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Why PAX Financial Group Suggests Creating a Virtual Vault

Financial Planning May 13th, 2019 by: Darryl Lyons

Safe deposit boxes in financial institutions, bank vaults and home safes have long been used to securely store financial, legal and other important documents. Storage in a secure physical location kept these documents free from being lost or misplaced in your home, free from natural disasters that could destroy them and free from theft by home intruders. But here’s why PAX Financial Group suggests having a virtual vault, a similar “place” in cyberspace where you can access these documents.

 

The Need for Digital Security

As Americans have increasingly moved online, important financial and legal documents have moved online too. Almost every document important to your financial and legal life and that of your heirs can now be online. Financial statements, loan documents, insurance policies, tax returns, wills and more can be born digital or scanned to become digital.

The end result has been a need for virtual security methods. Loss, theft and natural disasters like fires and floods can happen to computers and computer-related files just as they can to physical files and objects. In fact, the risk of loss through theft might be even greater for important documents stored online than for physical documents. The last few years alone have brought multiple tales of data breaches involving millions of Americans. Data breaches often reveal personal identifiers, such as bank account or credit card numbers.

Once cyberthieves have these identifiers, they can gain access to your overall financial life and your cyber identity. Cyberthieves are very sophisticated at linking personal identifiers with the broad picture of your assets. All your assets and information could be at risk. 

Not only that, but if your house is broken into, intruders might use physical documents to find these identifiers, and then use the identifiers to steal your digital documents or commit identity theft. Even a list of passwords lying next to your computer could provide a thief in your home with a digital goldmine.

 

Ready to have a serious conversation about your finances? Contact PAX Financial Group to schedule a free, no-strings-attached consultation and see how we can help.

 

The Virtual Vault: Securing Your Digital Documents

For your digital documents and accounts to be secure, you need to create a virtual vault. A “virtual vault” is a broad umbrella term referring to the creation of a system to securely store your important digital documents.

The term encompasses both security methods for your computer(s) and specific services offered by financial institutions and other providers to form a safe place to keep your online documents, also sometimes known as online safe deposit boxes. Together, these security methods are equivalent to the physical bank safe deposit boxes and home safes of times past.

To understand the creation of a virtual vault, you should first think about what items need to be in one and how they need to be made secure.

 

What Should Be Placed in a Virtual Vault?

There are a lot of tasks that require your personal information. So, there is a wide range of documents that we believe should be securely kept in a virtual vault. This includes any document or file that relates to your financial or legal status and your financial assets, liabilities and responsibilities, including any documents regarding your estate or heirs. Any documents or files that establish your identity and can be used for cybertheft should also be securely stored.

Here’s a list of what we at PAX Financial Group think is wise to keep in a virtual vault. (We also recommend creating an inventory of all the documents you’ve protected in a virtual vault and where they are. Make sure you then also keep that inventory secure, of course!)

Financial and legal documents

  • Bank statements
  • Financial statements (brokerage, retirement accounts and other accounts)
  • Stock and bond certificates
  • Net worth statements
  • Credit card statements
  • Mortgage documents
  • Loan documents
  • Car titles
  • Tax returns
  • Insurance policies
  • Wills
  • Estate planning documents
  • Marriage certificate(s)
  • Divorce and custody decrees
  • Any business documents related to your personal ownership or responsibilities
  • List of household goods
  • List of personal possessions

Identity documents

  • Driver’s license
  • Social Security cards and/or numbers
  • Passports
  • Birth certificates
  • Death certificates
  • Military identification and discharge papers

It’s prudent to make sure that all the information placed in a virtual vault is current. If any of these documents are not current, update them.

 

Computer Security Methods

Any of the documents above can be in your computer. It’s important to make them secure via the following methods:

1. Protect via passphrase

Passwords are, in today’s world, relatively easy to hack. Hackers can easily access relatively common passwords, like “password” or your birthday. 

In lieu of passwords, many security experts suggest using passphrases. These are phrases that mean something to you but can’t be guessed, such as “johnnycashisawesome” or “oaktreesstandtall.”

 

2. Encrypt your data 

Next, make sure the data and files on your computer are encrypted. Many software programs can encrypt your data so it can’t be accessed.

 

3. Maintain software protection

You may also want to keep software on your computer to protect it from viruses, malware and other potential intrusions. Then remember to update it regularly.

 

4. Back up your files 

In case of cybertheft, it’s important to back up your files regularly. Backed-up files should be encrypted as well.

Backing up your files can also protect you against ransomware, a type of cybercrime in which computers are inaccessible until the owner pays a ransom.

It is recommended that documents that you don’t use regularly, such as tax returns and wills, be moved off your personal computer entirely once they are stored.

 

5. Shred old documents

Some documents, like tax returns, should be kept for seven years. Others, like quarterly financial statements, can be discarded once you have the yearly statements.

After you no longer need files, remember to shred them to keep the information free from prying eyes.

 

Online Safe Deposit Boxes

A number of businesses and financial institutions have developed products to help consumers safeguard their important documents. These are sometimes called online safety deposit boxes or virtual vaults.

The services range from creating a list or inventory of which documents are protected and where documents are to actually storing them. Some services provide a beneficiary list and ask for a third-party verifier who is not a beneficiary.

Be sure to ascertain how often you can access your online safe deposit box before using one.

 

Retirement Guide - PAX Financial

This material is provided by PAX Financial Group, LLC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The information herein has been derived from sources believed to be accurate. Please note: Investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.

Darryl Lyons

Darryl Lyons

CEO and co-founder of the PAX Financial Group, Darryl Lyons has been a licensed professional in the financial services industry since 1999. A lifelong Texan, Darryl began his career in the financial sector just one day removed from earning his bachelor’s degree in corporate financial management and accounting at St. Mary’s University. Throughout his career, he has won awards for recruiting and development from Fortune 100 companies. In January 2007, he chose to begin and develop his independent practice. He joined Andres Gutierrez and Joseph Schuetze to form the PAX Financial Group. Darryl also served as the Chairman for Brooks Development Authority. Shortly after his service, Mayor Julian Castro, named a park “The Darryl W Lyons Park” in honor of his service. He was named to the 2010 San Antonio Business Journal’s “40 Under 40 Rising Stars,” which honors people making a difference in business and in the community.