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?
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To all of you in the comments who are trying to give OP advice, thank you.
To OP, I’m sure you aren’t doing it intentionally, but you’re getting some great free advice from internet strangers, but your responses are coming off condescending and unappreciative.
To eco some of the others:
- Get a tax accountant to help you plan for tax time. The cost is minimal and the savings could be impactful.
- Invest the portion that you are not going to spend on taxes or the condo. You said you don’t like Vanguard. Okay. Fidelity has a great mutual fund search tool that allows you to filter for other traits such a sustainability. Yields may be lower, but you do you.
- Look into finding a fee only financial fiduciary to help you come up with an investment and retirement plan.
- If you graduated Uni 10 years ago, I assume you are still young and are in your prime earning years / future life events (spouse, kids, etc) may alter your expenses. You may want to consider staying in the job market in some capacity until you’re positive the income or skills are no longer needed.
Or ignore. It’s your life. Congrats on the windfall and kudos on keeping your expenses so low. Best of luck!
Sorry, I do appreciate advice in general – but I do not take kindly to people who tell me to invest in mass murder and genocide.
Too often in these spaces do people take that in stride; we need a culture that condemns such advice. It’s not okay to invest in companies like Lockheed or UnitedHealtcare.
Regarding the FDIC limits, I think the bank can help you open two or three different types of accounts, e.g. money market, savings, interest-bearing checking, that are materially similar but considered as individually insured to $250k by the FDIC. If your bank cannot help you, you could open an account at a large the bank that’s unlikely to fail. If there is difficulty opening the account, arrange a meeting with someone. They are generally interested in meeting with people with $1M net worth and are interested in putting $250k in a deposit account.
The risk of a banking crisis or the USD tanking during the next 24 is very remote. USD is the reserve currency for the world. I think this is like planning for a meteor devastating the planet. It has happened; it will happen again, but the risk of it happening in the next 24 months is too low to consider. You are more likely to have an accident that puts you into a coma or something, so it’s more important to have a financial and medical power of attorney set up. These are all remote risks that I would not worry about.
If you want to invest the money but want to avoid businesses with practices you disagree with, just invest in individual stocks, or invest in local real estate or a local business you understand and approve of. If you’re going to use most of the money for your primary residence within 24 months, forget about investing, and just put it in a good bank. Focus on getting the property you want for a fair price and on engineering, and don’t worry much about very unlikely perils.
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.
You got rich off of Bitcoin which destroys the environment just as much as Apple.
The money you deposited in the bank isn’t sitting in a vault. Banks don’t just loan out the money deposited. The bank is putting part of your money in the market.
My biggest concern about Apple, Amazon, Tesla, and Walmart is their history of abusing workers.
Bitcoin uses magnitudes less energy than the financial industry companies, it doesn’t use any additional energy as it scales-up, and most of that is renewable energy. So bitcoin is definitely the ethical option for the environment when it comes to non-physical money (despite the disinformation on the net about this).
I prefer to put my money in credit unions (non-profit banks in the US) that do not invest in war, animal exploitation, or fossil fuels. Most credit unions loan out their money to their local community to support small business. That, bitcoin, and buying stocks in other ethical companies has been my approach to ethical investing.
Bitcoin uses magnitudes less energy than the financial industry companies
No, Bitcoin uses 100,000 times the energy per transaction compared to credit cards.
https://buybitcoinworldwide.com/bitcoin-mining-statistics/
It absolutely does use more energy as it scales.
It is currently using 2% of all electricity in the US.
https://www.eia.gov/todayinenergy/detail.php?id=61364
The carbon emissions from Bitcoin mining are significant.
“To offset this footprint, 3.9 billion trees should be planted, covering an area almost equal to the area of the Netherlands, Switzerland, or Denmark or 7% of the Amazon rainforest.”
“During this time period, Bitcoin’s water footprint was similar to the amount of water required to fill over 660,000 Olympic-sized swimming pools, enough to meet the current domestic water needs of more than 300 million people in rural sub-Saharan Africa.”
This is misinformation.
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.
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 $
