10 years ago, I graduated Uni with no debt and about $1,000 net worth.
My first job (engineer) paid $100k/yr. After taxes & expenses, I saved $70k per year for 3 years.
With $200k net worth, I lived on $5k per year and for the past 7 years, I worked only 30% of the time – just enough to cover my expenses without dipping into my savings.
This year I sold bitcoin (bought for $7,000. sold for $1,000,000). My target to retire-retire was $800,000, so I’ve finally reached my goal.
The sell orders executed so fast that I don’t know where to put it. I already stuffed every US bank that I have to the $250k FDIC max, but my last sell order exceeds that. I’ve applied to open bank accounts with maybe 100 banks in the US, and I’ve only succeeded in opening 1. My requirements:
[1] No monthly fees
[2] No inactivity fees
[3] No phone or phone number required
[4] Online Banking with 2FA support (TOTP, Webauthn, or email)
99% of the banks that I’ve tried to open with auto-deny me. My credit is great. When I call and ask why, they say something about the information I gave them not matching their records. The ones that have an appeal process told me “the system” denied me, and there’s nothing they can do – even supervisors.
My long-term plan is to buy a small condo in a city and a lot of land in the country. But it’ll probably take me 6-24 months to find and finish those deals, and in the meantime I want to keep my money somewhere safe.
I’m also a bit worried about the USD tanking. I’ve looked into banks in Europe and Canada, but Canada requires a tax ID and I only speak English. Can anyone recommend a very stable bank abroad (with English language support) that a US American can open remotely that meets the above requirements?
Where would you put your money if you were in my situation?
My advice is USA centric.
A cash management account with Vanguard or Fidelity will automatically split the money up to the partner banks. (There are some questions as to the fraud protection.)
Get a book on boring stock investing and the FIRE movement.
I put my money in the stock market, cash management accounts, and bank accounts.
Be careful. You run many of the same risks as a lotto winner. Money made easily can be gambled easily.
Also, get a good accountant. Taxes are going to suck.
Be careful. You run many of the same risks as a lotto winner.
I’ve been spending $5k per year for the past 7 years. I think I might go all crazy and spend $10k this year lol. I’ve already bought like 8 bottles of $3 wine!
cash management account
what do you mean by “cash management accounts”. Is that just a checking account split with other banks?
I’ve wondered about this a lot. We saw recently the mismanagement of Synapse. It’s true that their customers would have been insured by the FDIC if they actually had put their customer’s money in these FDIC-insured bank accounts. But they didn’t.
These US banks have a history of fraud. If they didn’t actually keep your money spread-out in different accounts, staying under the $250k limit, then you would only be insured up to $250k, right? I’d love to see that theory tested – but I don’t really want to risk it with my own $
Wow! Congrats!
Some things to know. The $250k FDIC limit has been a bit of a joke for decades. If the bank goes under, FDIC covers all deposits, basically everything.
Pay a tax attorney, follow their advice.
Open a Vanguard account put most of it on VTSAX their total stock market index.
Then read. I recommend:
The Richest Man in Babylon A Random Walk Down Wallstreet The Index CardThen take some time to relax.
From the sound of it, OP sold BTC but hasn’t transferred the proceeds off the exchange since they are getting bank accounts in order. If this money is in Coinbase for example, either as USDC or in a USD Wallet, that is not FDIC insured at all. This is significantly riskier than going over the $250k limit at bank with FDIC. The priority should be to get the money off the exchange ASAP, especially as there’s maximum daily/weekly/monthly withdrawal amounts, so it will take time. As others have mentioned, you can just open 4-5 accounts with the same institution if the FDIC limit is a concern, but the main concern should be getting the money out of the exchange and then figure out where to keep the money long term later.
Also, be sure to set aside $148,950 for the long term capital gain taxes for April.
The $250k FDIC limit has been a bit of a joke for decades. If the bank goes under, FDIC covers all deposits, basically everything.
Wow, that’s a very interesting take. One I’m very skeptical-of…
Open a Vanguard account put most of it on VTSAX their total stock market index.
I try very hard to avoid investing in anything unethical, and when I look at the holdings of VTSAX, I see Apple, Amazon, Meta, Alphabet, Tesla, JPMorgan Chase, Exxon, Walmart. Fuck, they’re even holding stock in UnitedHealtcare.
Congrats on your windfall. How are your annual expenses so low?? If someone else has been providing housing/food for you for 10 years and/or paid for your education, maybe paying them back for that would be a start.
Your situation may be unique and an online retirement calculator which showed you an $800,000 retirement value might be misleading considering your current spending. Since one of your goals is to own a condo in the city, the annual taxes and maintenance alone could be $5k depending on the city and housing prices. Also you probably don’t want most of the money in the condo, so you may have a mortgage as well. Perhaps you can map out your goals for the money and additional costs that will entail, and then either adjust your goals or your retirement amount.
What’s up with banks rejecting you
My guess is AI.
I can’t say for sure because when I ask them, they won’t tell me. But it seems like they use some third party to process their applications, and that third parry is probably using some sort of machine-learning or private AI algorithm that’s throwing a false-positive. Two things would fix this:
- Legally prevent banks from deferring account opening decisions to AI-powered systems, or
- Legally require all banks to have a human-override in-place for when such systems inevitably throw false-positives
Right now it appears that the third party that tells the bank “yeah, don’t open this account” doesn’t really say why. Kinda like how AI doesn’t tell you what it was trained-on to decide what word it should say next. It’s incredibly frustrating.
Update: one time a bank did enumerate exactly which pieces of information that I supplied caused the rejection, due to not being able to verify its authenticity. One of them was my email address. One was my employer. I was never asked to prove the authenticity of this data. I emailed them asking what they need to authenticate my information, and they send me back another generic message that I had been rejected.
I work for a major US bank. We use AI for a lot of stuff, but not for determining if someone should be allowed to open an account.
Banking is a heavily regulated industry and there are federal “know your customer” rules that we abide by. They exist for a variety of reasons which mostly all boil down to anti-money laundering.