Saving Your Nest Egg in Tough Times

Pamela Yellen was recently interviewed by AARP about the Bank On Yourself wealth-building method for an article on “Saving Your Nest Egg in Tough Times.”

Scroll down to the second paragraph below the “50/50, if you’re 50″ subhead to read the advice Pamela gave for investors age 50-65 who are fed up with watching their hard-earned nest-eggs shrink yet again.

What about investors over age 65?

Pamela also gave advice for investors between the ages of 66 and 85 who want to add more guarantees and predictability to their financial plan and bump up their returns without the risk of stocks and other investments.

Although there wasn’t space to include that advice in the AARP article, this is an increasingly popular option for Americans up through the age of 85.

This little-known option provides many advantages that annuities and CD’s do not have, including…

• Provides guaranteed growth and a higher return
• Exceptional flexibility and liquidity
• Protection from estate taxes
• Automatic long-term care coverage at no additional costs (in states where it’s available)

The Bank On Yourself Authorized Advisors are well-versed in this option and can conduct a free Analysis that will help you determine which plan is best for your unique situation.

If you’re not sure where you’ll find the funds to start a plan, don’t worry.  The Bank On Yourself Authorized Advisors are masters at helping their clients of any age restructure their finances to free up seed money to fund a plan that will help you reach as many of your long-term and short-term goals as possible – in the shortest time possible.

Remember – Wall Street already lost more than 45% of the typical investor’s savings TWICE in the last decade.  How would it affect you if this latest stock market rout is just the beginning of another look-out-below crash?

To find out how you can add predictability and guarantees to your financial plan and have the financial security and peace of mind that you want and deserve, request your FREE Analysis now.  You’ll be connected with one of only 200 financial advisors in the country who have met the rigorous training and requirements to be a Bank On Yourself Authorized Advisor.

Is a “look out below” stock market crash looming?

By some key measures it is – corporate profits have only commanded as large a share of national income twice before – in 1929 and 2006, and those years preceded the past century’s two worst  financial collapses.

Knowledge is power, so I encourage you to read this article on The Invisible Stock Bubble¹ from SmartMoney.com.

Pamela Yellen interviewed on NPR:  Teach teens how to manage money

Bank On Yourself company founder Pamela Yellen was recently interviewed on National Public Radio’s “Your Money Coach” program about how to teach teens financial responsibility.

Listen in (or read the transcript) for some surprising advice.

Quick!  How fast can you get your hands on $2,000?

Nearly half of Americans say they definitely or probably couldn’t come up with $2,000 in 30 days, according to new research.²

If faced with an unexpected expense in the next month, many people would have to resort to extreme measures to cover it.

Learn more about the best ways to create a family emergency fund.

Is a college education worth the price?  More than half those surveyed say no

This recent study³ reveals why a majority of people don’t believe the benefits of a college education are worth the cost.

Want to see a very interesting take on the difference between “college” and “education,” the benefits of self-education, and the one subject everyone should absolutely study?

Read the article, “Congratulations!  Now Stop Being a Wuss,” by John Carlton.  John is a member of a MasterMind Group of successful entrepreneurs I belong to.  He has some very perceptive ideas on this topic you may find of interest.

WARNING!  John doesn’t mince any words and he tends to pepper his blog with sailor language.  If that offends you, please do NOT read this!  And if you do, don’t say I didn’t warn you…

Read John’s article here.

We want to know what you think!  Tell us in the comments box below…

1. “The Invisible Stock Bubble”, by Jack Hough, SmartMoney.com, May 24, 2011
2. “Nearly Half of Americans are Financially Fragile”, By Phil Izzo. The Wall Street Journal, May 23, 2011
3. “U.S. College Education Isn’t Worth Price, Pew Report Says”, By John Hechinger, Bloomberg.com, May 15, 2011

• Why she’s so passionate about the Bank On Yourself Method
• Why she created the $100,000 Challenge – a cash reward for the first person who can show they use a different strategy that can match or beat the advantages and guarantees of Bank On Yourself
• Three tips you can use today to take back control of your money and finances

So, relax and enjoy this “Skype” video interview:

James Rick, also known as “Mr. Full Potential,” is the founder of FullPotential.com and author of  “Unleash Your Full Potential.” James is a lifestyle strategist for living your best life, cutting costs and building wealth through what you love! So check out his other terrific interviews!

That’s the conclusion of a recent Wall Street Journal study.¹ But the most shocking revelation is just how big the gap is between how much retirement income people will need to maintain their standard of living… and how much they’ve actually saved:

Many have less than one-quarter of what they’ll need

And how are they dealing with this challenge?

Facing shortfalls, many are postponing retirement, moving to cheaper housing, buying less-expensive food, cutting back on travel, taking bigger risks with their investments and making other sacrifices they never imagined.” ¹

Like Carol Dailey, who is continuing to work at age 71 because her 401(k) took a hit in the 2008 market crash.  She also cut back spending for entertainment and food, and is substituting boxed wine for the ones she used to enjoy from her favorite vineyards.

Her financial advisor is planning to help her be able to retire by shifting her assets into riskier investments that can “return 10% a year.”

Hmmm… I wonder if that’s the same financial advisor who advised her on where to invest her money prior to the 2008 market plunge?

If people could take more risk, and do it successfully, why haven’t they been doing that all along?

Isn’t that the classic definition of insanity?

How much more evidence do we need to know that 401(k)’s and “doing all the right things we were told to do financially” aren’t working?

Not everyone has been a loser in the high-stakes Wall Street casino game…

401(k)’s “were a gold mine for money-management firms.  In 30 years, the 401(k) went from a small program to a multi-trillion dollar industry supporting thousands of financial planners and money managers.”¹

The cards are stacked against you as an individual investor.  And truth be told, most Americans have no real financial security.

Wall Street’s average performance over recent decades has been flat at best, with long-term treasury bonds – the “turtles” of the investment world – outpacing Wall Street’s “hares” for the past 40 years.

Even in bull markets, if you are like the average investor, you will wait too long to buy and then compound your misery by selling too soon.  What money you do manage to preserve could very well be subject to annual fees and taxes that will chew up a hefty chunk of what should have been yours.

What’s left, the scraps, will be your only financial legacy.

If that isn’t awful enough, you get to spend months and years of your life, hands clenched and veins popping, worrying about where your money will land on the roulette wheel that is Wall Street.  Hint: Only the dealers are certain to win.

So, what lessons have we learned from two decades of “doing all the right things” with little to show for it?

1. “Retiring Boomers Find 401(k) Plans Fall Short ”, By E.S. Browning, The Wall Street Journal, February 19, 2011

Since AAII said they would not publish my response or correction of the misinformation contained in their review, I told them I would publish it here and let YOU be the judge of whether AAII was twisting and omitting things… or being fair and unbiased.

The response was swift, surprising and universal.  There were so many insightful comments made that I couldn’t pick only three to award prizes to, as was my original plan.

So I picked ten (the winners are listed at the end of this post – check to see if your comment was one that was chosen).  And I’ve excerpted from a number of the comments here, so I can share some of the highlights with you.

Jeffrey summarized the thinking of many commenters about AAII this way:

AAII naturally committed the typical strategic blunders essential to the charade proposed by the investment industry (Wall Street) and financial professionals (a.k.a. traders, gamblers, speculators, etc.). Any attempt to allow people an opportunity to truly grow wealth, reduce risk, and prepare for a more stable environment challenges the status quo of buy and lose (commonly referred to as buy and hold) and then industry pundits (AAII) start the negative attacks in order to establish fear of finances and preserve their base of profits. AAII omitted important aspects of your plan, distorted facts of your plan to promote obfuscation, and blatantly twisted all aspects of your plan in order to destroy your credibility.

Thank you for presenting people with an opportunity to actually prepare, plan, and realize a better financial picture.”

Reuben echoed that by saying…

Is anyone really surprised, it’s the fox guarding the chicken house, the blind leading the blind, the king has no clothes.”

And Daniel summed it up in one sentence…

Bank on Wall Street or Bank on yourself…a very simple decision.”

One thing we know for sure about life is that it’s unpredictable – stuff happens

The only actual reason or “excuse” given in the AAII review for why Bank On Yourself is “too good to be true”  had to do with policy loans.  But the ability to take loans from your life insurance policy has proven to be a real boon, and sometimes a life saver, for several commenters…

James wrote about how his wife Verna broke her wrist a few months ago.  Even though they had only been participating in Bank On Yourself for less than a year, they were “able to borrow enough to get us through surgery, the therapy, and all the physicals that were needed to allow my wife to get back to work.”

Deana says her Bank On Yourself policy “saved me a lot of hassle, frustration and money when I needed a loan to replace a transmission on my car, pay off medical bills, purchase a much needed storage shed and buy a used car.” It also helped her after her income from work was reduced.

“Unlike a bank loan, I set up my own payment schedule and set up how much I can afford to pay back every month and when I want to pay it back,” wrote Deana, who notes she did a lot of research into the concept before moving forward.  Now she says, “as with many other people (Bank On Yourself) is the best money investment I have ever made in my life.”

Troy says “Bank On Yourself is a life saver” and “we use our policy to buy every thing from our boats to repairs for our rentals – it’s a great way to borrow money when needed, pay it back, borrow it again, and watch the cash value continue to grow.” He ends by saying, “Keep up the fight, Pam, and thank you for educating all of us.”

Rik just started his Bank On Yourself policy six months ago, but “just took a loan out for $29,000 for a down payment on a new condo.  Compare that with the hassle of taking money out of a 401k.”

Bank On Yourself saves businesses, too

Allen wrote, “I, too, used my policy to expand my business in the last few months when no banks were (and still aren’t) lending money and have had similar results with my return on investment.”

And David Brimhall started a policy in 2004, “after losing 80% of my retirement account.” His money is now doing double duty for him and he has taken 9 loans, investing some of those funds.  As a result, “I have real retirement now,” and investments making money for him.

As I noted in my rebuttal to AAII, you do not have to sell assets to use your equity in a Bank On Yourself policy to invest it elsewhere or to make purchases.  And some companies will even pay you the exact same guaranteed cash value increase and dividend as though you hadn’t borrowed a dime.

This is true for “non-direct recognition” policies, which don’t “recognize” you have taken a loan when crediting dividends.  The policies recommended by the Bank On Yourself Authorized Advisors meet the requirements that maximize the power of the concept.  These advisors also have advanced training in how to structure policies to maximize the growth of your cash value and minimize the taxes.  To get a referral to an Authorized Advisor, simply 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.

And Will posed the question…

How can you tell the difference between a Bank On Yourself user and an ordinary person?  The BOY user can buy a business with the BOY policy loan, and the non-Bank On Yourselfer can work for that business.”

Bank On Yourself lets you have a retirement income you can predict and count on

“Ahhhh – let AAII say what they may… but I know what my retirement will look like… I cannot wait to start another policy.  Keep up the great work, Pam,” wrote David.

“My hard-earned dollars have always lost money with any commodity/stock/bond type investment.  I have never had a gain except with a CD and that barely kept up with inflation,” noted Ang. “My Bank On Yourself policy gives me such security.  I can sleep at night.  It reminds me of  (the movie) ‘It’s a Wonderful Life’ – we are all banking on each other (instead of padding corporate executives’ lifestyles).”

I am thankful I found Bank On Yourself, otherwise, I may never see retirement in my future,” wrote Karen, who is starting her first policy now, at the age of 59. “Yes, I have a financial advisor and am a very disciplined investor in my 403(b) and, yes, I rode out the downturns and have not nearly recovered to this point… If I had known about this even 10 years ago, I might be looking at retirement, instead of working an additional 8-10 years.”

And William bemoaned how he lost 30% in his 401(k) between 1999 and 2001, and then another 40% in 2008 – after he had retired, because “I followed the advice of those who are paid to know and each time ‘rode it out.’ I do not want to go through any more of these ‘cycles.’”

Paul made some excellent points with this comment:

How easily people forget the lessons of history.  Our ancestors survived the Great Depression by using Cash Value Life Insurance and fixed annuities.  They didn’t use the investment vehicles touted by so many.  They relied on… the asset class so often overlooked today when all else is in flux.”

Paul also made a point I hadn’t even thought of when I wrote my AAII rebuttal – that…

Other loans must be repaid with taxable and probatable cash from elsewhere in the estate.  Death doesn’t cancel (other) debt.”

One of my favorite comments was this tongue-in-cheek response from Jim Vana…

WOW! After reading all the glowing posts about the Bank On Yourself system, I’m afraid I may have a different viewpoint. I set up plans for me and my wife and we recently received our first annual reports. But I hate to inform you, it’s no dang different!! Yes the policy loans need to be paid back. Yes interest is paid as well. And just like those typical “FAT CAT” bankers, my B.O.Y. banker is using MY MONEY to buy fancy cars, take exotic vacations and do all the other fun stuff at MY EXPENSE.  And he’s probably socking away tons of MY MONEY for HIS RETIREMENT!!!!!!! Oh wait a minute. THAT’S ME!!!!!!!! Never mind.

As for AAII, GO GET EM, TIGER!!!”

And Steve summed up the beauty and simplicity of Bank On Yourself this way: ”My Bank On Yourself plan consolidates my emergency fund, liquid savings, retirement and life insurance into a single flexible vehicle. This makes it really easy to manage my money!”

AAII gets poor marks from former members

“I joined AAII a few years back because their publicity made it sound simple and profitable.  But when I got their newsletters with investment recommendations, they left me in a fog,” wrote Val.  Park echoed that with, “I subscribed to AAII several years ago, but my eyes always glazed over trying to submerse myself into their data.”

I will confess that I delighted in JC’s comment: “I’m glad you revealed this about AAII – I had a membership application sitting on our table, and was intending to join. Due to the ‘contrarian indicator’ effect of AAII’s member surveys mentioned, and to the closed-mindedness of the organization to even print your response and let its members decide, I have decided AAII is not for me.”

I believe they call that “pay back”!

Steve may have summed it up best with this insight:

The AAII comments sound like they were drawn from the good ole’ boy tank of sour grapes.  I’m excited about Bank On Yourself, which has provided a much needed transition to a vehicle that is safe, predictable and provides not only a solid nest-egg for retirement, but also a funding pool over which I have complete control. I’ve seen nothing else that allows you to have your cake and eat it too.”

Now for the list of prize winners…

As I mentioned, there were so many thoughtful and entertaining comments to my AAII rebuttal blog post that I simply couldn’t narrow it down to just three winners. So, I decided to award 10 commenters their choice of a $25 dining gift certificate or a personally autographed copy of my best-selling book.  Those 10 winners are listed below and if your name is on the list, you should already have received an email asking you which prize you prefer.

And I want to thank everyone who commented from the bottom of my heart for your support.  I will keep fighting the good fight with your help!

We want to hear from you, too!  Just enter your comment in the box below…

The reason given was, “A life insurance policy loan is not truly a loan.  Rather, it is an advance that the insurer must eventually pay out.  Worse yet… policy loans can erode a life insurance policy over time.”  It also pointed to “potential tax liabilities.”

This review brought to mind one of my favorite quotes…

If you’re looking for an excuse, any one will do.”

– Dan Kennedy

So I wrote the editor and explained there was some misinformation in the review, and that I would like an opportunity to correct the record, pointing out that their motto is “Unbiased Investment Education.”

The editor told me to let him know what I think is incorrect, and he “will take a look at it.”  I suspected he was just “humoring me,” but gave him the benefit of the doubt.  However, when I submitted my rebuttal, he replied that they would not publish it because “there are no factual corrections to be made.”

I informed AAII I would be publishing my rebuttal on this website, and let YOU decide who is taking things out of context, committing sins of omission, and twisting the “facts”… and who is being fair and unbiased.  We’ll pick three of the most interesting, insightful and/or humorous comments made on this blog and award the posters their choice of a $25 gift certificate for a restaurant in your area or a personally autographed copy of my “too good to be true” book.

Besides that, there are several points made in my rebuttal that I have not made elsewhere, so you will find value in reading this (I made it a bit more colorful for your reading pleasure)…

When you take a policy loan, you’re actually taking a loan against your cash value and using your death benefit as collateral for the loan.  Should the policy owner die with a loan outstanding, it will be deducted from the death benefit, along with any interest that has accrued.

So, in essence, an unpaid policy loan would be an advance against your death benefit, which in most cases will be far greater than your cash value.  With any other financial product, you wouldn’t even have a death benefit larger than your equity to use as collateral.

And what most people (and even most financial advisors and experts) don’t know is that in a dividend-paying whole life policy, both your cash value AND your death benefit grow exponentially, and the growth is both predictable and guaranteed.

Here’s an eye-opening personal example of how this works:

I started a new policy designed to maximize the power of the Bank On Yourself concept a little over four years ago.  The death benefit (known as the “face amount”) at that time was $605,000.

Just four years later, the death benefit had grown to $1,104,332 – an increase of over 82%.

One and a half years ago, with almost $125,000 of cash value in the policy, I took a $100,000 policy loan to expand my business.  At the time, all my business-owner colleagues were crying on my shoulder about how their bank wouldn’t give them a penny – even those who had perfect credit and long-time relationships with their bankers. They were astonished to discover how I got access to capital by answering just one question:  How much do you want?

I am in the process of paying back that $100,000 policy loan now.  I set my own payback schedule, and I can reduce or skip payments if and when I need to.  Try doing that when you borrow from a bank, finance or credit card company!

Suppose I passed away with part or all of that loan unpaid?

My husband would get nearly $1 million, income-tax free.  That’s almost $400,000 more than the original death benefit was four years ago!  And it’s ten times the current equity remaining in the policy beyond the outstanding loan balance!

Meanwhile, I used those funds to grow my business, and I’ve already gotten close to a 100% return on that investment in my business.

So do you think it bothers my husband that if I die before I finish repaying the loan, he’ll “only” get $400,000 more than the original death benefit, rather than $500,000 more?  Or that he’ll “only” get ten times the current cash value?

And can you tell me any other product or strategy that could accomplish anything even close to this result?

Note to Bank On Yourself Blog readers: AAII’s response to this part of my rebuttal was that my statements “point out that the policy can be adversely affected by outstanding loans.”  And, thus, “no factual corrections need to be made in our magazine.”

Okay, let’s assume AAII didn’t take this wildly out of context.  Their statement that a policy loan “is an advance that the insurer must eventually pay out” is an error of fact.  If they already advanced it to you, they don’t have to pay it out again! (Duh!)  One problem is that  four different people on my team read this statement and each interpreted it a different way.  So it wouldn’t surprise me if you do the same.

Additional benefits of the Bank On Yourself method include:

As mentioned in the AAII review, you continue to receive the exact same annual guaranteed cash value increase PLUS the exact same dividend you would receive if you had never borrowed a penny.  This let’s you use your money and still have it working for you.  And you don’t have to sell your investments to take advantage of this feature.

Please tell me where else can you get this advantage?

This is true for “non-direct recognition” policies, which don’t “recognize” you have taken a loan when crediting dividends.  The policies recommended by the Bank On Yourself Authorized Advisors meet the requirements that maximize the power of the concept.  These advisors also have advanced training in how to structure policies to maximize the growth of your cash value and minimize the taxes.  To get a referral to an Authorized Advisor, simply 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.

You do pay interest on policy loans, and the interest rate is typically below commercially available rates.  However, as I explain on pages 100-103 of my best-selling book, the interest paid ultimately benefits the policy owner.  You will end up with the exact same cash value in your policy if you borrow from your policy and pay it back at the interest rate the company charges as you would if you didn’t use your policy’s equity at all.

The AAII review of my book never even mentions a central part of this concept:  It is not about just taking policy loans!  It’s about becoming your own source of financing.

As noted in the AAII review, there are potential tax consequences to policy loans that are not repaid.  A policy that lapses or is surrendered can result in taxes being owed on the gain.  As long as you pay the premium and the loan interest, the policy will not lapse.

However, it should be pointed out that defaulting on or renegotiating mortgages or credit card and other debt can result in tax consequences, too.  A friend of mine settled $50,000 of credit card debt for 50 cents on the dollar.  She got slapped with a tax bill for the $25,000 that was “forgiven.”

Note to Bank On Yourself Blog readers: AAII’s response to this was, “Again, you reiterated what we wrote (about potential tax liabilities).”

Critics of whole life insurance will be surprised to learn that I had $125,000 of cash value in that policy when the policy was only 2-1/2 years old.  They might be even more surprised to know that I had tens of thousands of dollars of cash value at the end of the first year.

That’s because policies designed to maximize the power of the Bank On Yourself concept have riders incorporated into them that significantly increase the growth of the cash value.  You could have up to 40 times more cash value in your policy in the early years than you would in a traditionally designed policy (the kind most experts and advisors talk about), as explained in Chapters 3-6 of my book.  This allows you to use your policy as a powerful financial management tool right from the start.

(Note: No two policies are alike – each is custom tailored to the client’s unique goals and situation.  To find out what your bottom-line numbers and results could be if you added Bank On Yourself to your financial plan, request a free Analysis here, if you haven’t already done so.)

The review ends by saying that “loans, when necessary, should be taken out separately from your portfolio.”

The Bank On Yourself concept can beat financing, leasing and even paying cash for things, for the reasons described above.

One final comment on this review:  It refers to whole life insurance as a “portfolio,” which implies it’s an investment.  It is not and is not subject to the ups and downs of traditional investments.  Dividend-paying whole life insurance is an asset that has increased in value every single year for more than 150 years, including during the Great Depression.

The Bank On Yourself method gives you a financial foundation that can help you weather tough times, access to capital when you need it on your terms, it allows you use your money and still have it working for you, AND it lets you grow a nest-egg you can predict and count on.

The Bank On Yourself method gives you a financial foundation that can help you weather tough times

That is what most of my book is about.  I wonder why none of this was even mentioned in this review?

So, is Bank On Yourself “too good to be true”?  I hope you’ll decide for yourself with the facts at hand.

Note to Bank On Yourself Blog readers: The AAII says that it stresses “hands-on participation in your financial future through education and understanding,” and that, “our reporting is unbiased and we are not beholden to anyone.”

Coincidentally, an article appeared in the Wall Street Journal ¹ this week that noted that AAII surveys its members each week and that “some investors have looked to the AAII survey as a compelling contrarian signal.  An ebullient reading often is a clue that the market is due for a fall.”  Translation:  AAII members tend to move with the herd and buy and sell at the wrong times.

Why am I not surprised?  And, given this revelation, I realize we should be concerned if and when AAII endorses Bank On Yourself.

We want to hear from you! And the best comments will win prizes…

Did the AAII review of my book twist things, commit sins of omission, and take facts out of context… or was it fair and unbiased?  Speak your mind in the comments box below.  We’ll pick three of the most interesting, insightful and/or humorous comments and award the posters their choice of a $25 dining gift certificate or a personally autographed copy of my “too good to be true” best-selling book. (To qualify, you must post your comment in the comment box below by Monday, January 24.)

1. “Dow’s Doubters Say Market Is on Borrowed Time,” by Jonathan Cheng, January 17, 2011, wsj.com

Pamela Yellen & Sir Richard Branson

Branson conceived the Virgin Group in 1970 and it has gone on to grow very successful businesses (Virgin Mobile & Virgin Airlines to name a few) in numerous sectors.¹

We had a chance to ask Sir Richard questions and here are five Success Tips he shared:

Success Tip #1…

Your business life starts at home – pick a good partner and respect them for who they are.

Success Tip #2…

The biggest challenge business owners run up against is being risk averse.  At some point, you have to just say, “Screw it, let’s do it!”

Success Tip #3…

It’s important to keep fit – you’ve only got one body.  Try to find fun ways to do it.

Success Tip #4…

Praise your team/employees – never criticize them.  Treat them right and they’ll do anything for you.

Success Tip #5…

Don’t take yourself too seriously!

I found it fascinating that when one of us asked a question of Sir Richard, he would often respond by asking a question back; he seemed genuinely interested in us as individuals and it tied right into Success Tip #4.  Sir Richard simply makes you feel that you matter.  And he always looks for the best in people.

Sounds like a blueprint for a life well-lived!

Food for thought…

If you haven’t already started to Bank On Yourself, please take the first step today by requesting your FREE Analysis and discover how you can take back control of your financial future!

1. http://www.virgin.com/about-us/
2. “How to Play a Market Rally”, The Wall Street Journal, November 15, 2010 (The DOW has since crossed 11,000 at least two more times)

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 barely 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…

Investor Trap #1:  “Investors are impatient and irrational,” and “consistently make buy and sell decisions at the worst possible moments,” according to DALBAR, a finding backed up by many experts in the emerging field of behavioral finance.

Investor Trap #2:  You could get a 25% “average annual return” for years and still not make a single dime or even lose money!

This is due to the smoke and mirrors the Wall Street illusionists have been using to pull the wool over your eyes for decades.  Don’t take my word for it – I exposed the mutual fund “rate of return” myth” here.

Investor Trap #3:  If you’re investing in mutual funds inside a 401(k) plan, fees can “eat up to half your income over a 30-year span,” according to an exposé on 60 Minutes.

In addition, most people aren’t aware that employers are making risky decisions on how to invest your money in your 401(k) for you without your knowledge or approval!  And they are automatically moving your money into higher-fee funds, too.

This is all courtesy of the Pension Protection Act of 2006.  Makes you wonder who they’re trying to protect!

Knowledge is power, so I urge you to learn what the government and your employer aren’t telling you about your 401(k).

Investor Trap #4:  Taxes, taxes and more taxes!

Nothing I’ve talked about so far takes into account the wealth-destroying effect of taxes.

If you’re like most Americans, much of your savings is in tax-deferred accounts, like 401(k)’s.  Paying taxes later is one of the big appeals of these plans.

But what direction do you think tax rates will go over the long term?  If, like most people, you think taxes are going to go up, and you’re successful in growing a nest-egg, you’re only going to pay higher taxes on a larger number!

The bottom line is that most people’s financial future rests on a game whose rules they do not understand and have no control over.  No wonder most Americans have no confidence they’ll be able to reach their financial goals and dreams.

Which is why Bank On Yourself should be a part of almost everyone’s financial foundation.

It gives you guaranteed growth in both good times and bad, as well as predictability and control.

A Bank On Yourself policy goes in only one direction:  UP.  Both your principal and gains are locked in.  It gives you peace of mine for retirement planning, because you can know how much income you could take every year in retirement (guaranteed), and for how long you’ll be able to take it.

You can take that income without tax consequences, if you do it right, under current tax law.

You can also use your cash value in the policy to inject needed capital into a business or to help you get through tough times.  To learn more about the many different ways people use Bank On Yourself, check out Chapters 6-12 of my best-selling book.

If you haven’t already added Bank On Yourself to your financial plan, why not find out today what your bottom-line numbers and results could be if you did?  Whatever your long-term or short-term financial goals and dreams are, you may be surprised to find out how many of them Bank On Yourself can help you achieve.

There’s no cost or obligation to receive an Analysis that will show you how a program custom tailored to your unique situation could improve your financial picture and help you turn your back on the stomach-churning twists and turns of traditional investments.

If you haven’t already started to Bank On Yourself, please take the first step today and take back control of your financial future!

1. DALBAR 2010 Quantitative Analysis of Investor Behavior

It also hit #2 on the USA Today Money Best Seller list for the week ending March 28th.

If you don’t have a copy yet, you can get it today for only $9.95 – 38% off the retail price.

The hardcover edition was released a year ago and immediately hit the USA Today, Wall Street Journal and Business Week best seller lists.

Find out what all the buzz is about and learn more about this proven, time-tested way to grow a nest egg, so you can take back control of your money and finances today.

The interview will play on all audio-equipped flights on Virgin America and US Airways early next year, but you can listen to a sneak preview of it here.

Pamela Yellen and Bank On Yourself will also be featured in January in a video series on “The Innovators” that will be broadcast in prime time on the CNN Airport Network in 44 of the busiest U.S. airports.

We’ll post a preview of that video here as soon as it’s ready.

Enjoy! And please tell us what you think…