It’s been a bumpy ride for banks lately – but context is everything! That’s why Josh Bretl, our fearless host and founder of FSR Wealth Strategies, is here to decode the collapse in recent weeks of Silicon Valley Bank, Signature Bank and First Republic.

When we talk about these bank failures and the role of the FDIC (Federal Deposit Insurance Corp.) in bailing them out, it’s important to understand the customer base of the institutions involved.

You’ll learn on this episode of Retirement Equals Freedom about the three key factors that have driven topsy-turvy ledger sheets and exposure for banks in general – but most especially among those serving primarily high-tech players holding lots of cash.

Interest rates at an all-time low converged with pandemic stimulus checks that produced a massive influx of cash deposits.

What happened next (you’ll have to tune in!) had everything to do with how those deposits and other cash holdings were invested and what occurred when interest rates started to rise.

Some banks – like those that specialize in serving the tech industry – have proved especially vulnerable. Risk mitigation is critical for just such situations, explains Josh, but you can rest assured that the banking system overall is fundamentally sound.

And remember: any account with a balance of up to $250,000 will always be covered by the FDIC.

It’s been a wake-up call for many of us who have been in an economic “dream state” the past 15 years, but there are fortunately lots of great financial planning strategies to help you navigate our new economic realities.

Josh and his Co-Host, Dave Schmidt, also leave you with some bonus advice to help manage the stress: Be kind. Go out there and live your life. We can make the world a better place!

Want to understand why it’s actually a bad thing for yields on investment vehicles like U.S. Treasury Bonds when interest rates go up? Listen to Episode 19 of Retirement Equals Freedom: "Do Bonds Have a Place in My Portfolio?"

If you’re feeling queasy about the recent banking roller-coaster, now may be the time to chat with Josh directly. He and the team at FSR Wealth Strategies are dedicated to ensuring your personal finances are safe – and growing! Click here to schedule your free 15-minute call.

Finally, here are a few fun links to explore if you’d like to dive into our podcast community:

• Sign up for FSR’s page-turner of a newsletter here.
• Join the R=F private Facebook group at this link.
• Visit this pod link resource to get one-click access to your favorite platform for listening to past episodes!
• You haven’t read "Harry Potter and the Sorcerer's Stone"? Book 1 is the very best!
• Click here for more about the behind-the-scenes FDIC negotiations that brokered the deal for Chase Bank to take over First Republic.

Where banks were preparing for massive

losses, what actually happened was there was a

massive cash inflow to banks.

The amount of cash sitting on a bank balance

sheet went up tenfold, overnight, it felt like.

So a bank that had a hundred million dollars

all of a sudden had $120 or $130 million dollars.

That sounds like a good problem to have, but they have to do

something with that money.

they can't let it just sit there.

They have to earn interest on it, otherwise they're

going to be losing money.

You have to weigh everything together.

But overall, it was kind of a good wake-up call for people

to get back to fundamentals.

And I feel like, actually a lot of 2022, and even in

2023, it's been that wake-up call out of the dream state,

that was the last 15 years.

It's been a bumpy ride for banks lately,

but context is everything.

that's why Josh, our fearless host, is here to decode the

collapse in recent weeks of Silicon Valley Bank, Signature

Bank, and First Republic.

When we talk about these bank failures and the role

the FDIC had in bailing them out, it's really important

to understand the customer base of these institutions.

Interest rates at an all time low, combined with pandemic

stimulus checks, produced a massive influx of deposits.

What happened next had everything to do with how

those deposits other cash holdings were invested, and

what occurred when interest rates started to rise.

Risk mitigation is critical for these situations, but rest

assured that the banking system overall is fundamentally sound.

It sure has been a wake up call for many of us who have

been in an economic dream state the last 15 years.

But fortunately there are many great financial

planning strategies that can help you navigate our

new economic realities,

And hey, Josh and I leave you with some sound advice on how

to deal with all this stress.

Be kind.

Go out there and live your life, man.

Because hey, we can make the world a better place.

You're listening to the Retirement Equals

Freedom Podcast.

Your host, Josh Bretl, is the owner of FSR Wealth Strategies.

And for the last 20 plus years, Josh has been helping

fine folks like you, gain the confidence to make retirement

the best part of your life.

And me.

Who the heck am I?

Oh, hey, I'm Dave!

Josh's longtime friend, co-host of the podcast and

big fan of dried mangoes from Costco and Sam's Club.

You gotta try 'em.

All right, all right, all right, enough of my voice, let me let

you let me end this introduction so we can get on with the show.

FSR Wealth Management is a registered investment advisor

located in Elmhurst, Illinois.

Information and opinions contained in this audio

have been arrived at by FSR Wealth advisors.

All information herein is for informational purposes

and should not be construed as investment advice.

It does not constitute an offer, a solicitation or recommendation

to purchase any security.

FSR is not providing legal, tax, accounting, or financial

planning advice in this audio.

These views are as of the date of this publication

and are subject to change.

Maggie's in first grade.

Maggie loves to read, but she's in first grade.

She doesn't have that same level of experience.

Naturally.

So Harry Potter, there's certain words,

plus it's a British author, there's just certain words

that she can't let go without asking, "What's that mean?

What's that mean?"

So it's like every page is like 20 questions, "What's that mean?

What's that mean?"

We try to teach her context and just listen.

I've now gotten the fact that I'm not going to answer

you until the page is over.

And then we can go back, if there's anything you didn't

understand, we'll talk about it.

There was a thing in the book yesterday where they're talking

about they heard somebody whooping in celebration.

And I wouldn't go back and answer that to her.

Because I was like, she understands what whooping is.

I mean, the girl, whoops her whole life.

And so we're sitting at breakfast this morning and

we're talking about Harry Potter because I read the books

and Missy didn't last night.

So she was asking, "What'd you learn in Harry Potter?"

And Maggie goes, "Dad wouldn't tell me what whooping means."

oh, no.

All four of us are going, "Whoop-whoop!"

She goes, "Oh, okay."

That's awesome.

That's funny.

Landon sees commercials for Harry Potter.

He sees pictures of the amusement park,

and he's intrigued.

I'm slightly concerned he wouldn't enjoy it.

I don't read books.

I'm like Jason Bateman, books are just foreign language to me.

Without a doubt.

I don't know, how do I introduce him to it?

I actually think Harry Potter is

right up your alley.

The two of you could read books.

Just start with book one.

Book one is the easiest.

It's Missy's favorite.

As she says, all the later books, they have dark

symbolism and all sorts of...

Now I don't understand symbolism, I barely

understand what a metaphor is.

But Missy's very good at English, I'm not.

But she says, book one's phenomenal.

It's a great...

Between the fantasy and the descriptive characters and

just the thought process, both you and Landon will love it.

It's an easy read.

You can do it a heartbeat.

And if you don't like to read, the audiobook is one

of the best audiobooks I've ever heard my entire life.

Really?

The narrator is great.

Are you looking at that name now?

Yeah, I kind of want to play it here.

I kind of want to put a clip of it in there for you.

All right.

This is the audiobook here real quickly.

Yeah, sure.

make you, get out of the way,

Potter!' Harry made up his mind in a split second.

Before Snape could take even one step toward him,

he had raised his wand.

'Expelliarmus!'"

the narrator, whoever the actor is

reading this, I think it's Jim Dale or something.

He's phenomenal.

It's Jim Dale.

I'm looking on my screen here.

But do it that way.

Listen to it.

Okay.

Buy the audiobook.

It's worth it.

It's really cool.

In fact, try your local library and see if you can download it.

We're doing an event at the Glen Ellyn Library.

Maybe I could just get it there.

Good call.

It's worth it.

You both, you and Landon will thoroughly enjoy it.

I'm assuming Carla has read it.

No.

She stays away from anything fantasy and supernatural.

Really?

Even as a teacher, I figured you'd have to

know all that stuff.

No.

She is so boring.

I agree.

She's like, if they make books about "The Real Housewives",

maybe I'll read them.

But not to good stuff like Harry Potter and stuff.

I'm going to get my butt kicked for imitating her.

I'm worried about you leaving that in, but we

know she doesn't listen to the podcast, so it doesn't matter.

It's true.

If anyone, Annette, if you're listening to this,

please don't tell Carla.

Yeah.

And guess what, Josh and I are going to have a really

good lunch, but you'll never know because you don't listen.

All right.

Let's not tempt them.

Not tempt fate.

It's true.

Leslie may actually be talking to our wives behind

our back and telling them everything that we say.

Leslie, we've talked about Leslie before,

our show notes writer.

We're going on vacation to San Francisco after school is out.

We wanted to take the kids somewhere different and we're

going to stay up in Muir Woods and it's going to be cool.

Dave Schmidt:

"Everywhere you look.

Dave Schmidt:

Everywhere..."

Our kids don't care about that.

Right.

I've been to San Francisco a bunch of times.

It's been probably 10 years since I've been there.

But Leslie lives out there and I asked her if she had

any recommendations and in her own words, snowballed me.

And it was the most helpful.

And Missy and I have checked out books from the library.

We've read all these websites.

But Leslie's 30-page email, this is what it felt like,

was the most helpful thing we've ever read to it.

If anyone's going to San Francisco, let me know, I will

forward you Leslie's email.

It was great.

Leslie is just awesome.

Hidden Gem.

I don't actually don't want other podcasters and

marketing people find out about her because I want to

hog her out to ourselves.

Either we need to give her more work....

Let's just triple our podcast output then.

We're going to triple it?

Let's triple it.

I like it.

Tripling our podcast output's a

lot like these recent bank failures, I think.

No, that's implying that we'd fail on our adventures here.

I actually wanted to talk about this.

This came in a headline in the news recently.

What is today's date?

Because we're recording this.

We're recording this on May 2nd.

And recently there was another bank failure over the weekend.

First Republic Bank, which is a fairly large bank, was

taken over by the FDIC and sold overnight to JPMorgan Chase.

This is the third bank failure of the year.

Third big bank failure in over the year.

Earlier in March, we had Silicon Valley Bank out, not too far

from Leslie, in Silicon Valley.

We had Signature Bank, a New York bank, and then we

had recently First Republic.

They happened a little bit differently, but they

seemed to come on quick.

They were kind of all of a sudden out of the blue.

And I wanted to spend a few minutes talking about

why this is occurring and why we're seeing this now.

Because we haven't talked about this for a long time.

It's been '08, ' 09, '07 a little bit, when we started

seeing some of these things.

And it's a different scenario.

It's a different ballpark.

I wanted to kind of set the stage of why this is happening

and what's going on and where we think it's going in the future.

This is a timely podcast.

The facts could change.

And if you're listening to this three years from now.

This could be a whole different world.

Can I say one quick thing?

In 2005 when I first...

2005?

Yeah.

When I got my job at the bank, everybody around me, including

you, said, "Oh, good Lord.

The chances of that bank failing are high."

I would like to say for the record, I have not ever

worked for any of those three banks that just closed.

I cannot be blamed for this one, Josh.

Charter One, which is where you worked...

Who bought Charter One?

Citizens Bank and then Fifth Third

or BMO bought Citizens.

Actually, David, it's a great way to put it.

Even banks, as a general rule of thumb, are so strong

that even you working there couldn't bring one down.

I know.

It took the likes of some really bad

decisions and some different things that went out there.

Thank you very much for getting

that on the record.

Yep.

No.

Banks are very strong.

But I do want to talk about what's going on here

because these are unique.

This is something that people didn't see coming here.

Let me talk a little bit about how a bank works and

how a bank makes money.

When you deposit money into a bank, they have to do something

with that because they're going to pay you interest.

Now, it may not be a lot of interest, but they're

going to pay you interest.

Let's say they're going to pay you 1%.

They have to take that money and they've got to put it somewhere

else so they can earn more than 1% because not only do they have

to pay you 1%, but they've got to pay their employees, they've

got to buy property, they've got those giant buildings

they got to take care of, and they have to make a profit.

They may need to earn two and a half percent.

I'm making numbers up here.

3%, 4%, whatever that might be, so they can pay you 1%.

Make sense so far?

So far so good, my man.

What they do is they're going to make money

in a couple different ways.

One is they're going to charge fees, and fees come

out of all sorts different places, but that's not what

I'm talking about today.

They're going to earn interest.

And they earn interest in one of two ways.

One is they send loans out.

They'll make a loan.

You'll deposit your money, they'll turn around and

loan it to somebody else for whatever their use.

And loan rates might be 4% or 5%, whatever the bank

charges, so they can turn around and pay you 1%.

They can't usually loan out all of their money.

If a bank takes in, let's use a number here, let's

say a hundred million dollars, they may be able

to only loan out 60 million.

They've got to do something else with that 40.

Does that make sense?

What they do traditionally is they will use what

they call Tier 1 Capital.

Tier 1 Capital is like risk-free capital.

It's US Treasuries.

It's a very common thing.

It's really high grade bonds and investments.

Makes sense so far?

Yeah, Roger that.

Roger that.

This is riveting stuff.

This is actually fascinating stuff, too, to me.

Yeah, it would be fascinating to you.

Hashtag tax

Now, what happens though is during the

pandemic, everybody thought that we were going to have

a mass economic issue.

Banks started preparing for losses like crazy.

They were allocating cash to get ready for losses.

But the government came in and said, "Whoa, we're going

to stimulize this thing and we're going to give more

stimulus than we've ever given in our entire life."

Where banks were preparing for massive losses, what

actually happened was there was a massive cash inflow to

banks, bank balance sheets.

The amount of cash sitting on a bank balance

sheet went up tenfold, overnight, it felt like.

So a bank that had a hundred million dollars

all of a sudden had $120 or $130 million dollars.

That sounds like a good problem to have, but they have to do

something with that money.

And they can't let it just sit there.

They have to earn interest on it, otherwise they're

going to be losing money.

Follow me so far?

Yeah.

They weren't loans.

You can't all of a sudden come up with that amount

of loans overnight.

So they were putting it back into treasuries.

Okay, treasury is a what now?

Treasury is a government bond,

a government note.

You are loaning money to the US government.

They're called US Treasuries, and they would pay you

interest in return.

Got it.

Now, back then, the interest on those treasuries

were really, really low.

Back then, as in like 2020-ish?

2020, 2019, 2018, 2020.

And a five-year treasury was paying one and a half percent.

Maybe two.

Nothing crazy.

Now, fast-forward to today, at the end of last year, the

end of 2020, treasuries were paying four and a half, 5%.

But these banks were sitting on all of these old

treasuries that were still paying them one and a half.

Now what happens, we've talked about this in our

bond episode, if you remember that riveting episode,

bonds work on an inverse relationship to interest rates.

As interest rates rise, the value of bonds has to fall.

Has to.

Mathematically.

Mathematically.

These banks' balance sheets were showing a giant loss

in their treasury portfolio.

Now, as long as they held them, and if it was a five-year

treasury, as long as they held them for that five-year period,

they'd get their money back.

But they were showing this huge loss as it came into play.

Now, the bank regulators, they don't look at that loss as

far as Tier 1 Capital goes.

And it's not really a big deal.

But these banks are only earning one and a half percent.

Now, in the world of SVB Bank, is a great example here.

SVB Bank had a lot of really, really high-end depositors.

They worked specifically with these Silicon Valley

companies that would have-

it's hard to say.

It is.

And it's even harder to say when

you follow up with Silicon.

Specifically Silicon.

Josh Bretl:

Specifically Silicon.

Josh Bretl:

Silicon Valley Bank specialized in startups that

Josh Bretl:

had large cash balances.

Josh Bretl:

These companies would have millions of dollars

Josh Bretl:

in their accounts.

Josh Bretl:

And the FDIC insurance was only 250,000 bucks.

Josh Bretl:

So what happened was the report came out that SVB Bank was

Josh Bretl:

losing money because these treasuries were underwater.

Josh Bretl:

Well, all the depositors said, "Hey, I have 5 million

Josh Bretl:

of uninsured deposits."

Josh Bretl:

And so they said, "Hey, we're going to move this money."

Josh Bretl:

And moving money in a bank nowadays is as simple

Josh Bretl:

as picking up your phone and transferring money.

Josh Bretl:

Money would leave overnight.

And they can't really control that.

They can't control it, it's the clients' money.

It's the customers' money.

To the customers' viewpoint, they felt nervous.

They felt, "Hey, what's going on here?"

And we had these uninsured deposits and we had to make

sure that they were safe.

Now, if you look at the safety of banks.

All of a sudden it brought out the safety of banks

that came out there.

And the FDIC came in and they shut SVB and

Signature Bank down, kind of the middle of the day.

And they said, "Hey, we're going to take..."

They created what's call a bridge bank.

And they did all these things and eventually somebody else,

another bank, bought them.

But to save those deposits, the government had to come

in and say, "Hey, there's no more uninsured deposits, SVB.

If your money is at SVB, we will insure all of it."

And what that did is that just kept everybody else

who was still left to leave their money there.

Otherwise, the whole thing would've collapsed and have

been a massive calamity.

Do you know percentage-wise of how much

assets was taken out, how much money was taken out?

I did read that, that number is public.

It was a pretty high number, and it was actually

organized via social media.

Depositors at the bank went into a Reddit and-

"Hey, we need to pull money out.

Did you guys see this?

We're transferring money."

Stuff like that.

Which is all legal, it's all legitimate.

Totally.

And it's understandable.

But the Federal Reserve has not done them any help

because of the fact that they're the ones raising

interest rates like crazy.

The treasuries are built off of and all these

things are built off of.

When they have that giant loss in their portfolio,

which isn't truly a loss because they have that money

sitting there, it's become a giant problem as they've

had to pull money out there.

What we see here is we see kind of an interest rate issue.

We see a timing issue.

And we also see a poorly managed risk issue.

I'm having trouble today, a poorly managed risk issue

because they should have seen this interest rate risk.

But it was a culmination of, there's never been deposits

coming into a bank this fast.

From the stimulus, banks have never seen this

level of cash input.

Got it.

At a time when interest rates were

record lows, they had to do something with the cash.

They invested that cash in, low rate, US Treasury bonds.

Interest rates went up, had to show a loss, and that triggered

a fear as that came into play.

Now, the nice thing is all banks in the country are

pretty much going through the exact same thing.

But some of them have hedged their risk better, and they

don't have the same issues, or they don't have nearly the

level of uninsured deposits.

The average depositor, if the average depositor only

has 80,000 as opposed to 800,000, well the average

depositor is fully insured, it doesn't matter what happens.

That becomes really no big deal.

Now, Signature and First Republic, they had

similar things happen.

They're a little bit different than SVB.

First Republic, though has kind of been on the radar.

And what happened is the FDIC did not shut

them down overnight.

They did over the weekend.

And they arranged a deal.

The bank closed Friday.

On Monday morning, they announced, "Hey,

JPMorgan's taken it over."

And over the weekend, they negotiated that

whole deal as it came in.

Those First Republic depositors never really knew.

They just said, "Hey, now you're part of Chase."

Similar to, you did so good at Charter One, all

of a sudden overnight, they became part of Citizens Bank.

Citizens Bank.

Overnight though, we all of a sudden had our name

all over the, I think it's a Pittsburgh Pirates or...

Citizens Bank field?

All of a sudden you guys had a field.

Yeah.

We all of a sudden had a field.

And I'm like, "See, I did that.

Might be the Phillies.

I can't remember."

Oh, boy.

So do you know was Chase forced to take this on?

Or they asked to?

I don't know the specifics.

Boy, I'm just saying some fun words there.

I don't know the specifics, but I was reading an article

on FT, Financial Times, and there was a bidding war.

And Chase put in some money as did the FDIC.

Chase put in the most, or whoever, whatever happened here.

And this is something that you wouldn't see.

They don't really let Chase buy banks anymore.

Chase is too big.

But, First Republic, they waive that because they

can come in and support.

Emergency.

They have the financial strength to do that.

The government will be out some money on this.

They will lose some money, the FDIC.

But Chase is going to protect all the depositors

as that comes in.

So bank failures, they're always out there, but this

is kind of a unique one.

With the sudden influx of cash, the interest rate

changes, the way you can communicate on social media,

the way you can instantly transfer money nowadays.

This is something that I don't think we're done

seeing the end of this, but I think for the most part,

our financial institution, the the banks in general are

extremely well capitalized.

I think what adds a level of fear is just how

much uncertainty and volatility there is in general with

our financial institutions.

I'm not going to pretend like I know the fancy words for it, but

what I am more concerned with is how does this affect everybody?

Like the normal people like your clients?

And does this affect people that don't even have

money with those banks?

Talk to me, goose.

That's a great question.

I mean, this is part of risk management.

This is part of...

I know it's a great question, Josh.

Don't patronize me.

Talk to me Goose.

I like the line.

This is something as owning your retirement, when you

have to decide where you're going to have money sit.

This is part of that safety thought.

As you're looking at where you're going to stick your

money, looking at the strength of banks is something we always

want to take into consideration.

Now, I got more calls about FDIC limits the weeks after SVB

Bank, then I probably did all of the last 10 years combined.

I bet.

Banks are still strong.

Things are still in good stead out there.

But you still want to monitor that because this

could happen to a retiree.

And now what does that mean?

For the most people, it does not mean you're going to lose money.

People who are losing money are the giant corporations.

They're the giant investors.

The hedge funds, things along those lines.

For the average Joe, the average client that we're

working with, what it could mean is a giant headache if

you're not planned for it.

Because just because the FDIC comes in and insures you,

doesn't mean your money is back in your account overnight.

It might take a few weeks.

That's one of those, having those emergency funds,

having those things out there becomes really important.

And it's also spreading out your wealth.

It's spreading out the thought that there are certain

institutions that aren't impacted by the volatility

of interest rates the way banking institutions are.

But banking institutions also provide something.

They're not subject to the fluctuations of the market.

You have to weigh everything together.

But overall, it was kind of a good wake-up call for people

to get back to fundamentals.

And I feel like, actually a lot of 2022, and even in

2023, it's been that wake-up call out of the dream state,

that was the last 15 years.

Yeah.

Bank failures.

Bank failures, man.

Who would've thought it'd be such a riveting podcast topic?

Hopefully you understood it and I figure if

you understand it, the much more intelligent listeners we have

will definitely understand it.

I should be offended, but #truth.

What I was thinking was...

Hey Mr.

Josh, let's take a break.

You've been talking for so long and my ears are sore.

Let's not make them snore.

Listening shouldn't be a chore.

So let's get to know Josh and Dave and watch our ratings soar!

I have a hard enough time coming

up with actual topics to talk about on the podcast.

If you make me start researching bird sounds, I'm really

going to have an issue.

I try not to LOL it's my own music there,

because that "Chickedy" got me laughing, man.

That was good.

That was really good.

I went back to the pod deck here.

And I'm going to get serious on this one.

Oh, crap.

Look at your face.

I don't do serious well.

What do you feel people complain too

much about these days?

Something that really grinds my gears, maybe.

Yeah, what grinds your gears?

Okay, I'll tell you what grinds my gears.

I know you see it a lot.

I see it a lot, too.

I have always had a deep appreciation for those that

work in the service industry, because I did myself.

And you did to some extent.

I cannot tolerate when people are impatient with people

in the service industries.

Restaurants specifically.

It drives me bonkers.

And I just want to go say, "Hey man, how about you put yourself

into their shoes for a second?

You have no idea what they're going through."

I've always gone out of my way to be super friendly with

these people and never blame them for what's happening.

That, Josh, that is my complaint.

I do find it funny, and I realize this, that we're

complaining about complaints.

Yeah, that's so meta.

What people complain about too much

to me is other people.

Oh, I like that!

I feel like we've become a us-versus-them society.

It's always, "Well, they said that."

And, "They believe this."

it's gross.

We agree at 98% of things as a country.

If we could solve a few things working together, and

just stop complaining and enjoy and live your life and

be kind and go out there.

I think we can make the world a better place.

I feel a little John Lennon ask on this one.

Or Michael Jackson, Make the

world a better place.

To that point, I heard this, I don't know who said it.

It was probably on "SmartLess".

Somebody really smarter than I said this.

But people are so much nicer than we think they are.

Yes.

They're all going through the same stuff.

And if you would just not complain or judge or do

something, or sit and listen to them, I think we'd have

a whole new world out there.

A whole new world!

This is the Aladdin theme song.

Come on now.

Let's just let it go.

You got me.

Let it go.

Now we're singing.

So many Disney songs are just so relevant to life, am I right?

Disney doesn't complain.

No, but speaking of Disney, Dave

relates to retirees.

I was talking about bank failures and really

wondering how the heck you'll relate this to retirees.

Sure.

Now, first of all, you do know that my sister Julie and I can

sing any number of Disney theme songs at the snap of a finger.

"Little Mermaid" will do it.

You want us to do a duet?

I challenge the two of you.

Jules, if I can get you and Dave on this podcast.

Oh, man.

Well, with the new "Little Mermaid" coming

out, I'm curious to see how they kind of redo those songs.

Because we knew that one top to bottom, it was crazy.

Retirees, soon-to-be retirees, and just everybody

else out there who likes money, I can relate to you

with these bank closings.

In fact, that's why I just choose not to have money.

Instead, I've chosen to live a life of bartering.

Did you know that?

I barter everything.

Sleepy Hollow dolls?

That could be one of them.

But I've never made a mortgage payment in my life.

Did you know that?

Really?

I just go out and I play harmonica for

local charities, and then they pay for my mortgage.

Did you know that?

Oh, that's really nice.

Do you pay for your own food?

I do and yours.

Yeah, you do.

But see I don't-

when this podcast is done, I think

I'm buying you lunch again.

When you're not around, I don't

pay for food either.

Instead, I go out in the street, I let people stare

at my big legs and, in exchange, they give me food.

Did you know that?

I barter for food.

Yeah.

And finally, this one's one's pretty private, I

haven't really shared it with anybody, but the clothes I'm

wearing, I don't buy them.

No.

I go arm wrestle monks in Joliet, and they

buy me these clothes.

I, dear friends, had never trusted cash and said, "I

live a life of barter."

Am I totally setting you up for the best full house moment ever?

I'm going to try and distract

from what you just said.

Sure.

People, once you get to know Dave, you

wouldn't complain about him.

You would think he's a lovely human being.

There's really nothing to- Well,

Carla would argue that.

Other than Carla, no one has any beef with me, I don't think.

No, I doubt it.

But you can keep cash at banks.

They are safe.

They will take care of you.

But I think it's good that you have another way you're planning

for your future by also having a system of bartering in place.

Does this mean I don't have to pay you anymore?

No.

That's another part of my barter is I'm your friend and then,

in exchange, you buy me food.

I'm worried that you are viewing banks differently

than a lot of the retirees and soon-to-be retirees are.

But if they're so concerned about the safety of banks

that they think they have to work with...

Where'd you get your clothes from?

Monks in Aurora.

I had to arm wrestle Monks in Joliet.

Joliet.

Yeah, there's a whole clan of them out there.

They're not as strong as the Aurora monks.

No.

True.

Right.

But you should worry about diversifying

and making sure that you have other systems.

Because one day, what if your legs don't look

as good as they do now?

And you actually, I feel like this is demeaning to

other people with large, hairy legs, but you can

feel safe in banks now.

I'm not worried about your money because you're insured.

We are insured.

I think if anybody does have any fear about these

bank closings, jump on our fsrwealth.com/podcast.

Book a complimentary 15-minute call with Josh.

Actually having too much cash is not just

a risk inside the banks.

It's also interest rate risk internally for yourself.

Inflation risk, things like that can hurt.

It's always good to have more money than less, but having

too much cash can hurt.

And not because of bank failures, but just because

it doesn't fit well into owning your own retirement.

Dave?

I think your DR2R is a little bit of a stretch.

The way you tied that last part together there, brilliant.

I know.

What would this podcast be without me?

Let's be honest here.

Nonexistent.

Nonexistent, no.

Josh, you know how we usually kind of end this

on a witty note here.

I am about to pee my pants.

And as you know, I don't buy clothes.

I barter for them.

I'm going to have to cut this podcast short.

I need to run and pee.

Bye!

Peeing in my pants is cool.