Wednesday, November 7, 2007

What to do with your savings in Second Life?

If you are some months or even more on the grid, I can imagine that you would have some money saved over this period. What would you do with it?
Keep it in your account, with the possibility that an individual with bad intentions would steal it in one way or another?
Put your savings in a SL bank, with possibility of bankruptcies?
Create other avatars and divide your savings over the several accounts?

I have chosen to put my savings at a SL bank, with a, not so bad, interest. For the last two months I have seen my account increase. The bank is trustworthy, I can say.
They started with a group, but they have now more than 300 members and thus moved to a website where you can register for being updated about the possible updates. They even have switched from server, due to the big success.

Yesterday evening I had the crazy idea to check my balance on that bank, and went to an ATM inworld, right clicked to see the balance. “Not found in database” was the result.
How can that be? What to do now?
Outside the “secured “ area, I found two names who could be contacted, but as a note said, one was offline, and the owner of the bank was online but asks to put any requests on the contact form of the website, which is understandable, with such a number of members.
But my problem was, how could I be sure that I did not lose my savings? So I tried again, and pretended if I was a new customer, logged in with my SL name, which is mandatory (there are no two of me). The result was that I found 10 L$ on my account. Hmmm, I thought I had saved a bit more than that.;)
As I did not receive an email in the meanwhile, and as I am very inpatient, I contacted the owner, with the request to provide me some information how it could be that I was not able to log in, that my access was denied on the website, and thus no more savings.
Cristopher Whitfield, that is his name, was very friendly and told me that there was a change, that I had to register myself to the new system, and that everything would turn out fine. He manually switched my savings to the new system, I checked….and everything was okay, I had my money back, save on my account.
Now, I have learned something too. As I was suppose to check the website regularly, I would have known about the change, and would have made my precautions, and there would be no issue, no reason for doubt, no stress. All I can say is that I found a trustworthy way for my savings in Second Life.

Now I hear you all say: What bank? Where?……Well, you can all find it here.


Veronique said...

mmm... indeed, the way you were helped gives some kind of feeling you can trust them Looker..
At least, at short term..

But, allow me to be critical about this..
They give a daily !!! interest of about 0.20%, that gives you what?.. that your money will roughly double in 1 years time.. (taking in account accumulated interests)..
I can eventually imagine that you get a return like that if you invest in the bank, become a shareholder...
But on a savings account?? How the hell are they going to do that?? Or maintain that?
We dont have exactly a high inflation in SL. In fact, with the amount of new shops and new "designers" coming in every day, average prices tend to go down..
Same goes for land, which seems to be their main "investment". I am now about a year in SL, but I didnt notice the land prices triple or even double during that time..(correct me if I am wrong..) Besides, how can they? Land isnt a limited resource in SL.. Lindens create new land almost on a daily basis in order to keep up with the demand..
So, where is the money coming from? The money that is payed out to the account holders, after paying the "staff" and the real investors, who surely want ROI too.. And you are not going to give your clients 0.2 per day, if you, as an investor, only are making 10% per year on your capital, do you??
I fear it mainly just comes from the new sign ups..
Especially if you compare the withdraw limits with the total amount the bank claims to run : 500,000 L$ bankwide withdrawals..(so, for all users togheter..) to 10,484,125.87 L$ running!!
Which financial authority is checking this banks operations?
Do they have something like a guaranty fund, or back-up?
OK, they claim that every (week?) they cash out a certain amount and put it in a RL bank, as a safety for their account holders. But is it enough to really pay everybody (a percentage) back if needed?? And.. that way they also limit their working capital that they need to generate this huge interests and paybacks.. Because I am pretty sure the RL bank isnt paying them 0.2% per day.. It seems they are located in Germany.. I dont know the rates on saving accounts there, but I guess its +/- the same in the whole eurozone, so..2.5-3% per year??

I dont know Looker.. maybe if you have a couple of 1000' s to spare, that you dont need for a week or 2, it might be interesting to take the risk and make some 10's of L$...
But with higher amounts, or on a longer term... one should be very carefull with this..

It just seems "to good to be true"... and as far I have experienced up till now, when (big) money is involved, nobody hands out gifts...
Even the presents Santa Claus brings to the kids are payed for by someone.. :-p

Looker Lumet said...

hey Veronique, I am glad I gave you some material to react on, thank you for that.;))
Do you have an alternative for your money, that will give a higher or the same percentage? When you play on sploders , or if you camp, you could earn some lindens too yes. That is true.
And when we were talking about big, and I mean big money, you would be right too. Then it would be better to invest your money in land, I would say.
But I am talking about small investors, like me, with no big capital. I will not be ruined if the bank goes bankrupt. ;)
When you leave your house in RL, you don’t have all your money in your pocket, do you? Well neither do I, and that is why a small amount is put on an account.
The thing is, I have been following the actions of this bank to its investors for quiet some time now, and was never encountered with an issue as last night, but saw already different times how they managed to give some service to their customers, as they used to do it over IM in the past. So, everyone was directly involved with common requests. And we did get immediately accurate information. So did I last night. Even from Linden I would not receive that service, we all know that.
My article is my way to say thank you to Cristopher’s bank, for the service and quick response he gave at a moment I needed it.
As I saw Santa Claus already in SL, I am waiting too for a big surprise or present (payed by the Lindens?)….that is what Second Life stands for, isn’t it? I have a dream…….;))

Sand Posthorn said...

/me goes on digging holes in her backyard and hiding her pocket money in all of them. Then sits on her rock by the beach and waits for Santa Claus.

Veronique said...

No, Looker, I have no alternative that gives the same kind of return.
That is exactly why this.. alarms me. A bank, so a business that itself wants to make money too, that gives you 100+ % interest per year?? A bank that in fact is operating in an economy that is slowing down??
How can they do this??

Of course, you can always gamble with some "small" amount, lets say a couple of 1000's. As you said, you wont be ruined. (though, for most campers some 1000's must already be like loosing everything, when you only make 2/10minutes..)
It are only a couple of euros/dollars after all..
But I like it that you talk about the splonders... sometimes you win, sometimes you lose. I guess here you can win too, if at least you withdraw at the appropriate moment..

The analogy with RL you make isnt realy correct I think, Looker..
Of course I dont walk around there with all my belongings in my purse.. (nor do a carry an inventory on my back, lmpao..) but, the banks I have my money in are controlled and supervised by a regulating authority. And there exist some common guaranty funds in RL too..

But hey, SL is a game.. to be played by its rules, sometimes the law of the jungle..
And, in fact, I am even tempted to give it a try too, but aware of the risks..

Looker Lumet said...

LOL, Sand, where did I leave my shovel?

Yes, Veronique, you can not compare RL with SL, that is true, but what should I do? Don't see it as a real bank. It is a place where you can put some of your money, with a small interest, and I trust them. And again, in the worst case, I would loose some 1000's Linden, but what is that in RL?
Be aware of the risks, don't put ALL your money on one place, and enjoy your second life, that is what I am trying to do.

Tymmerie said...

Wait - you mean people actually have Linden's just sitting around to save? All I know is that I am going to have to start selling blood plasma in RL to suport my shoe/hair/lingerie/dress shopping addiction in SL.

Looker Lumet said...

Lol, Tymmerie, that is just the difference, I have an SL addiction, but no shoe/hair/lingerie/dress shopping addiction, that is why I can keep a few Linden's a side.
Perhaps you should try it too, and eat less ice creams!;)

Dalien said...

Looker, just ensure you jump off the bandwagon in time. I did make a reasonably good money in Ginko... (yes I cashed out my several hundred K L$ around 3 months before it busted)

Think logically where such a %% can come from. If you do not find the logical explanation - then you're gambling imho.

And gambling is known as a double-edged sword...

Veronique said...

exactly Dalien.. like I said, its to good to be true,.. its a casino, not a bank.

I did the little math..
on thre website, they promise 0.2% daily..
so, putting 1000 in your account, after one year you have:
1000* (1.002)^365 = 2073 L$

or, roughly, 107% benefit on year-basis..
Not on shares, but on a savings account?? If this were true, I would convert all my RL belongings to L$... :-p

Looker Lumet said...

Yes Dalien, I am aware, but as already said, what would I loose by this, if it turns out bad? If I go out for a couple of beers, I would loose approximate the same amount. It is not RL, but it is SL, where you can gamble, although less than it used to.;)) Everyone is free to put their choice of amount in that bank. But if you don't have much, you don't have much to loose. I don't have hundred K L$ to cash out, that is for sure. I am still a "free" player. I don't pay to the Lindens, I have my own house, my piece of land. And if something goes wrong with the owner of that land, I will loose also some money, so why all the fuzz here? I think everyone is pretty well aware, that miracles are not from this world (RL), (and if they don't, they did not read my article with their comments, ;)),that is why they have invented SL.;))
Thank you Veronique for your maths, I could not do it better myself, ;))