This post is a response to @SavingNinja’s Thought Experiment #4.
@SavingNinja poses the following challenge, and asks for a ‘stream of consciousness’ reply:
You wake up one rainy morning and after checking on your accounts you find out that you’ve been ‘wiped-out’ by a cybercriminal. You’ve lost all of the money and assets that you’ve ever owned and you can’t get them back. What will you do?Thought Experiment #4 by @SavingNinja
My first reaction is to clarify exactly what I have lost. I don’t accept the premise that I have lost all the money/assets I’ve ever owned; for starters, I’ve spent some of those! So for purposes of this discussion I’ve lost all the assets that can be retrieved via online / written instructions to banks/brokers/etc.
This loss is catastrophically bad for me. It amounts to:
- £100k+ of cash in various accounts
- £millions of publicly quoted investments in my own numerous brokerage accounts
- £00ks of assets in Mrs FvL’s accounts and brokerages that I have access to
SavingNinja tells me I can’t get them back. I am not going to take that at face value and am going to find a very competent lawyer, agree a performance-related fee structure, and send them hard at everybody that moves. I am going to consider going public with my predicament and creating an almighty fuss that my banks, brokers, etc will find embarassing at least. But, for the sake of argument, SavingNinja proves right and I can’t retrieve more than, say a few £000s of goodwill gestures.
I do however have a few remaining assets.
My first remaining asset is myself. I have ‘personal capital’, which simplistically put is best valued by my earnings potential. Right now I am, slightly unusually for me, earning a reasonable income and I could certainly keep the short term wolves from the door. I do not earn enough to cover all my Wants so I would need to cut back but I would not be in penury. I would also need to shift my employment mindset because I have now lost my ability to say FU, and thus I have lost my independence of thought/action. If I had retired though I’d have effectively ‘sold’ my personal capital and I would be very exposed.
I also have my DOH Mrs FvL. She would be absolutely critical as I would need a great deal of emotional support. She also works and earns and this would become more important than it was until The Cybertheft.
I also have my friends/network, my ‘social capital’. I’m not sure how much help they’d be at this point but I’d reach out to get advice / introductions to the best lawyers/etc.
I also, thankfully, have a few financial assets left, because they have proven impervious to cyber attack.
Let’s assume that the ownership of my Dream House and my Previous Home and my other rental property is in dispute. So I can’t collect rent but nor can I, or my tenants, be evicted. I struggle to believe that ultimately I can lose both these properties but if I am wrong that makes life that much harder. I would make sure I didn’t leave my residence unoccupied until I had resolution of this catastrophe.
My pension will have proven inaccessible to the Cyber Crook, I assume (unlike weenie), so in a few years’ time I will have that income to draw on. That doesn’t help yet but it is something.
I also own a half share in a family member’s residence. This property can not be sold/cashed in without the assent of its occupant and that will not have been given, however hard the Cyber Crook pleaded. So I can’t do anything with this asset but it is a six figure positive asset on my balance sheet. Within the next few years I could get it back, admittedly by spreading my misery to my family.
In addition, I have a debt owed to me by another (older) family member. I am not expecting ever to be repaid this, but for inheritance tax purposes it is a formal debt and at some level it is an asset of some value on my balance sheet; post the Cyber Theft this debt would be a material component of my net worth. At the very least it allows me to ‘guarantee’ I receive something under probate. This is ‘unhackable’ as it is essentially entirely offline and based at least partly on word-of-mouth.
There is a reasonable chance that my highly diversified / overly complex set of finances has meant the Cyber Crook has missed at least one account somewhere. I do not use the same password on two accounts so he has got his work cut out for him. One very significant possibility is a significant illiquid property holding that my Ltd company owns, worth around £1m, which would be practically impossible to dissolve/liquidate at short notice. More than likely the Cyber Crook has just missed it.
I am wearing a gold watch. That is very hard to nick by Cyber theft, and I am grateful for that now. Part of why I own it was a conscious decision that, while I do not believe in gold as an investment class, I accept that in extremis it provides a store of value.
Most importantly, I have a variety of private illiquid ‘angel’ investments in early companies.
As it happens right now I am also a few days away from receiving over £100k from an angel ‘windfall’ that is, literally, in process. They would be my first phone call and I would stand a decent chance of preventing the Cyber Crook from snaffling any of these funds. The funds should then provide a decent fighting fund for me for the next few months.
The Ltd also owns shares in private companies that produce over £10k of dividends every year; this income is going to become material to me.
My angel investments are not tradable; ordinarily this is a source of grief / gnashing of teeth, but post Cyber Theft this is a blessing. I will write to each company asking them to be very careful about any ‘permitted transfer’ requests (in which the Cyber Crook tries to say that FvL has sold his holding to Cyber Crook) but in most cases such transfers need board approval /similar anyway. I will succeed in keeping almost all, if not absolutely all, of these holdings. They can’t buy me much right now but at some point I will receive some value from somewhere in that portfolio.
Thank goodness for illiquid investments.
(Links to other posts follow)