You see, truly wealthy people... I'm talking about the ultra-rich... don't think like most ordinary Americans. Because they don't think in ordinary ways, that also means they don't do the same things with their money as "normal" folks do.
It's all about protecting and building capital. And they take steps to avoid what I call "capital killers" -- conventional habits that can have devastating effects on long-term wealth building.
Here's a simple example of what I'm talking about...
If you have money in a regular bank, let's say one of the "too big to fail banks," your capital is being eaten away in fees. I'm talking about the wealth-killing fees they charge you every single day. On checks. On ATM usage. On balance requirements. And on dozens of other bogus "services."
These fees are "capital killers." And without capital, it is almost impossible to create lasting wealth.
If you don't have capital, you end up on a treadmill... always trying to keep enough cash coming in to pay the bills. That's where 90% of American households are. You need to avoid it.
This is why I urge you to do everything possible to get out of their clutches now.Giving away free money to the "too big to fail" crowd may be OK for some folks. But serious wealth builders NEVER allow their costs to drain their capital.
Instead, they continually reinvest their capital in new business or investment profits. Capital is the key to creating lasting wealth. Reinvesting your profits and keeping your costs low is the way to build capital.
Bank of America, for example, charges a $12 monthly fee for a standard checking account, subject to conditions such as direct-depositing your money or maintaining a balance above $1,500.
Then you pay $2 each time you use a non-Bank of America ATM. It's $10 if you need to visit a branch for a cashier's check. You pay $5 if your card gets cracked or stops working.
Individually, none of these fees will sink you. The fees your bank charges you are nickel and dime size. But they mount up.
Consider too that you're also not making anything on your deposits (which are essentially loans to your bank). If you have a common yield-bearing checking account, you make pennies per year. If you're lucky.
A "Tiered Interest Checking" account with Bank of America pays you 0.02% on deposits between $10,000 and $99,999.
One step you can take to free yourself of these wealth killers is to switch to a credit union.
Credit unions are member-owned. Members elect the directors. The directors set rates and fees. With a credit union, you're dealing with a local institution. Not a faceless corporate board on Wall Street.
I found a credit union near where I live offering accounts that pay 0.15%. That's seven times the interest a "too big to fail bank" like Bank of America will pay you.
You will also save money on fees. For example, some credit unions reimburse your ATM fees. The one I found has none of the "account minimums" that tend to trip extra fees in banks.
Credit unions also have far fewer "nickel and dime" fees than banks: no check fees, overdraft protection, free online bill pay.
And depending on the credit union you find you're eligible to join, you could receive discounts on homeowners or auto insurance.
You could also be eligible for special deals on rental cars or accidental death and dismemberment (AD&D) insurance. Taking advantage of these local "ins" will save you even more money.
It took me only a few minutes to find a way to save myself hundreds of dollars a year and make over seven times the interest on my deposits than I'd get with Bank of America.
You can do the same by investigating a local credit union today.
In future dispatches, I'll show you more ways to rid yourself of hidden wealth killers and switch from conventional to unconventional ways of building wealth.
As Bonner & Partners chairman and colleague Bill Bonner puts it, "You're either a contrarian or a victim." And that goes for the way you bank too.