Yes and No. How’s that for an answer?
In all seriousness, yes, we feel that the risk of identity theft is strong enough that you should make changes. However, you should not make changes solely due to this particular situation. Even if this Equifax breach had not occurred (and for those of you not impacted this time), we would recommend most of these same tactics to help prevent identify theft. There are so many headlines about security breaches each year that it pays to take a few minutes and take action now. Here are a few things you can do:
- Alerts: Most credit cards and banks let you set up alerts. For example, I get immediate text notices when any of these things happen: a) any transaction over $1,000, b) any ATM withdrawal, c) any foreign transaction, and a few others. You can check with each bank/credit card to learn how to set up these alerts and to determine how to customize them as you please.
- Credit Monitoring: You could subscribe to a service that monitors your credit report and alerts you to changes or new requests for credit. You can do this at any of the three major credit agencies (Experian, TransUnion, and Equifax) as well as other firms such as https://www.creditkarma.com/. For this particular Equifax breach, you can sign up for one free year of monitoring services by visiting https://www.equifaxsecurity2017.com/.
- Free Credit Report: The official website to check your credit reports for free is www.annualcreditreport.com. You can check each report once per year. Some people check all three at once. Others retrieve each one every four months so that they check each on a rotating basis. If you notice any errors, you can then report it.
- Passwords: It’s best to have a unique and complex password for each of your financial institutions (e.g., banks, investment accounts). Furthermore, many institutions allow for two-factor authentication where they send you a code via text message after you log in. We would advise you to enroll in this enhanced authentication.
- Opt-Out: You can opt out of prescreened credit card offers by calling 1-888-567-8688 or visiting www.optoutprescreen.com.
- Shred: Shred important documents that have account numbers or other identifiable information instead of just throwing it away.
- Credit Fraud Alert: Placing a fraud alert means that a business is supposed to (but is not required to) verify your information more thoroughly before issuing credit. It is free, and if you place it with one agency, they will report it to the other two. The downside is that there can be a bit more hassle when you truly want to get a credit card, loan, etc.
- Credit Freeze: More severe than the fraud alert, a full credit freeze makes your credit report unavailable and therefore prevents new companies from issuing credit. There will likely be a small charge ($5 to $10, though you can try to get this waived with proof of identity theft), and you must initiate the freeze with each of the three credit agencies. The downside, of course, of the freeze is that it will create difficulty for the legitimate needs of someone to pull your credit (e.g., if you get a new cell phone plan, if you change banks). You will be issued a PIN and would need to contact each agency to lift the freeze. You can learn more about freezes and alerts here – https://www.consumer.ftc.gov/articles/0497-credit-freeze-faqs. Note that even after placing a freeze, your existing lenders and creditors can still access your report, so it’s important to follow some of the other suggestions here as well.
Good luck, and let us know if you have any questions or if you utilize other tools and techniques to help keep the bad guys at bay.
After 20 years in the corporate world, I decided to follow my true passion for helping people improve their financial lives. I spent six months doing informational interviews with a variety of firms, large and small, publicly traded and independent, commission-based and fee-only. Virtually everyone I met was helpful and supportive, and I greatly appreciated their advice. However, it quickly became clear that this is a tough industry to enter – between 60% and 90% of new advisors quit or get fired within three years. The reason is simple – they didn’t bring in enough assets.
In most of my discussions, I heard words like “marketing”, “sales”, “business development”, and “assets under management”. Things changed when I met Pat and Josh at Greenspring. I heard words like “client”, “service”, and “asset allocation”. At Greenspring, while bringing in new money is necessary, of course, in order to sustain the business, it is not the primary focus. First and foremost is doing a great job for clients and delivering outstanding results. Because of this, unlike most firms, there are not strict quotas for bringing in new clients. Also, Greenspring is unique with a team approach where two advisors are assigned to each client relationship. Instead of spending 90% of my time prospecting for new business, I can focus 90% of my time on developing and implementing strategies that help our clients.
Fortunately, our clients agree. With a 99% retention rate and steady stream of client referrals, Greenspring is thriving. I feel lucky to have found Greenspring. After all, instead of spending time finding wealth, shouldn’t wealth management be more about managing wealth?
At Greenspring, our investment philosophy is pretty simple. We try to help our clients manage their investing behavior by focusing on the four simple things they can control:
- Being globally diversified
- Being disciplined
- Controlling costs
- Minimizing taxes
Arguably the wisest and most successful investor in history, Warren Buffett is certainly the richest (at the end of 2013 he was worth an estimated $60 billion and made roughly $37 million per day last year!). One of my favorite reads each year is the annual letter he writes for shareholders of Berkshire Hathaway (see the link for access to his letters dating back to 1965). You will learn more about business and investing than you can imagine simply by reading this treasure chest of information.
Fortune Magazine has just released an exclusive excerpt from this year’s upcoming letter. I was struck by 3 things that he emphasized that resonate closely with our approach:
- The importance of managing behavior – His 5 “fundamentals of investing” all focus on avoiding negative behaviors (” If you can enjoy Saturdays and Sundays without looking at stock prices, give it a try on weekdays.”)
- Validation of passive investing for most people – “The goal of the nonprofessional should not be to pick winners — neither he nor his ‘helpers’ can do that — but should rather be to own a cross section of businesses that in aggregate are bound to do well. A low-cost S&P 500 index fund will achieve this goal.”
- The wisdom of low cost diversification – “Following those rules, the ‘know-nothing’ investor who both diversifies and keeps his costs minimal is virtually certain to get satisfactory results.”
If you have an interest in becoming a smarter investor I would encourage you to give Mr. Buffett’s annual letter a read when it is released on Saturday. If the excerpt is any indication, it’s sure to be a great read.
Information contained herein has been obtained from sources considered reliable, but its accuracy and completeness are not guaranteed. It is not intended as the primary basis for financial planning or investment decisions and should not be construed as advice meeting the particular investment needs of any investor. This material has been prepared for information purposes only and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Past performance is no guarantee of future results.