• The unbanked. This is a rough category to be in. Most of the world doesn’t care about you, let alone a bank. The processing costs of opening an account would already be more than your total net worth. You typically keep what you have under a mattress.
  • The underbanked. You might not have a credit card or a full blown checking account, but you might have prepaid debit cards and can therefore interface with a broad set of merchants.
  • The banked. Standard stuff: checking, savings, credit cards. Maybe you have a mortgage or car loan. People are willing to lend to you. You might have a portfolio of stocks and other investments options.
  • The superbanked. You have all of the above but more. A team advises you on portfolio allocations. You own stocks, bonds, have access to options and other derivatives. Advisers will explain how to minimize the tax implications of all of your transactions. Preferential interest rates are offered and you can get a loan at will. “Exclusive” investment funds are made available to you. Your private wealth advisor invites you to box seats at a Yankees game and sends you a bottle of 1982 Chateau Lafite for Christmas.
  • The ultrabanked. This is where you want to be. Paradoxically, at this level you are actually trying to disentangle yourself from the traditional banking system. You’re no longer storing your wealth as much as hiding it. You have shell companies in various island regions — not to be tax optimized, but to simply not pay taxes at all. Stocks? Nah, you store your wealth in Picassos. And not in your apartment, usually in a storage facility at an airport so that it’s perpetually in transit and you do not have to pay taxes. Black bags with diamonds in safe deposit boxes, etc. etc. The must haves in this category are anonymity of wealth storage, tax evasion, and the ability to move assets at will for reasons you do not want a lot of people asking about.



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Paul Chou

Paul Chou

VI & XVIII @ MIT; GS; YC; LX. Nerdy asian kid from NJ, prankster, lifelong believer in how lucky I’ve been. Proof is my wife — that’s Q.E.D. real fast.