This episode is specifically designed for those of us who have done well through the pandemic era, have money saved up, and want to protect it. I will cover those currently facing hardships in a future installment.
This is NOT financial advice.
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– Don’t gaslight yourself. Don’t feel bad. This is not your fault and this is not just nature. These are systems designed to do what they do and stick the burden on working class, middle class, disadvantaged populations, or even just those who those in power don’t like in the name of “saving the economy.”
– Recessions are a policy/economic choice
– We can choose to protect workers, families, and vulnerable people. This was proven during the pandemic.
– Policymakers’ choice to “bail out’ Silicon Valley Bank and Signature Bank
– It was the right choice to ensure market confidence and protect payroll that workers were owed
– FDIC/NCUA limit is $250,000 per bank per person – most people will be more than fine!
– Review details on FDIC Insurance limits, including how certain accounts (like some retirement accounts) may be counted separately, allowing you to have more than $250k insured in one bank if eligible: https://www.fdic.gov/resources/deposit-insurance/financial-products-insured/
– Short-term access may be an issue though
– Potential dangers of banking with “app-based” FinTech banking services that are not banks themselves
– These are often tech startups subject to the current increased risk of failing, pull-back of VC funds
– If they are depositing your money in an FDIC insured bank, you’ll be covered, but the app/platform being unavailable, customer service being unavailable can be an issue for access if your FinTech provider goes out of business
– Maybe don’t use a FinTech/app-based banking service as your sole bank, diversify
– Consider putting your money in multiple institutions for higher rates, easier access, and behavioral reasons/impulse control.
– Keeping an emergency fund at another bank makes it less likely for you to spend it impulsively
– I considered First Republic for a business account but their fees are too much in my opinion.
– CDs can be a great option for those who have savings over and above an emergency fund that they won’t need to spend in the next 6-12 months+. Locks in your rate but withdrawals have penalties. Read the fine print.
– Some Institutions offering higher CD rates on shorter rather than longer durations
– Will the Fed start dropping rates?
– Small increase in rates rumored in the very short-term
– Extended Sweep Deposit Accounts from brokerage firms that allow $1 million or more in FDIC insurance on one account
– Brex applying this to business banking
– I prefer credit unions for lower fees, better rates, and investing in communities
– IntraFi deposit program for banks: https://hub.intrafi.com/rethink-uninsured-deposits
– The vital role of credit unions and community banks in helping communities thrive
– Avoiding investment fraud and “safe money” scams when markets decline, a cautionary tale from my real life
– Regulation D/private placement investments are the highest risk – AVOID unless you are okay with losing your money.
– Financial advisors should be “fiduciaries”
– Covering tips for when recessions “hit” and cause job losses on a future episode.
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This content is for entertainment and general informational purposes only. We do not warrant or guarantee the accuracy of the information herein. The viewer should not rely solely upon such and consult a competent professional before deciding to follow any course of action. Please consult a qualified, fiduciary financial professional before making any financial or investment decisions.
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