TechWag

There is a lot of discussion about WAMU this morning, and how it needs to find a buyer to keep from falling over, but many startups in Seattle use WAMU as a place to do their company banking. There have been a number of conversations within the startup meetups over the last couple of days on what can you do if you use WAMU.

Like many other people, the first thing to do is “don’t panic” that will just lead to even worst things happen, but the best advice I have seen so far is to make sure that your money is spread amongst a number of banks, and that you do not go over the FDIC insured limit of 100,000 dollars in the account. That way the impact is minimized, and while no one knows how long it will take the FDIC to pay out on the money, at the very least you know that it is the USA that is insuring your assets and not AIG.

We have been talking about things to do to survive a recession since last year when the housing crisis started; here are some good ideas on what you can do.
Will the recession hit Seattle Startups
Surviving a recession in Seattle
Recession, forget that, we are doing a startup
Looking at a entrepreneurs recession

While none of us are bankers, none of us are brokers, and the volatility indexes have gone through the roof, there are still simple things you can do as a startup that will minimize your risk to any bank collapse. The idea is that you have to remain solvent to make payroll and bills, as long as the startup can meet those two primary goals, then you should be able to ride out what is turning into a very bad year for business.

Don’t keep more than 100K in any banking account at least for now, the reason for this is the FDIC insurance limit

Get to know the FDIC, go here, read up, and make your own decision based on your ability to tolerate risk

Know that this is not over with yet; WAMU is not the only one that will continue to have issues, pay attention to what is going on, then make your decisions based on your ability to tolerate risk

Don’t run the bank, one of the major issues with the great depression was the bank run, the loss of money for anything under 100K can be dealt with, so using your own common sense, if we run the bank, we might still be covered, but we will be feeding the fear, and in many cases feeding the reality that is the banking industry today.

Best of luck fingers crossed, but so far the only stable banks seem to be Bank of America, Banner Bank, and Wells Fargo, but that statement is based on what I have read in the news, check the links, they will take you to MSN Money. There are probably other stable banks out there, we just don’t know about them; again banking is not our strong point. The bigger problem is going to come in where the bank account and the number of banks left over might not be able to support what you have, if you have one million dollars, you need ten banks, although it is unlikely that you have one million dollars, this is a bit of perspective, and again, all depends on how you manage or tolerate risk.

Tags: banks, wamu, seattle, startups, advice, fdic, insurance, insured, money, advice, free, risk, tolerance, interest

Tags: business, sad //