Relying on a single bank is a major vulnerability. Maintaining accounts with at least three banks—one primary and two backups—provides critical redundancy. This strategy protects against institutional failure, account lockouts, poor customer service, and provides leverage in disputes.
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During the 2023 banking crisis, IBKR’s holdings of short-dated bonds allowed it to benefit from rising rates while competitors with long-dated assets suffered. This shows a conservative balance sheet is not just defensive but an offensive tool to win client trust and outperform during turmoil.
The Profit First methodology flips the traditional 'Sales - Expenses = Profit' formula. By creating separate bank accounts for profit, owner's pay, taxes, and operations, businesses ensure profitability from day one, forcing more disciplined spending as a built-in habit.
Silicon Valley Bank was already a member of deposit networks that could have prevented its collapse. However, 94% of its deposits remained uninsured because the bank failed to actually use the tools at its disposal. This reveals that the mere existence of a solution is worthless without proper implementation, integration, and incentives for adoption within an organization.
Contrary to the push for an "efficient" (smaller) Fed balance sheet, an abundance of reserves increases bank safety. Bank reserves are immediately accessible liquidity, unlike Treasuries which must be sold or repoed in a crisis. This inherent buffer can make the banking system more resilient.
Platforms like ChatGPT achieve global scale in years, not decades. This speed means relying on a single payment service provider (PSP) is no longer viable. Companies now need a multi-PSP strategy to optimize routing and maintain leverage, creating a market for orchestrators like Basis Theory.
Relying on monthly financial reviews is too slow. Instead, treat finances like a body's vitals: glance at cash daily (pulse), hold a 15-minute money stand-up weekly (vitals), and perform a full review monthly (physical). This cadence creates a constant, real-time understanding of your startup's health.
Recent breakdowns in student loan processing, AI governance, and cloud infrastructure highlight the vulnerability of centralized systems. This pattern underscores a key personal finance strategy: mitigate risk by decentralizing your money, data, and income streams across various platforms and sources.
To avoid premature scaling, Nubank required three conditions before entering a new country: 1) Profitability in its core market (Brazil), 2) Secure banking licenses and funding, and 3) A tech platform that could launch a new market as a "call option," not an "all-in" bet.
Large enterprise clients are often diversified themselves with multiple departments and divisions. A powerful de-risking strategy is to leverage your existing relationship as a proven vendor to get introductions and sell into these other parts of the organization, effectively diversifying your revenue stream within a single account.
To mitigate client concentration risk, the quantity of relationships you maintain within a single customer account must be directly proportional to the revenue it generates. Relying on one or two contacts is a critical failure point, especially during leadership changes, transforming generic advice into a specific, quantifiable strategy for account security.