People think that the safest place to store their valuables would be in a safety deposit box at their bank. They would be wrong. Here’s a true story about what happened to me many years ago.
About 16 or 17 years ago, as I described in my book The Unchained Man, I was having some financial trouble due to some very stupid things I did as a younger man. I had a sudden increase in income and I was not yet skilled at actually managing money, so I fell behind in some of my debts and taxes. I cleaned all that up many years ago, but even to this day, reflecting on that time in my life gives me some unpleasant chills.
I had a safety deposit box at a bank at that time, where I kept some valuables, cash, and some sensitive business data. To be safe, I made sure to have the safety deposit box at a bank where I did not have any other accounts. If you’ve seen the movie Mr. Brooks (excellent movie by the way), you know that the first place the government and criminals look for a safety deposit box is the bank where you do your usual banking.
I thought I was being smart by having a safety deposit box. I was wrong.
One of the creditors to whom I owed money at the time pressed a few buttons on a computer, instantly found where I had my safety deposit box, walked down to the bank, and flashed a legal document to the bank staff. The bank staff said, “Yes, master,” ushered them into the vault, and took a power drill to my safety deposit box, drilling out the lock. They then handed the creditor everything I had in the box and sent him on his way.
This is the kind of thing that happens if you ever have any financial trouble. When I went to the bank to discover all of this, I was, of course, horrified. I screamed at the bank employees, “You mean anyone can just walk in here off the street and flash some paperwork and you’ll drill my fucking deposit box and give them everything in it?”
“Yes, sir,” they answered, “We have to. It’s the law.”
Gotta love corporatism. Thankfully, the day the creditors took everything in my box, I had no valuables or cash in there, just a few removable hard drives with some encrypted data on them, so I didn’t actually lose anything of real monetary value. That was pure dumb luck on my part though; just a few days before that, I had a serious amount of cash in that box; I could have been seriously screwed.
I learned a very valuable lesson that day. At any time, creditors or your government can, and easily will crack open your bank safety deposit box and take everything out of there whether you like it or not or deserve it or not. Banks call this a “bail-in.” This is exactly what happened in Cyprus back in 2013. Banks there had been so mismanaged that the government gave them permission to just take the deposits of their clients with no warning and little explanation.
Cuckoo Canada and the Suicidal EU both have laws on the books saying banks can do this too, whenever they want, as long as it’s an “emergency.” In the Collapsing USA, banks such as Chase have warned their customers to not keep nonnumismatic gold or silver coins in their safety deposit boxes. (“Nonnumismatic” means gold or silver coins that have value strictly in the gold or silver, with no collectable value.)
And don’t forget what happened to me. It doesn’t have to be your government that will take your stuff; corporate creditors can also.
Lastly, if your country ends up having an extreme financial crisis, your bank will have mobs of people in front of it, and the bank will probably be locked down. Good luck getting to your safety deposit box then.
Do not ever use a safety deposit box at a bank, unless you’re doing something temporary. If you really need to store something of value outside of your home for the long-term, use these options instead, listed in order of how good I think they are:
1. A professional vault or vault service that is not registered as a “bank” and does not have to comply with the usual anti-privacy laws banks do.
2. A small safe you purchase and store at a friend’s or family member’s house. Obviously, this person needs to live a very stable, safe life, and you’ll have to really trust this person. Do not give this person the combination to the safe. Make sure the safe is a good one too; theft resistant, fireproof, and waterproof.
3. A safety deposit box in a small bank in a country far away from the Western world that respects the privacy and personal property of their clients. This is still a bank, but at least it’s removed from both your collapsing, corporatist Western government and creditors in your country won’t ever have access to it. Also, realize that if you’re an American, most of these banks won’t want to do business with you because our government makes it so difficult to do so. (This is yet another reason to get a second passport.)
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Throughfare
Posted at 06:12 am, 20th August 2017Hmmm, there’s another way to have the contents of your safety deposit box emptied out: by bank employees!
People might be surprised to know that bank legislation in most places allow banks to open safety deposit boxes basically on their own recognizance, as long as they follow a prescribed procedure and tell the bank regulators that something was remiss, like payments not being made, or even if they claim they had no address on file for the renter of the box (you are not a safety deposit box owner, as many people like to say, you are a renter.)
I have never heard of any case of a bank being prosecuted for opening boxes, even fraudulently. If you suffer losses due to banks opening your box due to error or fraud, it’s up to you to sue them.
These articles explain just 2 of the ways bank incompetence or even fraud can result in the bank grabbing your stuff.
http://sanfrancisco.cbslocal.com/2017/05/06/customers-complain-bofa-is-drilling-safe-deposit-boxes-and-losing-valuables/
https://www.thestar.com/business/personal_finance/2016/09/20/when-bmo-branch-moved-his-safety-deposit-box-was-opened-roseman.html
Walter
Posted at 06:47 am, 20th August 2017Great article. You can also get creative and hide your valuables in another way. For example, instead of using heavy gold coins, use lighter casino chips. And hide the chips inside something like a portrait or a toy so even if someone opens your vault they won’t see what you have.
joelsuf
Posted at 12:57 pm, 20th August 2017People often wonder why I have started keeping cash on my person at all times, instead of just putting it in my bank account. This article is why. This is nothing I haven’t known tbh.
They laugh at me for being paranoid now. I’ll be laughing at them later. Keep your money far, far away from government and banks if you can. I’ve started using my credit card for buying stuff electronically, then when its time to pay the bill, I put whatever money I need to pay in my bank account (by depositing cash into an ATM machine) and pay the bill within an hour. I’ve been doing this for a couple months now. I never keep any money than what is necessary in my bank account.
Leo
Posted at 01:38 am, 21st August 2017I see so many people complain about the current situation of Western countries. What will happen when USA or EU collapse? What do you mean by that? I know that these countries have big economies, how can they collapse with immigration?
I am from Turkey and living in here. Every young man looks at the Western world and admires the culture. I don’t understand what is happening.
Walter
Posted at 04:21 am, 21st August 2017Relax, it is never going to happen. People see a lot of countries have a high debt-to-GDP ratio and think the situation is somehow going to end very bad but it won’t happen. Governments will manipulate a solution by altering currency or taxes or whatever.
But just in case. If you live in America or somewhere where guns are legal, you should stock up on guns and ammo. If something truly bad happens and shit hits the fan (civil unrest, etc) the ones who win are those with the guns. Also stock up on food and water in your house if you are really paranoid.
joelsuf
Posted at 08:42 am, 21st August 2017Ideally, it already has happened. But its a very slow burn. Any chance for Anarcho Capitalism went buh bye decades ago, when they US decided that it wanted to jump on the “superpower” train and become a poor man’s Nazi Germany. And now we’re gonna be a poor man’s USSR at best, and a recreation of the Weimar Republic at worst. But like CJ says, that’s not gonna decisively happen until midway through the 2020s, giving anyone plenty of time to get out of dodge.
That’s only because Eastern Europe has been the #1 worst place to live for the last six or so decades. To this day there are still Communist Dictatorship countries there, and most of the region is still feeling the effects of the Cold War.
People from the West are going to be saying similar things about Southeast Asia come the 2020s.
Caleb Jones
Posted at 10:38 am, 21st August 2017Yup.
That depends on how much cash you’re carrying around. Carrying around thousands of dollars isn’t a good idea, but a few hundred if you want, sure.
That’s overkill in my opinion. That would be hassle and I don’t like hassles because of my goal of long-term happiness.
My advice is to keep the minimum amount of money in the bank that you require for day-to-day operations of your life, but never any more. There’s always enough money in my accounts to take care of usual expenses, but whenever it grows beyond that (and it always does at least twice month), I pull it out of there and get it somewhere safer.
https://calebjonesblog.com/how-bad-will-it-get-what-exactly-will-happen/
1. I never said it would be because of immigration (I’m not a ranting nationalist nor right-winger), though I agree it’s a factor.
2. Why would a large size immunize a country from collapsing because of immigration? That just means it would take longer. (And it has/is.)
That’s because, with all due respect, Turkey is even worse, so of course people in Turkey would admire and/or want to go to the West. But you don’t see booming, prosperous, well-run nations like Singapore or Hong Kong full of people who admire or want to come to the USA or Europe. Thus my point.
GeronimaXP
Posted at 04:22 pm, 21st August 2017I think this is will correlated topics too; so where do you put your primary/majority of your net worth then?
I’m assuming that nothing of asset class that actually “safe” and basically even if anything called safe, it mean that is visible to government(law) or at least it would need an “extra” self-maintenance?
Caleb Jones
Posted at 05:20 pm, 21st August 2017All over the place, but not in any banks. Most of my stuff is in either investment firms (not banks!) and off-site storage.
No, there are lots of assets that are safe. Cash in your possession is safe. US government bonds are safe for at least the medium term. A paid off house you rent out is safe (assuming you have insurance on it). And so on.
You’re mixing up safety from 100% loss with asset protection / anonymity. Those are two different things.
A Man
Posted at 08:23 pm, 21st August 2017I have a decent chunk of money in accounts with 2 different credit unions. I also have stocks held in a brokerage account. Do you believe those kinds of institutions will be subject to confiscation?
Caleb Jones
Posted at 09:33 pm, 21st August 2017Credit unions are not quite as bad as banks, but yes, they are still considered “banks” for the purposes of this discussion. I would never hold any long-term money in an American credit union; short-term or medium-term money is fine. For example, my HSA account for my health care is in a credit union, but that’s not long-term money.
Your brokerage account is okay if it’s not inside a government instrument like a 401k or IRA. (And of course there’s that thing I have about not owning any American stocks, but that’s a different conversation.)
DC
Posted at 01:06 pm, 22nd August 2017I’ve learned not to place your money all in one place and preferably have things under your name or control. Also, don’t trust small companies. I’m in Canada and I’ve put some money into Exempt Market Funds (not sure what the US equivalent is) that pay 6-8% a year. 2 out of 3 have entered into bankruptcy protection. 1 was straight up stolen by the fund manager, the other entered into protection because the insurance company that was supposed to “guarantee” the payment hasn’t paid. The 3rd is doing OK and I’ll see how that goes. Luckily this was extra cash and not something that I am relying on.
Some investors put their entire savings into 1 fund for hopes that the investment cashflow will pay their lifestyle. Not smart at all. I’d go for large, reputable firms and spread it out so your entire savings in the hands of one firm.
I’ve also placed money into a forex brokerage (based in Illinois) and that was straight up stolen by management as well. This was a smaller company, so now I am sticking with big names only.
Most of my net worth is in real estate and this has done very well for me, especially the last 2 years. But this is all paper gains. Even with real estate I spread it out over multiple cheaper properties incase one floods or burns down. Insurance helps, but even then, they will use weasel clauses to avoid paying or not pay as much as promised. Happened to a family property. In addition, if one tenant decides to suddenly not pay rent, at least I’m getting some cash from other properties. This could be a monstrous disaster if I had one large home and the tenant started to mess with me. In my province landlords have no where near as many rights as tenants. My advice in real estate, stick to properties that can attract professional middle class people, or invest in something with redevelopment potential and suck up some shitty tenants if its a tear down type of property.
Even with real estate its not 100% safe from government bs. Im in the PNW and our province was dumb enough to elect an uber-left wing government, which I fear could affect my life way more than ISIS, North Korea, KKK or whatever other fear mongering I hear on the news. Even our previous centre-right government put in a foreign buyer tax just to screw with the market and I have a feeling that the new government is going to expand on this to mess with us even more. Local governments have the power to fuck with people’s real estate assets as well, putting in dictatorship style policies that tax those that don’t live in their own home for the majority of the year. Can’t even AirBnB your own property.
I’m very intrigued with Crypto Currencies. The price fluctuation is not stable, but in regards to security, this can be completely anonymous way to store wealth. One can literally store unlimited cryptos on a piece of paper and as long as the private keys are kept private (and assuming the paper is not lost/damaged), no one can take your cryptos from you. No one will even know you own it. Can literally bury this out in the desert or multiple locations and it can’t be traced back to you if done correctly, but you have control of it.
greg g
Posted at 01:51 pm, 25th August 2017Did the creditor have a judgment against you? What happened to the property they did seize? Just interested in how this works legally. I’ve managed to avoid anything like that under perhaps riskier circumstances.
Caleb Jones
Posted at 02:03 pm, 25th August 2017Yup. (All my fault of course. I was stupid.)
I have no idea. I assume they auctioned it off / sold it for cash.
Newbie
Posted at 03:08 am, 28th August 2017I have been looking into these options but have not been able to find any exchange where I can trade eur/dollar into crypto without providing ID scans and proofs of address. Anyone know any way I can buy cryptos anonymously? I know there are some crypto atms but those arent anywhere near my area. I want something easy and online and available 24/7 and completely without having to prove my identity.
DC
Posted at 02:53 pm, 28th August 2017“I have been looking into these options but have not been able to find any exchange where I can trade eur/dollar into crypto without providing ID scans and proofs of address. Anyone know any way I can buy cryptos anonymously? I know there are some crypto atms but those arent anywhere near my area. I want something easy and online and available 24/7 and completely without having to prove my identity.”
I don’t know of a service that is online and available 24/7 without having to prove one’s identity. At least not in North America or other developed nations. It could exist though.
The only way I know of buying/selling cryptos anonymously is through private sales, but that opens up a new can of risks. As an example, you could literally wire me (or anyone) eur/usd and I (or anyone) can send you cryptos to your wallet. I don’t need your ID or name, only a wallet address. The question is, do you trust a method like this.
Another work around is to sign up (with ID) on a reputable exchange. Buy cryptos. Then, send those cryptos to another (or several) wallet(s) of yours. No way to prove whose wallet(s) you sent those cryptos to. Print said wallet(s) on UV protected paper, laminate and store in air tight container. Put in fireproof safe and/or bury it somewhere. You could even cut the wallet code in half and store it in separate spots as an added redundancy because the wallet code is useless if one only has half. Don’t put it in a safety deposit box as per Caleb.
Newbie
Posted at 11:05 pm, 28th August 2017Yes I have seen such options on some exchanges. Some of these had rating etc and you can migitate the risk by sending them money in chunks and only send the next chunk if you get your cryptos. The main issue for me was that these individuals know very well they are the only non ID option so the rate at which they sold cryptos was outrageous.
Why does that change anything? The point is that perhaps I do not trust the exchange with my ID and/or believe they have no business having my ID as they dont need it for anything. When I buy physical goods on Amazon for example in exchange for fiat currency they also dont ask for ID. Why should this be different? I suppose youre saying its not tracable that I still have those cryptos or not for tax purposes?
Something I considered is that I am not sure whether those exchanges require address verification or just ask for ID scan out of protocol. If its the second you could just send them a picture of a random passport you found on google images.
Caleb Jones
Posted at 11:14 pm, 28th August 2017Yes. That.
Because then the bitcoin isn’t at the exchange anymore. Just transfer everything to zero out your balance and you’re good to go.
They are forced to by the US government. I agree; it’s absolute bullshit, but the method DC describes is valid and will solve your problem.
DC
Posted at 05:49 pm, 29th August 2017Not sure if I’m doing this quote thing correct….
I agree they don’t, but its government requirement.
You would be taxed as income or capital gain when trading cryptos. The profit (assuming buy low, sell high) is the difference between the buy and the sell price, and that is taxed. The initial buy can be traced and any sales can be traced if done on a typical exchange. However, from a store of wealth point-of-view, you can move coins around so you can anonymously own and control them. Caleb’s post is about protecting your wealth so government can’t suddenly take if from you. My original post took it a step further to describe some experiences I’ve had with losing money due to theft. Tax avoidance is a different topic that requires different strategy.
For example, you sign up at Kraken exchange and they give you wallet ABC. You buy 1 bitcoin for $5,000. This buy can be traced. However, you also have your own private wallet XYZ you generated on an app that doesn’t need ID. Transfer the 1 bitcoin from wallet ABC to wallet XYZ. No one can prove you own and control wallet XYZ. The transaction from ABC to XYZ is public on the blockchain, but you can plausibly say you sent it to XYZ who is a random person for a purchase of some service. If the government or creditor tried to seize your assets, at least the coins in wallet XYZ can’t be suddenly taken from you.
If you need to liquidate easily, then you transfer it back to wallet ABC and sell it on the exchange. If the bitcoin is now worth $7,500 you are technically taxed on the $2,500 profit.
That probably won’t work, because you need to fund you exchange account with fiat currency. The name on your bank won’t match the random passport you found/forged…I think that’s a govn’t requirement for the funding to match the account ID.
Newbie
Posted at 12:02 am, 30th August 2017By the way any particular exchange you recommend for cryptos and a which wallet?
Newbie
Posted at 12:11 am, 30th August 2017But… in this case it wouldnt be tracable right so no one can prove it has to be taxed, it would be at my own decision of goodwill towards the government to decide whether I get it taxed or not..
DC
Posted at 10:23 am, 30th August 2017I’m Canadian, so I can use QuadrigaCX, which is based in Canada. Not sure if they accept international. I also use Kraken, which is an American company, and accept at least Americans and Canadians. The exchange will automatically give you a wallet. Never keep your cryptos at the exchange for too long. The exchange can be hacked (like MtGx got more than a billion dollars stolen), or management can steal your coins because they control the private keys. Transfer them out to a wallet you fully control. You can use Jaxx or some other app service. But the most secure imo would be a paper wallet (YouTube how to set one up) that you don’t lose or destroy. I’ve heard about USB wallets, but I’ve had USBs that have failed or kept in my pocket and went through the washing machine. Anything electronic can fail or degrade in the long term.
Not necessarily. When I buy real estate at $100,000 and sell it for $150,000, then the $50,000 profit is taxed. Its up to me to declare this, as the government is not tracking it. I don’t have to pay it, but if I get audited they will catch this and ram a giant stick up me.
I think Americans are technically supposed to declare world income. But as a Canadian, I could set up an off shore corporation (ex Cayman islands), fund it with cash to buy shares. Use the cash in my cayman account to buy cryptos. Any profits from the appreciation would be tax free because the caymans does not charge tax. Then I could use the cayman company to purchase real estate or other assets I can use.
Although the government can’t prove you control a certain wallet after you transfer your cryptos from the exchange, they can track what you buy and sell over the exchange. I guess you could buy cryptos on Exchange A, move it to Exchange B to sell. That makes it harder to track, but in the end, the buy and sell prices are recorded on the exchange with your ID and I assume the government can get this info. Another thought would be to buy on Exch A and sell the coins in cash to a local buyer. This would be hard to trace. You could also buy on Exch A and then use cryptos to buy diamonds, gold etc for long term wealth preservation if you aren’t bullish on cryptos. This is out of my realm with tax avoidance/evasion so do your own home work and risk evaluation.
Anti-libertarian
Posted at 05:58 am, 26th December 2018Banks: no longer places to store stolen money. Good!
While we’re supposed to feel badly for you, this narrative didn’t help. Look, you owed people money-their money-so of course they can sizes it from you. If I had your money in my pocket, and I’m buying other things, what do you do? “Ah who cares, let him have it?”
No. You’d call the cops or take me to court. You know you’re calling 911 the second some dude takes an iPhone you forgot at a cafe, what makes you think your creditors don’t want *their* money?
You want to store stolen goods, get a gun and find a fence to help you convert them into cash. Don’t expect the legal banking industry and the rest of us to help you.
John
Posted at 08:48 am, 1st June 2019That paperwork that was “flashed” was likely a court order signed by a judge for search and seizure… Do you really expect a bank to ignore that on your behalf?…. not only that… any other company that offers safe box services MUST comply with the same court orders when presented. No one in the country gets to ignore court orders signed by a judge. So you are dead wrong from the first letter of your rant all the way until the last period. What you are saying is all garbage… this is the final word on your argument and no you nor anyone else may respond except to agree 😁
Caleb Jones
Posted at 10:26 am, 1st June 2019No. Where did I say that?
Correct. I’m talking about privacy of my personal assetts, not ignoring court orders. It would be unlikely the court would be able to as easily locate private assets in the first place if they were not in a bank.
I realize you’re trying to be cute, but you also just made yourself look very foolish and you clearly have no idea who I am, nor have you read any of my other blog articles. I get a constant stream of people disagreeing with me and I always respond to them just like I’m responding to you now.
You are really angry about this little article you found on the internet. Do you work for a bank or something?