Lessons from a lost decade
January 15, 2010 by Pamela Yellen · 3 Comments
I’ve lost a bet. I’ve lost my keys. But I’ve never lost a decade – until now.”
- Sam Stovall, S&P’s chief strategist
The S&P 500 ended the past decade down almost 25 percent below where it was ten years earlier. And that doesn’t even factor in the 29% inflation we experienced during the decade.
In fact, since the end of 1999, the S&P 500 stock index has lost an average of 3.3% a year, on an inflation-adjusted basis, even after including dividends, according to the data compiled by Charles Jones, finance professor at North Carolina State University.1
Hmmm… so what does that mean to the typical family in dollars and cents?
You may want to grab a bottle of Pepto-Bismol, because it isn’t very pretty…
Here’s what inflation and negative returns have done to a nest egg invested in an S&P 500 index fund (the way most Americans’ retirement savings are), over the past decade…
You now need a 39.9% increase just to get back to where you were ten years ago!
Given that the stock market has just experienced its fastest climb since 1933, how likely do you think it is that we’ll have another 39.9% rise this year? Especially given soaring government spending, stubbornly high unemployment, and looming tax hikes.
Six Frequently Asked Questions about Bank On Yourself
November 13, 2009 by Pamela Yellen · 6 Comments
I thought you might find it helpful to have the answers to the six questions about Bank On Yourself 
we’re most often asked – right at your fingertips.
How many of these questions have you been wondering about?
FAQ #1: 
How does Bank On Yourself compare with traditional investing and savings strategies?
You can compare the Bank On Yourself method to traditional investments here, including stocks and mutual funds, a 401(k), a ROTH plan, real estate, gold, commodities and several other investments.
If there’s a different financial product or strategy that you think can match or beat the Bank On Yourself method, I encourage you to take the $100,000 Challenge. If you’re right, you could pick up an easy $100K!
FAQ #2: 
How does Bank On Yourself let you recapture every penny you pay for major purchases like cars, vacations, business equipment or a college education?
I’ve summarized this in a short video overview of how Bank On Yourself works.
However, for a more detailed explanation, you’ll want to review Chapters 2, 6, and pages 52-54 of my best-selling book, Bank On Yourself. If you don’t have the book, we offer a 35% discount on it.
FAQ #3: I’ve heard people like Dave Ramsey and Suze Orman say whole life insurance is a lousy place to put your money. Is a Bank On Yourself-type policy different from the kind they’re talking about?
Think you have to risk your money to get big returns? Hogwash!
April 28, 2009 by Pamela Yellen · 1 Comment
According to a recent comment on this blog, I’m full of it. Apparently, the author thinks I 
pulled the following statement out of my butt: “The reality is that the typical mutual fund investor has actually been losing 1 percent per year over the last 20 years, after adjusting for inflation.”
The statistic comes from the respected research firm, Dalbar, Inc., in its 15th annual study of mutual fund investor behavior. The study measures the returns investors actually get, not the returns they wished they got.
According to Lou Harvey, the president of Dalbar, the study once again revealed that
“investor returns lag what performance reports and prospectuses would lead one to believe is achievable. While those returns are theoretically achievable, the reality is that investors are not rational, and make buy and sell decisions at the worst possible moments.”
Let me paint a picture of how this happens: Lets say you do what the author (who calls himself “David K.”) of the rather nasty blog comment suggests and buy “simple index funds” and hold them for twenty years.
What the financial gurus think they know about Bank On Yourself that just ain’t so
April 6, 2009 by Pamela Yellen · 31 Comments
One of my most influential mentors (Dan Kennedy) says,
If you don’t offend somebody by noon each day, you’re not doing much.”
So I want to thank Danny Snyder, whose post to this blog you’ll find below (exactly as he submitted it), for confirming that I am indeed doing something:
First of all using the words “money on steroids” immediatly puts you in the liar and non-trustworthy catagory. If you put in $5314.44 and your cash value is $2937.18 you need some ritilin, you are A.D.D. Dave Ramsey (who is in a catagory way above the likes of you and Suze Boreman) knows of what he speaks. Millions of people have changed their lives due to Dave’s advice. You need to tread very lighlty, if you want to succeed and prove yourself. Think… before you tear down people you do not know. I do actually Bank on Myself.
Your a scam!
Danny Snyder
On this website, I have stated that I agree with many of the basic principles taught by the financial “gurus” like Dave Ramsey and Suze Orman. And I know they have helped turn around the financial lives of many.
However, there are two critical areas we differ on…
Read more
Suze Orman and Dave Ramsey: Let’s debate!
March 14, 2009 by Pamela Yellen · 62 Comments
Are you wondering why you haven’t heard about Bank On Yourself before? Or why – if it’s so good – everybody isn’t already doing it?
Here’s why…
S&P 500 loses 25% over the 10 years from 1/1/00 - 12/31/09 (and inflation took another 29% bite)
If you browse the personal finance section of any bookstore, turn on the TV or open a magazine on finance, you’ll discover that 99 out of 100 financial “gurus” will insist that whole life insurance is a lousy place to put your money. Most will recommend you buy term life insurance instead and invest the difference in mutual funds.
That’s in spite of the fact that, had you invested in an S&P 500 index fund for the past decade, your nest-egg would have been shredded by almost 25%. And that doesn’t even factor in 29% inflation during this period!
But I’m getting a little ahead of myself. Part of the problem is these financial experts know nothing about the specially designed type of dividend-paying whole life policy used for the Bank On Yourself method…
Read more
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