What Frustrates you most about banking?

What frustrates you most about banking?

If you have a mortgage and a chequing or savings account (with the same institution), what is the spread they are they are taking on you?

What is your mortgage cost (interest rate): 4% perhaps?

What are they paying you for the money that you are lending them back in your chequing account? 0% (they get this money from you for free).

In your savings account? 0 .5%.

So the spread they are taking on you in this scenario is 3.5% to 4%.

If you have a mortgage of $250,000 and savings of 40,000 (savings account), your net borrowing should be $210,000 if you were able to apply your savings to your mortgage. You would be paying approximately $1400 less per year in interest costs (that are not tax deductible). That adds up over time.

So why do the banks not let you do this?
They don’t want to lose the free $1400.

Then there are the fees and don’t forget the gouging spread on foreign exchange.

I can help solve the first issue and generate very good ideas for flexibility in your cash flow, especially if you have a variable income stream.

Of course: cash flow is the engine that drives a financial plan.

If you want to explore any of these options, let me know, we build Wealth Forecasts to show you how to maximize efficiencies in your financial plan and mitigate risk in your investment portfolio.

jstomenson@wellwest.ca
www.jstomenson.ca
http://www.financialpost.com/magazine/story.html?id=2514256