Building a Digital Moat: Protecting Your Privacy and Financial Security
During the 1920s, a bank robber named Willie Sutton stole more than $2 million. As the story goes, after being arrested, Sutton was asked by a reporter why he robbed banks. His answer was probably apocryphal, but it’s gone down in legend anyway: “Because that’s where the money is.”
These days, thieves still go where the money is, usually by targeting private individuals who have a lot of it. But modern theft isn’t about lock-picking a safe or blowing a bank vault with dynamite. More often, it comes in the form of cyberattacks. One study in the UK found that 28% of high-net-worth individuals have experienced a cyberattack.1 But any investor is potentially vulnerable, because nearly every investor has digital vulnerabilities that can be targeted by thieves.
For investors in Bakersfield and beyond, protecting your financial future also means protecting your privacy and financial security today. As financial advisors, our job is to help you plan for the future you want to achieve. With each passing year, protecting your privacy is more and more important when it comes to securing that future.
The good news is that while cybercrime, identity theft, and other forms of fraud are very real problems, you can protect yourself and your privacy with a little advanced planning. We like to think of it as building a castle. First, you must understand where you are vulnerable. Second, you must build the necessary walls, gates, and drawbridges to protect those vulnerabilities, with a wide, digital “moat” around it all.
Understanding Your Digital Vulnerabilities
In the old days, a robber like Willie Sutton would “case” a bank he wanted to rob, looking for entrances, exits, and blind spots. Cybercriminals do the same thing using your data. So, to protect your privacy and your finances, you must understand exactly what modern-day thieves are looking at.
The first thing is evidence of wealth. Whenever money moves, it leaves a trail online. Real estate transactions are visible in public records. Major luxury purchases, investments, philanthropic efforts, inheritances, and awards are often easy to spot, too. Cybercriminals will also scrutinize social media posts, geotags, membership lists, business and legal documents stored online, and more.
By doing this, cybercriminals can build profiles for which individuals they want to target and the best way to do so.
How Cybercriminals Use Your Information
Data-Hacking
Cybercriminals often try to hack crypto wallets, financial institutions, online retailers, and public Wi-Fi networks to gain access to email accounts, passwords, credit card numbers, Social Security numbers, and other sensitive information.
With this data, thieves are essentially stealing your digital identity so they can spend, transfer money, or apply for loans in your name.
Scamming
Using the profiles they’ve built, many cybercriminals will attempt to scam investors by targeting some aspect of their digital identity. This could be a phishing email that poses as coming from your bank or an online store you use. It could be a text message that appears to come from the government or a local business you frequent.
In these days of AI, it could even be a phone call or voice mail that sounds like it’s from a friend or loved one. In every case, these messages are designed to trick you into revealing private information, transferring money, or downloading malware onto your device.
Hijacking Your Reputation
Most insidious of all is when cybercriminals use the data they’ve collected to threaten your privacy or reputation, usually in the form of blackmail or extortion.
High-net-worth individuals, especially those who are business owners, public figures, or are otherwise visible within the community, are especially vulnerable to this.
How to Protect Your Privacy and Financial Security
So, now that we know where some of the vulnerabilities are, how do we shore them up? How do we build a “digital moat” that protects both our privacy and our money?
The most important thing you can do is take steps that reduce your digital footprint and make yourself less of an easy target. Using strong, unique passwords for every device, account, app, and login is absolutely critical. Having a password manager to generate and store these complex passwords is far safer than writing them down, storing them somewhere on your computer, or trying to memorize them.
Enabling multi-factor authentication, or MFA, is nearly as important. If passwords are like adding steel gates to your personal castle, MFA is adding a drawbridge. MFA requires entering a second PIN, password, fingerprint, facial recognition requirement, or random code with a fast expiration to log into any device or account. It can be a pain, but it makes it substantially more difficult for thieves to access your data.
Keeping your devices updated and using firewalls and anti-malware software is important, too. So is backing up your data on a regular basis, and turning off features like Bluetooth, location sharing, and geo-fencing when you do not need them.
Finally, reduce your vulnerability by never shopping or conducting transactions over unsecure networks, and by resisting the urge to “overshare” details about your personal life online. All this is the equivalent of reinforcing the walls around your castle, as criminals often target these areas, looking for gaps in your defenses.
By doing this thoughtfully, you can build a kind of “digital moat” around your castle. This is not about fear. It is about being prepared, paying attention, and making it harder for criminals to find easy gaps in your defenses.
FAQ: Digital Privacy and Financial Security
Why should investors pay attention to cybersecurity?
Because protecting wealth today also means protecting access to your accounts, your private information, and your reputation. Cybercriminals often look for simple openings, such as reused passwords, unsecure networks, or personal details shared online.
What is one of the simplest ways to start building a digital moat?
Start with strong, unique passwords for every important account, and consider using a password manager to store them securely. Enabling multi-factor authentication is another important step.
Should I talk with my financial advisor about data protection?
Yes. A conversation about privacy and data protection can be a helpful part of a broader financial planning relationship. It can help identify where your personal information, accounts, and devices may be vulnerable.
In the meantime, remember: Achieving the financial future of your dreams means protecting your financial present. Your privacy is a castle, and castles must be defended.
Sources
Disclosure
The opinions expressed in this piece are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. It is only intended to provide education about the financial industry and the economy. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. Any past performances discussed in this letter are no guarantee of future results. As always please remember investing involves risk and possible loss of principal capital; please seek advice from a licensed professional.
Advisory services are offered through Entruity Wealth, LLC, a Registered Investment Adviser. Services are only offered to clients or prospective clients where Entruity Wealth, LLC and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Entruity Wealth, LLC unless a client service agreement is in place.
Certain Advisory Persons of Entruity Wealth are also registered representatives of Purshe Kaplan Sterling Investments, Inc. Securities offered through Purshe Kaplan Sterling Investments, Member FINRA/SIPC Headquartered at 80 State Street, Albany, NY 12207. Purshe Kaplan Sterling Investments and Entruity Wealth, LLC are not affiliated companies. California Insurance Producer License Numbers 0A68692 and 0K53827.