Phenom II Posted March 2, 2010 Share Posted March 2, 2010 Ok, lets say a man has £5,000,000 Putting it all into 1 bank gives him the risk of losing it all if that bank collapses So... He splits it into 2 banks, leaving £2,500,000 in each bank My question is, has he really just given himself better odds on not losing the lot, or has he in fact just doubled the chances of losing half? Each bank account he opens and moves some money into, is it giving him better and better chances of not losing all the money, or worse and worse chances of losing some money. Or... Do the % of his chances stay the same ? What is the better option... Link to comment Share on other sites More sharing options...
Singh400 Posted March 2, 2010 Share Posted March 2, 2010 It is a little more complicated than that, have a read of this BBC article that deals with said issue. Link to comment Share on other sites More sharing options...
Growled Member Posted March 2, 2010 Member Share Posted March 2, 2010 If you're that worried about it, just put it in a jar and bury it in the backyard. Link to comment Share on other sites More sharing options...
Phenom II Posted March 2, 2010 Author Share Posted March 2, 2010 lol Its not a real man with a real amount or real banks, It was just something I was thinking about and it was screwing with my head. As the chances lessen for losing the lot, they also increase of losing some So it messes with my head as to which is the better option Link to comment Share on other sites More sharing options...
jbrunt1990 Posted March 2, 2010 Share Posted March 2, 2010 Get a 100 bank accounts with ?50,000 in each. Then your covered! Link to comment Share on other sites More sharing options...
Mekun Posted March 2, 2010 Share Posted March 2, 2010 I thought banks in the US covered losses on accounts of 250,000.00 or less? Link to comment Share on other sites More sharing options...
multimediatechy Posted March 2, 2010 Share Posted March 2, 2010 Ok, lets say a man has ?5,000,000 Putting it all into 1 bank gives him the risk of losing it all if that bank collapses So... He splits it into 2 banks, leaving ?2,500,000 in each bank My question is, has he really just given himself better odds on not losing the lot, or has he in fact just doubled the chances of losing half? Each bank account he opens and moves some money into, is it giving him better and better chances of not losing all the money, or worse and worse chances of losing some money. Or... Do the % of his chances stay the same ? What is the better option... If you don't have this kind of money then there is not much point worrying about this.!??! people who have that amount have way too much anyway. Link to comment Share on other sites More sharing options...
MikeChipshop Member Posted March 2, 2010 Member Share Posted March 2, 2010 I love crazy maths like this because it's way beyond what my mind can comprehend! :P I sat here toying with it in my mind and now have a massive headache, what's your address so i can send you the paracetamol bill... you obviously have 5 million so you should be able to cover it :D:D:D Link to comment Share on other sites More sharing options...
Phenom II Posted March 2, 2010 Author Share Posted March 2, 2010 I love crazy maths like this because it's way beyond what my mind can comprehend! :p I sat here toying with it in my mind and now have a massive headache, what's your address so i can send you the paracetamol bill... you obviously have 5 million so you should be able to cover it :D:D:D haha, I wish, but you have the right math problem if its hurting your head, thats exactly what was / is happening to me when I try to work it out :laugh: Get a 100 bank accounts with ?50,000 in each. Then your covered! 100 pin numbers to remember Ahhh lol If you don't have this kind of money then there is not much point worrying about this.!??! people who have that amount have way too much anyway. If I had that much money I deff wouldnt be worrying about this, but I like the problem, its mind boggling lol Link to comment Share on other sites More sharing options...
.Markus Posted March 2, 2010 Share Posted March 2, 2010 I'd store all the cash in one high-interest account in a bank that's trusted and not likely to go bankrupt, i.e. HSBC, Deutsche Bank or BNP Paribas. You'd earn more interest storing ?5 million inside one account, than ?500k in 10 accounts. Link to comment Share on other sites More sharing options...
MR_Candyman Posted March 2, 2010 Share Posted March 2, 2010 I don't know why you're beating your head up over this because BOTH statements are true. If they really are separate banks (remember a lot of banks own other banks) then splitting your money in half would both double the chance of losing half your money and it would double your chances of not losing all your money. It's the same way you're supposed to trade stocks. You're supposed to diversify your assets so you run a lower risk. The problem with that is though, if you have 10 different stocks and one of them shoots up, you make less money than if you only had 1 or 2 stocks and one shot up. The counter argument is though that you run a greater potential of having one of your stocks shoot up if you diversify. It all kind of goes in circles. If you want a lot of risk but the potential for a lot more gain, keep it in 1 or 2 stocks, if you want more security so you don't just end up losing all your money, invest in many. Link to comment Share on other sites More sharing options...
FunRoomSite Posted March 2, 2010 Share Posted March 2, 2010 Each bank account he opens and moves some money into, is it giving him better and better chances of not losing all the money, or worse and worse chances of losing some money. Of course it's giving him a better chance of not losing ALL the money. But also a better chance of losing SOME money. Right? Link to comment Share on other sites More sharing options...
sparkymcg Posted March 2, 2010 Share Posted March 2, 2010 Would it be safe putting it in like the bank of england, could that ever go bust? Link to comment Share on other sites More sharing options...
External HDD Veteran Posted March 2, 2010 Veteran Share Posted March 2, 2010 there are lots of variables here. nothing can be said accurately without knowing all details. game theory. portfolio risk calculating. bla bla bla..:) Link to comment Share on other sites More sharing options...
Growled Member Posted March 2, 2010 Member Share Posted March 2, 2010 You know that really rich people do not keep their money in the bank. They have stocks and bonds and properties and companies and such. When they want cash they sell something. Link to comment Share on other sites More sharing options...
primexx Posted March 2, 2010 Share Posted March 2, 2010 banks are almost never allowed to go bankrupt, the government would arrange for a take over. plus, there are minimum insured amounts that you're guaranteed to recover. our insurance counts per-account type so it's definitely safer to split up your savings amongst many accounts to maximize the amount insured. it might be different in your country. Link to comment Share on other sites More sharing options...
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