Society has come under a unique amount of stress in recent years. So have plenty of financial investments.
A pandemic created economic disruption around the globe. The “Great Resignation” put pressure on businesses—pressure that those companies have passed along to consumers in different ways. Ongoing inflation continues to aggravate income and increase expenses. War in Europe is impacting supply chains.
No matter where you turn, there are factors contributing to the financial pressure cooker of the present. As individuals look for ways to preserve their wealth, the specter of cybercrime remains a very real concern, as well.
The pandemic served as a catalyst to amp up cyber attacks, compounding the issue of protecting wealth. Not only do investors need to find ways to avoid losing hard-won gains in a tough economy. They also need to protect their wealth from actual theft and fraud.
Safeguarding Your Financial Investments
If you’re worried about cybercrime, here’s a quick reminder of some ways you can safeguard your financial investments.
1. Start with a willing mindset.
This may seem like an odd place to start. But it’s a critical first step. It’s easy to acknowledge the value of things like cybersecurity and digital hygiene in theory. Putting it into practice, though? That takes commitment and patience.
It doesn’t matter if you’re spending hours researching or taking a few seconds to approve a software update. If you want to protect your investments, you have to see these activities as more than an inconvenience. You need to see them as an investment …in your investments.
So, before you come up with a strategy to safeguard your wealth, take a moment to shift your mindset. You aren’t trying to throw a quick solution at a potential issue. You’re staking real time, effort, and resources in a positive effort to protect your cash (and your peace of mind).
Once you’ve embraced this positive attitude toward financial cybersecurity, it’s time to start looking at ways to put this mindset into action.
2. Vet your tools carefully.
The tools that you use can make or break your safety measures. You can be impeccably careful with your own financial transactions. And yet, if a company that you trust with your hard-earned money doesn’t take the right steps to guard its own enterprise, it can lead to trouble down the road.
Whenever you consider using a new financial tool, do your research beforehand. Don’t just look at the company’s about us page or read their white papers (although that’s a good place to start). You also want to track down honest, third-party reviews from dependable sources.
For instance, Experian has a reputation as a consumer credit reporting company. However, in recent years, the American-Irish brand has also branched out into several other areas of the financial service sector. This has created a larger number of points for potential cybercrimes. In response, Experian tapped the services of the data security firm Okta. The reputable IdP (identity provider) plays a critical role in the functionality of the credit bureau’s software, providing peace of mind for anyone considering using their services.
If you’re looking at a new tool to manage your wealth, start by asking the following questions:
- Is it well-established?
- Are the tool’s purpose and benefit clear?
- What do others think of the tool?
- What affiliations does the tool have with reliable name-brand security solutions?
Building an arsenal of security tools is a foundational element to protecting your wealth. Make sure to select each item with care.
3. Choose good passwords.
Passwords are an age-old approach to protecting valuable belongings. However, passwords don’t work well if you make them easy to guess.
Boston University recommends several ways to create strong, safe passwords. Along with basics, like using letters, numbers, symbols, and upper and lower cases, the university also suggests:
- using phrases without vowels;
- misspelling phrases; and
- choosing obscure words that are specific to your personal experience.
These are guidelines you should consider at all times. In other words, don’t just make a password as difficult as a website or piece of software requires. Consider how important the information is and then put in the effort to come up with a password that genuinely matches the level of security needed.
If you’re concerned about keeping track of all of these complex passwords, you’re not alone. Fortunately, there are many password managers that can make the process simpler. When shopping for a password manager, though, remember the above tip. Vet each tool carefully when making your choice.
4. Embrace multi-factor authentication.
Security measures, like a strong password, are a great single wall of protection. However, if you want to exponentially increase the effectiveness of your digital security, you want to add multi-factor authentication to the mix whenever possible.
Multi-factor authentication consists of having multiple forms of security that overlap. For instance, when logging into your account, you might be asked to fetch a security code from your email or open an app on your phone. This may slightly complicate the process of accessing your investments, but it makes it astronomically more difficult for someone else to do so.
The best thing about multi-factor authentication is that you can adjust it to meet the security needs of any given situation. For instance, you might only want a code sent to your email when trying to log into a social media account. However, when accessing your 401(k), you could employ biometric or geography-dependent security steps to make it virtually impossible for anyone but yourself to be approved.
5. Consider encryption.
Encryption refers to the act of scrambling data on a digital device or service. In effect, it means your software is speaking in code — a code that only certain parties are able to understand.
Some devices already come with encryption enabled. Apple, for instance, is famous for encrypting its iPhones to the point where even the government can’t easily access the information.
If you’re using an unencrypted device to access your financial investments, there are ways to encrypt its data, too. Multiple encryption software solutions mask your sensitive data by making it unreadable to any outside viewers. Hacked points out that there are different ways you can do this, such as:
- encrypting specific files within your computer or device;
- encrypting whole devices so that everything on them is secure;
- extending encryption to your home network (and, consequentially all of your online activity) through a VPN.
It can take a bit of work to set up proper levels of encryption. But the peace of mind that it creates is well worth the effort.
6. Familiarize yourself with phishing.
Phishing is a common and dangerous cybercrime. It’s hard to always be on guard against emails that make wild claims and try to provoke you to make emotional decisions (like clicking on a link). In the past, phishing attacks were easy to spot, but over time they’ve become more sophisticated.
If you want to protect your financial investments, it’s important to become comfortable with identifying when an email or text message is trying to capture your personal information or gain access to sensitive data. There are a few obvious giveaways to look for when vetting a message to see if it’s a phishing attempt.
- Does it have a link or attachment? Never click on links or attachments from any message unless you are absolutely sure you’ve verified the sender and the contents.
- Does it promise something odd? Research anything that seems to be unusually threatening or too good to be true.
- Does it come from an unrecognizable address? For example, if an email from “Shopify” comes from a sender whose address is “[email protected],” that’s a good sign it’s a fraud.
- Is it professionally written? Any business communication should be cleanly and legibly written with few grammatical mistakes.
Familiarizing yourself with phishing attacks is a great way to make sure you’re doing your part to avoid putting your investments at risk.
7. Practice digital hygiene.
Finally, there are many sophisticated technological solutions to avoid cybercrimes. But the truth is, if you aren’t doing your part to protect your wealth, you’ll undermine your own security tools.
Guarding against phishing is a good start, but ideally, you should practice good digital hygiene on every level. This includes:
- updating your devices as soon as patches and updates become available;
- avoiding public Wi-Fi when accessing sensitive data;
- using passwords, multi-factor authentication, encryption, and other recommendations on this list; and
- always being careful when giving out your personal information.
The way you treat your tech tools will have a direct impact on how safe your investments are.
[Related: 7 Safe Investments with Relatively High Returns for 2023]
Safeguarding Your Financial Investments
There are a lot of dangers threatening individual finances these days. From inflation to economic woes, investors are feeling the pinch when it comes to preserving their wealth.
If you have investments at stake in an unstable market, the last thing you want to do is add to the danger through poor security. Use the tips provided above to shift your attitude and establish healthy habits and protocols designed to safeguard your financial investments in an uncertain future.