OK, so the bank failures quietly go on. Last week the 21st bank of the year failed. As the economy goes down the tubes in front of our eyes, and before a scary wave of bank failures happens, maybe it’s time to revisit the notion of cash on hand.
Here’s the scenario. Your friendly neighborhood bank… just went under. You know, the place where, back when you had a job, you used to go and stand in line on Friday afternoons and hope that the law of averages somehow brought you to the window of the nubile young teller with the tight sweater and just a trace left of teenaged acne… (yeah, I know you had direct deposit, but I like the image).
Anyway, the shit just hit the fan and the bank has gone under. Instead of an orderly line of people inside the bank, there’s now an unruly mob OUTSIDE the bank. You have some money locked up in there and you can’t get it.
The government’s going to help you, of course. The FDIC has insured your deposits up to $250,000. You’ll get your money back, all right. In three months or maybe six months, after everything gets sorted out, as long as the feds themselves haven’t gone belly-up before then.
Meanwhile, you need money NOW. Your bills haven’t gone away just because your bank did. And US greenbacks, for the time being, are still good. Merchants will accept them and exchange items of actual value for them. What merchants won’t accept, in this scenario, are credit cards. See, because the credit system has frozen, too. And the Rotties need food. And the guns need ammo. And the kids need new games for their Wii.
So what do you do? Hopefully, you have a stash of cash on hand to weather the storm. Personally, I currently have $2,500 in cash. $1,000 is tucked into the inner breast pocket of a pinstriped three-piece hanging in the bedroom closet. You’d never think to look there, would you? $1,500 is in various other places. It’s all twenties and tens because when SHTF, nobody’s going to be breaking large bills. In fact, I’m toying with the idea of picking up $500 in ONES. And I’m thinking I should up the entire amount I’m holding to $5,000.
Want to hear a secret? I know of one guy who has done pretty well in commercial real estate. At this moment, he has $40,000 stashed in an undisclosed location in his house. The location is undisclosed because I’m choosing not to disclose it. But I have seen the money. It takes up less space than you might think. And it’s stashed in such a way that anytime he needs to, he could just grab it and go.
So the questions are – Do you keep a SHTF money stash on hand? How much is it? Where do you hide it?
- Max Impact
17 responses so far ↓
1 noisynick // Mar 31, 2009 at 7:37 am
I totally Agree i for one keep about 6 months worth on hand in all different denominations but the bulk is about in 50’s 20’s and smaller.
Your right about the 40k i hAD 50k in a cigar box once and it was only half full. My favorite hiding place is an over size wall rcepactacle easy to install and overlooked.
The 6 months worth of money is based on all known bills plus 40% works out to a little over 10k used to keep more then i decided there were better places to put it than in a can. If it all goes to Hell paper money won’t mean much and Gold will be right behind it……………
2 Brad in FL // Mar 31, 2009 at 7:37 am
I keep $5000 in cash at home, some in the 800 lb gun safe and some in another location. I have learned that when a hurricane is coming or afterwards, no one can take a credit/debit card without power. If the banks do close and I need to pay bills it would not bee too hard to get things done. Although after years of paying bills on line it would be tough! The question is will the you still be able to purchase money orders to send as payments? I don’t know of anyone that accepts cash anymore? I would love to have more cash on hand but unless I hit the lottery….
3 Brad in FL // Mar 31, 2009 at 7:37 am
I keep $5000 in cash in 20’s and 10’s at home, some in the 800 lb gun safe and some in another location. I have learned that when a hurricane is coming or afterwards, no one can take a credit/debit card without power. If the banks do close and I need to pay bills it would not bee too hard to get things done. Although after years of paying bills on line it would be tough! The question is will the you still be able to purchase money orders to send as payments? I don’t know of anyone that accepts cash anymore? I would love to have more cash on hand but unless I hit the lottery….
4 Brad in FL // Mar 31, 2009 at 7:39 am
sorry hit submit twice!!!!
5 Hokiemagnum // Mar 31, 2009 at 8:00 am
I spent all my SHTF dough on bannable firearms, food reserves, generator, hookers and blow. I need to restock the reserves.
Don’t know about $5 G’s though….
6 Celmare // Mar 31, 2009 at 8:04 am
Only issue about hiding cash in a ‘undisclosed location’: what happens if the house burns down? Unless it’s in a fireproof safe, but that might tip off someone that there is something valuable inside.
That’s always been my dilemma. Any thoughts?
7 3rdman // Mar 31, 2009 at 8:27 am
Clemare
Buy a good quality gun safe that is also a fire safe and anchor it to the foundation. This should take care of your concerns. A thief can work on that safe all he wants and still not get in it short of a cutting torch or some C4.
8 vladviking // Mar 31, 2009 at 9:54 am
I just cant see keepin much around. Especially when you got a gov. like this one creating wealth out of thin air. I see the value of real goods like flour, salt, meat and such basics only going up while cash just looses it’s potential sitting in your safe. Better to invest in beans, bullets and bandages now rather than pay hyper inflated prices later. 5000$ could be worth 1000$ in a couple months. And I’m talking real time current events.
9 Prep-o-Matic // Mar 31, 2009 at 11:46 am
1. I keep around $500 stashed around the house (400 in 20s, 80 in 1s, and a couple of rolls of quarters). I agree with Vlad that keeping much more than that incurs some serious risk (but then again so does keeping any dollar-denom investments…diversify!)
2. Once a goblin has rifled your drawers looking for cash/valuables, the freezer and hanging clothes are on the short list to look for cash. Picture frames, books, and can safes are on that list as well. Plain-sight indoor caches are tough to design. I’m not sharing mine here but I will say that diversification is the key. Don’t put it all in one place. Don’t put it in an object worth stealing. If you put it in junk/consumables, make sure that the junk doesn’t get thrown out.
3. There’s always money in the banana stand.
10 Snoop-Diggity-DANG-Dawg // Mar 31, 2009 at 1:53 pm
A very good idea inded, MI. I’d respectfully suggest considering a little precious metals, as well. Not ‘legal tender’? I doubt the black market will mind…
All that paper (cotton) money will be lost if, God forbid, the house burned down. After a fire silver & gold will still be still be silver & gold
11 Snoop-Diggity-DANG-Dawg // Mar 31, 2009 at 2:05 pm
Also, I never consider precious metals an investment, but rather more simply ‘wealth preservation’. Sky-rocketing interest rates will destroy the dollar’s purchasing power.
My 14$ silver slugs will still buy 14$’s worth of goods (in today’s dollars) when gas is “12$” a gallon.
12 Steelheart // Mar 31, 2009 at 7:54 pm
I only keep a few hundred in the safe (mostly 20’s). However, I”ll be increasing that once I sell 2 pistols that are surplus to what I need (XD & a P9).
Steelheart
13 Richard // Apr 1, 2009 at 9:49 am
I keep $500 in my belt at all times plus more in my safe. I keep a mix of $100, $50, and $20 bills. I try to keep one month of non-mortgage expenses worth of cash at all times. I also keep some silver.
14 Richard // Apr 1, 2009 at 9:53 am
one more comment - if all banks shut down, you have Force Majeure clauses in virtually all debt contracts that would take effect until the Force Majeure situation ends. Don’t worry about your mortgage, credit cards, student loans, etc. Do worry about how to pay for food and critical items during the Force Majeure situation. Also worry about whether you have a job when the Force Majeure situation ends because those that are not short-term natural disasters are extremely hazardous to private businesses. No banks means no main street economy in a matter of days or weeks.
15 theotherryan // Apr 1, 2009 at 8:35 pm
One great thing TOM brought up is that people who get checks NOW (rent, etc) would continue to get them. If nothing else the landlord/ bank can wait for a month. Eviction/ foreclosure takes a long time so if a situation where you can’t get your money (or make some more) lasted that long you have bigger issues be they personal finance or the darn world ending.
It would be awhile (months) in a bank failure but not TEOTWAWKI situation before they could figure out a way to legally stop taking checks. Of course the grocery store and the gas station could decide they just accepted cash as could other merchants.
I think it is a good idea to keep about one months worth of CASH expenses (food, fuel, etc) in mixed bills on hand. To me this is enough to deal with a bank holiday on steriods but also relatively small enough that if it was stolen I would not be taking a MAJOR financial hit.
I think precious metals are also good but they don’t replace good old greenbacks.
16 Mike in Maine // Apr 3, 2009 at 12:29 pm
Beware Civil Asset Forfeiture. I can picture a court case on the docket, United States vs. $5000 of Max’s Cash.
After all, surely only a drug dealer or terrorist would keep cash on hand.
17 Sneaux // Apr 16, 2009 at 2:12 pm
Right now I have about $1,500 in 20s in a little safe in my closet. Nothing terribly covert - and I’ve been toying with the idea of emptying out my savings account to up that cash-on-hand. I’ve never been very trusting of banks anyway - and these days even less so. Since savings accounts don’t garner much in the way of interest, I’m not losing out too much on having it at home instead. Maybe I’ll do that this week.
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