The End of the World! (Financial Fear)

Recently in California (no comment) we have people standing in line to withdraw their money after a bank went under. It is reminiscent of the Great Depression. Shouldn't people get worried? Not hardly. The important thing to remember in times like this is that financial decisions based on fear are never good ones. The bank (as all reputable banks) was FDIC insured. Which means, ALL members are guaranteed up $100,000 by the US government in the event of a bankruptcy. The funniest (or saddest) part of the story is that people stood in line for hours and some even stayed overnight to get their money. Banks are only required to keep 10% of their total assets in liquid form at a given bank. Therefore, even if the bank wasn't in financial trouble, it could not pay out money to everyone in line. So standing in line to get your money from a recently bankrupted bank doesn't make you look smart and savvy, it makes you look like a moron. You will get your money (eventually), and if you have more than 100,000 dollars sitting in your checking account you are a moron for other reasons. The point of this story isn't to make fun of people from California (they're too easy targets anyway), but rather to encourage you to never make financial decisions based on fear. When you have a clear head, you make better decisions. When scared, you act rashly.