After the collapse of SVB and Signature Bank, I decided to review our existing banking relationships and see if we are well positioned to weather another potential bank run. I also wanted to share with you the ideal number of banking relationships to have to feel safe and sound.

When I first started Financial Samurai in 2009, I recommended having three banking relationships.

• One for operations / working capital
• One for borrowing
• One for investing

Back in 2009, we were in the middle of the global financial crisis. Lehman, Bear Sterns, Washington Mutual, and a number of other financial institutions were failing. Spreading out your deposits if you had more than the FDIC-insured $250,000 per bank and ownership was a rational move.

At the time, having three banking relationships was more than enough to protect my cash. The main reason why I wanted three banking relationships was for optimization purposes.

Today, I still feel three banking relationships is the ideal number to have for those who have more than $250,000 in cash, investments, or loans. For those with less than $250,000 in assets or liabilities, I’d go with at least two banking relationships and work your way up to three.

During the pandemic, we learned that Americans can save a lot more money if we want to. Take a look at the historical American personal saving rate chart according to the U.S. Bureau of Economic Analysis and the St. Louis Fed.

After lockdowns began on March 18, 2020, the U.S. personal saving rate skyrocketed from a respectable 9.3% pre-pandemic to an impressive 33.8% in April 2020! Americans suddenly decided that saving money during a time of great uncertainty was a priority. So that is what we did.

As the initial six-month shock of the pandemic began to wear off, Americans decided to lower our saving rate to 13.3% in November 2020. Then, when news of a new strain of COVID emerged in the beginning of 2021, Americans decided to increase our saving rate again, reaching 26.3% in April 2021.

Since April 2021, the personal saving rate has steadily declined thanks to vaccines, experience, and the desire for most of us to get on with our lives.

Today, the U.S. personal saving rate is around 3.1%, which is a low not seen since January 2008.

Recently, I was told by a producer of a certain podcast that I was being overly frugal. This comment came after an interview covering my upcoming book, Buy This, Not That was done.

I had thanked her over e-mail, pointed out a spelling error in my name in the show notes, and also asked her to tell the host I had finally gotten a headset for potential future interviews. Here’s what she wrote:

“Re mic: I totally get the frugality mindset but treat yourself to a Shure MV7 or ATR2020 and write it off against tax. You’re a fab interviewee who deserves a better mic.”

Been Battling Frugality For A While

At first, I was slightly taken aback by the comment because I’ve been trying hard for the past couple of years to get out of the frugality mindset. I’ve admitted I suffered from frugality disease. So to be reminded that I may still be battling this affliction stung.

This year, at age 45, I’ve finally entered the decumulation phase of my life and have purposefully been spending more on things I care about, e.g. food, children’s education, and nicer travel accommodations. It’s been hard to spend more than usual, but I’m making progress. Heck, just the other day I ordered toro sushi instead of the usual salmon sushi!

Furthermore, I already have an external microphone for doing podcast interviews which I purchased a couple of months ago. It had been working great over multiple interviews until this podcast session. When we connected, the host said he heard an echo whenever he spoke. Therefore, he wanted me to put on a headset.

Unfortunately, I didn’t have a headset that could plug into my laptop because I didn’t have an adapter. I ended up not using my external microphone and doing the interview with my Apple earbuds plugged into my iPhone. As a result, the sound quality wasn’t as good as it could have been.

I don’t think I was being overly frugal. I’m just a newbie at doing podcast interviews and didn’t have the ideal setup. I’m also technically challenged. Or, maybe I am actually cheap and just don’t realize it!

Practicing Stealth Wealth is the act of keeping your overall wealth a secret. It helps with keeping haters at bay and your family safe. For your well-being, it’s much better to blend in with the majority than stick out when it comes to your finances.

When it comes to money, people have all sorts of ideas. Think about this situation. The security detail for Elon Musk’s seven children must be extraordinary.

Given Elon has a ~$300 billion net worth, his family may be constantly at risk. Luckily, Elon could easily pay a ransom in the tens or hundreds of millions of dollars, which ironically makes his family even more of a target.

Not sticking too far out of the crowd is wise. However, is it equally wise to be stealthy with your donations? To appease his haters, he could announce a $10 billion donation to helping eliminate poverty where he lives. If so, how can you still hate someone after giving that much?

Even so, let’s discuss why we should still probably keep our donations a secret.