The #1 Secret That Banks Don’t Tell You- Jerry Fetta | Grant Cardone TV
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The #1 Secret That Banks Don’t Tell You- Jerry Fetta

Why do you put your money in the bank? Seriously, think about the answer to that question. I was asked this at the age of 19 and couldn’t answer it until age 22. You do it because you just do it. You’ve always done it because everyone has always done it. But why? My goal is to find the logical reason as to why it makes sense for you to put your money in the bank to the point that you put almost every dollar you earn there. Banks know why. Do you?

I was at a conference and it was posted in 2008. The financial meltdown that was caused by our very own banks and financial institutions. Wells Fargo was just caught not even 2 years ago opening accounts in the customer’s names and charging them without permission. Yet we still put our money in the banks. Why? Marketing. Plain and simple. Banks spend billions of dollars in marketing and advertising to make sure you put your money there. Think about it, even as a kid you were told to save your money into a “piggy ____” (bank!) The question is, why would a bank want your money so badly? Do you know? When I learned the answer my world turned upside down and I went on to make more money than I ever did before.

Three words.

Fractional Reserve Banking. 

For every dollar you give to a bank, they are only required to keep $0.10 of it in reserves. The rest of it is loaned out and invested. Fractional Reserve Banking is a system where for every dollar a customer deposits, a bank can lend out and invest at a 10:1 ratio. You see, I thought banks just kept my money in the safe, waiting for me to return and that’s why the interest was so low because the money in the safe is just being held for me. Wrong!

The reality is, banks are making tremendous money on my money! In fact, there is a good chance that they are making money on me with my own money. Think about how much money you have saved. Let’s say it is $20,000. Now think about your car loan. Let’s say it was also $20,000. So I put my $20,000 into the bank for safekeeping and then I proceed to borrow $20,000 from the bank to go buy my car. I’m paying them 5-7% annual interest for the next 60 months to use the $20,000 that they got from me in the first place? Or consider your mortgage. The money you’re borrowing for your house does not belong to the bank. It belongs to their depositors. Banks don’t have a revenue stream aside from fees. They didn’t get that much money on ATM and account fees. They lend out the money deposited.

So if they’re making 5% on mortgages and car loans and they can do this at a 10:1 ratio, then for every dollar deposited they can make $0.05 x 10. That’s a 50% ROI. But they pay me .10%. Why? Because that’s a pretty good deal for them. Why not? If you could borrow someone’s money for .10% and then go make 50% you’d do it too right? If you were to ever start a business, it would be best that business be a bank.

Permit me to issue and control the money of a nation, and I care not who makes its laws.” – Nathan Meyer Rothschild (Rothschild Banking Dynasty)

That’s the secret. Banks have no assets. Banks have only liabilities. AKA, money owed back to depositors. If a bank had assets, the bank would consider those assets to be liabilities because those assets are not making money. The MO of a bank is to have a little money on reserve as possible and have a maximum interest being earned on its deposits. A bank stays in business based on the spreads that it makes between what they earn and what they have to pay you on your deposits.

This would be worth billions of dollars in advertising. This would be worth numerous lawsuits. This would be worth having that most prestigious buildings in town for.

This is the #1 secret that banks do not want you to know.

Don’t believe me? Go set up an account and tell me you don’t sign a disclosure saying you’re aware of the fact that your deposits will not actually remain in the branch and that they will be invested. You’ve signed them all along, you’ve just never taken the time to read it or consider what it means.

I don’t allow myself to be taken advantage of in this fashion and I don’t allow my clients to either.

Ironically there are 4 solutions here.

Credit, Real Estate, Gold & Silver, and Life Insurance.

By transacting with credit, you avoid the need to place money in the bank. You can pay for things with credit, invest your money for cash flow, and use the credit to pay it off.

The place you’d invest it in is real estate that produces income.

You can hold your money in gold & silver bullion and life insurance instead.

You see, all of my money goes into bullion and life insurance to be used for investing when it’s ready.

I transact my day to day expenses with my credit lines so that I am using someone else money, rather than it happening to me.

I take the accumulated cash from my bullion and life insurance to invest in small businesses and real estate to generate income to repeat the cycle.

At all costs, I avoid the bank, and I strive to instead BE THE BANK.

If you understand this, it makes you a little-pissed off, and you would like a strategy to bypass it, click here and I can help.

Own Your Potential,

Jerry Fetta