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.
Thanks. Is a tax accountant different than a CPA? That’s definitely my priority now.
I’m still waiting for them to pencil me into a meeting, but so far it looks like three’s not much I can do to reduce my capital gains tax burden.
If I was you, I might take a risk and start a business, maybe abroad, maybe in USA
Its awful if you just want to relax and retire, but if it works out then your retirement won’t just be comfortable, it’ll be luxurious and it’ll extend to your family (if you so wish)
I started a business a few years ago :) I don’t like living idle. Retirement for me means contributing to open-source.
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.
Expenses are kept low by living in a low-cost-of-living country and volunteering several months per year at intentional communities with work-trade programs. Usually you do 20 hours of volunteering (per week) in exchange for free food and accommodation. Great way to travel, meet cool people, and lower your annual expenses.
My plan is to rent out the condo half the year, which should cover condo and tax expenses. I’m still looking, but I think the combined taxes & fees would be <$4,000 per year, and I can charge $1,000 per month if I get a condo in a good location (in South America, taxes are very low). I don’t expect passive income, but I do think it’ll pay for itself and give me (and my friends) a place to sleep for free whenever I visit the city.
Also you probably don’t want most of the money in the condo, so you may have a mortgage as well.
I don’t like debt. I’m currently thinking of putting $500k into the land and $300k into the condo. What would be the benefit to getting a mortgage?
What’s up with banks rejecting you
If I had to guess, the requirement for no phone number and TOTP preclude OP from a lot of the big institutions in the US. I know none of my banks offer TOTP, only SMS. I’d be really interested in seeing the hundred banks which don’t require a phone number.
My guess is OP has found some smaller credit unions which do support the requirements, but they may be more risk adverse, and the Bitcoin earnings may look like illegal gains? Also some credit unions only allow certain members, such as NFCU which is only available for military service members and their family.
Correct about credit unions, but not about the bitcoin earnings. I was denied before I was asked the source of my income or even how much I’d be transferring-in. This was an application just for a standard savings/checking account.
Unless the AI that is denying me learned that I used to work for a company that does cryptocurrencies. Or read my blog and saw the word “bitcoin” and put me in a “high risk; deny” bucket. It scares me to realize that’s possible in 2024 :(
Good guess! I’ve also never seen a bank do TOTP
I have 3 banks that use TOTP. It’s common in credit unions.
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.
Sure, but that’s not what’s happening.
I’ve submitted my passport and all the KYC info required by law. I was denied before they ever asked me for the source of the income. This isn’t related to KYC/AML. If it is, then they’re not doing their job of even trying to collect the data. I’ve asked if they need any further documents, but I’m just told to apply again. I apply again, it doesn’t ask for additional documents, and I get denied. Every time.
Interesting! Authentication sounds probably right
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.
You sold the Bitcoin, you’re free of the HODL mentality, and can think rationally again. You don’t need to dismiss information because it is critical of cryptocurrency and is counter to your financial interests anymore.
Do you also think smoking tobacco doesn’t cause lung cancer? Or that burning fossil fuels doesn’t cause climate change?
I am the one thinking rationally. You seem to be incapable of detecting junk science published by big corporations.
Even in the recent Silicon Valley credit union failure. Where companies had 10s of millions in their accounts, it all got covered. It’s literally been decades since the government let account holders loose money in a bank failure. The PR is just too bad to let it happen.
Now in investment banks that’s a different story. You control the investments. Not the bank. The value of your account isn’t at risk if the bank goes down. Your assets can and would simply be transfered to another investment bank.
Investing isn’t condoning. Avoiding certain companies will only cost you money. It won’t effect them at all. A broad total stock market fund is the simplest option to start with. After you do more research, you can spread out to more places.
And the BTC network burns massive amounts of energy for no practical purpose.
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 $
Synaspe collapse is horrible. Thanks for the link!
Fidelity and Vanguard have the cash for auditors (and lawyers to fight against me…).
Cash Management Accounts are labeled as such. They can act as a savings or checking account depending on the offering company (Vanguard is savings, Fidelity is checking.) They are a wrapper that shuffles cash between accounts but you don’t have to do the shuffling. It is easy to buy CDs and bonds from the accounts, but not stock.
Don’t use a new company, in a new class of companies. Use an established player.
And thank you for the advice. It is always good to challenge one’s conclusions and deliberately research the negative side of companies before doing business with them.
As others have said, the $250K limit seems to not exist. I also would not push it. The limit seems to be an issue for companies doing payroll. It is also per account. A CD and a savings account are different “buckets” with regards to the FDIC limit.
Happy to hear your spending is tight. Great habit!
Only 1mm I wouldn’t sweat it
The $250k FDIC insured amount is per account ownership category. These categories are Single accounts, Joint accounts, certain retirement accounts like IRAs, Trusts, corporate accounts, corporate or partnership accounts, employee benefit plan accounts, and government accounts.
Since you are planning on using most of it for retirement, it would seem like opening an IRA at a couple of the banks you already do business with are the best bet.
This is true of SIPC too. See my original comment for details.
I’m planning on using most of it to buy land as soon as I can. I do have retirement funds, but I don’t plan to contribute to them from this windfall – other than my usual yearly max Roth IRA contribution.
My only comment on that is that a Roth is great if you’re going to live in the US or a country that acknowledges the Roth as a retirement vessel. If not, it’s a huge liability and may need to be liquidated. I’d check specific countries to see unless you’re sure you’ll be in the US the whole time.
I’m still a US citizen. Even if I live abroad, I have to pay capital gains taxes to the US. That’s why I use the Roth IRA.
Why would it be a liability?
