Personal Finance Blog for Retirement and Investment Advice

7 Reasons the Economy is Worse than it Seems

Do you believe the economy has improved significantly since the Great Recession?

Or do you feel like we’re staring down the barrel of a cannon whose fuse has already been lit?

The stock markets should be down considerably by plenty of measures, but many investors appear to have been hypnotized to believe that nothing can go wrong.

I believe things are worse than they may seem on the surface, and extreme caution is warranted, for the 7 reasons I spell out here.

I’ll also give you some tips on how to protect yourself and have a “Plan B” in place in case the you-know-what does hit the fan.

Here Are 7 Reasons the Economy is Worse than It Seems…

1. Addiction to Stimulus and Low or Negative Interest Rates

We have been guinea pigs in the greatest experiment in monetary policy in the history of the world.

Every time the Federal Reserve so much as sneezes, the markets whipsaw. In this topsy-turvy world, good news about the economy becomes bad news for the stock market and vice versa.

Even the Fed knows it’s in over its head and has lost control of the situation. But that won’t stop them from continuing to experiment with you and me as their lab rats.

2. Overheated Stock Market Valuations and Deteriorating Fundamentals

Profits for S&P 500 companies continue falling, but the S&P 500 is trading at the highest level of projected earnings since 2002.

3. Rising Poverty and Expanding Government Assistance Rolls

The U.S. poverty rate has actually risen since the “official” end of the Great Recession in 2009. (I say “official” end because, to a lot of Americans, it still feels like we’re mired in a recession.)

During the same period of time, food stamp usage increased 39%.

4. Persistent Underemployment

A measure of the number of people working part time who want – but can’t find – full-time work in their field, that peaked above 16% at the height of the last recession, still remains above 12%. Obviously, that’s a major drag on economic performance.

Slow Wage Growth5. Slow Wage Growth

Between 2009 and 2015 inflation-adjusted median weekly earnings actually fell by about 1%, and median household earnings fell by around 4%.

6. Global Economic Weakness

Many people underestimated how the economic situation in other parts of the world affects our economy. But no one can deny any longer how interconnected our economics all are.

Emerging economies like Brazil and Russia have been heavily impacted by falling commodity prices.

The largest economies in Europe are struggling. And China, which is now the world’s second-largest economy, is experimenting with an economic transition that many think is likely to fail.

If it does fail, the U.S. economy could be seriously impacted.

7. By Historical Standards, We’re Already Overdue for Another Recession

Historically, recessions occur at alarmingly regular intervals.

In fact, according to the National Bureau of Economic Research, by post-war standards, we’re almost two years past due for the next recession. Ugh.

The political uncertainty we are facing with the upcoming election isn’t helping any either.

As people who know me well will tell you, I’m an optimist – I always see the glass as half full.

But while I hope for the best, I also have a backup plan – my “Plan B” to help my family weather those tough economic times that seem to come when you least expect them.

What Characteristics Should a True Safe Money Plan B Have?

It should have all of these:

  • No loss of principal or gains in a market crash (safety nets)
  • Guarantees
  • Liquidity
  • Control
  • Tax-favored
  • Contractual growth guarantees

Out of the more than 450 financial products I’ve investigated, only one meets all the requirements: The Bank On Yourself method, based on super-charged dividend-paying whole life insurance. These plans have increased in value every single year for more than 160 years, in every period of boom and bust, including during the Great Depression.

And no luck, skill or guesswork is required to make that happen.

In addition to the benefits I mentioned above, the Bank On Yourself method also provides:

  • Asset Protection – your cash values are protected from creditors and lawsuits (varies by state)
  • Privacy – your plan and its growth, along with the income you take from it, are generally not reported to the government or IRS
  • Lets You Become Your Own “Banker” – so you can get access to cash whenever and for whatever you want – no questions asked

You control how and when you pay it back and – if your policy is from one of a handful that offer this feature – your plan can continue earning the same guaranteed annual increase and any dividends the company credits, even when you’re using that money elsewhere!

Here’s the Key Question to Ask Yourself:

Safe Money Plan

Does having your money…

  • safe…
  • liquid…
  • growing significantly faster long-term than a savings, money market account or CD…
  • and earning the exact same guaranteed annual increase and dividends – even when you use it

… take away any of your options?

The reality is that it gives you more options, not fewer.

Here’s how to protect yourself in scary times

It wasn’t raining when Noah built the ark. To find out how you can benefit from a custom-tailored Bank On Yourself plan, and discover why it’s the ultimate financial bunker for scary economic and political times, simply request your FREE Analysis here.

You’ll also get a referral to one of only 200 advisors in the U.S. and Canada who have met the rigorous requirements to be Bank On Yourself Authorized Advisors.

Don’t dilly dally! Do it now! Just click this button:

Yellow-Button-FREEanalysis-trans

The Bank On Yourself No-Nonsense Guide to Life Insurance

Life insurance is a subject we don’t like to think about. It’s right up there with going to the dentist and writing the annual Christmas letter. (Do people still even do that?)

Thinking about life insurance is one more reminder that we may not live forever. Ugh.

But not going to the dentist doesn’t make things better. And not thinking about life insurance won’t help you live longer.

On the other hand, going to the dentist and thinking about life insurance are two really positive things you can do that are almost guaranteed to make your life better.

If peace of mind, a sense of security, and the knowledge that you’re doing all you can for your family and yourself are important to you, then it’s wise to spend a little time thinking about life insurance.

But life insurance doesn’t have to be complicated or boring—which is why we created this Consumer-Friendly Guide to Life Insurance.

Here are some interesting facts about life insurance that we cover in our Guide. Did you know that …

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Could the Government Seize Your 401(k) and IRA Money?

Is it far-fetched to wonder if the government could take control of your retirement savings in 401(k)s and IRAs?

Or is that just a paranoid conspiracy theory?

The fact of the matter is that it’s not far-fetched, or a conspiracy theory. The groundwork has already been laid.

And the government already gave banks the green light to seize your bank accounts.

Read on for the facts – and I urge you NOT to discount the importance and urgency of this issue affecting your hard-earned savings…

The Government Has BIG Plans for Your Retirement Savings

An article in American Thinker titled “The Feds Want Your Retirement Accounts” revealed that, “Quietly, behind the scenes, the groundwork is being laid for federal government confiscation of tax-deferred retirement accounts. Slowly the cat is being let out of the bag.”

And Bloomberg reported that,

The U.S. Consumer Financial Protection Bureau is weighing whether it should take a role in helping Americans manage the $19.4 trillion they’ve put into retirement savings.”

For the last 18 months, the Treasury Department has been testing the “myRA” program – which Obama created through executive order – no Congressional approval needed.

The myRA, which stands for “My Retirement Account” supposedly “guarantees a decent return with no risk of loss.”

And the only investment allowed in this account is a low-yielding Treasury security.

Of course, the Treasury wants to get more people signed up for this program, because it means more funds flowing right back into the U.S. Treasury to help the government meet its voracious borrowing needs. How convenient… [Read more…]

Dalbar 2016 Report: Many Investors Haven’t Even Kept Up With Inflation

The latest report from DALBAR reveals the harsh reality about the actual returns stock market investors have been getting for the last 30 years.

Would it surprise you to know that many investors haven’t even been able to keep up with inflation for the last three decades?

Many investors haven’t, according to the 2016 Quantitative Analysis of Investor Behavior.

Here are the facts about actual long-term investor returns

The average investor in asset allocation mutual funds (which spread your money among a variety of classes) earned only 1.65% per year over the last three decades!

These investors didn’t even come close to beating inflation, which averaged 2.6% per year.

The average investor in equity mutual funds averaged only 3.66% per yearbeating inflation by only 1% per year. (Was that worth the roller-coaster ride and sleepless nights?) [Read more…]

What’s In “The Big Black Book of Income Secrets”?

If you receive emails from investment advisory services, you may have gotten a sales pitch for The Big Black Book of Income Secrets from the Palm Beach Research Group.

The promo promises you’ll discover “30 unique income tools” in The Big Black Book of Income Secrets.

The offer entices you with a “risk-free 60-day trial subscription to the Palm Beach Letter.” If you’re not satisfied before the two-month trial is up, you’re told you can get a refund and keep the book and some “bonus” reports that are included in the offer.

To find out if The Big Black Book of Income Secrets lived up to its promises, we signed up for the “Platinum Subscription” for $99 for the first year, which comes with additional “bonus” reports.

Three weeks later, the book arrived, containing 22 (not 30 as promised) strategies, with a cover letter from the Publisher, Tom Dyson, explaining that we could log into their website to access the reports we signed on for and back issues of the Palm Beach Letter. (I guess for $99, they can’t afford to mail you hard copies of the reports.)

The First Red Flag in The Big Black Book of Income Secrets is “Income For Life”

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Do You Have As Much Saved for Retirement As the Average Person?

How do you think you compare to other people when it comes to how much you’ve saved for retirement?

The results of a new survey from the Employee Benefit Research Institute (EBRI) reveal some surprising insights into America’s preparedness for retirement.

Read on for the highlights of the 2016 Retirement Confidence Survey and a 6-Step Action Blueprint to make sure your money lasts as long as you do…

The survey revealed that 54% of all workers report less than $25,000 in household savings and investments, excluding the value of their primary home.

That includes 26% who say they have less than $1,000 in savings.

10% have between $25,000-$49,999 saved, 10% have between $50,000 and $99,999 saved, and 12% have between $100,000-$249,999.

And how many have saved $250,000 or more? Just 14%.

Are people close to retirement any better prepared?

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The Ticking Tax Time-Bomb of Conventional Retirement Plans

One of the biggest selling points of 401(k) and IRA retirement plans is that the money you put into them isn’t taxed right away. Bring out the bubbly to celebrate, right?!

Not so fast.

First of all, some people – hopefully not you! – mistakenly believe money placed into these retirement plans is “tax free.” It isn’t. It is “tax deferred,” meaning that you will pay tax on that money when you withdraw from your retirement plan down the line.

Deferred taxes might sound good, but deferring your taxes is like putting off a visit to the dentist. The problem compounds and will only get worse.

Deferring taxes creates a dangerous potential tax time bomb because you don’t have the answers to two critical questions…

First, what will the tax rates be when you retire? And what will they be 20 or 30 years later?

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Is Your Money Frozen in Your Retirement Plan?

One of my biggest beefs with government-controlled retirement plans, such as 401(k)s, IRAs, 403(b)s and Roth Plans, is the total lack of liquidity. The money you’ve socked away in your conventional retirement plan is about as solidly frozen as the iceberg that sank the Titanic! And because of this, if your financial ship hits rough waters, you might end up sinking as well.

Here’s the critical question: How quickly and easily can you get your hands on all the money in your retirement account if you need it before age 59½?

We all know life happens. Cars break down. Roofs need replacing. A tough medical diagnosis can create mountains of unexpected bills to pay.

Every year many participants in employer-sponsored government-controlled retirement plans make early withdrawals for a number of reasons. And every year, the IRS collects penalties related to those early withdrawals.

In fact, in the last year for which statistics are available, the Internal Revenue Service collected $5.7 billion dollars in penalties from Americans who took out $57 billion from their retirement funds before they were supposed to. [Read more…]

Who’s Got Control of Your Retirement Plan?

Do you remember playing with that kid in the neighborhood who set up a game, and then changed the rules as the game went on to suit himself? Just like those games, you’ll never come out winning with your retirement plan if someone else sets – and constantly changes – the rules!

Here’s one of those inconvenient truths: When your retirement savings are in a government-controlled plan sponsored by your employer, your employer can change the rules at any time. And so can the government.

Despite the mass of paperwork your employer handed you when you first began your retirement plan, your employer’s retirement plan rules are not set in concrete. Employers can change their rules, even in midstream.

For example, not too long ago, IBM decided to change its retirement plan rules. Up until that time, IBM gave employees their 401(k) match with each pay check. But some smart bean counter pointed out that Big Blue could save a bundle if they waited to give the match until the very last day of the year instead of throughout the year.

So what’s the big deal?

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What Infinite Banking and Nelson Nash Missed

I am infinitely grateful to Nelson Nash for introducing me to the Infinite Banking Concept®. It’s a very powerful concept that brings to the table Nelson’s life-long study of the Austrian School of Economics.

In this article, I described what Nelson got right about this concept, and my own life-changing experience of how it lets you “Become Your Own Banker.”

However, here are several things in his ground-breaking book that I take issue with, and that have caused unnecessary confusion for readers…

1. His first book, Becoming Your Own Banker®, was copyrighted in 2000.

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