Saving Account OR Destroying Account
Some days back, I heard an interesting conversation of two friends A and B of a country ABC that I would like to share with you as follows. Sometimes, some stuff is useful, partly or fully that we throw it, considering it, as useless. Similarly, this conversation, of these two persons, who don’t seem to be experts, in Finance field but most probably we can get some good thing (s) (if available) from this conversation. According to me, it is unfair to underestimate anyone’s imagination, just because of lesser Education / Experience / Expertise. Following two most popular quotes of Albert Einstein’s will definitely support me:
IMAGINATION is more important than knowledge. For knowledge is limited, whereas, imagination embraces the entire world, stimulating progress, giving birth to evolution.
Logic will get you from A to B. IMAGINATION will take you everywhere.
Dear! I am noticing that years back, I used to receive more than 10% to 12% p.a. on my investment, maintained at a bank. But this percentage is going down year by year and now it has been reduced to 3% to 5% p.a. This declining trend is very alarming for me and it seems that after some years, I will receive 0% p.a. Do you have any idea about it? Perhaps I don’t have any concrete knowledge…….
Buddy! Yes, it is true and it is not only happening in your country but it is being occurred all over the world due to unstable economic conditions and sometimes it is due to adoption of different techniques to encourage or discourage investments. Further, your distressed feelings are also right that this percentage can not only go to 0% but it can also go into negative. Means, it is possible that you will have to pay to your bank on your investment instead of receiving. It has also taken place in some places. Actually, banks invest your money as per different prevailing Banking Rules & Regulations of their homeland’s central banks. Then upon these investments, they pay you as per the Rate of Return, set by their Central Banks……………………..
Thanks for your good explanation / guidance for me but why these banks or central banks don’t promote such investment methods that are having different good characteristics of different Banking Systems. So that higher return could be obtained. Why banks lend money on limited Fixed Ratios / Markup Rates, Banks have to lend money on agreed substantial Profit Sharing Ratios as a Working Partner and Bank or their outsourced resources should fully involve into their Borrower’s Businesses / Projects so that more Productivity, more Transparency and more Profitability could be achieved. This way, depositors’ money will be more secured and will be having a good growth in shape of higher returns. This will also encourage depositors for further investments. Moreover, employment opportunities will also be created with good expansion of different businesses. Finally, the Economy will be Stronger and Stronger.
The World actually needs a Stronger Economy that can create Peace, Progress and Prosperity all over the World. Forgetting about region or religion relations of any economy, we should adopt best, more profitable and fair techniques of any type of economy and we should not focus or debate in the names of different economies i.e. A Economy, B Economy or C Economy as WORLD NEEDS STRONGER ECONOMY ONLY……………