So you have money in a bank account. It’s yours, right?
WRONG! The bank owns it; you just have an unsecured IOU.
But wait- the FDIC protects all depositors for $250,000, correct? True, except that in the case of a major financial crisis, banks are allowed to repay the IOUs in the form of “bank equity.”
That’s right – you get bank stock, not cash. In addition, you lose the FDIC protection and your bank equity is totally at risk of being wiped out.
How’s that for security?!
You may say that at least you’re earning interest by allowing the bank to use your money.
Nowadays, however, the interest rate on a savings accounts is near zero, and actually negative in some countries. That means you literally pay the bank for the “privilege” of letting them use your money to make money for themselves.
How screwy is that?!
What about the money in your retirement account? Perhaps you have an IRA or 401k and you don’t have to worry about paying taxes until you take withdrawals. You may even have a Roth account where you’ve already paid your taxes. You’ve made the sacrifices necessary to help ensure you’ll have money for retirement, so you feel fairly secure.
Not so fast! Guess who made the rules for those accounts? Congress did.
That means the rules, or even the right to have these accounts, can be changed at any time with a simple change in law. What’s to stop Congress from deciding to increase the tax rate on withdrawals, even ROTH accounts?
Let’s face it: there is a vast amount of citizens’ money sitting in retirement accounts, and may be a juicy target for a money-hungry, debt-leveraged government.
OK, but maybe you have gold or other precious metals as a safe haven. Well, you may be surprised to learn that a government can outlaw their ownership. Even the US Government banned individuals from owning gold in 1933. Citizens had turn in all their gold to the Government for the set price of $20.67/ troy ounce.
How’s that for freedom?
These unsettling thoughts should surely make you less secure about your financial position in the future.
Luckily, the situation is not all dire. We have bitcoin and crypto assets.
Yes, YOU can actually OWN and CONTROL your digital money.
It’s one of the most alluring aspects of owning cryptos – NO ONE can take them from you if secured properly.
In addition, you can buy, sell, or transact globally any time of any day – no borders and no censors!
Even if you are not sure about Bitcoin and crypto assets, at least consider them as a form of hedge or insurance against government overreach or global catastrophe.
For all these reasons, I strongly urge everyone to have at least a small amount of their investable money in cryptos. It may turn out to be one of the smartest moves you make – especially in moments of crisis.
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