Don't Have Just One Bank Account!

Summary

In 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

00:00

🏦 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.

05:03

🌐 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.

10:05

📚 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.

Keywords

💡Bank Account Diversification

Bank account diversification refers to the strategy of having multiple bank accounts across different banks, often in different jurisdictions. This approach is highlighted in the video as a way to ensure that no single bank failure or policy change can disrupt one's financial operations. The video emphasizes that different banks may excel in different services, such as transactional accounts, wealth storage, or investments, and diversification allows individuals to leverage the strengths of various banks. For example, the speaker mentions having a local bank for mortgage and car loans, and another for transactional needs like salary payments and debit card usage.

💡Redundancies

Redundancies in the context of the video pertain to having backup plans or alternative options in place to mitigate risks. The speaker suggests that having multiple bank accounts serves as a financial safety net, ensuring that if one bank account becomes inaccessible or undesirable, there are others to fall back on. This concept is particularly important for those who operate businesses or have complex financial needs that require flexibility and reliability. The video illustrates this with the example of a bank deciding to no longer service non-residents or changing minimum requirements, which could leave a customer without access to their funds if they had only one account.

💡Transaction Accounts

Transaction accounts are bank accounts that are optimized for regular financial transactions, such as receiving salaries, making payments, and using debit cards. The video explains that some banks are better suited for these types of activities, offering lower fees and more convenient services for transactions. The speaker contrasts this with wealth storage accounts, which are designed for holding funds securely rather than for frequent transactions. An example given is the speaker's experience with a Singapore bank account that charged high fees for a simple transaction, indicating it was not suitable as a transactional account.

💡Wealth Storage

Wealth storage in the video refers to the practice of keeping one's money in accounts that prioritize security and stability over frequent transactions. These types of accounts are ideal for long-term savings or investments where the focus is on preserving and growing wealth rather than on daily transactions. The video suggests that not all banks are equally good at wealth storage, and diversifying into accounts that specialize in this area can be beneficial. The speaker's strategy includes having accounts in stable banks for wealth storage, separate from those used for everyday transactions.

💡Offshore Banking

Offshore banking involves maintaining bank accounts outside of one's country of residence, often for reasons such as asset protection, tax optimization, or access to specific financial services. The video discusses the importance of having offshore accounts as part of a diversified banking strategy. The speaker mentions that offshore banks can offer services or accept customers that domestic banks might not, but also cautions that the offshore world is becoming more complex with increasing regulations and requirements, making it important to stay informed and proactive.

💡Tunnels

In the video, 'tunnels' is a metaphor for establishing initial, smaller bank accounts as a way to 'dip one's toe in' the water of international banking. This strategy allows individuals to test the waters with a low initial investment before committing more significant funds. The speaker uses this term to describe the process of opening accounts with a modest amount of money to get familiar with a bank's services and then gradually increasing the balance as trust and comfort grow. This approach can also serve as a proactive measure to secure banking options that may become unavailable in the future.

💡Operational Efficiency

Operational efficiency in the context of the video refers to the effectiveness and cost-effectiveness with which one can conduct financial transactions and manage accounts. The speaker argues for having bank accounts in locations that are operationally efficient for one's specific needs, such as investing in a particular region. For instance, having a bank account in the UAE if one plans to invest in the Middle East can streamline financial operations and reduce the risk of complications that might arise from using a less familiar or less accommodating bank.

💡FinTech

FinTech, short for financial technology, encompasses the use of technology to deliver financial services more efficiently. The video briefly mentions FinTech as an alternative to traditional banking but suggests that even with the rise of FinTech, having multiple bank accounts can still be advantageous. The speaker implies that while FinTech products can offer convenience and innovation, they may not replace the need for diversification and redundancy in one's financial strategy.

💡ROI (Return on Investment)

ROI, or return on investment, is a financial metric used to evaluate the profitability of an investment or to compare the efficiency of different investments. In the video, the speaker implies that the effort and resources put into managing multiple bank accounts can provide an ROI in terms of financial security, flexibility, and access to a wider range of banking services. The speaker suggests that while there is a cost associated with maintaining multiple accounts, the potential benefits in terms of financial stability and opportunity outweigh these costs.

💡Nomad Capitalist

Nomad Capitalist in the video refers to the speaker, Andrew Henderson, and his philosophy of going where one is treated best, both in terms of personal treatment and in terms of financial and business opportunities. The term encapsulates the idea of being mobile and adaptable in one's financial and business strategies, taking advantage of global opportunities. The speaker uses his experience as a Nomad Capitalist to advocate for bank account diversification and other strategies that can enhance personal and financial freedom.

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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