Financial safety in the age of Musk

February 12, 2025 7:57 PM

So, now that not only does Musk have access to data of people across the USA, but he's also seized money from New York, what are prudent steps to take to keep money safe these days?
posted by NotLost to Work & Money (13 answers total)

Response by poster: I'm also concerned about financial safety in regards to economic troubles and potential political collapse, etc. Just general Trump calamities and catastrophes. But not natural disasters, at least so far.
posted by NotLost at 8:00 PM on February 12

what are prudent steps to take to keep money safe these days?

Doing nothing at all beyond keeping your cash savings in FDIC-insured savings account and brokerage savings in SIPC-insured brokerage accounts.

This doesn't prevent any calamities/catastrophes you've referred to - it's just better than the alternative. Investors are notoriously bad at timing the market and changing their asset allocations according to market and political conditions conditions. All behavioral finance evidence indicates that you're more likely to increase the risk in your portfolio by doing so. Further, USA regulated banks/brokerages are generally considered "risk free" (more accurately, lowest risk) and all other options are considered as slightly more risky than those options.

It's worth avoiding catastrophizing here. I am not hopeful for the outcome of a Trump administration. I believe a number of vulnerable populations will be negatively affected by the administration. However, Trump and Musk are rich people themselves, and generally funded by rich people, and they are not incentivized at all to harm their own investments and the investments of their backers.
posted by saeculorum at 8:48 PM on February 12 [18 favorites]

Response by poster: To clarify, I'm not trying to time the market. But besides whatever happens to markets, and however we might protect ourselves about that, it's conceivable that they could reach into our bank accounts. And I'm not sure whether there is any line they won't cross.
posted by NotLost at 8:55 PM on February 12

it's conceivable that they could reach into our bank accounts

It has always been the case that government officials can seize money from individuals. One report I found says between state and federal authorities, $68.8B was seized between 2000 and 2019. This is not even including assets taken due to criminal convictions. Anybody (government or not) who deposits money into your checking/savings accounts can reverse that deposit through an ACH reversal. Similarly, anybody (government or not) who has your checking/savings account number can just initiate an ACH pull and take money from your account. None of these are particularly hard to do.

The legal system, governmental-backed insurance (FDIC), and a governmental interest in preserving the USA financial system, protects your checking/savings accounts. If you are planning for those things disappearing, you are planning for a world where the entire US financial and legal system has collapsed. In that case, you may consider doing things like storing food, fuel, guns, and ammunition, rather than trying to rearrange your financial investments.
posted by saeculorum at 9:08 PM on February 12 [16 favorites]

If Musk were to start taking money out of Americans’ bank accounts, the unrest that would follow would be a Very Big Problem. As posted upthread, keep your money in FDIC insured accounts. If those fail everyone is going to have bigger problems anyways. However, it’s reasonable to assume that there may be times of significant unrest. If possible, hide some cash (not your whole account, just a few hundred bucks or so) somewhere in your house so you have it on hand if needed. This last part isn’t about money so much, but if you can, stock your pantry well. You’re not prepping for the apocalypse, you’re just being prepared in the case of unrest or food shortages. We have enough to get by for a few weeks, granted a lot of what we’ll be eating is bread and rice but we’ll have enough to share with the neighbors if needed.
posted by azpenguin at 10:34 PM on February 12 [3 favorites]

I agree with people upthread about the big picture here, but I will tell you one relatively mild thing I am doing to feel a little more secure.

Most of my money is in a 401k, extremely hard to access (for me, ie I can't really get money out quickly in a pinch),

The next most is in IRAs, easier but still hard to access,

The next most is in a high yield savings account, that is at an online-only account tape offered by a well known brick-and-mortar bank. Easier than the above to access, but because of this arrangement I cannot walk into a bank near me and take out money using an ATM. I have to wait a day or two for it to transfer to a bank account that I can withdraw from an ATM.

Therefore the one thing I am doing, is keeping somewhat more money in a bank account from which I can walk to an ATM and withdraw cash right away. This sacrifices around 3.7% in interest on that money so I'm not moving all my cash, or even 20% of my cash. But I found a number I'm comfortable with where the loss of the interest doesn't pinch, but I feel a little secure knowing I can have that money in my hand in 5 minutes if I need it.

I'm doing this more for reasons like something suddenly goes awry with the way credit cards or debit cards work and it is suddenly more advantageous to pay in cash, or regulations change in a way that make businesses treat cash payments more preferentially, as a small layer of protection while sacrificing only very little to get that protection.

None of my investments have changed, I haven't withdrawn anything from a brokerage account, this is just keeping most of my cash in the highest interest option, and now a slightly larger portion in the lower interest but more easily accessible portion. I guess I could take that portion, withdraw it now and put it in a safe deposit box in my house, but I don't feel the need to do that.
posted by fennario at 3:30 AM on February 13 [4 favorites]

-- I'm keeping a few thousand in cash in the house. This is not something I'd recommend, it is fully indulging in irrationality but I've seen the Handmaid's Tale so.
-- we have only one account that I've ever used for tax payments or refunds. I keep 99.9% of our funds in other accounts.
posted by Dashy at 4:12 AM on February 13 [6 favorites]

I would note that Project 2025 hasn't directly targeted the FDIC, but The Heritage Foundation has previously proposed lowering FDIC deposit guarantees to $40,000 from the current $250,000.

Watch for that. If that changes, you will need to allocate your savings as appropriate if that threshold no longer protects what you have.
posted by glaucon at 6:29 AM on February 13 [14 favorites]

Mod note: One comment removed. AskMe has stricter guidelines, so comments should answer the question rather than discuss / argue / make jokes about the situation.
posted by loup (staff) at 6:45 AM on February 13

I'm succumbing to some paranoia and anxiety and just cashed out our I-Bonds. It's not a lot and they weren't making much interest at this point. But I'd rather have that money not in a US government instrument.

I'm going to get some Euros and Dollars to keep in the safe at home. Think low thousands of each. Maybe I've been watching too many spy shows on Netflix, but I'd like to have a few months worth of cash around, in case the ATMs aren't working. Or enough to pay cash for two airplane tickets to somewhere not here. Can you even pay cash to airlines anymore? I'll be giving up a few hundreds of dollars of interest, but so be it.

I opened a Wise account (we're thinking about moving to Europe) and will probably put some of the I-Bond money in there. At least that will be earning some interest, close to our high yield savings account. At some point I might try to actually open a non-US bank account (again, would want that if we go to Europe anyway), but I'm not clear if that's really necessary at this stage.

I'm not divesting from Treasuries in our retirement savings, although that's not a big part of our investments. I do think about selling the house to cash out the home equity, but then I'd have to figure out where to put that money. And would need somewhere to live.

I'm not a prepper, but keep a solidly stocked pantry for normal life and cooking. We could probably go several weeks or a month with minimal new purchases. Produce, eggs, and dairy would be the challenge.

I have no idea if any of this makes sense to actually do. And yes, i acknowledge that these are rich people problems and my privilege is showing.
posted by jindc at 8:20 AM on February 13 [2 favorites]

Late to this, but here’s a good followup on what actually happened in the NYC case: the feds simply cancelled/reversed the ACH transfer within the technically allowed timeframe for doing so (if not for a valid reason). Certainly shitty, improper, and likely illegal, but they didn’t “reach into” an account in some novel way. /coldcomfort
posted by staggernation at 6:03 PM on February 13 [2 favorites]

There’s a lot of confusion and uncertainty right now about whether and how the current administration is going to weaponize payment systems. This article both acknowledges that confusion and discusses potential fallout and actions you can take in opposition.
posted by congen at 7:24 PM on February 13 [1 favorite]

Adams says he's going to sue the Bully Admin over the illegal $80M clawback.

Just after he sells the Brooklyn Bridge.
posted by Dashy at 10:50 AM on February 16