Should I stay or should I go ? Wamu account.

[guitarbug]

Anyone else considering jumping on the fear wagon and pulling out of Washington Mutual after todays news and Wamus recent stock drop ? I hate to be a part of this fear driven collapse, but I am a little freaked out right now with all my hard earned money sitting there. I had a great year so far and would just about die if I had to shut down my business due to the collapse of my bank. If anyone knows more than I do about economics and is up to date with whats going down right now (99% of the group hear most likely) , please give me some advice on this matter. I dont want to have to go through all the crap of starting a new business account and switch to another bank that could be in the same boat. Wamu did report that it has the capitalization to avoid this, but who knows ?

[picman]

Nothing wrong with a little diversification - open a savings account at another bank.

[dbphotos]

Unless you have more than $100,000 in bank deposits (savings, checking, cd's, etc.) you are protected by the FDIC and there is no reason to run. No one really should have more than that amount in a bank anyway. If you have more than $100k the rest should be with a reputable investment firm which then covers you with SIPC up to $600,000 ($500,000 investments and $100,000 cash). The SIPC coverage is for collapse of an investment company, not market losses. Check here for details: SIPC.

Stock price of a bank has no impact on account holders unless you own stock in that bank.

I always recommend the counsel of a good investment advisor. I use 2; Schwab and a local Dallas advisor named Dan Levin. There are many good advisors, just interview them well.

[LanceHaynie]

Originally Posted by dbphotos

Unless you have more than $100,000 in bank deposits (savings, checking, cd's, etc.) you are protected by the FDIC and there is no reason to run.

Exactly! Well put!

The worst thing you can do is join in the take your money out rush, that just aggravates the situation. Either way just like with IndyMac, the Feds wont allow a bank that large to fail, they will take it over and sell it.

[LanceHaynie]

WASHINGTON MUTUAL Says It's 'Well Capitalized,' With $40 Billion Liquidity... Read Article

I love the Drudge Report!

[guitarbug]

Thanks David, Lance & Brian. So if its under 100k and they folded would i get 100% of my money back ? Not there yet, but getting close fast! I did read that article before I posted this but I never know what to believe with finance news. I have been screwed once allready as some here know and don't need any other surprises. I know all about finding and making money, but how to invest it or secure it is another story. Think I will seek some professional advice soon. Want to start investing in something but know nothing about stocks and from what I am reading it's a risky business. Allthough they do say that the markets are in a bear state and have to change sooner or later. Whatever the heck that means, lol..

[Gambit]

I'm not sure if it's 100k per person or per account, but yes, the FDIC insures deposits up to that amount. 100%. Check out what's going on with IndyMac - something like 90% of their customers are eligible to get their full value, the other 10% had over 100k. At least, that's the figures I got out of the 30-second newsbite on CNN this morning... ;)

[LDB]

Each account holder is covered for all their money up to $100k under FDIC coverage. You can have more than $100k in a bank and still be fully covered in certain circumstances, i.e. husband John Doe has an acct covered for $100k, wife Jane Doe has an acct covered for $100k and the couple have a joint account John and Jane Doe covered for $100k so they are covered for $300k under FDIC insurance.

[dbphotos]

You are covered up to $100,000 total for all FDIC insured accounts. Here's a good video from FDIC on all the questions you may have when a bank fails, etc. http://www.vodium.com/MP/MPF/1.1.3/m...=mediapodflash

A "bear" market is when the stock price are down and/or declining a "bull" market is when stoc prices are high or declining. If you could time things perfectly you would always want to buy at the end of a "bear" market and sell at the end of a "bull" market, but a better strategy is to buy over time (dollar cost averaging) and accumulate wealth. If you have close to $100k in a bank I'd STRONGLY suggest you get with an investment advisor to go over your options as you are leaving a lot of money on the table and you won't get rich at 2-3% returns that you will get from banks. 2 things to keep in mind when investing; make sure you are maxing out your tax deferred (401k, IRA, etc.) investments before you invest in taxable accounts. Once you have maxed out your annual "tax deferred" investments, then start with taxable investments. When you are starting out a good place to be is "no-load" mutual funds from a strong mutual fund company, instead of buying individual stocks or other investment products. Once you are comfortable there are a lot of other good investment choices to choose from, just stay away from the gimmicks. A good counselor will get you on the right track.

Bottom line, now is a good time to buy while stocks are low. Why wait until the prices go back up again and get less for your money?

In case I haven't said it enough, get a good advisor/counselor and make a plan. What's that old saying? Those that fail to plan, plan to fail...

Also, here's the online FDIC insurance calculator that will tell you how much is actually covered. There are variables to the $100,000 rule. FDIC CALCULATOR.

[Rson]

Don't go to BOA, I swear a bunch of drunks that are fine happy for no reason work there.

They tacked me for no apparent reason other than they felt like it.....I called and had to have it reversed only after waiting 20 min on hold.

[LDB]

Originally Posted by dbphotos

You are covered up to $100,000 total for all FDIC insured accounts.

That isn't correct. From the www.fdic.gov website: Deposits maintained in different categories of legal ownership at the same bank can be separately insured. Therefore, it is possible to have deposits of more than $100,000 at one insured bank and still be fully insured.

There are 8 categories of ownership so in theory one could have $800,000 of insured deposits however it is unlikely one would fall into all 8 categories. It is more likely one could only fall into 3 categories as I mentioned earlier.

[LanceHaynie]

Originally Posted by Rson

Don't go to BOA, I swear a bunch of drunks that are fine happy for no reason work there.

They tacked me for no apparent reason other than they felt like it.....I called and had to have it reversed only after waiting 20 min on hold.

Not to hijack a thread (atleast for too long) but AMEN!!! We have clients that wire us money a lot since most of our clients are out of state... $12 for an incoming wire... $12!!!! To take money!!!

End Rant :)

[guitarbug]

Again, thanks guys! Cannot put a price on the info I get here. Maybe I should invest 25 bucks and become a premium member someday, lol..

[andyz]

There is a lot of good advice in the posts above. I'd swear it sounds like it came from bankers. You guys are better educated that the common customer.

Yes, you can easily have more than $100K in fully insured deposits. You can have $250K in an insured retirement account. Those are now separate as they used to be $100K. Joint accounts are separate from individual accounts, as was mentioned above.

One mistake many people make is to put $100K in an insured account to get a high interest yield. That interest won't be insured. Go to $98K or some lower number to allow that interest earned falls into the $100K bucket.

WaMu should be stable. If in doubt, ask your CPA to review their financials. These are available on the FDIC's website. What I would look out for is a small bank that is heavily into subprime mortgages or another concentration of credit in a troubled area.

Deposits aside, loans can be an issue too. If you have loans at a bank that is troubled, they could be less willing to work with you if you want a restructure. If you have a balloon payment coming due, they could be less likely to renew, wanting the cash. These are just possibilities, dependent on the bank. Troubled banks are a small fraction of the total.

[Jenny Z]

Originally Posted by Rson

Don't go to BOA, I swear a bunch of drunks that are fine happy for no reason work there.

They tacked me for no apparent reason other than they felt like it.....I called and had to have it reversed only after waiting 20 min on hold.

No joke... we dumped them a few months ago in favor of a local bank.