Elliot S. made a living in the California real estate market, who, after retiring, moved to Las Vegas where he worked on new business ideas.
Elliot started a business called 24/7 Private Vaults. He promoted the business as safer than banks.
He gave his clients complete anonymity and privacy. Customers could access their property in the vaults whenever they wanted.
According to a TV commercial, “When you store your valuables with us, we don’t want to know your name or what you put in your vault. It’s safe and untraceable.”
In a city like Las Vegas, the concept was popular. Many people don’t want to take their gambling winnings to banks.
Customers had keys to safe deposit boxes, and used an iris scanner to enter the vault and signed their paperwork with an X to remain anonymous.
It’s believed some of the people who used the vaults included professional gamblers, and celebrities.
And it’s estimated that the private vaults held more than $70 million worth of cash and valuables.
Elliot often bragged that his business had a high-tech security system which included reinforced steel doors and security guards on duty at all hours.
The business was located in an ordinary-looking strip mall about six blocks from the airport in Las Vegas.
From the outside, it didn’t appear to be an incredibly secure facility…
And as it turns out, 24/7 Private Vaults wasn’t secure at all. You see, one thing Elliott forgot to account for was insider threats.
Early one morning, two robbers surprised a 70-year-old security guard.
They handcuffed the guard and bound her with duct tape. As she struggled, the robbers shocked her with a stun gun.
The thieves disarmed the security system with the instructions posted next to the control panel.
There were no other security sensors, and the doors were not solid steel. There were no other employees on duty other than the 70-year-old security guard.
The robbers were able to climb through a crawl space and drop down into the vault. They drilled open the safe deposit boxes and took valuables.
Nearly five years after the robbery two employees were charged with carrying out the crime. Prosecutors argued that the pair made off with over $2.5 million.
A U.S. Bankruptcy Trustee stated the obvious: “It wasn’t as safe and secure as he advertised.”
Now, that said, these days a lot of people are feeling uneasy with their banks.
After the fall of Silicon Valley Bank, more people are looking for better ways to keep their money safe.
So here are a few options to consider for keeping your money secure…
Add a joint owner/change ownership category:
Bank accounts are FDIC insured up to $250,000. This number is per individual on the account.
So, if you and your spouse are listed on the account you are covered up to $500,000.
If you have family members that you trust you can put them on the account, and it will increase the amount you are insured for.
Another option is to have more than one bank account but have them in different categories.
For example, you could have checking and savings accounts that are insured for up to $250,000 in total.
In addition, you could have a trust account or corporate account that is in a different category than the checking/savings.
The trust account or corporate account could be insured for another $250,000.
Talk to your bank about opening up additional accounts in different categories. This way you can maximize the FDIC insurance coverage.
Bank insurance:
Another method to keep your money safe is to ask your bank if they have insurance.
Now, I’m not talking about FDIC insurance. You are probably already familiar with the $250,000 insurance guarantee from the FDIC.
But many banks also have third-party insurance to protect the bank from stolen money resulting from cybercrimes or similar incidents.
The insurance doesn’t protect the individual customer. Rather, the insurance covers the bank losses and the money stolen.
You see, FDIC insurance only matters when the bank fails…
But, if the bank has losses from a robbery, cybercrime, or identity theft, the FDIC insurance won’t cover this.
So next time you are at the bank ask them if they have third-party insurance for these other types of losses.
Government securities:
The U.S. government offers three main types of securities. These are treasury notes, bills, and bonds.
These are longer-term investments that often take years to mature and pay-off, and there are penalties if you remove the funds before they have matured.
But the thing about.
Even though the country is trillions of dollars in debt, the U.S. government has never defaulted on its debt obligations.
So, government securities remain one of the safest places to invest and keep money.
Obviously, with the recent banking failures, more people are concerned with who they trust with their money.
Most banks remain secure, but these are a few things to keep in mind when diversifying with whom, and where you keep your money.
In addition, I always recommend keeping six months’ worth of living expenses in your home, along with a few other particular things…
I call it my “financial bug-out bag” and recommend everyone have one.
