Don't Have Just One Bank Account!
Summary
TLDRIn this video, Andrew Henderson explains the importance of having multiple bank accounts for diversification and redundancy. He emphasizes that no single bank can cater to all financial needs, suggesting that different banks excel in areas like transactions, wealth storage, or investments. Henderson also discusses the concept of 'tunnels,' which are low-entry accounts that can be gradually funded as one gets comfortable, ensuring access to banking options that may become restricted in the future. His advice is particularly aimed at those looking to go offshore, invest, or run businesses, highlighting the need for strategic financial planning.
Takeaways
- 🏦 Diversification is crucial: Having multiple bank accounts allows for better management of financial needs, as no single account can serve all purposes.
- 🌐 Geographical considerations: Offshore banking can provide better services tailored to specific financial activities, like transactions or wealth storage.
- 💡 Tailored banking: Different banks excel in different areas, such as transactional services, wealth storage, or investments, and should be chosen accordingly.
- 🔄 Transactional efficiency: Some banks are better for frequent transactions, while others are more suitable for long-term wealth storage or investments.
- 💡 Redundancies are essential: Having multiple accounts ensures financial security and continuity, reducing the risk of being left without access to banking services.
- 🚧 Future-proofing: As banking regulations and requirements evolve, having multiple accounts can provide flexibility and adaptability to changes.
- 🌱 Incremental investment: 'Tunnels' or smaller initial investments in multiple banks can serve as entry points, allowing for gradual increase in investment as comfort and understanding grow.
- 🌐 Strategic location: Having accounts in specific countries can facilitate regional investments and operations more efficiently.
- 📈 Proactive planning: Establishing multiple accounts can secure access to banking options that may become unavailable or more restrictive in the future.
- 📚 Education and testing: The speaker's personal experience with numerous accounts informs his recommendations and helps others to make informed banking choices.
Q & A
Why does Andrew Henderson believe in having multiple bank accounts?
-Andrew Henderson believes in having multiple bank accounts because no single bank account can serve all of one's financial needs. Different banks excel in different areas such as transactional accounts, wealth storage, and investments.
What is the significance of having redundancies in one's banking strategy according to the video?
-Having redundancies in one's banking strategy is significant because it provides a backup plan in case a bank decides to close accounts or change its policies, which could leave a person without access to banking services.
What is the term 'tunnels' as mentioned in the video and how does it relate to banking?
-The term 'tunnels' refers to setting up several different bank accounts, each with a lower price of entry, to get started with offshore banking. It allows individuals to gradually build up their accounts and become comfortable with the banking system before fully investing.
Why does Andrew suggest not relying on just one bank for all financial needs?
-Andrew suggests not relying on just one bank because each bank has its strengths and weaknesses, and no single bank can provide optimal services for all types of financial transactions and needs.
What are the potential risks of having all your money in one bank account as per the video?
-The potential risks include the bank shutting down, changing policies that affect you negatively, or raising minimum requirements that you can't meet, which could lead to losing access to your funds or scrambling to find a new banking solution.
How does Andrew justify the ROI of maintaining multiple bank accounts?
-Andrew justifies the ROI of maintaining multiple bank accounts by emphasizing the need for redundancies and the ability to have access to different types of banking services that suit various financial needs, which can be crucial for both personal and business operations.
What is the importance of being upfront with banks about your intentions when opening accounts, as per Andrew's experience?
-Being upfront with banks about your intentions helps establish trust and transparency, which can prevent the bank from closing your account later due to misunderstandings about your activities or the jurisdiction of your offshore companies.
Why might someone want to have a bank account in a different country for specific investments?
-Having a bank account in a different country can facilitate investments in that region more efficiently, as local banks are more accustomed to transactions related to that area and can provide better support and understanding of local investment activities.
What is the concept of 'dipping your toe in' as it relates to offshore banking in the video?
-The concept of 'dipping your toe in' refers to starting with a smaller initial deposit in a bank to test the waters and get comfortable with the banking system before gradually increasing your investments and activities with that bank.
How does Andrew Henderson use the term 'going where you're treated best' in the context of banking?
-Andrew Henderson uses the term 'going where you're treated best' to encourage individuals to choose banks that offer the best services and conditions for their specific needs, rather than settling for a one-size-fits-all approach with a single bank.
Outlines
🏦 Importance of Bank Account Diversification
Andrew Henderson discusses the significance of having multiple bank accounts, emphasizing that no single bank account can cater to all financial needs. He explains the benefits of diversification, such as setting up accounts where one is treated best and using specific banks for different purposes like transactions, wealth storage, or investments. Henderson also touches on the importance of redundancies to avoid being left without banking options if a bank decides to close an account or change its policies.
🌐 Building Financial 'Tunnels' for Offshore Investments
The concept of 'tunnels' is introduced as a strategy for those new to offshore banking. It involves starting with smaller investments in multiple accounts to test the waters and gain comfort with the banking system. Henderson shares his personal experience of gradually increasing his balance in a Montenegro bank account after becoming familiar with its operations. He also highlights the changing landscape of offshore banking, where requirements and opportunities evolve, necessitating proactive measures to secure access to various banking options before they become unavailable.
📚 Resources for Offshore Financial Strategies
Andrew Henderson concludes by promoting his book available on Amazon, which condenses his extensive knowledge and experience in offshore financial strategies. He invites viewers to subscribe to his channel for more informative videos and encourages企业家s to visit Nomad Capitalist's website for personalized assistance in implementing these strategies to legally reduce taxes, enhance personal freedom, and accelerate wealth creation.
Mindmap
Keywords
💡Bank Account Diversification
💡Redundancies
💡Transaction Accounts
💡Wealth Storage
💡Offshore Banking
💡Tunnels
💡Operational Efficiency
💡FinTech
💡ROI (Return on Investment)
💡Nomad Capitalist
Highlights
The importance of having multiple bank accounts for different financial needs is discussed.
Different banks excel in different services, such as transactional accounts, wealth storage, or investments.
Having a local bank account in the United States can be beneficial for certain financial transactions.
Offshore banking can magnify the need for specialized bank accounts due to varying services and fees.
The concept of 'tunnels' is introduced as a strategy for starting with smaller investments in multiple banks.
Redundancies in banking are crucial to avoid being left without access to funds if a bank relationship ends.
The idea of having a backup plan, similar to military strategy, is applied to banking to ensure financial security.
The offshore world is becoming more complex, making it wise to have multiple banking options.
Banking requirements and regulations are changing, making it important to secure banking options while they're available.
The strategy of 'dipping your toe in' with smaller investments to test banks before committing larger sums.
The importance of being upfront with banks about your intentions to avoid future issues.
The concept of using specific bank accounts for particular investment regions to ensure operational efficiency.
The value of having accounts in stable banking environments for making investments in riskier regions.
The author's personal experience with 24 bank accounts and the reasons behind this extensive diversification.
The advice for entrepreneurs to consider the benefits of multiple bank accounts for their businesses.
A call to action for viewers to subscribe and enable notifications for more tips on optimizing personal finances.
Transcripts
so I recently made a video called why I
have 24 bank accounts and we got a lot
of feedback from you the viewer Sophia
were confused you know why is having
different bank accounts important why
not just get one why not just get a
FinTech so in this video I want to
explain more about my principles on why
bank account diversification is so
important
[Music]
[Applause]
hi I'm Andrew Henderson now what I
understand about banking and
diversification is obviously most of you
don't want and we'll never have 24
different bank accounts actually the
number is hired now because I've been
I've been a little busy but here's why
having different bank accounts is
important one thing I tell people when
I'm working with them personally is you
want to set up your bank accounts to go
where you're treated best in that no 1
bank account is gonna serve all of your
needs see where you're from you know in
my case for the United States you'd have
one account at the local bank and that
same bank might convince you to take out
your mortgage or your car loan or you
know whatever with them and that might
be you know your your financial partner
okay and a lot of people do that but
that bank ID really isn't perfect at
everything but once you go offshore
that's gonna be magnified okay so there
are some banks that are better as
transactional accounts they like having
money coming in from let's say a salary
that you pay yourself from your company
or salary that you get for freelancing
and then that money goes out you use
your debit card etc other accounts are
better for wealth storage others are
better for investments you know for
example I've got a great Singapore bank
account I was I was down the street here
took out five hundred euros I got
whacked for twenty four euros in various
fees and so that's not the kind of card
what's an ultra stable Bank amazing Bank
great customer service I love my banker
there he helps with everything I need
it's not a card that I want to use to go
and travel around so I use more of a
transactional bank for that and so one
thing I tell people is it's nice to have
a couple of different banks that each
serve different parts of your needs okay
don't rely on just one bank and try and
shoehorn it into giving you everything
that you want so that's not gonna be 24
banks but it might be two or three and
if you're from the United States you
might keep one of your US banks as well
now why so many well one thing that's
important in my mind is that you always
have redundancies okay it's always
interesting when people come to me
who've been in the military because
they've been trained to have a second
back-up plan a third back
a plan you know there's there are
fail-safes that they're used to and so
those guys understand the idea of
redundancies that obviously we don't
want to open accounts at banks that are
closing I can't say I've ever
recommended or open an account at a bank
that was shut down that's more the
province of these banks in these tiny
islands where some of those do get shut
down from time to time but what you
might find depending on which bank you
go to is a bank it says at some point
you know what we don't want
non-residents anymore or you know what
we're raising the minimum requirements
or you know what we don't want someone
who doesn't have a tax home there's a
possibility although I think there's a
way to greatly reduce the possibility
there's a possibility that one of the
banks in your mix might no longer want
you this is the price of going where
you're treated best is knowing that your
plan is never going to be quite perfect
okay there's always going to be that one
thing that might need a little bit of
attention five years from now
okay now the ROI is there to justify
doing this but you have to understand if
you're going offshore you've got to keep
a little bit closer eye on your finances
than you would if you just kept all of
your money at Chase in the United States
or Commonwealth Bank and so I think it's
important to make sure particularly for
a business if you've been an offshore
company and even more particularly if
you're a US citizen it's important to
have redundancies to where not only do
you want to be left without a personal
you don't wanna be left without a
personal bank account but if you have a
business bank account you don't want to
be forced to put that money in your own
name because you have nowhere else to
move it okay and I've seen far too many
cases of people who had one bank account
where the bank shut them down namely
because the bank no longer trusted their
offshore companies jurisdiction you know
they were in Belize or something and the
Singapore bank said we're done with
Belize and they were scrambling and some
of them may have have had some real
problems and both operational and tax
problems so I always want redundancies
okay now here's the other thing that's a
bit more optimistic one of the things
that we've talked about here before is
the idea of tunnels okay I understand
that a lot of people who get started
going offshore they don't just want to
go and move you know a million dollars
into one bank okay if if you have a
million dollars
get it you know you probably want to dip
your toe in a little bit and everyone's
definition of toe dipping is a little
bit different but the idea of tunnels is
you set up several different options all
of which have a lower price of entry
that you're comfortable with you fund
that lower price of entry and then you
build up from there so for example I had
a bank account in Montenegro I needed
three thousand euros and change to
become a resident but later I started
bumping that bank account balance up I
said you know it's not worth it for me
to have any less than 20 grand in a bank
account for example so let me let me
bump that up because I'm comfortable you
know I've been at the bank I know the
girl who works there you know at the
online banking works the ATM card works
is you know I dip my toe in I got
comfortable with it I learned how you
know each and every one of my banks
works and the ones that sucked I just
got rid of but the rest I kept around
and I'm just slowly bumping them up and
so having the ability to do that to me
is important but in order to do that you
probably want to have a couple of them
now obviously I have 24 and again now
more accounts because I'm out testing it
so that when you come to me I say yeah
these these ones suck I had a terrible -
HSBC never never right but you still
want a couple of accounts here's the
other reason okay
the offshore world is increasingly
getting more complicated whether its
banking whether it's residence so many
things every year the requirements go up
countries close programs banks closed
off - taking new customers
I've still got a bank account in
Singapore I opened with less than a
thousand dollars a lot of years ago you
can I get that account anymore if you
aren't a resident of Singapore okay but
the bank is happy with me I'm still
there they didn't close my account they
just said you know what no new accounts
okay and so what my my philosophy the
second part of the tunnels equation
having tunnels is about saying let me
just get my toe in over here and over
here and over here you know what then
I'll have the option ok Yavana who works
doing R&D for us recently it's been
travelling all over Europe meeting with
different bankers and building our
spreadsheet of 800 plus banks because
you know what some people want an EU
bank account to be able to receive money
from the EU
or use the Iban system or they want to
make certain new investments or you know
they want to get a FinTech product or
whatever that requires an EU bank
account and so you know what if you
think that you might need an EU bank
account for that reason it might be wise
to go over and put a thousand euros over
here to have a tunnel knowing that you
know in Romania for example you could
use people to get you know 10 bank
accounts now you can't get any but there
are some countries where you used to get
10 and and now there's only one bank
that will take you and who knows if in a
year maybe that one bank will also shut
down two new accounts for non-residents
also so if I can get that account now
obviously I'm gonna be totally truthful
with a bank I'm not ever deceiving the
banks I'm just saying here's my
situation will you accept me now yes
oftentimes if the bank is aware of your
situation they're not gonna kick you out
of the bank later they'll just stop
taking similar people okay and so I
think that everyone who's going offshore
investing doing business etc might want
to have access to different types of
accounts as a proactive measure not only
to get comfortable and to keep funding
the accounts more and more but but just
as a proactive measure one other thing
we've talked about here is you know if I
want to buy real estate in Egypt for
example I'm not sending that money for
my US bank account the US banker is
gonna get a you know you know he's gonna
be really freaked out right I'm probably
gonna do it from Singapore I would want
a bank account if my goal is to invest
in Middle East North Africa I would want
a bank account in let's say the UAE okay
where it's relatively stable compared to
like you know an Egyptian bank account
but they're gonna understand investing
in Egypt and then I kind of freaked out
okay again I'm being totally upfront
about what I'm doing but that's just an
idea okay if you want to invest in
Southeast Asia a lot of banks in the US
are freaked out by Malaysia Singapore
it's like second nature to them people
of course people send money to Malaysia
okay and so having that Singapore
account might be a great tunnel if you
think in the future you're going to
invest in in Malaysia and you want to do
so in an operationally efficient way
again I'm not telling you to go and set
up dozens of bank accounts but what I
want you to consider is the idea of
number one no one bank account is gonna
serve all of your needs the same way no
one country is going to serve all of
your needs
number two tunnels are a great way to
dip your toe in and to get comfortable
as you grow and number three you can use
those tunnels to also make sure that you
have access to low-cost straightforward
options that exist today but probably
won't exist tomorrow make sure you get
your foot in the door before they'll no
longer let you hi I'm Andrew Henderson
from Nomad capitalist I wrote this book
which you can find on Amazon to distill
a lot of the stuff we talked about in
these videos and a lot of the stuff I've
learned over the last decade plus
traveling all around the world teaching
you about how to legally reduce your
taxes build your personal freedom and
create wealth faster definitely get a
copy of this book if you want to learn
more now if you want to watch more
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to go where you're treated best and if
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