Wednesday, April 11, 2012

Do you remember how much TB used to pay? Did they really worth?

Everyone remembers the Old Italian Treasury Bonds (BOT), which until 15 years ago they used to pay a 10% interest rate a year. Some of us miss them a lot. 
If in the 90's you had half a billion liras (400.000 $), you felt like you were rich. Your yearly income was of about 50 million (40.000 $) a year and you lived in wealth. 
Today, your 500 million have become 250.000 Euro. Although the worst side of it, it's those same 250.000 Euro don't pay you that same 10% of interest rate anymore, but much less, in fact it's about 4%. As a matter of fact you would have an yearly income of 10.000 Euro (9.000 $). Less than 1.000 Euro per month. 
In fact if in the 90's you would have decided to invest your savings buying 4 apartments, for example in the University district of Milano, today your investment would have been doubled and at present you would have had 4.000  (3.200 $) Euros as a monthly income. 
So investing in the Italian treasury bonds was a real bargain? 
Hindsight do you think was it a good advice? What about that time years ago when your personal banker suggested you to invest your savings in Treasury Bonds? Do you think BOTS (italian treasury bonds) were in the long term a profitable investment? At present do you feel richer or poorer? Have you ever asked yourself who made profits during the past 30 years? If you invested 500 billion liras in TB before the coming of Euro you made about 5 million liras per month. Today you won't make 1.000 Euros per month. 
The impoverishment is more than clear, and those who followed their personal banker advice got burned. Before the Euro you were wealthy, today you struggle to survive. What about tomorrow? 
If you want to know what's next, you are in the right place.
Luigi Foscale

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