Todd Polke explains why the Commonwealth Bank outage matters: legally, deposited money belongs to the bank, not you. He shares stories of accounts frozen over crypto purchases, then argues the real risk is concentration, keeping everything with one bank. Spread your accounts across institutions.
Okay. Hey, hey everyone. It is Todd here and I wanted to talk to you today about something you may have noticed. You may have seen the news over the last couple of days. So in Australia, basically Australia's largest bank, Had a few, let's say, technical difficulties a couple of days ago. Basically what happened, they are saying that part of their internal systems stopped communicating with each other and a whole bunch of people literally got locked out of their bank accounts, unable to access banking services, unable to withdraw money, unable to use the app, and effectively had a bit of a taste of what it is like for banks to go turn off access. So this brings up the really first point that we want to actually start to understand. When your money is in a bank, is it your money or is it their money which they're allowing you to have access to? That's the first question you want to ask yourself. Now, put in the comments, let me know which one you think it is. Is when you have put your money in the bank, is it actually your money or does it become the ownership of the bank and they just allow you to have access to it? Put in the comments for me, what do you think it actually is? Now, if you're reading between the lines, what you will know is that when you put your money in the bank, you have to understand this. It stops becoming your money. It becomes ownership of the bank who are allowing you to have access of it. Okay. Now that brings up some points, brings up some things you have to really be thinking about and going, how comfortable and safe do I feel that's the case? Now, just because we haven't necessarily had a problem to date and And I say that very lightly, necessarily had a problem to date. Because if you've had the experience of when you know that your money is in the bank account, have you ever had the experience? And again, put in the comments for me because a lot of people will learn from this, no doubt about it. That when— who's had the experience when a bank has said, no, I'm not going to let you do that transaction, or no, I'm not going to let you make that transfer, or no, you can't buy that cryptocurrency, or you cannot do this, or they've had their banks frozen. Look, I've met people who have had their banks frozen for 3, 6, 9 months because they didn't like the type of transactions they were doing, even though the transactions were for charitable purposes to be able to help out during some of the big floods and different things that were going on. Like some crazy stuff I heard. So my first question to you is, have you ever had the experience of your bank accounts being frozen? Right? I know I certainly have. I've been told, no, you can't buy that cryptocurrency. You can't interact in this way, shape, or form. So I ask again, Is that money actually your money? So that's the first question you've got to ask. Now, the second big point that this big Commonwealth Bank outage kind of brings up is this risk. And this risk is called concentration risk. So what I meet a lot of people when they set up their bank accounts and how they operate in their finances, that a lot of the time what they do is that they put everything with one bank. You know, they're saying home loan is with one bank, their car, their loan was with the bank. Their bank accounts with the bank, their business banking is with the bank, their partners is with the same, and it's all with the same bank. And they have total control over everything you absolutely do and everything that you have. And it's a really, really big problem. So think about it right now. Everyone who had all their banking with Commonwealth Bank for a period of time, and given it wasn't long, it was half a day or whatever it was, and people might be going, well, don't make a big deal out of it, but we'll talk about another aspect of that in a moment. You might be sitting there going, okay, well, they were unable to access all their capital and their cash for a period of time, even though— sorry, there's some dogs going off— even though it is your money. Okay. And that's the thing you've got to understand. You've got to be thinking about that concentration risk is huge. So at the very least, you want to make sure that you have bank accounts set up with multiple different blended, multiple different banks so that you can go and duck and weave and pivot and navigate no matter what comes along the way. And the same way you want to make sure that your home loan and your everyday bank account is all going to be separate because that concentration risk can be extreme. So the second thing you want to make sure you do is that, number one, is you have to be really crystal clear who owns your money. Number two is you have to get out of this concentration risk of having everything with the one bank and make sure you set up multiple different pathways so that no matter what happens, right, you can go and duck and weave and pivot and you've got choices up your sleeve. So I'd love to know your thoughts. Hey, have your bank accounts ever been frozen? Have you ever been told, no, naughty boy, naughty girl, you can't go and take that level of money out, you can't do that transaction? Let me know, put some stories in, let me know what's happened to you. Number 2, what did you take out of that? Like, what are you going to do about it, right? Because this financial, like, you're setting up, removing this concentration risk and setting up what, you know, your financial plans, and that no matter what goes on, you want to be safe and secure. What are you doing to be able to create that in the future? And I'd love to know your thoughts. Put in the comments for me, let me know. Other than that, I'll talk to you soon. Chat soon, team. Bye.
