If ever a case could be made for regular financial reviews for individuals, the SVB bank collapse is exhibit-A. It’s not that we shouldn’t trust big financial institutions. No, it is the fact that things go wrong and our personal finances are affected in ways we can’t always anticipate.
Regular financial reviews of retirement plans, insurance coverage, and even savings accounts are a must. We can’t trust that Big Brother Government is going to cover losses just because of shocking events like the SVB Bank collapse.
Remember, the FDIC only covers up to $250,000 of bank deposits.
The people who lost more than that amount are fortunate that their losses are being refunded by the government. But many observers would argue it was not just good fortune, rather it was preferential treatment for the many startups connected to SVB Bank.
I’ll leave that argument to other outlets.
My goal is to prompt my readers to take action and protect their assets by scheduling regular consistent financial reviews. Many experts did not see the SVB Bank failure coming until it was too late. Sadly, this happens with personal financial plans too when plans are left on ‘autopilot’.
Examples of unexpected events harming couples financially:
● Unprepared for sudden need for long-term health care
● Risk-heavy portfolio too close to retirement
● Buying homes at the height of housing market prices just before a long dip
● Legal will not properly set up
● A pension plan that’s not transferable to a spouse
Yearly reviews are crucial for protecting the wealth you work so hard to accumulate. Some people can benefit from financial reviews even more often. Every six months is not unreasonable.
The point is that if we don’t pay attention to our finances, even during what appears to be safer times, we can get hit with financial wake-up calls. Or disasters. Which is a perfect description for what happened with the SVB Bank collapse.
As of this writing, most banking experts are saying SVB Bank did not do anything underhanded or even risky. Although, catering to startups, which have a high failure rate could be called into question. SVB’s main issues were:
● Interest rate spikes that lead too…
● Losing $1.8 billion on Treasury Bonds / mortgage-backed securities they sold before maturity
● Vastly lower deposits recently, then depositors finally making a run on the bank when the bank’s troubles became public
These events show the wisdom of financial reviews— reviews have prevented untold financial hardships for families for decades. It only takes a few hours a year to go over your financial plans with an advisor. That is time well spent, folks. Because you don’t want to find yourself scrambling once a disaster strikes.
Those SVB Bank customers waiting on hold to find out if their deposits over $250k were going to be covered, well, you can bet they were wishing they had reviewed their situation and vulnerabilities before SVB’s troubles hit the fan.
Has it been a while since you took a closer look at your retirement plans, goals, and where you stand currently? Then please schedule a financial review as soon as possible. I’d love to speak with you if you do not have a trusted financial advisor you can turn to already.
Investment advice offered through Private Advisor Group, LLC, a registered investment advisor.