Protecting Your Wealth from Theft During a Crappy Economy

I had a very interesting conversation over lunch last week. Standing in line at a local fast food restaurant with a client who works in law enforcement, I placed my order and opened my wallet to find two one dollar bills, a fifty dollar bill, and my debit card. I groaned. “Is it easier for you if I pay with a fifty or my debit card?” I asked the pimply faced teen behind the counter. “The debit card,” he replied. “Definitely the debit card. If you pay with a fifty, I have to take your fingerprint.” My fingerprint, really?

The clerk went on to explain that with the unemployment rate in the area sky high and the continuation of the crappy economy, the store had experienced a rash of people trying to pass counterfeit bills. It had become such an epidemic that the new policy was to collect a fingerprint and log the serial numbers of every bill larger than a twenty that graced the cash drawer.

During lunch, my client and I talked about how the area had changed due to the economic situation recently. Credit card thefts, arsons, break-ins, auto thefts, and murder/suicides in the area were all on the rise, with the largest jumps noted in credit card fraud and suicides. Having experienced credit card fraud personally in the past, I asked him what he recommends the public do to protect their wealth against theft in such a crappy economy. Here are some tips you can put to use to protect yourself.

1. Don’t shop online with your credit card. The average Joe doesn’t know nearly enough about encryption and security measures to protect his credit card number from being stolen during an online transaction. If you must shop online, use a third party service, such as PayPal, to complete your transactions.

2. Do your banking in person. Online and telebanking might be convenient, but they also provide an opportunity for hacking thieves to swipe your account information. If you must use telebanking, do so from a landline (non cordless) phone to stay safe. Anyone with a police scanner and a little know-how can tune into your conversations made on a cordless or cellular phone.

3. Safeguard your social security number. Don’t opt to put your social security number on your driver’s license and personal checks. If a company asks you for your SS number, ask them why before giving it out. Some companies simply use this number for identification purposes because it saves them from having to develop an internal identification system. This also makes it easy for a would-be thief to make off with your personal information, take out a loan in your name, or steal your identity. Only companies that will be doing a credit check, or securing payment (such as a rental business) should have access to your social security number. Otherwise, tell them it’s off limits for security reasons.

4. Shred all personal documents. Any receipt with your credit card, banking, or investment information on it holds the potential to become a security issue if it finds its way into the hands of the wrong person.

5. Fill in all blanks on every credit card receipt you turn in. If you’re not leaving a tip, draw a line through the blank so no one else can add charges to the receipt after you leave, an always take a copy with you for your records. You’ll need this copy later to help dispute your claims that a charge is invalid.

Protecting yourself and your finances from fraud is made even more difficult during a recession since many thieves become desperate and the number of thieves seem to multiply exponentially. Educate yourself on how to foil fraud artists and thieves. Many credit card and investment companies offer information about protecting your wealth free of charge. Check with your company today to begin protecting your money when thefts are on the rise.

Photo Credit: Don Hankins

Tagged as: Credit Cards, Money Management, Wealth

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How to Build Wealth in a Depressed Economy

The current economic environment has led many investors to become pessimistic about the United States' economy. Consumer confidence is low and unemployment is running high. But as Warren Buffett has often noted, economic recessions are when investors can find some of the absolute best opportunities.

Let’s take a look at a few ways to build wealth during the current downturn.

One of the easiest ways to lose your hard-earned dollars is by following the crowd. Fear is causing many investors to rush to the safety of Treasury bonds and gold. These assets do have some value, but they are not the best opportunities right now. The time to rush into gold was when no one was buying it at $300 or $400 per ounce. Gold now trades at nearly $1,400 an ounce. You never want to chase an investment when it is trading close to its all-time high valuation.

Investors looking for a nice return should turn their attention to the assets that investors are avoiding. Stocks and exchange-traded funds (ETFs) in the financial sector have been underwater for years now. Many technology stocks are still trading at prices below their true value. The steel and industrial production sector contains some great values as well. These investments are long-term holds that could reap serious rewards for risk-taking investors.

Unemployment may be running high, but that shouldn’t deter you from starting your own company. A bad economy is the perfect impetus for starting an online business. There are needs for temporary agencies, consultants, and webpreneurs. All of these businesses require very little overhead and can be started from the comfort of your own home. Most just require paying a few bucks for a domain name to get started.

A part-time job can also add a little income. You can do freelance writing or design work for other companies and bring in an extra couple hundred dollars a month. You can start you own catering business or run errands for people in your neighborhood. If you love pets, then start a pet-sitting business. Your entrepreneurial venture could end up turning into a full-time job.

The real estate market looks like an absolute mess right now. Foreclosures are peaking and home prices continue to be depressed. Every market pundit is predicting more pain for the real estate sector. But while the market may be tough now, but there are signs that the sector may finally be reaching bottom.

Mortgage rates are the lowest that they have been in decades. This could help entice some homebuyers and real estate investors back into the market. Remember back in 2009 when everyone was so pessimistic about the stock market? The market reached its low early in 2009 and has bounced back nicely. Many investors missed the rebound waiting for another market drop.

The same thing could be setting up right now in the real estate market. Everyone is waiting for commercial and residential real estate to hit bottom. The truth is that no one can tell when a market is at its lowest point. Investors with the capital should consider getting in these markets now, as they are much cheaper than they were just a few years ago.

Remember that during a bad economy can be the best time to implement your wealth-building strategy. Just because the economy is in a downswing doesn’t mean that you cannot emerge from these difficult times in better financial shape than you entered them.

This is a guest post by Mark. Mark publishes his own financial blog at Buy Like Buffett. He is a registered investment advisor and has written financial columns for Baltimore and Washington D.C. area newspapers. Read more by Mark:

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