Hey everyone Me: Kevin Here of coming to you from my Airbnb in Florida that I had to crash in last night. The most important warning that I have for you in this whole banking crisis phenomenon is be careful of smaller Banks But also folks, the big fintechs that you've become so familiar with many of you have asked me hey, Kevin What about companies like Chime Wealthfront M1 Finance Robin Hood And the reality is, a lot of these companies will use the deposits that you have the cash deposits that you have with them and offer you yields. but these are not actually banks. In fact, if you look at a lot of these companies like for example, you go to Acorns.com One of the very first things you see at the top uh in this super fine print is Acorns is not a bank.

That's because in order for you to be a bank, you have to have a banking Charter But they want you to get yield on your cash deposited with them, right? So how do they do that? You deposit cash into the app they promise you let's say four percent interest or five percent at Wealthfront or whatever it is. But they're not a bank. So what they do is they take that money and they go deposited into small Regional banks that can offer a higher yield and then they take a cut. So let's say a small Regional Bank will say hey Wealthfront, we'll give you 5.25 if you put all your customer money with us and uh and then Wealthfront says okay, uh, that's great, We'll put a bunch of deposits in with you.

Wealthfront takes 5.25 let's say, and then offers you five percent. Wealthfront gets to take that 25 bip spread. Or maybe they even split that with the bank. You know, half for wealth, front half for the bank.

But the point is, when you're using Fintech apps, you should be astutely aware as to what bank is actually backing the cash that you have with those apps. Consider for example, Acorns is Not a Bank Acorns Visa Debit cards are issued by Lincoln Savings Bank Okay, that sounds great, right? Lincoln Savings Bank Has you know a reputation? In fact, if you go to Banking Strategist.com you could type in Lincoln Savings Bank and you'll see This is a bank that has about 1.8 billion dollars of assets under management. It's not a huge bank, it's a smaller bank. but 1.8 billion dollars is a pretty big bank, right? But then right after that it says or N B K C Bank And usually when I hear or it's because you're getting the or Nbkc bank is about half the size of Lincoln Financial barely has a billion dollars of assets under management.

So how do we know that Nbkc bank a bank out of Kansas that I've never heard of before actually has your Acorns money safe. Now again, up to 250 000 you should have FDIC insurance, but you still don't necessarily want to go through that crap, right? So it's a danger that I would consider. The same is true for potential banking stress at actual Banks whether that's like an ally or a Sofi But even look for example, at M1 Finance M1 Finance. For example, if you go to their fine print, you'll see they also use Lincoln Savings Bank which we just talked about.

But then they also use B2 to bank for people's deposits. Okay, well what the heck is B2 Bank When you look at Banking Strategist.com it says B2 Bank only has 41 million dollars under management. It is a bank out of Minnesota or that might be Montana Uh, Montana No, it is Minnesota a bank out of Minnesota that only has 41 million dollars under management. So then that makes you wonder.

Wait a minute. What about the other fintechs And there are a lot of them and you have to look the ones that don't actually have a banking Charter Go to their front page. They have to say it on their front page. For example, go To Chime.com If you type in Chime.com what do you get? You get chime the first thing you go to Chime.com and then type in command F or press command F on your keyboard and type in bank.

and then what's the first thing you're going to see? Chime is a financial technology company if the fintech, not a bank. Banking services provided by The Bancorp Bank North America Okay, that's a big bank and then it says or stride Bank Yeah okay so who the heck is Stride Bank Because if the smaller banks are going to have problems, well, then your money could get stuck a stock. Well Stripe Bank. It's not a huge bank.

It's got about 2.7 billion dollars is actually larger than Lincoln savings. Now just to to be clear, the assets that tier One banks have like JP Morgan assets under management. Like how much own deposits they actually have, they have 3.6 trillion dollars in assets. You've got a company like those.

That's why they're called too big to fail, right? Silicon Valley Bank which went bankrupt had about 211 billion dollars in assets these little Banks the tens of millions to maybe a billion dollars in assets under management according to banking strategist.com That's scary. That's not a lot of money that's actually with all of these different banks. And the concern here is my goodness if all of a sudden people leave these Banks the smaller Banks to go to the bigger ones, Well, the little ones get screwed. So JP Morgan's sitting at three point just over three trillion dollars in deposits Bank of America but 2.4 Citibank 1.7 Wells Fargo 1.7 U.S Bank Uh, 585 billion.

You know you're talking about hundreds of billions to trillions of dollars as opposed to some of these smallers that are sitting at maybe a bill. maybe tens of millions of dollars, right? It's insane now. I actually banked with a small Community Bank Uh, and last month I mostly moved 95 of our assets away from that small Community Bank I did that because I was fearful about the financial crisis that we might be going into and it just so happened that now banks are starting to fail so knock on wood. That was really lucky.

Fantastic! My startup, We're safe. You know we were not even exposed to Silicon Valley bank anyway, but you know I was precautious a month ago. Uh, and now we're at JPM. But anyway, the bank that I had banked with had 186 billion or a million dollars under management.

Really small, right? But some of the banks that like M1 Finance is using are one-fourth that size. So I think these Banks could be going through massive, massive stress uh, as as a result of the contagion of Silicon Valley Bank and any kind of fintech could be exposed. So keep that in mind if you have cash not and I'm not talking about in a brokerage account, but if you have cash on deposit somewhere, it could be at risk. so keep that in mind.

Very important. And as always, if you like my perspective, check out the programs on building your wealth. link down below with the Saint Patty's coupon linked down below that you can take advantage of now until the coupon expires at the end of next week and then what happens after expiration price goes up. You get lifetime access, so even if you're not ready to study now, a lot of people join now.

so that way they're in and then when new content is added or they want to pop into a course member live stream and ask a question they can do so. follow up if you have money at a brokerage like Weeble or Robinhood and it's not in the cash sweep program like M1 save or spend at M1 Finance or the cash portion at Robinhood where you're depositing it where you could use a debit card to get it out. if your cash is at a brokerage which could be Robin Hood or Weeble or whatever you are protected by Sipc up to five hundred thousand dollars, right? But yes, look is it true that your money's probably safer at a bigger institution, even from a brokerage point of view? Yeah, probably. Uh.

Anyway, look I I don't want to, you know, spread fud or whatever. I just I just don't want anybody to lose money. Uh, so anyway, good luck out there. We'll see in the next one.

Bye.