Are You Resilient?

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Last month I booked a flight to Tucson to visit a friend. I took an Uber from my house in suburban Denver to a nearby park-and-ride. I boarded an express bus to the airport, where I checked a bag, shuffled through security, rode a train to my gate and, finally, boarded my flight. Each step was arranged, facilitated by and/or paid for with that magical device in my pocket called a smartphone.

Robot hand on computer keyboard

I marveled at how painless it was. Flying commercially had once been a loathsome experience. Smartphones had made it tolerable. What better example of technology’s gift to humankind?

My reverie was interrupted by a less happy thought. Given my phone’s outsize role in facilitating my trip, how crippled would I be without it? Say I’d left it in the Uber, or on the bus, on the way to the airport.

Well, I’d have to downshift to old-school mode; use my credit card to print a bag tag and paper boarding pass. On arrival in Tucson, I’d go straight to the T-Mobile store to buy a new phone.

OK, Zoomer

But what if I was one of the cool kids; the kind who pays for everything on my smartphone using Apple Pay, or Google Pay? I’d be screwed. No phone, no boarding pass; no boarding pass, no trip.

And that’d be just the start of my troubles. I’d need to find a way home from the airport. Surely there’d be someone kind enough to lend me their phone. I’d call a friend. Except I don’t know my friend’s number. Why would I? I have a smartphone to remember it for me!

Resilience

Technology is a double-edged sword. On the one hand, it unburdens us from repetitive and time-consuming tasks that might otherwise overwhelm us. It frees us to focus on what’s important, and that is undeniably a good thing. On the other hand, in exchange for that convenience we trade resilience.

What do I mean by resilience? I mean having an escape plan, and the means to execute it (that credit card in the foregoing thought experiment). If we can’t access the technology we typically rely on due to failure or loss, what’s the fallback?

Inversion of Control

Someday credit cards will go the way of the dodo. We’ll have no choice but to pay for things using a smartphone app (or perhaps even a fingerprint or facial scan). The days of brick-and-mortar storefronts, like the T-Mobile store I mentioned above, are surely numbered.

Artifacts such as these will become quaint relics of a bygone era; their functions replaced by virtual surrogates. Our lives will become easier. But by ceding control to the automation, we risk painting ourselves into a corner.

The Problem Is Not Theoretical

Last spring I was driving back from a canyoneering trip in southern Utah. I had been off the grid for a few days and anxious to get caught up. I switched off airplane mode and braced for a cacophony of bells and chimes. It didn’t come.

I pulled over. The error message on my phone read, SIM card malfunction. I needed to get hold of my friends, whom I’d be joining that evening in Glenwood Springs, Colorado. They were expecting me to check in; to let them know I was out of the canyons and on my way.

I drove to the Super8 in Green River. I asked the desk clerk if I could tap into the hotel’s wi-fi (smartphone wi-fi doesn’t require a functioning SIM card). “Wi-fi is for guests only.” “Ok, can I borrow your landline?” The clerk scoffed. “Is it a local call?

Plan B

I got back in my car and drove to the public library, where I rented an internet-connected computer for $2. I pecked my password into the login form of my Gmail account. Google just sent an authorization code to your phone; enter it here and click Submit to continue.

Game over. The technology failed, and my hastily devised escape plan hit a dead end. I literally had no way to contact my friends in Glenwood Springs, or anybody else I know for that matter. I wasn’t resilient enough to recover from my phone’s malfunction.

Remember Payphones?

There was a brief period of time—between the advent of the smartphone and the moment everybody owned one—during which payphones still dotted the landscape. A payphone might have saved me that day in Green River, but they had long since ceased to exist.

As is all too often the case with new technology, the moment it displaces the old, the old slips quietly into oblivion. Once it disappears, the old technology can no longer be counted on to bail us out when the new one fails.

Lesson Learned

I vowed never again to repeat the Green River experience. I switched to an authenticator app for two-factor authentication (2FA), instead of the SIM-based variant that prevented me from logging into Gmail at the library. This protects me if my SIM card fails. But what if I lose my phone?

On the security page of my Google account, I generate a list of random numeric codes. Each is good for one 2FA-free login to my Gmail account. I jot these codes on a piece of paper, which I stuff into my wallet. I also jot down the phone numbers of two or three close friends and family members.

Now I have resilience if my phone malfunctions, or I lose it outright. I have the means to contact a friend or relative completely independent of my smartphone.

Related: Protecting Financial Assets from Fraud, Theft, and Scams

Fragility

The opposite of resilience is fragility. As we hand more of our lives over to automation, we become more fragile. We do so in subtle and unobvious ways that may escape our notice.

Virtual Banking

The Pandemic precipitated a rise in virtual, online-only banking. Virtual banks are governed by the same capital requirements and financial regulations as their brick-and-mortar brethren. But they have no physical branch locations. Their services are accessible only online, via smartphone or browser-based apps.

Beyond the pandemic benefits of being contactless, virtual banks woo consumers with low fees and favorable interest rates on deposits and loans. They can do this because they don’t have to buy or lease physical branch locations, or pay staff to operate them.

This is a boon to consumers, but it is not without cost. If you lose access to the internet, or the virtual bank’s computer infrastructure goes down, you lose access to your money (albeit temporarily one hopes).

Banking with an online-only institution makes you more fragile. It leaves you no place to go—literally—when the website is down. When all banks go virtual, we’ll need a new escape plan to stay resilient.

Institutional Diversification

Institutional diversification is another form of resilience, and represents at least one means of escape when branch banking is a thing of the past.

I keep my retirement accounts at one financial institution; let’s call it A. I keep my brokerage account at institution B, and my checking account at institution C. I have two credit cards, both issued by institution D.

If A succumbs to a crippling cyberattack, say by a hostile state actor like North Korea, I could lose access to my accounts for weeks, months or perhaps even longer. Because I still have access to B, C and D, however, I can fall back on them until (unless?) A recovers.

To bolster my institutional resilience, I download and print account statements from each at least quarterly. This arms me with physical proof of my holdings, thereby increasing the likelihood I recover them if an institution declares bankruptcy or fails outright.

Are You Resilient?

We are all by now aware of technology’s clear and present dangers. For over a decade we have been warned of the ill effects of social media on our brains, and civil society as a whole. Recent advances in artificial intelligence and quantum computing are ringing new alarm bells.

My aim in this post is to shine a light on a more insidious threat; that of technological fragility. I urge you to think about ways in which you might be vulnerable to it, and to take action if necessary to ensure you are resilient.

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[I’m David Champion. I retired from a career in software development in March 2019, just shy of my 53rd birthday. To position myself for 40+ years of worry-free retirement, I consumed all manner of early-retirement resources. Notable among these was CanIRetireYet?, whose newsletters I have received in my inbox every Monday morning for the last ten years. CanIRetireYet? is one of exactly two personal finance newsletters I subscribe to. Why? Because of the practical, no-nonsense advice I find here. I attribute my financial success in no small part to what I have learned from Darrow and Chris. In sharing some of my own observations on the early-retirement journey, I aim to maintain the high standard of value readers of CanIRetireYet? have come to expect.]

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22 Comments

  1. Well said David, as I am about to jump on an international flight I will ensure I am technologically resilient….thank you!

  2. Thank you David, for a most thought-provoking subject! I’m not a ‘prepper’ as some view that term, but I do like to have options when plans go haywire. When it goes bad at the worst possible time (Murphy’s Law)… well yes, that will test your resilience. I’m really glad you put these concepts into the financial realm of our lives, which we take for granted, and I do hope these ideas help people weather any troubles they may have. It is a different world from the days of my youth. Again, thank you and please write more! We are now so deep in technology, as well as dependent. What can we do?

  3. Always double up on the important stuff. As they say about survival equipment, “Two is one, and one is none.”

  4. “Smartphones had made it tolerable”? You were closer with “Flying commercially had once been a loathsome experience. ” I, personally, think it still is.

  5. I’ve been nomadic (no home base, full-time travel) for 5 years. May I also suggest you need to practice with all your alternative options. First, to remind yourself of how to use them, second, to keep them current and active. Many banks/credit cards put unused cards/accounts into sleep mode, requiring all kinds of extra steps (during business hours only) to be able to use the credit card/debit card/app that has been unused for too long (they don’t tell us how long is too long, but one bank does this after 90 days).
    A dusty backup credit card may be worthless in an emergency.

    1. Good advice, Laura. In addition to serving as a backup, my second credit card doesn’t assess foreign transaction fees, and so I use it only when traveling abroad. I will make sure to double check it is active next time I leave the country.

      Thanks for the share!

  6. Thanks for this post David!

    We have not made the switch to paying with our phones yet-still carry the credit card- but have been thinking how convenient it would be as I always have my phone with me. Lots to think about- I do know my husband’s phone number by heart- but do not know anyone else’s unless I have my phone. Will add this resiliency check up to my list of things to do to reduce anxiety / stuff that keeps me awake at night 🙂
    Also on that to do list is getting a ‘go bag’ – or box- packed in case of emergency evacuation. Hope to hear from you in future posts!

    1. Thanks, Sally.

      Financial resilience is no less important than technological (in fact likely more). I will be writing about that soon…

      Best,

      Dave

  7. It’s really important to think of these things! I wonder if our parents’ generation felt so vulnerable?

    1. Hi Robert,

      My dad grew up scrounging for food during the depression, and drove a tank in Patton’s 3rd army in World War II. I’d say he and many of his generation felt considerably more vulnerable.

      Our vulnerabilities are no less real. But happily, for most of us anyway, they are less existential!

      Thanks for your comments, Robert.

      Dave

  8. I travel with two phones — my current and an old Pixel 3 that has my 2 factor apps. The phone has become so important that I probably should carry a third!

  9. David,
    A thoughtful article with a lot of good points.
    I would differ on the credit cards, though. If they are both from the same institution (i.e. Chase) and Chase decides you’re a bad credit risk, then both cards get shutdown. If they are tied to Paypal, Apple Pay, etc., then you’ve lost all options. Definitely have your cards from different providers.
    Prior to smartphones (for a century or so) these were the same problems we faced if losing our wallets. Loss of ID, cash, ATM card, credit card, insurance card, etc., quickly became a daunting list of phone calls to make and left us very vulnerable. Of course, then, as now, the best solution is to have an immensely understanding spouse to come save you! And, yes, I have her phone number memorized.

    Eric

  10. Thanks for a good article David. We have a rule “always have enough cash to get home”.
    Has helped us more than once.
    .

  11. Timely article. I handle my 93 year old Mom’s finances. Her visa was compromised last week and closed. The new card is on its way. At the same time an online transfer to her bank from Capital One was delayed due to a tech problem from one of their support businesses. Bank balance was low. Working on a 2nd credit card for her and a 2nd bank account to avoid this 5 to 7 day delay that was made longer by the MLK holiday and Capital One’s internal issue. I like simplification but in this case she needs a backup for both.

  12. David, Excellent presentation of how vulnerable we have all become. Honestly, I had not thought about the scenario you’ve presented and needed to be reminded of how far we have come in our dependance on technology.
    Thank you for this article.
    Mike Williams

  13. Appreciate the article, and completely understand about being resilient.
    In your example, your phone malfunctioned, but what would you
    do if your phone was stolen ?
    Do you know what apps are on your phone that login automatically ?
    Do you know how to disable your phone ?
    What accounts are you immediately going to have to change passwords on ?
    More food for thought.
    Thank you

    1. Indeed, Brian. Thanks for pointing that out.

      That’s why it’s so important to secure your device, preferably with biometric authentication; e.g., fingerprint or facial scan. I use a swipe pattern, which is less secure. But as a rock climber, fingerprint scanning is not an option (I’m not kidding!).

      Also important, as you point out, to know how to disable your phone, which I suspect most all carriers now support.

      Best,

      Dave

  14. May I suggest adding one or two email addresses to the emergency list? It might have helped when using that library computer …

Comments are closed.