Smart Money: Vigilance only protection against security theft

Bruce Williams is a national radio talk show host and syndicated columnist.

Dear Bruce: I recently learned that someone used my Social Security number to apply for a credit card.

I was advised to call all three major credit-reporting agencies and put a fraud alert on any attempts to apply for credit in my name. I was sent complimentary copies of my credit report for review. I was also advised to notify the FTC and my local police department. J.G., Newtown, Pa.

Dear J.G.: Thank you. This info cannot be repeated too often. Identity theft is a crime that will affect one in four citizens; a scary statistic. The best defense is a good offense. Keep up with your credit file and know where your credit card is at all times.

That said, considering your credit card will disappear at restaurants and gas stations, it is impossible to keep it with you at all times.

Stealing numbers and identities is a very simple process. Make sure to take the time to unravel it if it happens to you.

Dear Bruce: You advise readers to learn more about investments. I subscribe to several financial periodicals, and I will be taking some classes at a local college. I'm about to inherit $500,000. I already have $500,000 of my own invested in CDs and a money market account. I have no debt, just our day-to-day living expenses. I will be collecting Social Security very shortly, and, in addition, I have a retirement from the National Guard and civil service when I retire.

What kind of investments do you recommend to get the highest return, but keep my principal safe? D.P., California

Dear D.P.: In today's world, safe investments have a net zero return when inflation is taken into account. Hopefully this is a temporary condition. Government bonds, CDs and instruments of this kind are paying a tiny amount of interest. This will likely continue for the foreseeable future. If you are tolerant of some modest risk, look into some well-rated corporate bonds, which can fetch around 6 percent with a minimal amount of risk.

Dear Bruce: I bought 6,000 shares online for pennies a share from one of the companies involved in the recent accounting scandals. The company has assets and does something, so I figured it should come back by the time I retire. I don't plan on trading anymore. I want to close my account to avoid the quarterly fees. If I do, how do I prove that I've had the shares for 15 years? T.C., via e-mail

Dear T.C.: Right now, you are holding the shares in the street name. The quick answer is to have the actual shares delivered to you.

Because a company is trading doesn't necessarily mean they will have any assets, and the value of those shares may evaporate before you are ready to retire. Keep an eye on them in the interim period. They may go up a bit and profits can and should be taken.

You should know, however, that buying penny stocks is about the same as putting money into a slot machine. The likelihood of a profit is very remote.

Dear Bruce: I'm 67 and have always had good credit. I had $100,000 in the stock market and lost it all. I owe $43,000 on credit cards, and all I have is my Social Security income.

I refuse to go bankrupt. If I just quit paying the credit cards, is there anything they can do legally besides harass me and give me a bad credit rating? Reader in Huntington, Pa.

Dear Reader: The answer to your question is difficult, given the lack of information. If you have any assets, the credit grantors likely can and will go after them. Of course, you can protect your home, and they can get liens that cannot be exercised until after your death. It would seem to me that it would be cleaner to consider bankruptcy, given the fact that it would benefit the credit card companies, and you would not have the harassing phone calls. As to future credit, you can forget about that. Given the very limited income you have, bankruptcy is something that you should consider.