Dust off your Dow 10,000 cap again
August 25, 2010 by Pamela Yellen · 5 Comments
As I write this, the Dow is flirting yet again with the 10,000 level – something it has done dozens of times since it first closed above that threshold more than 11 years ago!
People are understandably nervous, as evidence abounds that the economic recovery is faltering.
An astonishing fact was revealed in a cover story in “The Hulbert Financial Digest” July issue, titled, “Slow and steady wins the race.” The digest is an independent rating service that has tracked investment newsletters for the past 30 years.
It turns out that, “the investment advisor in first place for risk-adjusted performance over the last 30 years has been largely in cash for more than two decades.”
What passes as a pathetic excuse for financial and retirement “planning” was exposed in this month’s issue of Kiplinger’s Personal Finance magazine1.
The article profiled a California couple working with a financial and money management firm to ensure they have enough money to retire in two years, when the husband turns 62.
The article details all the steps the couple has taken to properly plan for this event over the last ten years. The husband summarizes it by saying…
Huh?!?! Isn’t that like scraping and saving your hard-earned dollars for decades, stuffing them all in a sack, and dropping it on a craps table in Vegas??
Yet this is what passes for financial “planning”
It may come as no surprise that a new survey by Senior Market Advisor Magazine revealed that 55% of seniors currently without an advisor said there’s “absolutely nothing [an advisor] could do to earn their business.”
I was recently asked by Selling to Seniors magazine to comment on this. My response shocked the editor – and it will probably shock you, too. You can read it here, along with two overlooked options available to seniors who want to be sure their money will last as long as they do.
Another recent article on, “The Great Stock Myth,” in The Atlantic2 revealed that, “even after a decade of lousy returns and a spectacular market crash, more than a quarter of Americans expect annual returns in the stock market to average 10 to 20 percent.”
The article points out that if the stock market’s return over the next decade or so is 2 to 3 percent above inflation, as some experts are predicting…
“You’ll need to save close to 40 percent of your annual income to replace almost half of your income”
The article concludes, “whether Americans know it or not, they have spent decades basing their retirement plans on expectations of big capital gains in their houses and stock portfolios. Unless we suddenly become willing to save a huge chunk of our income every year, we may need to rethink our retirement plans.”
Housing fades as a means to build wealth
An article this week in The New York Times3 discusses why housing values are likely to only keep up with inflation and may ultimately return the money an owner put in, but will not multiply the investment.
This is actually nothing new. I have written about this for the past five years. Home prices have only appreciated around one percent more than inflation each year for the past century, according to Robert Shiller, co-creator of the Case–Shiller home price index.
So, if you can’t count on the stock market or real estate values to fund your retirement, what can you count on?
You can Bank On Yourself
Bank On Yourself is based on a twist on an asset class that has increased in value every single year for more than a century – including every period of economic boom and bust: dividend paying whole life insurance.
The Bank On Yourself concept involves adding little-known riders and options to the policy that supercharge the growth of your equity (“cash value”) in the policy – especially during the early years of the policy.
This lets you use it as a powerful financial management tool from day one.
The growth in these policies is not only guaranteed and predictable, it is also exponential – it gets better every single year – and no luck, skill or guesswork is required.
It gives you peace of mind when planning for retirement, because you can know the minimum guaranteed income you can take – and for how long you can take it.
Plus, you can get your hands on that money with little or no tax consequences under current tax law.
However, no two plans are alike. Each one is custom tailored to help you achieve as many of your short-term and long-term goals as possible – in the shortest time possible.
If you haven’t already requested a FREE Analysis, why not do so today? There’s no obligation to find out what your bottom-line numbers and results could be if you added Bank on Yourself to your financial plan.
Still have a few questions?
Find the answers here:
- What’s the rate of return of a Bank On Yourself-type policy?
- What do the companies used for Bank On Yourself invest in?
- How are these policies different from the ones the financial “gurus” talk about?
- Where do I find the money to fund a plan?
- I have good savings habits and little debt – how will Bank On Yourself help?
- How do I get started?
1 “Get a Jump on Retirement” – Kiplinger’s Personal Finance, August 2010
2 “The Great Stock Myth” – The Atlantic, August 13, 2010
3 “Housing Fades as a Means to Build Wealth” – The New York Times, August 22, 2010
Bank On Yourself under the microscope
August 10, 2010 by Pamela Yellen · 1 Comment
Dan Proskauer
It was almost two years ago that Dan Proskauer – a Vice President of technology engineering for a major health care company who holds three U.S. patents – first heard of Bank On Yourself.
Dan lives below his means, has significant savings discipline, and is a sophisticated investor. But when the financial crisis hit, Dan realized he had nothing to show for decades of saving and investing his hard-earned money and “doing all the right things” we’ve been taught to do.
He felt angry, betrayed… and willing to open his mind and find out if there was something better out there.
Dan is very analytical and has since spent literally hundreds of hours investigating Bank On Yourself. He has already started seven Bank On Yourself-type policies because, as he puts it, “the more I look into Bank On Yourself, the better it looks.”
Dan recently contacted me and generously offered to share his findings with you. Whether you already use Bank On Yourself, or you’ve been considering adding it to your financial plan, you’ll learn something of value from this interview. You can listen to the interview by pressing the play button below, or you can download the entire interview as an MP3 and listen on your own player or iPod…
Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.
You can also download a transcript of the interview here.
In this fascinating interview, you’ll discover…
Why Dan has cut back his 401(k) contribution to what his employer matches… and why he’s considering stopping funding it altogether
What he discovered were the problems with traditional college savings plans, and why he believes Bank On Yourself is a better option
The surprising result of Dan’s research into the rate of return of a Bank On Yourself-type policy – and why he feels the additional “intangible” benefits make it the best way to build a financial foundation in both good times and bad
Why Dan has seven different policies – and is getting ready to start more
Where Dan found the money to fund his policies
Why Bank On Yourself will hold its own against things people worry about – including inflation, deflation and fluctuating interest rates
The two downsides to Bank On Yourself that Dan found
Why Dan believes it’s critical to use a Bank On Yourself Authorized Advisor to set-up your policy… and how getting knowledgeable, on-going coaching and advice can result in your having far more wealth over your lifetime, while ensuring you don’t lose the tax advantages of Bank On Yourself
Why Dan – like hundreds of thousands of others who use the Bank On Yourself method – says the only regret he has is that he didn’t know about this sooner
Dan’s advice to anyone who’s still sitting on the fence and hasn’t started yet
You can listen to the interview by pressing the play button below, or you can download the entire interview as an MP3 and listen on your own player or iPod…
Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.
You can also download a transcript of the interview here.
If you haven’t started to Bank On Yourself yet, it’s free and there’s no-obligation to request an Analysis and find out what your bottom line numbers and results could be if you added Bank On Yourself to your financial plan.
When you request your Analysis, you’ll also get a referral to one of only 200 financial advisors in the country who have taken the rigorous training and meet the requirements to be a Bank On Yourself Authorized Advisor, like the one Dan is working with.
Request your free Analysis now, so you can have the peace of mind that comes with knowing your financial future will be one you can predict and count on!
We want your feedback! Tell us what below what YOU think of Dan’s interview below…
Wall Street Journal Exposes Stock Market Myths!
July 27, 2010 by Pamela Yellen · 1 Comment
A very revealing article appeared in this past Sunday’s Wall Street Journal entitled, “Ten Stock-Market Myths that Just Won’t Die.”
Maybe you don’t quite believe what I’ve been saying for years. This article confirms exactly what I’ve been trying to tell you…
This article is must-reading for anyone who’s been scratching their head and wondering…
If what they say about the long-term returns you should be able to get in the stock market is true, how come I’m not rich?!?”
Please pay particular attention to…
Myth #1: “This is a good time to invest in the stock market”
Myth #2: “Stocks on average make about 10% a year”
And the article author’s insight into Myth #10: “Stocks outperform over the long term” is priceless.
I’ve quoted many sources confirming what this Wall Street Journal article says. How many more sources do you need to hear it from, before you request a free Analysis that will show you how much your financial picture could improve if you added Bank On Yourself to your financial plan?
Four fascinating facts that affect your finances
July 20, 2010 by Pamela Yellen · 4 Comments
I just came across these four surprising new facts that affect your money and finances…
Fascinating Fact #1: 61% of boomers fear outliving their money in retirement more than they fear death
That’s according to a new study.1
Maybe you’re one of them. It appears that lots of boomers should be scared out of their wits – almost half of them could run out of money in retirement, according to a new study by the Employee Benefit Research Institute.
In fact, most employees recently surveyed – regardless of age – say they aren’t saving enough money for retirement.2
Many people are adjusting to “the new normal” by postponing retirement.
But you may not have a choice: Nearly four in ten retirees say they were forced out of work earlier than they’d planned, because of layoffs, poor health, or the need to take care of a loved one.3
And, for those already retired, 60% say they have been forced to do without things they had taken for granted, to make ends meet.4
Things like meals out, new books and movies, travel, new clothes and home improvement projects.
Can you live without those things? Sure.
But why should you have to, after a lifetime of hard work and sacrifice?!?
Famous people who use the Bank On Yourself method
June 30, 2010 by Pamela Yellen · 11 Comments
There’s one surprising thing Walt Disney, J. C. Penney and the Pampered Chef have in common – they all used the Bank On Yourself method to start, grow and/or finance their businesses!
Walt Disney borrowed from his life insurance in 1953 to help fund Disneyland, his first theme park, when no banker would lend him the money.1
Following the 1929 stock market crash, famous retailer J. C. Penney borrowed from his life insurance policies to help meet the company payroll.2 Had he not had ready access to capital, the company probably would have been forced to close its doors, adding even more people to the unemployment line.
In 2002, Doris Christopher sold her kitchen tool company, the Pampered Chef to Warren Buffett for a reported $900 million. Seven years earlier, she launched the company with a life insurance policy loan.3
Foster Farms was founded in 1939 when Max and Verda Foster borrowed $1,000 against their life insurance policy to buy an 80-acre farm near Modesto, CA.4
Senator John McCain secured initial campaign financing for his presidential bid by using his life insurance policy as collateral.3
So-called “permanent” or cash value life insurance (versus term insurance, which is like renting insurance) builds up cash value that policy owners can use in difficult times as a ready source of money to cover personal or business expenses for emergencies and even to cover insurance costs.
Hold your financial course or change your course?
June 15, 2010 by Pamela Yellen · 5 Comments
The Dow has dropped below 10,000 several times recently – a level it first reached more than eleven years ago and has since bounced over and back an astonishing 63 times!
Millions of people who were counting on their homes to help fund their retirement now have no equity to count on, because they owe more than their homes are worth.
Credit is still extremely tight for both businesses and consumers, underscoring just how little control we have when we have to rely on other people’s money.
As we face continuing economic challenges, many people are wondering… what does the future hold?
Ever hear the old saying, “Change is the only constant?” Today that is clearly true more than ever! Stephen Covey, author of the run-away best seller, Seven Habits of Highly Effective People, tells the following story:
How will the debt crisis affect Bank On Yourself?
May 13, 2010 by Pamela Yellen · 22 Comments
A question we are getting frequently right now is how safe is your money in a Bank On Yourself plan if the debt crisis in Europe continues and spreads to the United States?
Let’s start by answering the question…
Life insurance companies are highly regulated and required to maintain sufficient reserves to ensure they can pay all future claims.
They are regularly audited by the state insurance commissioners’ offices, and sometimes by dozens of states, to ensure they are on solid financial ground. And a multi-layer safety net exists to assure your money in a life insurance policy is secure.
You may be wondering, “What about AIG?” Many people missed the fact that AIG’s problems were caused by a holding company, not its life insurance subsidiaries. Their insurance companies were walled off from the problems, have always been solvent and did not receive a bailout.
The companies recommended by Bank On Yourself Authorized Advisors are among the financially strongest life insurance groups in the world.
They enjoy some of the strongest surplus positions in the industry, approximately double the industry average.
These companies are, in essence, owned by policyowners, rather than stockholders, which allows them to focus on the long-term interests of policy holders, rather than the short-term demands of Wall Street.
Here’s what the companies used for Bank On Yourself invest in:
The truth about investing in mutual funds
May 5, 2010 by Pamela Yellen · 6 Comments
Investors earn returns over time that are far lower than those quoted by mutual fund firms. In fact, it’s not even a close race.”
This is the conclusion of DALBAR, Inc., the well-respected independent investment research firm.1
For the past 20 years ending December 31, 2009, “the average equity investor managed to eke out an annualized return that outpaced inflation.” The average return was 3.17% per year – just slightly more than the inflation rate for that period!
Asset allocation and fixed income investors weren’t so lucky (if you can call that “luck”); they lost ground after adjusting for inflation.
Why most investors don’t come close to getting the returns touted in mutual fund prospectuses…
There are plenty of reasons for this. For starters…
Does money buy happiness?
April 28, 2010 by Pamela Yellen · 3 Comments
There is probably nothing in the world that people spend more time discussing than money.
Countries go to war because of money. People marry and divorce because of money. And we spend the biggest part of our waking hours working to earn it.
The age-old question, of course, is, does money buy happiness?
While writing a fascinating book, John Stossel, the highly regarded former anchor of the investigative TV show, 20/20, did some research into the answer to this question.
Dow 11,000: Déjà vu all over again?
April 12, 2010 by Pamela Yellen · 13 Comments
Bill Clinton was President, the world awaited the potentially disastrous consequences of the Y2K computer bug, and – oh, yeah – the Dow closed above 11,000 for the first time in history.
The date was May 3rd, 1999, and to quote Yogi Berra, nearly eleven years later,
The Wall Street spin-makers are pointing out what a “big accomplishment it is for a measure that was below 7,000 only a year ago” to recapture the 11,000 level.
Before we pop the cork on a bottle of champagne, here’s a few sobering questions to ask yourself…
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