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horgad
1000+ Penny Miser Member
USA
1641 Posts |
 Posted - 07/15/2008 : 07:41:28
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Assuming that your bank fails:
1. Do you trust FDIC insurance not to fail?
2. Do you trust the FDIC not to botch up the process of refunding money?
3. Can you afford to waits months without access to you money while the refund process takes place?
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TenBears
1000+ Penny Miser Member
USA
1021 Posts |
Posted - 07/15/2008 : 07:51:14
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1. no
2. no
3. yes. Have your "electronic" money in several banks. Also, Dave Ramsey fan here. A person needs to have several months of living expenses in cash -- not electrons in some bank computer that shows a balance, but actual cash. Here is the flaw in my plan, emergency cash is kept in a safety deposit box. Yes, I know, if I don't hold it, I don't own it. But, I don't want cash like that in my house. I have more comfort that it is in the vault at the bank. |
"Rich," the Old Man said dreamily, "is not baying after what you can't have. Rich is having the time to do what you want to do. Rich is a little whiskey to drink and some food to eat and a roof over your head and a fish pole and a boat and a gun and a dollar for a box of shells. Rich is not owing any money to anybody, and not spending what you haven't got." Robert Ruark
there are too wild Indians...
there are too wild Indians...
there are too wild Indians...-----still taunted
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horgad
1000+ Penny Miser Member
USA
1641 Posts |
Posted - 07/15/2008 : 08:58:23
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"Also, Dave Ramsey fan here."
Dave Ramsey is head and shoulders over most financial advisors in my book because he tells people NOT to invest until they take care of the basics like paying off all debts.
Most advisors are happy to tell you to invest money no matter what debts you have. Some of them are essentially telling people to borrow money at 8% to make 5%...which of course makes absolutely no sense.
However when it comes to the investment phase of the Dave Ramsey plan, he falls flat. He pushes Mutual Funds like they are the eternal and all encompassing answer to every investment problem and that is just plain wrong, IMHO.
There will never be one good lasting answer as to where to stick your money and anybody that says that is just trying to sell you something (like a book). As it happens, it is relatively easy to sell a book that has a definitive get rich formula and almost impossible to sell one that says that what you should invest in at any given time is immensely complex, changes from month to month, and is never 100% certain.
Heck if a dedicated individual made a fulltime job of researching investments he would be considered hugely successful if he could manage to be right 60% of the time... |
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TenBears
1000+ Penny Miser Member
USA
1021 Posts |
Posted - 07/15/2008 : 13:25:51
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quote:
Originally posted by horgad
Heck if a dedicated individual made a fulltime job of researching investments he would be considered hugely successful if he could manage to be right 60% of the time...
Or even 51%. I am fairly certain that I could be wrong on my investments well over 75% of the time. So, why can't I do it in reverse? |
"Rich," the Old Man said dreamily, "is not baying after what you can't have. Rich is having the time to do what you want to do. Rich is a little whiskey to drink and some food to eat and a roof over your head and a fish pole and a boat and a gun and a dollar for a box of shells. Rich is not owing any money to anybody, and not spending what you haven't got." Robert Ruark
there are too wild Indians...
there are too wild Indians...
there are too wild Indians...-----still taunted
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Cerulean
Penny Hoarding Member
USA
993 Posts |
Posted - 07/15/2008 : 13:45:47
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quote:
Originally posted by TenBears
...emergency cash is kept in a safety deposit box. Yes, I know, if I don't hold it, I don't own it. But, I don't want cash like that in my house. I have more comfort that it is in the vault at the bank.
This assumes that you can still get to your safe deposit box if the bank has failed. |
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simplicitycounts
Penny Hoarding Member
USA
535 Posts |
Posted - 07/15/2008 : 13:55:43
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| You're forgeting why the bank failed in the first place. The stock went down and people went to get their money thinking it was going to fail. A self fufilled proficy. They pulled 1.7 Billion in 7 days before the crash, and that was enough to send the bank to a downward spiral. Same thing happened in the 1930's, everyone started pulling their money thinking the banks would fail, and they caused them to fail. We had more banks fail in 1981 then during the whole depression, why didn't all banks fail? Not everyone pulled their money. Even if a bank fails you will have access to your safety deposit box, you signed a contract and that box belongs to you as long as you pay your rent. |
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swusc
Penny Hoarding Member
USA
553 Posts |
Posted - 07/15/2008 : 15:07:32
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I could be wrong on this, but I think the Federal Reserve would step in and lend them money if liquitidy was the only problem. I think IndyMac had balance sheet issues as well. The 1930s would be different because we didn't have a pure fiat money system of unlimited liquidity. I think it is worse to have failures due to balance sheet having negative equity vs liquidity issues.
Bear Stearns was rumored to be liquidity problems so they were kind of saved by being sold to JPM. IndyMac just died. I guess both kind of failed though. |
`Everybody is ignorant. Only on different subjects.' Will Rogers
"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the "hidden" confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." Alan Greenspan, 1966. |
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kavajava
Penny Collector Member
USA
490 Posts |
Posted - 07/15/2008 : 15:07:47
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quote:
Originally posted by simplicitycounts
Even if a bank fails you will have access to your safety deposit box, you signed a contract and that box belongs to you as long as you pay your rent.
Did you see the news item recently where in Great Briton they went in and seized a bunch of safe deposit boxes and opened them because they "thought" they "might" be related to terrorist of drug activity?
Did you see the news item recently that talked about how some banks here in the US just take over safe deposit boxes because they do not think they know the owners?
I am not a big fan of safe deposit boxes for many reasons.
If you are going to follow Ramsey's advice and keep several months of cash, it seems like you could find some place (or two or three) in the house, attic, basement, garage to store it safely--maybe in a small out of sight fire safe?
Obviously, to each his own, but IMHO, storing at a bank sort of negates many of the reasons why you are storing cash in the first place...
Of course, I must admit, my supply of actual cash is woefully inadequate... |
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n/a
deleted
32 Posts |
Posted - 07/15/2008 : 18:39:49
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quote:
Originally posted by kavajava
Did you see the news item recently that talked about how some banks here in the US just take over safe deposit boxes because they do not think they know the owners?
Yep. And overseas accounts might not be such a good idea, either:
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Technician in Liechtenstein Turns Over Names of Americans With Secret Bank Accounts
By BRIAN ROSS and RHONDA SCHWARTZ
July 15, 2008
Hundreds of super-rich American tax cheats have, in effect, turned themselves in to the IRS after a bank computer technician in the tiny European country of Liechtenstein came forward with the names of US citizens who had set up secret accounts there, according to Washington lawyers investigating the scheme.
The bank clerk, Heinrich Kieber, has been branded a thief by the government of Liechtenstein for violating the country's bank secrecy laws.
He is now in hiding but scheduled to testify to the Senate's Permanent Subcommittee on Investigations Thursday via a video statement from a secret location, according to Congressional investigators.
MORE:
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starwarsgeek171
Penny Hoarding Member
USA
651 Posts |
Posted - 07/15/2008 : 19:42:28
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lol, that guy looks just like my neighbor!
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wheeler_dealer
Penny Collector Member
USA
402 Posts |
Posted - 07/15/2008 : 20:02:53
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| The Government (Taxpayers) foots the bill in any current bank failure through currency inflation. IndyMac is a perfect example. Chances are this failure didn't just happen. The scenario was well thought out. The reserve probably brought enough currency in ahead of time. The hope is customers see others in line ahead of them get their money and decide to leave theirs alone. It was probably well know weeks in advance that they were in trouble and that this would happen. Could you imagine if this happened(Bank Run) at multiple banks even supposedly healthy. How many people think that everything they deposit is sitting in the vault ready for them to come and take it out. The amount of on hand cash in the vault is somewhat minimal and replenished regularly as currency is needed. Banks can limit the amount of cash withdrawl regardless of your balance (uncommon yet legal by law) in an effort to meet other customers day to day needs. |
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wheeler_dealer
Penny Collector Member
USA
402 Posts |
Posted - 07/15/2008 : 20:06:50
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| Regarding safe deposit boxes. It is probably a good idea if you need more than one to keep them in seperate banks and keep an inventory and pictures. If you can't prove what you had you may be out of luck in event of a seizure or worse. |
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Nickelless
Administrator
USA
5580 Posts |
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starwarsgeek171
Penny Hoarding Member
USA
651 Posts |
Posted - 07/15/2008 : 20:35:24
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| My son and I were talking about that today, Nickeless! A true benefit of penny hoarding! |
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horgad
1000+ Penny Miser Member
USA
1641 Posts |
Posted - 07/15/2008 : 22:28:11
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When I am in the middle of lugging my pennies around and sweating like a toilet in August, I for one am thoroughly convinced that nobody would be dumb enough to steal pennies...except maybe me.  |
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CoinHunter53562
1000+ Penny Miser Member
USA
1805 Posts |
Posted - 07/15/2008 : 22:54:05
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| Not sure that I do to be honest. I had an ING Direct account and loved it but once I started learning about fiat and the pending financial storm coming, I moved 90% of the money out. I also had a small savings at a local credit union and moved out all but about $25. Maybe it will end up not being a necessary move, but I feel better having ownership of the money in my hands versus the alternative of having to wait for the FDIC to refund me in case of a bank failure. |
My hobby: collecting real money 1 copper cent or nickel at a time.
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TenBears
1000+ Penny Miser Member
USA
1021 Posts |
Posted - 07/16/2008 : 00:16:51
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quote:
Originally posted by Cerulean
quote:
Originally posted by TenBears
...emergency cash is kept in a safety deposit box. Yes, I know, if I don't hold it, I don't own it. But, I don't want cash like that in my house. I have more comfort that it is in the vault at the bank.
This assumes that you can still get to your safe deposit box if the bank has failed.
It is a conundrum, kind of a Catch-22. Whether or not wise, I can't stand the thought of having any significant cash, or PM for that matter, hidden around the house. If a burglar (or a fire) got it, I would be kicking myself. |
"Rich," the Old Man said dreamily, "is not baying after what you can't have. Rich is having the time to do what you want to do. Rich is a little whiskey to drink and some food to eat and a roof over your head and a fish pole and a boat and a gun and a dollar for a box of shells. Rich is not owing any money to anybody, and not spending what you haven't got." Robert Ruark
there are too wild Indians...
there are too wild Indians...
there are too wild Indians...-----still taunted
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WheatieFan
Penny Pincher Member
USA
106 Posts |
Posted - 07/16/2008 : 02:56:22
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quote:
1. Do you trust FDIC insurance not to fail?
Yes
quote:
2. Do you trust the FDIC not to botch up the process of refunding money?
3. Can you afford to waits months without access to you money while the refund process takes place?
I'm under the impression that the 'rollover' to a new bank takes place over the weekend. So, if your bank is shut down on friday afternoon, you can still get your money on monday morning. You can even use your bank card over the weekend.
I'm under the impression that the only people that get really screwed are the ones that have over the 100k FDIC insured limit. They may only receive a portion of their 'overage'. I don't have much sympathy for them, anyway. They walk by the same plaque I do when I enter the bank. They can open multiple accounts at multiple banks as easily as I.
WheatieFan
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Nickelless
Administrator
USA
5580 Posts |
Posted - 07/16/2008 : 02:57:15
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quote:
Originally posted by TenBears
It is a conundrum, kind of a Catch-22. Whether or not wise, I can't stand the thought of having any significant cash, or PM for that matter, hidden around the house. If a burglar (or a fire) got it...
Fire would only be a problem if you were stashing FRNs at home. I think all of us on here are smart enough not to do that. As for fire and PM, what's the problem there? You'd just have your own in-house refinery |
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jadedragon
Administrator
Canada
3788 Posts |
Posted - 07/18/2008 : 18:30:12
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quote:
Originally posted by CoinHunter53562
Not sure that I do to be honest. I had an ING Direct account and loved it but once I started learning about fiat and the pending financial storm coming, I moved 90% of the money out. I also had a small savings at a local credit union and moved out all but about $25. Maybe it will end up not being a necessary move, but I feel better having ownership of the money in my hands versus the alternative of having to wait for the FDIC to refund me in case of a bank failure.
ING is not high on the "going to fail list" They are a big dutch based bank. I also trust any of the Canadian based banks like RBC and TD that have US operations. HSBC is also very solid and has online savings accounts. JMHO. |
The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man. George Bernard Shaw.
Why Copper Bullion ~~~ Interview with Silver Bullion Producer Market Harmony
Passive Income blog |
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Nickelless
Administrator
USA
5580 Posts |
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horgad
1000+ Penny Miser Member
USA
1641 Posts |
Posted - 07/21/2008 : 08:34:47
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quote:
Originally posted by Nickelless
Are there ways that your average economic layman can tell if their bank is in trouble, say, from public records, stock reports, etc.?
I always get worried when I walk into one of my bank and all the tellers have been mysteriously replaced, but so far nothing has come of it. The best bet for Average Joe to get by, without having to scour the banking news, would be for him use two+ banks. That way if there is any delay with getting money back from the FDIC, the other bank can still be used. Of course, using two+ banks is the least you should do, but at least it would be a start...
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jpf231
Penny Collector Member
USA
340 Posts |
Posted - 07/21/2008 : 10:39:17
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| I'd rather eat a bag of live, angry hornets than live in or near L.A. |
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Tourney64
1000+ Penny Miser Member
USA
1035 Posts |
Posted - 07/21/2008 : 16:24:52
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| I'm also a Dave Ramsey fan. Just found out about him a year ago yesterday. Been practicing what he teaches for 10 years. |
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Tourney64
1000+ Penny Miser Member
USA
1035 Posts |
Posted - 07/21/2008 : 16:36:27
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I am also a big fan of credit unions. Every credit union if federally insured, which most are, are required to provide financial data to the NCUA quarterly. You can find out how any credit union you are doing business with is doing financially.
You must be logged in to see this link.
There are numerous options. Figure out the what data you want and have it sent to your email. It will be delivered within a few minutes of your request. |
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Cody8404
Penny Hoarding Member
USA
602 Posts |
Posted - 07/22/2008 : 15:44:43
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Here is a site about the security of banks and credit unions. All the ones I have looked at show four stars.
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If we keep all our cash in the banks and the banks fail we are in trouble. If we take all our money out of the banks and we are hit by fire, theft, misplacement, or many other things we are in trouble. Sounds like a happy medium and being prepared to loose half is not a bad idea.
The system we are in is going to get worse, but will it fail? The FED has done a good job putting off the day of reconning for nearly 90 years. I hope they can put it off until I am dead and gone.
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Awake, O kings of the earth! Come ye, O, come ye, with your gold and your silver, to the help of my people, to the house of the daughters of Zion, to the help of the people of the God of this Land even Jesus Christ. |
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Bank Run...Right Here, Right Now
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