think the next bank to go is Credit Suisse, because the bond market is crashing,’ Kiyosaki told Fox News.
The SVB collapse – and the vulnerability of other small American banks following days of panic share selling – has aroused fears about 2008 repeating
Read more at DailyMail.co.uk