Is my money safe at the bank right now? This is the question on many American minds. Over the last week, three banks failed or entered liquidation: Silvergate Bank, Signature Bank, and Silicon Valley Bank (SVB) (the second-biggest collapse in U.S. history).

Here’s some high level points that I shared with clients earlier this week.

Why did these banks collapse?

The banks failed due to 3 primary reasons:

• Who the banks did business with – crypto, startups, venture capital firms
  
• The lack of client base diversification – the banks’ exposure to these types of clients was extremely high
  
• The underlying assets “insuring” the deposits that were put under pressure as the Fed raised rates

Is my money safe in my checking and saving accounts at my bank?

• If you have $250,000 or less at a bank, your money is federally insured. You are good.
  
• The government stepped in and said it will cover all deposits over the $250,000 for the collapsed banks’ customers. They are acting quickly to do what’s best for the economy and maintain the integrity of the financial system.
  
  While this does not a guarantee a bailout for banks in the future, it is highly likely that the government would step in again if your bank were to have similar issues.
  
• Banks are in much better shape than they were in 2008. This is especially true for the big names in banks like Citi, Wells Fargo, and JP Morgan. They are highly scrutinized, and stress tested frequently. The three banks that collapsed are smaller, regional banks.
  
• This recent article, Is My Money Safe?, can help you review your personal situation.

What does that mean for markets in the short run?

The market doesn’t like uncertainty so it’s fair to say to expect volatility.

What about the long run?

Some economists believe this might be a good thing in the long run for the economy. Why? Because it might convince the Fed to stop increasing interest rates. Or at least, slow down the aggressive strategy the Fed has been using.

If you are looking to learn more, check these articles out:

8 Questions on the Banking Panic of 2023 (this one does a good job at covering the situation)

Silicon Valley Bank’s Meltdown Visualized

All the Things We Do Not Know About SVB

U.S. Inflation Cooled in February as Fed Confronts Bank Failures

Here’s what else I’ve been reading:

The 15 Worst Tax Reduction Techniques

We all hate seeing our taxes go up, but sometimes the cure is worse than the disease. People will try all sorts of things that sound good, but aren’t effective in accomplishing the goal – keeping more money in your pockets after taxes.

#5 Getting a Big Mortgage, #10 Whole Life Insurance, and #13 Forming an LLC are common tax reduction techniques I hear floating around out there. Read this article to learn more about why they are ineffective.

One Way Students Can Save Money on College Tuition: Head to Europe

Worried about college costs? Here’s another option.

All the Asian Actors and Moments that Stole the Show at the Oscars

When I was younger, the only faces that looked like mine on tv were minor characters like the butler from Falcon Crest or Miss Chung, Arnold’s teacher) from Diff’rent Strokes. In the movies, there was the rare Mr. Miyagi. Otherwise, if there were Asian characters, they were the villains, the trusty sidekick who usually died, or the quirky best friend. It was rare that they were the main characters. It’s amazing to see how things have changed.

For all the little boys and girls who look like me watching tonight, this is a beacon of hope and possibilities. This is proof that dreams dream big and dreams do come true.

Michelle Yeoh

In the Media

Financial Wellness for Women: An Interview with Betty Wang

As you know, I am passionate about financial wellness for women. I had the opportunity to share my thoughts with Pure Healthy Living.

Do Women Need Bigger Emergency Funds than Men?

HerMoney shared my comments on this issue in a recent post.

Fun Stuff

Happy International Women’s Month! I started the month by shaking hands with Vice President Kamala Harris – the first female, first African American, and first Asian American Vice President. Thanks to my friend Melissa we were able to see the VP up close. Thanks, Melissa! 😘 And, unexpectedly, we received a tour of Air Force Two. Amazing way to celebrate women! 🎉🎉

One more thing. If you are looking for a great read, Tomorrow, and Tomorrow, and Tomorrow: A novel was EXCELLENT. Highly recommend.

Thanks for reading! Please let me know if you have any questions.

Disclosure: BW Financial Planning is an Investment Adviser registered with the State of Colorado. All views, expressions, and opinions included in this communication are subject to change. This communication is not intended as an offer or solicitation to buy, hold or sell any financial instrument or investment advisory services. Any information provided has been obtained from sources considered reliable, but we do not guarantee the accuracy or the completeness of any description of securities, markets or developments mentioned. This communication is for informational purposes only and should not be construed as legal, accounting and/or tax advice. Should you have any questions and/or issues in these areas, please consult your legal, tax and/or accounting adviser.