The Prosperity Protocol

Systematic Steps to Financial Success

Investor's Handbook
May 27, 2025

Issue #8 – May 27, 2025

Editor’s Note: Todd here, and welcome to the eighth issue of The Prosperity Protocol!

Your responses to our budgeting issue were incredible—it's clear that simple, practical approaches resonate with all of you. As we continue building financial foundations together, this week we're addressing a topic that's unfortunately more relevant than ever: Protecting Your Financial Future from Scams and Fraud.

Whether you're just starting your wealth-building journey, or you've accumulated significant assets, understanding how to protect yourself from financial predators is absolutely critical. The tactics are getting more sophisticated, but the good news is that knowledge and preparation are your best defense.

The New Face of Financial Fraud: Why Everyone's a Target

Have you noticed how financial scams seem to be everywhere these days—from suspicious texts about your bank account to investment "opportunities" that sound too good to be true?

Unfortunately, you're not imagining it. Financial fraud has exploded in recent years, with Americans losing over $10 billion to scammers in 2023 alone. What's particularly troubling is that these schemes aren't just targeting seniors or inexperienced investors—they're successfully victimizing people of all ages and financial sophistication levels.

I learned about this threat firsthand when a relative, who works in finance, nearly fell for a sophisticated romance scam that would have cost her $15,000. The scammer had built a relationship over several months, shared "investment opportunities," and created an elaborate fake persona complete with social media profiles and a compelling backstory. It was only a casual conversation with me that raised red flags before she sent the money.

This experience opened my eyes to how these schemes have evolved. Today's financial fraudsters aren't just the obvious email scams we used to laugh about. They're using artificial intelligence, social engineering, and psychological manipulation techniques that can fool even financially savvy people.

The scary truth? As you build wealth, you become a more attractive target. But with the right knowledge and systems, you can protect yourself and your growing assets.

Your Fraud Protection Blueprint

Let's build comprehensive defenses that protect you from the most common and dangerous financial threats:

1. Recognize Modern Financial Scams Before They Hook You

Today's scammers use sophisticated psychological techniques, so awareness is your first line of defense:

Investment and "Get Rich Quick" Scams:

Crypto "investment" schemes promising guaranteed returns or exclusive access.
Fake robo-advisors that take your money without actually investing it.
Ponzi schemes disguised as legitimate investment clubs or opportunities.
"Hot stock tips" delivered via social media or unsolicited messages.
Red flags: Guarantees of unusually high returns, pressure to act quickly, requirements to recruit others, secretive or complex explanations.

Identity and Account Takeover Scams:

Phishing emails/texts impersonating banks, investment firms, or government agencies.
Phone calls claiming to verify account information for "security purposes".
Fake customer service numbers found through internet searches rather than official websites.
Social media impersonation of financial advisors or institutions.
Red flags: Unsolicited contact requesting personal information, urgent language, spelling errors, mismatched URLs.

Romance and Social Engineering Scams:

Dating app connections who eventually pitch investment opportunities.
Social media "friends" who build relationships before requesting money or financial information.
Fake financial advisors who use personal relationships to gain trust.
Red flags: Quick emotional connections, reluctance to meet in person, financial requests or advice from new relationships.

Sarah, a reader who works in IT, shared her close call: "I received a text that looked exactly like it came from my bank, warning about suspicious activity. The link took me to what appeared to be my bank's website asking me to verify my login. Something felt off, so I called my bank directly instead. Turns out it was a sophisticated phishing attempt—the fake website was nearly identical to the real one."

For Beginners: Start by being skeptical of any unsolicited financial offers or requests for personal information, regardless of how legitimate they appear.

For Intermediates: Develop systematic verification processes for any financial communication you receive, including independently confirming contact information through official channels.

2. Build Strong Digital and Physical Security Systems

Protecting your financial accounts requires multiple layers of security:

Essential Digital Protections:

Unique, strong passwords for every financial account (use a password manager).
Two-factor authentication (2FA) enabled on all banking, investment, and credit accounts.
Regular credit monitoring through free services or paid monitoring solutions.
Secure Wi-Fi practices (never access financial accounts on public Wi-Fi without a VPN).
Updated devices and software to protect against security vulnerabilities.

Advanced Digital Security:

Identity monitoring services that alert you to new accounts opened in your name.
Credit freezes at all three major credit bureaus (free and highly effective).
Dedicated devices or browsers for financial activities only.
Regular security audits of your accounts and permissions.

Physical Security Measures:

Secure mail handling (collect promptly, shred financial documents, use secure mailboxes).
Safe storage for important documents (fireproof safe or bank safe deposit box).
Careful sharing of personal information in public or social settings.
Home security considerations if you keep cash or important documents at home.

Marcus implemented comprehensive security after a friend was victimized: "I set up credit monitoring, froze my credit reports, and started using a password manager with unique passwords for every account. I also put fraud alerts on my main accounts. It took about three hours to set up initially, but now it runs automatically and gives me incredible peace of mind."

For Beginners: Start with strong passwords, two-factor authentication, and free credit monitoring as your foundation.

For Intermediates: Add credit freezes, identity monitoring, and systematic security audits to create comprehensive protection.

3. Create Response Plans for When Things Go Wrong

Despite your best efforts, fraud can still occur. Having response plans minimizes damage:

Immediate Response Actions (First 24 Hours):

Contact your bank and credit card companies to report suspected fraud and freeze accounts.
Change passwords on all potentially compromised accounts.
File a police report if you've lost money or provided sensitive information.
Contact the FTC at IdentityTheft.gov to report identity theft.
Document everything with screenshots, phone call records, and written summaries.

Short-Term Recovery Steps (First Week):

Review all financial accounts for unauthorized activity.
Contact credit bureaus to place fraud alerts or freezes.
Monitor credit reports for new unauthorized accounts.
Gather evidence and maintain detailed records for potential legal action.
Update security measures on all accounts.

Long-Term Protection (Ongoing):

Continue monitoring all accounts and credit reports closely.
Work with institutions to permanently resolve fraudulent activity.
Consider identity theft insurance if losses are significant.
Update emergency contacts and security procedures.
Share lessons learned with family and friends to help protect them.

Rachel experienced credit card fraud during a vacation: "My card was skimmed at a restaurant, and fraudulent charges appeared the next day. Because I had alerts set up, I caught it immediately and called my credit card company. They froze the card, removed the charges, and sent a new card overnight to my hotel. What could have been a vacation disaster became just a minor inconvenience because I had systems in place."

For Beginners: Focus on knowing who to call and having important phone numbers easily accessible if fraud occurs.

For Intermediates: Develop comprehensive response checklists and maintain detailed records of all your financial accounts and security measures.

Beyond the Basics: Advanced Fraud Protection Strategies

The "Trust but Verify" Principle Never take financial communications at face value, even if they appear legitimate:

Always independently verify requests for information by contacting institutions directly using official phone numbers.
Be suspicious of urgent requests, especially those involving money transfers or account access.
Take time to research investment opportunities thoroughly, including checking regulatory databases.
Get second opinions on significant financial decisions from trusted, independent sources.

Social Media Security Your online presence can provide scammers with information to target you:

Limit personal information shared publicly (birthdate, location, family details).
Be cautious about financial success posts that might attract scammers.
Verify the identity of anyone offering financial advice or opportunities online.
Regularly review and update privacy settings on all social platforms.

Family and Estate Planning Protection Protect vulnerable family members and plan for potential incapacity:

Discuss common scams with elderly family members.
Set up joint accounts or financial oversight for at-risk relatives.
Create powers of attorney and clear succession plans for your accounts.
Establish family passwords or verification systems for financial conversations.

Social Engineering is the practice of manipulating people to reveal confidential information or perform actions that compromise security. Unlike technical hacking, social engineering exploits human psychology rather than computer vulnerabilities.

Common social engineering tactics include:

Creating false urgency ("Your account will be closed unless you act now!").
Impersonating authority figures (fake IRS agents, bank officials).
Building false relationships (romance scams, fake friendships).
Exploiting emotions like fear, greed, or helpfulness.

Understanding social engineering helps you recognize when someone might be trying to manipulate you into making poor financial decisions or revealing sensitive information. The key defense is always taking time to think and verify before acting on emotional appeals.

What's Happening in Markets This Week (May 26-30, 2025)

Markets were closed Monday for Memorial Day. Last week ended on a lower note though as stocks retreated as the Treasury market continued to experience volatility from tariff related news. The news had an outsized impact on small- and midcap indexes. At the same time both the S&P 500 and the DJIA retreated for the year and are showing negative YTD.

For fraud protection purposes, it's worth noting that market volatility and economic uncertainty often create fertile ground for financial scammers. During uncertain times, people become more susceptible to "guaranteed return" schemes and other fraudulent investment opportunities.

Key events to monitor this week:

Tuesday: Consumer Confidence Index
Thursday: Weekly Jobless Claims, GDP, and Pending Home Sales
Friday: Personal Income, Consumer Spending, PCE Index, and Consumer Sentiment

Be especially cautious of investment schemes that claim to profit from economic volatility or promise protection from market downturns. Legitimate investments carry risk, and anyone guaranteeing profits during uncertain times should be viewed with extreme skepticism.

Your Questions, Answered

Question from Alex P.: "I've been getting calls from someone claiming to be from my investment company asking me to verify my account information for 'security purposes.' How can I tell if these calls are legitimate or scams?"

My take: This is an excellent question, Alex, and unfortunately, these types of calls are becoming increasingly common and sophisticated.

Here's the key principle: Legitimate financial institutions will never ask you to provide sensitive account information during an unsolicited phone call. They already have your information—they don't need you to verify it over the phone.

Here's what to do when you receive these calls:

Don't provide any information during the initial call, even if they claim it's for security purposes.
Get the caller's name and department, then tell them you'll call back to verify their identity.
Hang up and call your investment company directly using the phone number from your official statements or their official website (don't use numbers provided by the caller).
Ask your company if they attempted to contact you and if the information requested was legitimate.
Report suspicious calls to your investment company's fraud department and consider reporting to the FTC.

Additional red flags to watch for:

Pressure to act immediately.
Requests for passwords, PINs, or Social Security numbers.
Claims about suspicious account activity that require immediate verification.
Requests to move money or make trades during the call.

Remember: It's always better to be cautious and verify independently than to risk becoming a fraud victim. Legitimate financial professionals will understand and appreciate your security-conscious approach.

If you discover the call was fraudulent, consider it a good reminder to review and strengthen your account security measures.

Tools That Make Fraud Protection Easier

Protecting yourself from fraud is easier with the right tools and services:

1. Aura – For Comprehensive Identity Protection
Aura provides identity monitoring, credit monitoring, VPN service, and identity theft insurance in one package. Their platform monitors over 90 billion data points and provides real-time alerts about potential threats. Plans start at $12/month for individuals, with family plans available. They also offer $1 million in identity theft insurance coverage.

2. 1Password – For Secure Password Management
1Password creates and stores unique, strong passwords for all your financial accounts while making them easily accessible when you need them. Their security features include breach monitoring and secure document storage for important financial information. Personal plans start at $2.99/month, with family options available.

3. Credit Karma – For Free Credit Monitoring
Credit Karma provides free credit score monitoring, credit report access, and identity monitoring features without requiring a credit card. While they make money through targeted financial product recommendations, their core monitoring services are genuinely free and quite comprehensive for basic fraud protection.

All three services offer mobile apps and send real-time alerts about potential security threats or suspicious activity.

Three Things to Do This Week

Enable two-factor authentication on at least one financial account (your primary bank or investment account). This single step dramatically improves your security.
Check your credit report for free at annualcreditreport.com to ensure no unauthorized accounts have been opened in your name.
Create a simple "fraud response plan" with important phone numbers (banks, credit cards, credit bureaus) stored in an easily accessible location in case you need to act quickly.

Let's Keep the Conversation Going

Want more detailed strategies for protecting your financial future? Check out my Medium publication "Investor's Handbook" where we explore these topics in greater detail.

Visit My Medium Publication, “Investor’s Handbook” → Here

Have you encountered financial scams or fraud attempts? Reply to this email with your experience—I'd love to feature reader stories (anonymously) to help educate our community.

Found this helpful? Share it with a friend who might benefit from stronger fraud protection. New to the newsletter? Subscribe below to join our growing community.

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Remember – protecting your financial future isn't just about growing your wealth. It's about safeguarding what you've built from those who would take it away.

Until next week,
Todd

This newsletter is for educational purposes only and doesn't constitute financial or legal advice. Always do your own research and talk to qualified professionals before making financial decisions.