Here's the letter I wrote to my family.
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Here's the letter I wrote to my family:

I was so upset about the banking downgrades yesterday that I felt obligated to reach out to the people who are closest to me and talk to them about this situation. Some of them will listen, and some will probably roll their eyes, but my conscience would not be clear if I did not make every effort to inform my friends and family about what's going on.

I want to share with you the same advice that I gave to them. The email I sent them is as follows:

Dear Loved Ones:

It's me again, your friendly family conspiracy theorist. 🙂 All jokes aside, I'm writing to talk to you about something very serious: the banking system.

You probably know that some banks out in California failed earlier this year. It probably seemed distant because you don't live in California and you don't bank there.

But now, the writing is on the wall for a whole bunch of other banks in the United States. Yesterday the news came out that 27 American banks did not have a good financial outlook. The one where I have one of my personal accounts is one of them. I'm not going into lists and details - you can easily find it on the internet, and I think it will seem more real when you see that these downgrades were discussed on every major news outlet yesterday.

You may find that your bank is on the list of banks not doing so well too, and you may not know what to do about it. I've been writing about things like this for more than a decade, and I have some advice for you. None of it is outrageous - it's all perfectly rational stuff you can do pretty easily.

1.) Make sure not to put all your eggs in one basket.

I strongly recommend you diversify all personal and business finances. For example, I have three business accounts and two personal accounts. They're at different banks. I do this because if one bank fails, the other banks may still be okay.

Yes, the FDIC will most likely get your money back to you but it could take months, and you'll be without it that entire time. If your money is evenly distributed, you'll have something to fall back on.

I'm not saying you need to rush out and withdraw every penny in a panic. I'm saying you need to be wise and spread your money and bill payments out among multiple accounts.

2.) Don't think you're safe or exempt from this.

You may be looking at those lists thinking, "Oh, my bank isn't on there. Everything is fine!" Well, the day before yesterday NOBODY'S bank was on that list. It can change at the drop of a hat. You may think that because you are at a big bank you're safe because they are too big to fail. You may think if you are at a small bank you're safe because it's more personal and you know the people there and they know you.

I'm here to tell you that I don't believe there's a bank in America that is totally safe. That's why you must pay attention and be prepared to make changes quickly if it's warranted.

3.) You need a plan for your savings.

If you have a savings account, as in money you don't spend or dip into on a regular basis, I suggest you create a plan to protect it.

  • Keep some of it in cash. I always keep a fireproof safe in my house with cash in a variety of denominations. If things go haywire in the banking industry, I have cash for buying groceries, medicine, and gasoline.
  • Keep it in different accounts. If you have way more than you want to have kicking around the house, please consider following the advice in point #1 and dividing it into different accounts at different banks. The FDIC only covers 250K in deposits so you do not want to go over that amount in one bank and you don't want to risk everything by trusting just one bank.
  • Invest some of it in tangible assets. Now might be a great time to invest in some goods that you know will hold value. Extra food, tools, work-related items, and precious metals are all great ideas, depending on your budget. Get things that you either know you will need and use or things that you know will hold value.
  • Talk to an expert without skin in the banking game. One of my friends told me, "I called my bank, and the investment guy there told me it was nothing to worry about." I was horrified. Why on earth would you trust the people who want to keep your savings right there at the facility you're concerned about? OF COURSE they're going to say everything is fine! They want to keep their jobs. I have advisors I trust, people who understand the fragility of our system and you can call them right now at 866-517-1257 to book an appointment and just ask questions. It won't cost you anything, and I'd feel so much better if you just discussed your options with them.

What do I do? I personally put most of my savings into precious metals. No, I won't be able to easily "spend" that right away, but if I did need to, it's always going to be liquid. If my thousand dollars in cash is only worth a hundred dollars later, I still know my thousand dollars of gold will be worth the same or more. If you want to learn more about that, go here.

I care about you and your future. I worry about you because I think times are going to get a whole lot harder. I don't want you to be taken by surprise. You may not act on my advice but I'd feel horrible if something bad happened and I'd never said a word.

Please take steps to protect yourself. This whole thing seems like it's speeding up and I don't want you to run out of time and wish you'd acted sooner.

Love,
Daisy
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