Episode 2

Minimizing Personal Risk and Liability to Protect your Wealth


Building wealth is rewarding. Failing to adequately protect your wealth is a mistake. In episode 2 of Wealthy Behavior, we’re talking about personal risk and liability. How much could you lose if you are sued? Will you have enough if you’re the one that gets injured? And what should you do from day-to-day to protect yourself from the ever-growing threat landscape that comes with our global and digital reality? Tune in as we pick the brains of our two guests: a personal injury attorney and a personal risk manager.

00:00:11 – 00:05:08


Welcome to wealthy behavior, talking money and wealth with heritage financial. The podcast that digs into topics strategies and behaviors that help busy successful people build and protect their personal wealth. I’m your host, Sammy Azzouz president of Heritage Financial, a Boston based wealth management firm working with business owners, executives and retirees for more than 25 years.


Now, let’s talk about the wealthy behaviors that are key to a rich life. Welcome to episode two of wealthy behavior talking money and wealth with heritage financial. I’m Sammy Azzouz, the president of heritage and your host. An important part of building wealth is making sure you’re protecting what you build. So this month we have two great guests we’ll be talking to us about personal liability protection. First, we’ll look at the right insurance coverage you need through the lens of a personal injury attorney, and then we’re going to chat with a personal risk manager about what you can do on a day to today basis to improve your overall personal security and reduce your risk. So let’s get started. Our first guest is Rich Mandel, a personal injury attorney with Baker Law Offices with over 27 years of experience on both the plaintiff and defense side. Thanks for joining wealthy behavior, Rich. Pleasure to be here, Sammy, you make it sound like I’m an expert so I love it. You definitely are an expert. And I’d love for you to share your background with our listeners, but before I do, let me set up the conversation a little bit by saying that as a personal injury attorney, I would imagine you have some pretty insightful perspective to share with our listeners who want to know how to protect their assets from liability, given that you’re the guy that’s going to be suing them. I think I do, Sammy, I definitely, I am the guy that’s suing them. I am the guy that wants to get the money, so to speak. And I definitely have run into situations where people have not had the proper protections. Great. And so you’ve been on both sides of this as a defense and plaintiff’s attorney. How has that kind of helped you in terms of the conversation today, but also just in your career? Well, yeah, that’s correct, Sam. So for about the first 13 years, I was an attorney. I did insurance defense work in both private law firms and for a number of years with working for an insurance company, but just handling their cases. That, like I said, that was about 13 years. I then left that and went out of my own and I flipped sides and became a personal injury attorney. And the true advantage of that is after 13 years, I really got a good understanding that insurance companies need documentation to note the file. They need the information. And while yes, it’s an adversarial process. At some level, it’s also a cooperative process. It’s a help me help you situation. Obviously, you’re going to argue over case value and things like that. But to help an insurance company, you need to justify the level of damages that you see. You need to give them the medical records and medical bills, any documentation for liability. And I got a great understanding of that working for the insurance company and I try to apply that now. That’s great. So I’d like to come at this first from the perspective of the individual being sued and how best they can protect themselves from a lawsuit in the first place. What are the most common sources of personal injury litigation for individuals? So an individual’s greatest risk of being sued is generally going to be a situation involving an auto collision, a premise liability situation, somebody gets injured on their property, you know, it all depends as the individual owned boats, you know, do they own toys. Do they own trampolines? ATVs. They have a treehouse on their property. Do they host parties where alcohol is served? You have a serious situation where you really need to take an active role in ensuring that people do not leave and drive inebriated state. All these things can lead to serious lawsuits depending on the injuries that happen. I would imagine you don’t own a trampoline. I do not own a trampoline. I actually freak out, so to speak, way back in my younger days, I lived in a vertically split two family and the other family put a trampoline in the backyard and what was technically common property because it was actually a two family condominium. I made them remove it. They didn’t understand why. I said, no, that has to get out of here. Now trampolines these days, I guess you can argue they’re a little safer. They have a wall, so you don’t fall off them, but still to be a trampoline is just an item waiting for an injury. All right, so what are the risks we aren’t thinking about or are those categories really the ones that drive things. So those are the categories that drive it. But you know, you also got to be careful, you know, things like if you’re going to have some work done in your house. You know, if a contractor is going to be on your property, a general contractor doing some construction. Do they have the proper liability insurance themselves? You know, it’s a situation where if somebody is injured, could they sue you.


00:05:08 – 00:10:19


And of course they’re going to sue you because, you know, listen, when I was plaintiff attorneys get around to suing people, we’re going to cast a wide net. We’re going to name everybody because we’re going to try to get every dollar that’s out there. So it’s really helpful if you can get certificates of liability insurance from contractors or anyone that does any work on your property so that you know that they at least have some insurance that can help you know what the limits are of that that you want to require are really up to you specifically with respect to you have to balance your risk profile, so to speak. What are your assets versus the risks? Got it. So once something, if we pivot to once something actually occurs, how does insurance work to protect your wealth and what are any thoughts that you have on coverage and recommend recommended coverages? You know, coverage, the amount of coverage is really up to each individual. You know, like I mentioned earlier, what is your risk profile? What amount of risk are you willing to tolerate? And what are the risks you’re trying to insure? Are you a just a couple without any kids in the house? Do you have young drivers that are driving? Do you have boats? Do you have trampolines? What is your wealth? How much is at risk? You know, umbrella coverage is cheap coverage. And with every $1 million you add on, it gets cheaper and cheaper. I mean, to have three, four, 5 million, $10 million in insurance, is not that expensive. And really, it comes down to, you know, can you sleep at night? Yeah, can you take a second to explain to folks auto home and then how umbrella fits into that picture just so we’re clear? Sure. So for each area of insurance your auto insurance or your homeowner’s insurance, you’ll have certain amounts of what we call the liability. This is the coverage that if you are sued that will provide coverage for you if you’re liable for somebody’s injury. You know, we all know the auto policies and the homeowner’s insurance. Usually homeowner’s insurance will cover you, you can usually get up to about a $1 million on an underlying homeowner’s insurance policy. Some of them might be 500,000 with auto insurance, the top limits you can get are about 250,000 per person or 500,000 per incident. When I say for incident, that means if multiple people are involved, but no one person can get more than 250,000. I also want to digress slightly to talk about under an uninsured coverage here because while I’m on the auto insurance policy, under an uninsured coverage, actually cover you. They get money to you if somebody is in a collision with you, and they don’t have sufficient coverage. There’s a lot of people on the roads out there driving with compulsory minimum insurance of 20,000 per person, 40,000 per incident. And if you want to protect yourself, you want to raise your under and uninsured coverage to the maximum limits of your liability insurance, which I recommend the two 5500. So for example, if you are injured by somebody with $20,000 in insurance and your case is worth $200,000, you can get 20,000 from them and turn to your insurance company with the proper underinsurance limits to get another 180,000. Now, that’s the underinsured and uninsured portion of getting back to your original question, though. So you have various components that your insurance, your homeowners, and your auto insurance, and you have the limits on those. To ensure yourself for greater liability coverage in case there’s a catastrophic injury for which you are liable. That’s where umbrella insurance comes in. It’s so called umbrella because it basically forms an umbrella over all your individual policies. And they require certain policy limits for the underlying policies. But after that, the umbrella insurance comes in increments of $1 million. And you can buy 1 million, 2 million, 3 million, 5 million, 10 million, whatever amount it is that you would require. And basically what that does is protect you in the event of a catastrophic injury by catastrophic injury. You know, we’re talking about injuries like traumatic brain injuries, spinal cord injuries, wrongful death situations. I mean, these cases can cost, you know, they’re verdicts at trial. You know, ten, 15, 20, $30 million. There was a verdict in Massachusetts last year on a wrongful death case. Now, it was in a contractor situation, but still wrongful death case for $42 million. That does not include the interest on that. So these verdicts for these types of cases can be astronomical and these cases can blossom out of the simple thing of you like you hosting a party at your house. Someone driving off and boom, they’re inebriated, and they cause a collision. So even at that level, I mean, we’re not recommending or talking about people getting insurance umbrella insurance coverage to the tune of ten, 15, 20, 30, 40 million. But what you are talking about, or we’ve talked about in the past is there is a gap even when it’s not a catastrophic event between your auto and your home coverage and what you could be liable for that if you don’t have an umbrella policy, a guy like you may need to go after somebody’s assets. That’s correct.


00:10:21 – 00:15:03


And I would tell you that the amount of umbrella you should get, you know, again, I said it based on your personal risk profile, but it’s also based on the assets that you want to protect. You know, to me, you know, a lot of people are very wealthy in this world. They spent a lot of time effort acquiring that wealth. And now you want to preserve that wealth. And one way to preserve that wealth is with the proper umbrella insurance for your assets. And that’s a decision each individual should make. And that’s something, you know, they should involve you as a financial adviser. They should involve their insurance broker and they shouldn’t just make that decision on their own. Yeah, absolutely. So you’ve talked to us a lot about the auto, the home, the umbrella. I think the underinsured and uninsured is a fascinating twist there and something probably people aren’t aware of and in terms of protecting your assets, obviously insurance is a key part of it, but if you don’t have enough insurance coverage, you may be subjecting the rest of your assets to liability or losing them in a lawsuit. Sometimes people worry about their homes and their retirement accounts with asset protection. How do you think about those types of things as a personal injury attorney? When it comes to your primary residence, you know, Massachusetts has a homestead act. It’s an automatic, it’s an automatic homestead for up to a 125,000. And then I did go back and look at it. You can file and bring that up to 500,000. What that does is protect you from unsecured wings and things like that. It’s never going to protect you from your mortgage, anything that you put your house up for collateral. It’s not going to protect you from a tax lien, but it could protect you, your primary residence from a forced sale in the event of a personal injury judgment that exceeds your insurance. You know, that’s not necessarily going to protect. I’m going to tell you this. It’s not necessarily going to protect a vacation home. If there’s a massive judgment compared to the insurance that’s available, and you have a vacation home, that’s not protected by a homestead. And that could be at risk. Retirement accounts, I believe, are somewhat protected. However, your investment accounts may not be. And that’s something that you have to consider, which is why I indicated earlier that, you know, someone with respect to determining the amount of umbrella coverage, they should talk to the financial adviser. What’s your net worth? How much coverage is it and what’s the cost. Now, I do want to highlight people become wealthy by being frugal. Let’s face it. So you often don’t want to spend the money on umbrella, but look at it this way. I personally view insurance as something that covers me for catastrophic events. It’s not covering me for small things. So if you’re concerned about the cost, if you have a deductible of $500, raise your deductible to $2500, you’ll probably save 750 to a $1000 on your insurance rates for that. And you could probably buy three, 4 million in umbrella for that amount of money, frankly. Yeah, it’s great advice and I think we haven’t touched on coverage amount recommendations because it is very variable depending on a person’s situation. But I would imagine almost all of our clients are somewhere between one and 5 million with some outliers beyond that. So we are talking about to your point short coverage dollars for big limits. Yeah, now I will tell you, you know, listen, I’m a personal injury attorney, so I’m always going after the money, the insurance money is the great money to get because getting money from people individually is more difficult and there’s a process involved. So I believe everyone should just be over insured. Frankly, because I’m a big believer insurance, but I personally believe I’m personally carry a lot of insurance. You know, listen, just because, you know, let’s say you have a client with a net worth of $5 million, Sammy and, you know, does that mean that they should be in short with 5 million in umbrella? Why not 10 million? Because you’re not insuring the amount equal to your net worth, you’re ensuring against the ten, 15, $20 million verdict for a catastrophic injury. And so what if you have 5 million? If there’s a $15 million verdict, if you go right through your insurance in two seconds. Let’s talk about from the perspective of somebody who is injured. So now the flip side, how long does the process take to recover funds if you’re injured? How long are you out of pocket? What are you doing there? What are you talking to your plaintiffs about? So the process is a long one.


00:15:04 – 00:20:02


I mean, you know, if somebody’s injured and they contact me, you know, first of all, we have three years generally to file a lawsuit. That’s the statute of limitations for negligence cases in Massachusetts. We generally don’t like to file a lawsuit or try to settle the case til the person has reached a medical end result. But, you know, if you’re injured, the first thing that I want people to do is frankly contact me. I often in many networking groups and you’ve heard this, I say to times calls as you fall. It’s a very flippant expression, but it captures a very important concept. Ice melts, defects get fixed. Conditions change. They would say pictures worth a thousand words. I want photographic evidence. I want to see what the situation was. Document the condition. I want you to document your injuries. Right away for causal relationship issues. Now, down the road that could arguably hurt you, they can say, oh, you spoke to an attorney, your litigious, you were planning on this lawsuit from the beginning. But I think overall you’re better doing all this because, like I said, conditions change and you need to document it. But getting back to the time frame. So you could be waiting a couple of years before you reach a medical end result. And hopefully that medical and result is your fully recovered. If you’re not fully recovered, then oftentimes we need a physician’s report to talk about a permanency impairment rating. Then we try to typically try to settle the case. And when that fails, then we file a lawsuit. So that can take, you know, a lawsuit, let’s face it the courts of been devastated by COVID. They were closed. They’ve been operating slowly. Lawsuits now, I used to tell people it could be two or three years. I’d probably say potentially three or four years right now. Federal court moves a bit faster. So if we could put a case in federal court, we will, but there are certain requirements to do that. But it can take a while. And you know, it’s an emotional process for a client. It really is because they can’t move beyond it. In their mental life until the case is done. And they have to relive it because they’re going to have a deposition taken. If you go to trial, they’re going to be on trial. They’re going to have to explain it again. If there’s a loss of consortium claim, that’s going to impact family and it can be a whole process can be emotional and traumatic to the point also. And this is where the uninsured underinsured also comes into play. That’s true. So if you’re injured, as I said earlier and it’s in a car collision and you have that under an uninsured insurance and there’s not sufficient insurance out there, you can then get money from your own insurance company. Now, one thing I didn’t mention earlier is some umbrella policies will pick up on that. So not only would you have the two 5 million 500,000 on your auto insurance, you could have another 1 million or 2 million through your undercovage through your umbrella coverage so that you can be seriously protecting yourself now. The beautiful thing about auto insurance in Massachusetts is it covers you if you’re riding a bicycle. So any one that’s out there on a bicycle should have very high limits because how many times do you hear stories of a car hitting a cyclist and taking off? And the cyclist is seriously injured. That would be considered uninsured because you have no one to blame. You can turn to your insurance company for that. Also, if you’re a pedestrian, your auto insurance covers you there too. So it gives you some protections and I recommend that people max out their under and uninsured limits and even if they have liability insurance, make sure if they have umbrella insurance, make sure that the umbrella insurance picks up on top of that. And that’s companies specific. You need to make sure that not all umbrella policies are the same. Got it. No, that makes a lot of sense. And we didn’t talk about motorcycles in any of this. Where do they fall in terms of the risk spectrum and the protection plans? I am personally not a fan of motorcycles. They’re highly dangerous. Cars, let’s face it, cars don’t pay attention. They don’t see motorcycles. Motorcycles can go down if they’re going around a corner and there’s some sand or loose, you know, any other loose debris on the road. One of my friends just his ex-wife recently about a year ago got killed in a single motorcycle collision where the motorcycle went down on a turn. And she was thrown from the bike. I don’t care if you’re wearing a helmet. I don’t care if you’re wearing leather. You know, let alone some of these states that don’t require helmets. Motorcycles can be incredibly dangerous. I’m not a fan of them. Got it. I don’t think trampolines or motorcycles will be on your gift list. I got it. There’s just so much we could talk about here, but this has really been a great overview of how to think about basic protections to wrap things up. What’s the one thing you want people to take away about personal liability as it relates to their wealth? So personal liability, I think it’s really more of a risk management assessment.


00:20:02 – 00:25:05


You know, this is going to tie into the other guests you indicated you’re going to speak with. You know, you have to look at your wealth, how are you going to manage the risk, how much wealth do you have? What is your risk? As I mentioned earlier, do you have drivers under 25? Do you have a lot of the toys we mentioned, pools, trampolines, etc.? These are the things you need to look at. So risk management assessment is incredibly important. And what are you comfortable with? Understood and then since the name of our podcast is wealthy behavior, what’s the best piece of money advice you ever received? The best piece of money is well, I’m going to the best advice I ever received was from my father. My father is 98. He’s been buying stocks since he was about 25. He’d buy them in $100 increments, that’s when $100 actually meant something. And basically, the word sell to him is a four letter word, literally. It’s a curse. I don’t think he’s so now he sells for his 401k or whatever, but it’s buy and hold, buy good stocks, don’t sell in a panic, you know, balance portfolio, and remember it’s for the long term. Wow, sounding like a wealth manager right there. I love it. I witnessed it work for my father, so. Tell him I’m very impressed, I’d love to meet him someday. Thank you very much, Rich. Thank you for having me, Sammy.


Our next guest is Jack Faer, personal risk manager and owner of fair risk consulting. Welcome to wealthy behavior Jack. Thank you, Sammy. Thanks for having me today. Absolutely really looking forward to it. So Jack, we just talked to Rich Mandel about how people can protect their assets from personal liability. And we dug into different types of insurance and a lot of interesting insight on the right types of coverage to have and some things to do to protect yourself in the event that you’re injured. So I wanted to bring you in next as a personal risk manager because you’ve built a business helping people with personal security, identifying strategies for identifying the risks that they’re exposed to. And just figuring out the risk protections that they can put in place to reduce harm to themselves before they then think to step of transferring some of that risk with insurance policies. So I want to dig into what strategies you’re suggesting to your clients for personal risk protection. But first, let’s talk about your background because it’s pretty interesting, including some time spent with the FBI. Tell us about your background and what makes you an expert in risk identification of protection. Sammy, yeah, my FBI time was a great deal of fun for me. And I worked on some white-collar crime matters as well as organized crime in New York, back in the day. And I got a good view as to how people behave and took some of those lessons and went on to have a really good career in the corporate side. Both at Fidelity and Iron Mountain and even some time with State Street, playing a number of oversight roles. So security, internal audit, risk management, and always on the side of helping people kind of follow the rules and do the right thing and try to lead by example. And I just figured it got to the point where it was time to share some of those lessons with individuals. And so that’s the, that’s the transition I made and setting up my own business. That’s great. That’s tremendous. And excited to have you on board so you can share some insight with our listeners. We can take this discussion in a bunch of different directions, but from our past conversations, I know you have some great strategies that people should be thinking about really in three key areas. Home, commuting and traveling. So let’s focus our conversation there for starters. People are getting back to travel. People are making summer travel plans, spring travel plans. We’ve chatted a little bit about that. What are some of the risk management protections you think of for travelers and maybe start with travel insurance? Do you think it’s worth it? Absolutely, it’s worth it at certain points and for certain people, but I’ll take a step back even Sammy and talk about the risk landscape. And I don’t know if Rich would have covered this, but kind of what we see in the world today is and we can talk about the cyber a little bit later on and the combination of an increase in cyber events, but a decrease in criminal prosecutions. But as it relates to travel and some of the safety concerns that you were raising, we look at things like weather events and the number of weather events that have cost this country over a $1 billion have more than doubled over the past, say, 30 years. So those kinds of things that used to happen once in a lifetime are happening on a much more frequent basis.


00:25:05 – 00:30:05


So it gets to the point where no matter whether you’re at home or whether you’re commuting to work or whether you’re traveling far distances is people now really need to be in a position of saying, do I have a safety plan and what things are part of that? And that’s a part of what I’m helping my clients with today. And so you talked about travel. Let’s talk about travel. And so yes, there are things like travel insurance, which the convenience part of it is if there’s trip cancellation insurance and you get some money, some of your money back, the part that I would focus on would be the medical assistance. So particularly for people who were getting Medicare now on Medicare today, that coverage does not extend outside of the U.S.. So my clients who are on Medicare, absolutely, they should have travel insurance from a medical perspective. And then beyond that, to the degree that they want the additional protection, I have helped clients also get medical evacuation insurance with a different vendor. So, and it’s really easy to get. And it’s very much an a la carte kind of selection process where we go to the website, and we say, okay, do you want to be able to be evacuated only from a hospital or from anywhere you are in the world? And particularly if you’re going on a multi week vacation and you’re spending a lot of money, it’s a fraction of the cost to have that additional level of peace of mind if you’re that kind of person. So Jack, who’s offering those types of policies, where would you even think about how to research them? Quite frankly, you could actually just Google how to, you know, how to find evacuation coverage. We have a number of vendors that we’ve used in the past. And I think depending on the circumstances, it’s hard to recommend one over another, you know, on this podcast, but I can walk the folks through any particular selection process. And then on top of that, Sammy in between having the insurance and the evacuation is also, there are vendors who you can subscribe to where they’ll provide kind of risk assessments of the area that you’re going to. So you get a sense as to what’s happening in that country, particularly if you’re going overseas. And then you enable your location device on your phone. And when you land in that country, you access that website that app, and they immediately identify that you’re in that country and they say, okay, if you run into any issues, here’s a number to call. So it’s a way of feeling like you’ve got a connection to a local vendor who can help you if things take place. And you know the little things like when I travel to South America, I was in Buenos Aires and got a notification that all of a sudden there was a protest. So not so much that my safety was compromised, but there were going to be a lot of disruptions and I should find alternate means of transportation and so on. So those things really come into play. So sorry, just to clarify quickly, Jack. That app sounds tremendous. Is that only for people who purchased it travel insurance? Or is there a way to access that level of information, you know, regardless of whether you need that coverage ultimately? They’re actually, there can be three different companies. So you can use one company for evacuation. You can use a second company for travel insurance. And you can use a third company for this kind of risk management for overseas. And just decide which parts are more important to you. Got it. No understood. And so kind of along those lines, maybe a couple of follow-up questions related to that. Are there any destinations you avoid, you suggest avoiding or at least being extra thoughtful as to whether you want to go right now? Well, I mean, look, it’s hard to keep up with the events that are happening even today. Obviously, even going back years for folks who go to either Russia or China, we always recommended leaving your devices home or bringing a phone with you that had no data on it, no information on it. Because we would have an expectation that even at the border, you could have those devices seized and scanned and so, you know, we take those kinds of precautions.


00:30:07 – 00:35:20


It’s hard to know and this is where when you use one of those companies of doing risk assessments ahead of time, you say, hey, I’m interested in these few countries to visit. What kinds of concerns do you have? Additionally, to that, you can also go to the State Department website and on an ongoing basis, the State Department will have their assessment of risk in any particular country. So you can see that for yourself. Before you select. And then you can also access their website even up to the minute and get any kind of additional information before you travel there. But obviously there have been terrorist incidents at countries that we used to regard as very safe. And quite frankly, some of those countries, the circumstances that existed that allowed those terrorist events to occur. Those circumstances are still the same. So it doesn’t mean that you can’t plan on that. But you just have to take the precautions if you’re going to travel to any country really. Yeah, understood, absolutely. That’s fascinating, stuff. Are you talking to clients these days about anything specific related to COVID and the possibility that their plans are disrupted after they’ve made them months in advance and kind of how to think about traveling overseas during COVID? Absolutely. And I’ve had clients who have been traveling overseas as far back as the fall of last year. And so, you know, obviously you need to be prepared for if you get to the border on your way home and test positive where will you stay? So you do have a financial risk. If you’ve checked out of your hotel and your Airbnb and say, okay, now you’ve got a quarantine for another ten days. And there are some very specific kind of processes that you go through in terms of do you get your PCR test right at the airport in the U.S. before you go. Versus try to get it somewhere else where you might save a bit of money, but the process is not as well, finely tuned. So we do go through some of the logistics on that to make sure that people understand if this thing goes wrong or if I test positive or I’m exposed, what do I do? It feels like right now some of those concerns are a little bit lower than they were. Particularly for people, even if they tested positive or they’ve been exposed, the risk seems to be much less. So it’s getting a little bit easier, but yeah, we run through kind of the logistics as much as the safety part of it. That’s great. That’s phenomenal. And you mentioned that service where you can get notifications, let’s say somebody didn’t move in that direction for whatever reason. Are there important numbers that you suggest people just have saved somewhere when traveling abroad? Well, I mean, obviously, particularly if you’re going to countries where there’s a regional security office of the State Department, that’s a good number to have. You know, I’m not sure how quickly they’ll answer the phone depending on what time of day you’re calling them. But at least you can try to get some information and have a sense as to who you can rely on because obviously in many countries, you’re not sure what the level of integrity is with law enforcement. So at least with the regional security offices, you know you can depend on them. And then obviously any folks back in the U.S., you want to have those numbers readily available. I know a lot of people have gotten to the point where they now put everything in their phone. What happens if your phone is stolen? You know, back in the day, we remembered people’s phone numbers. Today, that today people we call all the time, if we didn’t have the phone with us, we might not be able to call them. So it sounds kind of ridiculous, but even making a piece of paper copy of key phone numbers back in the U.S. and sticking it in your suitcase is probably a really good tactic to follow. It’s not ridiculous at all because now I’m just realizing I don’t think I could tell you my kids phone numbers because I mean I’m texting them, calling them through the phone or just yelling at them in the house. So I totally now have an appreciation for that concept and what I like to do. And you know Sammy, depending on which countries you’re visiting, some countries, particularly for folks who are using their phone for to figure out where they’re going, even if they’re walking, right? They have their head down, and in certain countries, the street criminals make a point of knocking the phones out of your hands and stealing them.


00:35:21 – 00:40:00


So I want you to know that that is a real possibility. And so do you end up if you need directions, should you be printing the directions if you have to put your head down and at least keep your phone in a safe place? Yeah, zombie head buried down in the phone, walking around your own town is a lot different than doing it in a foreign country. Exactly. And you know, again, it sounds kind of silly, but I do talk to my clients about some of the behaviors to try to follow, particularly when you’re outside of the U.S., even what we all learned when we were kids to walk against traffic. And even if you’re in a big city and you have sidewalks on both sides of the street, if you’re walking against traffic and you have your head up, you can pretty much depend on you can feel assured that you’re going to see anything that’s coming. You know, some of those some of those terrorist events that were using vehicles and cars and running people over. If you were walking against traffic and you had your head up, at least you could see it. So things like that. Absolutely. So pivoting to a separate topic in this sphere, we all spent a lot of time in our homes, obviously, and maybe over the last couple of years, a lot more than we wanted to. What’s the biggest exposures maybe focusing on all the tech to start that we have running our houses? So usually Sammy would I do with my clients is I asked them to talk to me about their balance between security and convenience. And so it really starts with, how does a person live their life? And what are they like to have? So if you’re the kind of person who wants to be able to start your car while you’re in the house or before you get home, turn on all the lights and things like that, that’s more convenience than security. And what some people have failed to recognize is all the things that you have at your home that are somehow accessed through the Internet. They’re all on a network. So it’s your Ring doorbell. It’s Siri and Alexa and all those devices. It’s your television. It’s your refrigerator. So when those things get delivered, if you don’t change your password, then you’ve actually exposed your entire network, which includes all the confidential information on your computer. And I don’t think a lot of people recognize that. And so making your Wi-Fi password more secure is important, but changing the passwords and all those devices when they come right out of the box is just as important. And that’s where some of the cyber exposure starts at the home. And what’s the risk there, jacket, you know, people talk about our devices watching us, you know, what is the risk there with devices, online network devices? Well, you do have, if you make it easier for external folks, fraudsters, any kind of hacker, if you will, you make it easier to access your system, then you’re talking about them stealing all your confidential information. Then you have to start to think about what kind of information do you put on your computer. And you have probably some folks will write their passwords in their phone directory. Hey, I don’t remember my American Airlines password. Oh, I’ll put it in the in the entry where I put the phone number for American Airlines. You know, so there can be some really meaningful information that’s easily obtained. And then at that point, your accounts potentially are also exposed. So it goes then to how well do you secure your passwords and how well do you use some of the other key protective measures in your network? Okay. Makes a lot of sense. I have two specific maybe personal questions for you. Do you have a device like Alexa and a lot of us are using Zoom, which you and I are using right now to have this conversation, people sometimes put tape over their camera on their computer when they’re not using it.


00:40:00 – 00:45:09


What do you think about that and are you doing that as well? So on the last part, yes, I do try to do that to cover the camera. Never really sure what capability comes through there. And to your first part, I do not use Alexa. It’s just as easy for me to turn on the music myself. I don’t need I don’t need her to do it. But again, my personal style is I lean a little bit towards the security versus the convenience side. Yeah. No, that’s a great point. And even, yes, turning on the music. She’s good at when you ask them a lot of questions. You get some weird answers back anyway. So I’m not sure the technologies all would it needs to be at this point. Anything related to this kind of home and online with kids and their online profiles that parents or grandparents should be worried about? Oh, there’s so much Sammy. We could do a separate podcast just on that. Maybe we will. There are a couple of quick things to come to mind. Number one, almost regardless of the age of your children. Is we want our listeners to have the children use a different device than the parents use, particularly in the parents use to access any financial account or anything that requires a password. Because if they’re getting on certain websites that might be more vulnerable to exposure, at least you’ve limited it to that device. And then beyond that, you do want parents and I’m sure a lot of your listeners do this already, but you want them to track there are many. There are many techniques they can use to understand where the children have been, what websites they visited, you want to limit the amount of time and the time of day that they’re on the devices. But more importantly, it’s really talking to the children about, hey, what can happen with a computer? It’s the same way before computers that we would talk to our children about talking to strangers in person. Now it’s about talking to strangers online. And how hard it is to even know who you’re really talking to. So it’s really following that same approach. When you get to this topic and one of the concerns related to it is identity theft, what’s kind of some of the basics in terms of protecting your identity and what do you think about services like life lock in that area? So in the first conversation with my clients, I start them off with an expectation that they’re social security number and their date of birth have already been compromised. I mean, if we go back, I think there were as many as a half dozen data breaches just last year that each impacted over a 100 million people. So the likelihood is, no matter how hard we try, our key information is out there. And so, but there are some things that we can all do to really secure ourselves. So on all of the financial accounts, again, it’s convenience versus security. So a little bit more security would be to create a multi factor authentication on every financial account. And so for our listeners who have accounts that don’t offer that, that’s when I usually suggest try another bank, try another financial institution. Because then if you have it, you’re much more secure than most of the population because most population don’t bother. So that’s kind of on the financial account side. And then the other part you want to protect against it are unauthorized people creating debt and your name. Taking out credit cards, doing extra loans, and so on. And from that same point, if you can add a security phrase to each of the three credit reporting agencies, Equifax, Experian and TransUnion, then what should happen is any time a new credit card or new credit account is set up, they should check. And if it’s locked down, then that can’t be created. So you mostly protect yourself against from any new debt being created in your name. After you do those two things, it’s unclear to me as to what additional value you get from services from Life Lock and other credit monitoring services. But as I tell my clients, if it makes you sleep better at night, it’s kind of a small amount of money to pay for that. But. Even when they offer to kind of access the dark web, where presumably information can be out there about you.


00:45:10 – 00:50:00


Once the information is out, there’s no such thing as getting it back. It’s out there. So that’s great advice and I think it’s actionable too. It’s great feedback. Thank you. I know from talking to you and from your materials and process that you also spend a lot of time thinking about risk during commuting. And so maybe we can wrap up chatting a little bit about that. What’s the risk that or the risks that people should be thinking about when they’re out and about? You know, Sammy, there was a point where I had a job where I drove to work, and I went from my garage to a an indoor parking garage at my work. And there were a lot of days where I thought, oh, I could just leave my winter coat at the office, in case I went out for lunch. And yet, what happens and what we see happen even recently in the D.C. area, Northern Virginia, is all of a sudden there’s a weather event and people get stranded in their cars. So people died actually in that event that happened not too long ago. So it’s the thought of, okay, if somehow I don’t reach my destination in my car, if you’re commuting by car, what would you like to have in the trunk? You’d like all the things that you think about. You’d like a blanket. A first aid kit, a coat there. A flashlight and some of those kinds of articles. I mean, it sounds pretty basic, but I would guess a lot of people don’t do that, or what happens is, is they have those things in the trunk, and then they go on a trip and they go, I don’t have room for that stuff. And they take it out. And that, of course, is when they really need it. And so it’s kind of going through and thinking about what you think you want there. The flashlight, the, you know, the multi-use screwdriver or that kind of a tool. All those things are really, really valuable. So the set of golf clubs I keep in my trunk and the emergency set of golf clothes in case anybody impromptu invites me to play as not really the emergency you’d have me focused on. Well, you know, Sammy, if you have a big enough trunk, you have room for that too. That’s true. All right, well, thank you for that, Jack. You know, I know that this is an area that’s potentially, as you mentioned when we were talking about children, we could have multiple podcasts, multiple conversations, I would encourage people to check you out. Where should they do that? So they can find me a FaerRiskconsulting.com. Or they can find me through you in either way, happy to chat with them. There is one more thing if I could just add. Absolutely. Is that a big part of my discussions with clients also has to do with those as they age. And there are a whole series of security and safety considerations. So again, that could be a different topic. But it’s the notion of balancing keeping a low profile versus making sure that people close to them know how to reach them and know how to reach the information they might need. So there’s a whole playbook that you can run on as you age, you know, whether you rely on friends or family, do they know where my accounts are, do they know where my key contact details are? If you have a medical emergency, can I get immediate help? All those kinds of things need some special consideration. And we work on that as well. That’s great. Thank you for including that at the end. I really appreciate it. If our listeners only take one thing away from our conversation about personal security, as it relates to their wealth, what should it be? I think it’s the notion of stopping for a few minutes and actually saying what’s my plan, right? So you mentioned at the beginning that you had Rich Mandel on who’s really talented in what he does. But before you buy insurance, you have to actually figure out what your risks are. So you have to stop and say, what are my risks and do I have a plan? And then you go from there. And if you do that, I think you’re ahead of a lot of people.


00:50:02 – 00:51:34


Great. And since the name of our podcast is wealthy behavior, what’s the best piece of money advice you ever received? Live below your means. That’s a great one. Absolutely. I have a feeling that as we do these podcasts we’re going to have more and more of that answer, but I appreciate it. And Jack, thank you very much for the insight today. Great. Thanks for having me, Sam.


Thank you for listening to wealthy behavior. If you found the conversation useful, please consider leaving us a review wherever you listen to your podcasts and sharing this episode so those around you can live a rich life too. For more insights, subscribe to our weekly blog at heritagefinancial.net and follow heritage financial on Facebook, Twitter, and LinkedIn. Check out my personal finance blog at the Bostonadviser.com and follow me on Twitter @Samazzouz.


This educational podcast is brought to you by heritage financial services LLC located in the greater Boston area. The views and opinions expressed in this podcast are that of the speaker, are subject to change and do not constitute investment advice or a recommendation regarding any specific product or security. There is no guarantee that any investment or strategy discussed will be successful or will achieve any particular level of results. Investing involves risks including the potential loss of principle.


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About Wealthy Behavior: Heritage Financial Services

Wealthy Behavior digs into the topics, strategies, and behaviors that are key to building and protecting personal wealth and living a rich life. We’re Boston Massachusetts-based wealth managers who have been helping busy, successful people pursue their financial goals for more than 25 years. Hosted by Sammy Azzouz, President of Heritage Financial, Wealthy Behavior digs into the topics, strategies, and behaviors that are key to building and protecting personal wealth and living a rich life.