Having been in business for myself since i was twelve years old i have been with all the big four banks and a few more to boot.I started out trading my labour on weekends for a passion fruit crop which was just used as a wind brake on an adjacent lemon farm. As a labouror i was worth about a$1 to $2 per day but as the orchardist had no idea that i was getting 10 cents each for this crop of several hundreds a week. He thought it was a good deal ,until my dad wanted in on the act as i was using him for the transport and his trading account on the vegetable market floor.This lesson was to not to let any of the players have control of the information.
An entrepreneur is just an opportunist who finds a niche in the market place that few can see. Any way i discovered not to trust any one when it comes to money especially the banks. As demonstrated recently by a large merchant bank that basically used someones business plan they were using to try to borrow the funds.Then the bank went out in direct competion with them.The client of the bank is sueing but if they had to borrow for the business ,then legal road is going to be long and winding for them. I won't name names as although truth is a defence to liable actions ,the legal cost to get involved will cripple you before you win.That is what they count on. My experiance with the large banks is that they will say one thing then change the goal posts after you have signed up .Check the fine print ,your probably dealing with the WESAYSO Corporation and can do as they please including withdrawing credit even if you have not defaulted and adding new fees without notifying you.The final straw with big banks came when they sent me a letter stating that if i closed my merchant credit card facilities account after a certain date they would then impose a $100 fee for closing the account.This same bank was charging me $20 per month for a clik clak machine.I close this account immediately opened a similar account with a Community Bank ,(the manager still recognises me) and recieved a 2% reduction in percentage charges and no monthy fees for using them, without even asking.The other reason i used them is that the credit society which is my main money changer does not have merchant facilities yet which i have been with for a number of years.I have found that if you keep your account with a credit society over their minimum monthly balances they require ,there are very little if any fees for running my business accounts. Many including the big four would say "What if they go broke". Well who cares, i am sure you owe them much more than you have on deposit.The thing to worry about is the small banks getting take over by the big ones then giving you the same service you just left.Like my experience with the Perth Building Society that became the Challenge Bank that was gooble up by the Westpac Bank which said it would continue the great service.Only they where just eliminating a competitor that made them look bad.For all the ad boffins and bank executives you don't have products only services, So stop trying to sell something as being more solid than it is. If the big four spent the money on providing good service instead of trying to convince us with advertising that they provide good service we would not have to change banks.Banks are only interested in the real money you earn each week and which they can use to lend (12 times what they have on deposit) or charge fees to.Bank employees would like you to believe that the money they lend you exists somewhere in the world but think about this.If i lend you $100 out of my wallet there is a hundred dollars less in my wallet ,then if the bank lends you $100 no one in the world has a $100 or part there of less in their bank account.They just rely on national governments to step in if there is a major run on the banks.There would not be infation if they were not lending more than exists.Money is just a measure of productivity of goods or services ,an exchange if you will.They rely on the fact that it is so huge with so little transparancy(ie. sub prime loans)that we will never figure it out. Banks used to be the Realm of Sovereignty now it they are just used by the rich to redistribute the wealth to themselves via borrowing and using the national tax payers to subidise their income earning asset aquisitions via negative gearing. Meanwhile they are offloading dubious secuitised assets(sub prime equities) to mum and pop investers via the superfunds and directly.As everyone wants to be part of the success story of rising assets ,only touble is by the time mum and pop have pluck up the courage to get in they are left holding the pyramid baby.Price to earning ratios can't just keep going up before someone realises they would get a better return by simply lending it.You can't help the Gordon Gecko's of this world ,they help themselves and we help because we would like an opportunity to share in the wealth and luxury lifestyle.
One third of the inflation in Australia is caused but rising credit cost so the reserve banks
answer is to raise interest rates again , just adding to the spiraling inflation and that is not me saying it .Check the interviews late last year with banking experts on Lateline ABC.Although i am debt free with money in the bank ,you would think i would be looking forward to interest increases but i don't feel we need them to slow the economy.That would adversely affect my income .We need to incentivise the alternate energy systems (see landline) to take pressures off transport and operational cost.Thus reducing pressure on inflation.Also this would reduce the balance of payments (foreign debt).What does all this have to do with my limousine business ,well nothing at all. I just thought i would put it out there to see what the universe will do with it.
