💡 Protecting Your Financial Assets (Issue 125)
American citizens should be concerned right now
Throughout history, governments have frozen accounts, seized assets, and taken land from citizens.
In 1938, Nazi Germany forced Jewish people to register their wealth—making it easier to steal
During World War II, the Soviet Union confiscated significant amounts of property in Poland
In October 1970, all Italian-owned assets were expropriated, and the 12,000-strong Italian community was expelled from Libya.
In addition to this type of fear, the U.S. federal government’s actions are now risking social security payments, erasing nearly $3 trillion from U.S. retirement accounts, and tanking the stock market.
If you wait too long, you may discover that your life savings have depleted or are no longer accessible. Many are also concerned about the potential impact on banks during this tumultuous time.
“When asked by Brookings senior fellow Aaron Klein about what keeps him up at night, outgoing FDIC chief Martin Gruenberg cited two key issues. One is the possibility of a shock, such as a surprise spike in interest rates, that could wreak havoc on the economy and banking sector. The second is the growth of nonbanks and the prevalence of noninsured deposits (above the $250,000 limit) at mainstream banks.” (source)
Remember, the FDIC currently only insures $250,000 per depositor, per institution, and per ownership category. But what do you do if you have more than that? NerdWallet has a good article about insuring your money when you’re banking over $250K. For example, the most straightforward way to get another $250,000 insured is to open a second account at another FDIC member bank.
Another option is to open an overseas bank account to diversify your holdings. However, this is very challenging due to U.S. laws and regulations. This article discusses the benefits, challenges, and countries where you could open an account.
Before you start looking for a trustworthy global bank, you should be aware of the complexity of a U.S. citizen holding accounts and other financial assets outside the U.S. The Foreign Account Tax Compliance Act (FATCA) was enacted in 2010 by Congress to target non-compliance by U.S. taxpayers using foreign accounts. It requires foreign financial institutions (FFIs) to report to the IRS information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest. Here is a summary of the IRS's FATCA reporting for U.S. taxpayers.
As usual, I recommend talking with your accountant about overseas banking before you make any decisions.
But how do you find safe, reputable financial institutions? I’m asking the same question, so I compiled a list of resources to get started.
Forbes list of the world’s best banks
Global Finance’s World’s Best Banks 2024: Global Winners
Do you have other valuable resources you’d recommend? If so, please leave a comment. Thanks!
I’m Larry Cornett, a Freedom Coach who works with ambitious professionals to help them reclaim their power, become invincible, and create new opportunities for their work and lives. Do more of what you love and less of what you hate!
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