When the News Becomes Operatic

In 2025, I’m attempting to reduce my stress.

At the same time, a lot of people are concerned about what they hear on the news about different moves the current administration is making and planning.

So, what do I think we should do concerning our finances? What actions should we all take?

1. Worry.

But worry and stress are closely related. I’m trying to take that off my list

2. Try to find out more about what might be making people concerned through the media…leads me to more stress.

These two actions don’t work, so I’m resorting to going back to basic principles.

I’m processing this by looking at the different risks that I hear people concerned about.

The first concern comes down to data breach risk. People seem to think that the federal payment system might no longer be secure.

Has our data breach risk really increased? I have no idea if my data ever was secure. I watch enough spy shows to know that getting my information is probably easy for someone who really wants it.

The best way I’ve found to mitigate data breach risk is to look at my bank and credit card accounts regularly. That way if someone else uses my information, I can inform the bank promptly.

As far as the federal payments system, how do I interact with it? Well, our company payroll makes payments for our withholding. I can’t do anything about that. It’s mandatory to use the system.

If I need to pay the IRS because I owe money or need to make an estimated payment, I’ll use checks through the mail. I’m not sure that’s more secure, but it’s an alternative to trying to use the EFTPS system. But, I gotta be honest—the reason is that I don’t use the EFTPS system often enough to have figured it out, so it’s easier to write a check and put it in the mail, not because I’m think this mitigates against data breach risk.

Not invest in I-Bonds? But I like my I-Bonds! It’s the beginning of the year, the variable rate is high, and everyone knows (irony here) that inflation is going to go up, so my I-Bonds will make my social media status shine.

I think the I-Bonds purchase system is awkward, but the feds probably already have all my bank account numbers and we’ve got a secure internet line. However, I could reduce my data breach risk by practicing good computer hygiene like changing my passwords and making sure I have two-step verification on my accounts.

Let me think through moving my money offshore. What about Canada?

First, I have to get the money to Canada. Wire transfers are monitored to deter money laundering, so wiring money out of the country won’t hide anything. I could drive to Toronto with a check. I like Toronto, but it’s 8 hours away. Fly there? That’s going to cost money. How much is it worth to me?

Will the Canadian bank even take my check? Who knows.

Next, the US paperwork will start. Moving money offshore is a strategy money-launderers and tax avoiders have been using for a long time. The IRS has responded by requiring forms to be filled out.

I’d start with filing form 8938 on the tax return and the FBAR with FinCen. Yes, it’s as confusing as it sounds. You might need to pay someone to do it for you. More of an expense for this.

If I decide to blow off filing the forms, the US passed FATCA in 2010 - requiring foreign banks and brokerages to report American owned assets to the IRS. In other words, my Canadian bank is required to report to the IRS.

As, a colleague, puts it, “Failure to report offshore financial accounts carries draconian penalties. Falling afoul of these rules is likely to lead to worse outcomes compared to confiscations.”

Okay, moving money to Canada seems like it’s not going to fool anybody and is going to be full of paperwork (which I do enough of already.)

But the colleague brought up confiscation risk. I think it was in jest, but still, it lurks.

A new kind of risk! It’s not market risk (the stock market going up and down), concentration risk (having a lot of investment in one type of asset) or credit risk (risk of not getting paid when you loan money). Confiscation risk is the risk of the government seizing my assets.

This risk is not zero and it feels stressful to contemplate. But what are my alternatives?

Buy gold? There’s no reporting requirements to holding on to gold. But guess what asset actually has been confiscated in US history—gold! And that was by FDR during the Depression because he thought it would help.

Even if I hide my gold to avoid the confiscation risk, what does gold really get me? It’s at risk with fires, hurricanes, and floods (ah, global warming).

Plus, gold is physically heavy. All my de-stressing strength training won’t help that much. If I do buy gold, I need small coins so that I can take it and run. But if I’m buying it to avoid confiscation risk, it’s unlikely I’ll be able to get change.

I mean really a $20,000 bar is overkill for toilet paper.

So, what to say to people concerned about the current talk about the federal monetary system? I understand the concern. I’m thinking about action and inaction. What action can I take? What can I control?

For security risk:

Change passwords

Check bank and credit accounts regularly

For market risk:

That’s the same as it always is. The stock market goes up and down.

For stress risk:

Take a media diet, laugh, and stock up on toilet paper.

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