Personal Finance Blog for Retirement and Investment Advice

Are we living in the United States of Amnesia?

It was announced that more than $1 trillion has been added to the value of American equities since the stock market hit a two-month low on August 7th. Americans’ wealth has reached a record high, thanks to a surge in the value of stocks and homes.

I’m sorry to be the bearer of bad news, but here’s a news flash: You haven’t made a penny in the stock OR real estate market!

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We’ve been here before…

Just like those glowing reports about how much Americans’ wealth had ballooned prior to the last financial crash, the new reports are pure fiction. Until you sell your assets and lock in your (hopefully) gains, you have nothing more than a bunch of eye-popping numbers on paper. Those numbers repeatedly sucker many of us into believing we have real wealth and financial security when we do not.

There’s a big difference between paper wealth and real wealth. Do you remember the go-go years of the dot-com bubble? I do. My husband Larry and I got into checking our retirement account almost every day because it was growing that fast. Yahoo! Some weeks we’d see such an enormous jump that we’d high-five each other shouting,

We’re rich! We’re rich!”

And didn’t we all feel like we were sitting real pretty again right before the financial crash of 2008? Then we discovered for the zillionth time that what goes up fast usually comes down fast, too. The stock and real estate markets did just that with a resounding thud. These collapses took the retirement security of millions of Americans with them. All our prosperity went unrealized.

Learn the Truth about Wall StreetIn fact, Americans’ “paper” wealth plunged by nearly 40%, due to the collapse in home values and the stock market, reducing the net worth of U.S. families to a level not seen since 1992. (Source: Federal Reserve’s 2010 Survey of Consumer Finances)

The Oscar-nominated movie that came out earlier this year, The Wolf of Wall Street, has the most profound ten-second scene about the truth about Wall Street. This blog post spills the beans.

We see the same principle in our home values: The rise in a home’s value is only an unrealized paper gain – and it may vanish just when you really need the money.

During the real estate boom years, we got some astonishing appraisals. I remember when our neighbors put their home up for sale. It had been appraised for nearly 50% more than our last appraisal, even though it was about the same size as ours and had nearly identical features. Three months later, we ran into their real estate agent who told us no one had even looked at the house, let alone made an offer on it.

Two years later, the bank foreclosed on it.

Yup, we’ve been here before – all too many times

I’ve been surveying thousands of people since the publication of my latest New York Times best-selling book, The Bank On Yourself Revolution. Buy it here for the lowest price available. I’ve been asking people if they believe there will be another major stock market crash in the next five to ten years?

Even I was a bit surprised to discover that almost every single person believes that’s going to happen!

My next question was, “How many of you have a significant portion of your savings in the stock market?”

I’ll bet you can guess the answer. Almost everyone was rolling the dice in the Wall Street Casino with a major portion of their nest-egg.

How much financial peace of mind do you think that provides?

Those who forget history are condemned to repeat it

The financial media is pointing out that the S&P 500 has “surged nearly 200% from the bear-market bottom on March 9, 2009… When compared to other bull markets at their five-year points, the current rally is the second-best performer since World War II. The only rally that performed better was the S&P 500′s 228% surge from August 1982 through August 1987, which ended that year on Black Monday.”

And we all know what happened next…

Yep – we’re livin’ in the good ole United States of Amnesia…

I guess the real question is – in the immortal words of Clint Eastwood in Dirty Harry – “Are ya feelin’ lucky?”

Hey, I’m all for optimism. In fact, my husband Larry sometimes calls me “Pollyanna” because I’m always trying to look on the bright side of things.

But doesn’t it make sense to hope for the best, and to have a “Plan B” in case it doesn’t turn out that way? (Especially when you know in your heart of hearts that the overall economic picture doesn’t add up and whistling and hoping for the best isn’t a financial plan.)

The Bank On Yourself method is based on an asset that has grown in value every single year for more than 160 years. The value of your plan is guaranteed to grow by a larger dollar amount every year you have it. (So you can sleep like a baby when the next crash happens.) What other financial asset do you own that does that?

It’s easy to find out how big your nest-egg could grow – guaranteed – if you added Bank On Yourself to your financial plan. And there’s no cost or obligation to find out. Just request your FREE Analysis, if you haven’t already.

Request a FREE Bank on Yourself Analysis

You have nothing to lose and a world of financial peace of mind to gain!

A Special Message for Women Who Want to Be Financially Independent

Best Kept Secrets of Successful Women - Financial Edge

Free Bonus Report when you subscribe to the Women’s Financial Edge

I was really excited when one of the largest consumer newsletter publishers in the world, Agora Publishing, asked me to be the Editor-In-Chief of The Women’s Financial Alliance, a new publishing franchise dedicated to helping women grow their wealth safely and enjoy a richer lifestyle.

We launched a free e-letter – The Women’s Financial Edge – at the beginning of May, and it’s being extremely well received. We’ve already been featured in USA Today, CNBC, Huffington Post, The Detroit Free Press and more.

If you haven’t already subscribed, you can do so here right now. And when you do, you’ll be able to instantly download our Bonus Report, The Best-Kept Secrets of Successful Women.

This Report contains 28 powerful, easy-to-implement strategies and tips for saving more, avoiding costly financial mistakes, saving a relationship, gaining a career advantage most men will never have, getting more done in one day than most people do in a week, losing weight effortlessly, and much more! (Get this Report instantly when you sign up to receive the Women’s Financial Edge here.)

Perhaps you’re wondering…

Do Women Really Need or Want Different Financial Advice than Men?

Good question! And one I asked myself when I was first offered the position of Editor-In-Chief of this new publication. That got me doing a lot of research, and I was surprised by what I discovered…

[Read more...]

30 Reasons Not To Worry
About A Market Crash

My favorite financial journalist is Brett Arends, a regular contributor to The Wall Street Journal and MarketWatch. He’s one of the very few who doesn’t have his head up his you-know-what.

Anyhow, Brett just published a tongue-in-cheek article about all the reasons the stock market is just going to keep going up and up. And I strongly encourage you to read it here.

Some of my favorites of Arend’s 30 reasons not to worry include…

  • Yes, stocks look expensive compared with annual sales, net asset values, gross domestic product, the replacement cost of company assets, and the average earnings of the past 10 years. But none of that matters because valuation measures are completely irrelevant.
  • You bears “just don’t get it.”30 Reasons not to worry about a Stock Market Crash
  • The S&P 500 is almost three times as high today as it was in 2009. Therefore it must be three times as good a deal!
  • People who aren’t bullish are losers and sissies.
  • Everybody on Wall Street says this is a great time to buy stocks, and if they don’t know, who does? [Read more...]

Pamela Yellen Named Top Personal Finance Influencer

I’ve just been named one of the 30 most influential people in personal finance and wealth, and I wanted to share the exciting news with you!

Starting with a field of more than 1,000 finance experts, the study (commissioned by MoneyTips) used a rigorous process to score and rank each expert to whittle it down to a ranked list of the top 30 influencers in wealth and personal finance.Pamela Yellen is a Money Tips Top 30 Influencer

I’m ranked #19 on this list of the Top 30 social influencers impacting Americans’ financial lives.

The list was published last week on the Huffington Post, titled, What the Top 30 Personal Finance/Wealth Influencers Know That You Don’t. I was also one of a handful of the top experts quoted in the article.

I am very gratified by this acknowledgement. For the past decade I’ve devoted my life to educating people about alternatives to traditional investing and retirement planning that have enabled hundreds of thousands of people to stop using the crystal-ball-hope-and-pray method of financial planning and start knowing how good their financial future can be.

And I’ve learned several important lessons along the way – I’ll share the most important one with you in a moment.

[Read more...]

7 Ways to Spend Less and Enjoy Life More

Do you remember during the recession when it was actually trendy to cut up your charge cards and get out of debt?

Well, that fad wore off rather quickly, didn’t it?

Americans have since resorted to their free-spending ways, and now total debt in the US has hit a new all-time record.”

Over the past several years, 6-year-term loans have become the norm for financing cars, according to Experian Automotive.

And subprime loans to business have skyrocketed – at rates equal to as much as 125% per year, when the fees are included. (You read that right – 125%.)

Borrowing creates the illusion that we can afford a better lifestyle than we really can. And sooner or later, the chickens will come home to roost. It’s never pretty when that happens.

[Read more...]

What does Financial Independence
mean to you?

flag-fireworks-4thWith Independence Day right around the corner, I got to thinking about the real meaning of financial independence.

(Take our survey now and tell us what financial independence means to you.)

For retired Navy Commander and Bank On Yourself revolutionary Bob Chambers, it means,

Spending time with family and friends and having a predictable, life-long income that provides a comfortable lifestyle.”

If you’ve been a subscriber for a little while, you may recall that Commander Bob agreed to share the booklet he wrote, which he called “Financial Independence Made Easy,” after we received an avalanche of requests for it when I posted an interview I did with him.

Commander Bob has been a student of money and finances for many years, and his 20-page booklet is full of profound insights, including:

[Read more...]

Breaking news roundup from
Bank On Yourself

Here are summaries of three important news stories affecting your money and finances…

1. Investment brokers fight rule to favor best interests of clients

Did you know that brokers are not necessarily required to act in your best interest – even if it’s your retirement savings at stake?

The investment industry – from large Wall Street firms to small independent advisors – is spending millions of dollars to fight a rule that would require a broader group of brokers and planners to put their clients’ interests ahead of their own.

The Labor Department said it would release the proposed rule in January, but has already indicated it may miss that deadline. That’s not the first delay on this, though. The rule was originally introduced in 2010 and was rescinded the following year after brokers and lawmakers protested. Wow!

[Read more...]

Pamela Yellen’s untold story (part 2 – the ugly Halloween mask)

Your time is limited, so don’t waste it living someone else’s life… And most important, have the courage to follow your heart and intuition.” – Steve Jobs 

At the end of my circus adventure (if you missed the story about my riding an elephant in a skin-tight gold sequined leotard, you can read all about it here), I returned to Sarasota, Florida. And I have to confess, I was beginning to feel a little restless.

My dating life was non-existent and I couldn’t afford to keep buying men (it’s not what it seems!). I had been working as the sales manager for a specialty publication for three years. Work was fine, but not very exciting and not something that I was passionate about.

All in all, my life was okay. Just okay. Yawn! 

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Are you a predictably irrational investor?

Nothing defines humans better than their willingness to do irrational things in the pursuit of phenomenally unlikely payoffs. This is the principle behind lotteries and dating…”

– Scott Adams, creator of the comic strip Dilbert

With full confidence, I can say that you are irrational when it comes to investing.

I know this not from talking to your broker or your mother-in-law, and I haven’t hacked into your portfolio statements. I know this because you’re human.

What will happen in the stock market isn’t predictable. But one thing is absolutely for sure and for certain: Investors are predictably irrational. We’re not talking smart or stupid, sophisticated or naïve. We’re talking across-the-board irrational.

So maybe you’re thinking that you’re the exception. You think you can handle the volatility of the market by just gritting your teeth and praying everything turns out all right as you roll the dice in the Wall Street Casino. Or maybe you think that at the first sign of trouble, you’ll be able to bail out of stocks and into bonds or money market funds to lock in your gains.

Researchers say, “Nope, that’s not what’s happening…”

[Read more...]

Is Pamela Yellen related to Janet Yellen?

People often confuse me – Pamela Yellen – with Janet Yellen, the chairman of the Federal Reserve.

I can understand the confusion – we share the same relatively rare last name (“Yellen”), we’re both women in finance (a male-dominated field), and we’re only six years apart in age. But that’s where the similarities end.

Janet Yellen and Pamela YellenJanet Yellen is head of the Fed, while if I were nominated, my first course of action would be to abolish the Fed. I’ll tell you why in a moment…

Alas, I am not hopeful about the progress of the economy with Ms. Yellen at the helm.  The Fed is still printing money 24/7, forever blowing asset bubbles (and the inevitable bursts that follow), and throwing seniors and savers under the bus by keeping interest rates artificially – and dangerously – low.

Of course, if this strategy works so well, why are we experiencing the slowest rebound from a recession in memory (if not in history)?

There are a lot of reasons I’d abolish the Federal Reserve…

For starters, it’s not federal, nor are there any reserves. It was conceived in 1910 during a secret meeting on Jekyll Island in Georgia of seven wealthy and well-connected bankers who controlled one-fourth of the total wealth of the entire world. Its purpose was to birth a banking cartel to protect its members from competition. (A fascinating book on this topic is The Creature from Jekyll Island, by G. Edward Griffin, available here on Amazon.com.)