Is Bank On Yourself a scam? (Part two)

We received several hundred correct entries to last week’s blog contest and the five randomly picked winners are listed below, along with the details of a NEW contest I’m holding.

Contest Prizes

Enter below to win these prizes!

You could win an iPod Touch, $100 Amazon.com gift certificate, a $25 dining Certificate and more!

In case you missed last week’s contest, I had posted a podcast discussing some of the internet forums where people anonymously debate the merits of Bank On Yourself and discuss whether or not it’s a scam.

On one of those threads that comes up very high in the search results, one of my toughest, potty-mouthed critics has slowly come around and admitted I’m right about many of the points I’ve been making.

When challenged by another poster about the actual returns people get in the stock market, he dragged out 29 years of records of his own investing accounts, and was shocked to discover what his returns had actually been.

The contest was simple to enter – just listen to the podcast where I revealed what my critic discovered was his actual annual rate of return BEFORE accounting for inflation and taxes… and then tell us what the percentage was.

Not a ScamSince the contest has ended, I can reveal the answer now.  My critic averaged a 4.5% annual return over the past nearly three decades of investing in the stock market.

That’s BEFORE accounting for inflation, which averaged more than 3% per year, bringing his real return down closer to 1% per year.

And since much of his investing has been in tax-deferred accounts, he has yet to pay taxes on that money.  Of course, he doesn’t know what the tax rates will be during his retirement, when he’s taking income from those accounts.

But what direction do you think tax rates will be going over the long term?  (If you said “down,” I’ve got a Rolex watch I’ll sell you for $20.)

When you account for inflation and taxes, the question that ought to hit you over the head is…

Was it worth it?!?

Was it worth all the roller-coaster ups and downs and the sleepless nights to get 4.5% per year before taxes and inflation?

As I pointed out in the podcast, Bank On Yourself can beat that with a stick.   And without the risk or volatility of traditional investments.

Keep in mind that no two Bank On Yourself plans are alike…

Each is custom tailored to your unique situation, goals and dreams. To find out what your bottom-line, guaranteed numbers and results would be if you added Bank On Yourself to your financial plan, request a free, no-obligation Analysis now, if you haven’t already done so.
Request Your Analysis Button
If you’re wondering where you’ll find the money to fund your plan, keep in mind the Bank On Yourself Authorized Advisors are masters at helping people restructure their finances to free up seed money to fund a plan. Here are the eight most common places they look.

My critic’s experience wasn’t unique, although I’ll commend him for actually looking at his statements and then being willing to admit publicly – if anonymously – his disappointing results.

One subscriber to the Bank On Yourself blog made a similar discovery and posted this comment on last week’s blog:

Wow. I had the exact same experience when investigating Bank On Yourself before starting my own plans (have multiple policies and am LOVING the results – exactly as predicted or better, no surprises and I sleep well at night). I made the same Google search and spent hours poring over the posts. What struck me was that nobody ever presented any evidence of any kind of scam. Some folks disagreed with the assumptions or touted their wildly inaccurate assumptions about equities as a more attractive alternative, but never did anyone have anything remotely scam-ish to report.”

This comment came from Dan Proskauer, a very analytical man who has spent literally hundreds of hours researching Bank On Yourself, running spreadsheets and crunching the numbers.

He says the Bank On Yourself method looks better the more he studies it.  Dan revealed the conclusions of his research in an interview I did with him last year.  I’d encourage you to read or listen to it.

And this concise comment made last week by a subscriber named John really summed up what a lot of people are (finally) figuring out…

I LOVE my Bank On Yourself plan, it does everything I was promised and more. I’ve not borrowed a penny from a bank or credit card in over a year. Why should I? I lend it to myself! And if you want a scam, I have two words for you … Wall Street”

Now for the details of our NEW contest…

A comment was made on the same thread that debates the merits of Bank On Yourself that it essentially works the same as a savings account, but with the added advantage of having a death benefit.  This statement really got me thinking.Enter-To-Win

While there certainly are some ways in which Bank On Yourself-type policies function like a savings account, I can think of a lot of major, critical differences.

But rather than me telling you what those differences are, I’d rather hear what you believe they are.  And some of our subscribers are a whole bunch smarter than I am.

So, I’m holding another contest, and our team will pick the five best answers and award a top prize of an iPod Touch (a $229.00 value), a second prize of a $100 Amazon.com gift certificate, and three runner-up prizes that will give you a choice of a $25 dining gift certificate or a personally autographed copy of my best-selling book for you or to give to someone you care about.

Just answer the following question in the comments box below no later than midnight, Monday, October 3:

The contest question is:  How is dividend-paying whole life insurance different from a savings account (besides the death benefit)?

You can address one or more differences, or comment on someone else’s response to qualify.

And if you think I’m “full of it,” feel free to tell us that, too.  (Some of our subscribers don’t seem to need any encouragement to do that…)

We’ll circle back here next week to report on the contest results and winners.

To qualify, just type in your response in the comments box at the end of this post no later than midnight, Monday, October 3rd.  Please note that all comments are moderated, so there will be some delay before it appears.  (Sorry – open to U.S. residents only.)

And now for the winners of last week’s contest.  As I mentioned, we received hundreds of entries with the correct answer by both email and via the blog comments.  These five randomly chosen winners have all been notified by email:

$100 Amazon.com gift certificate – Sheri Browning

The four winners of the $25 dining gift certificate or autographed book – Jeannie Fisher, Kevin Caldwell, Lynne, and Rich Rhoads

Okay!  Scroll down to the comments box and enter the contest…

 

Comments

  1. john cossick says:

    SOUNDS LIKE A GOOD PROGRAM TO ME!

  2. You get paid dividends even if you use (borrow) the money.

  3. Russ Clever says:

    Money in savings account is FDIC insured. Money in life insurance is not.

    • For what it’s worth, FDIC only promises to get it (up to $250k per account) back sometime within 30 years…. Not cool. Not to mention, they really have no way to back that up anyway, since actual bank reserves are a TINY fraction of the money people have put into them – which is NOT the case with life insurance – they have every penny you put in, and then some. See the extremely eye-opening book How Privatized Banking Really Works, by L. Carlos Lara and Dr. Robert P. Murphy – you will be shocked.

    • Gentry Eddings says:

      Banks are required to maintain a reserve to cover consumer deposits.
      Reserve requirements are the amount of funds that a depository institution must hold in reserve against specified deposit liabilities. Depository institutions must hold reserves in the form of vault cash or deposits with Federal Reserve Banks.
      Reserve Requirements
      Type of liability Requirement Percentage of liabilities
      Net transaction accounts
      $0 to $9.3 million 0%
      More than $9.3 million to $43.9 million 3%
      More than $43.9 million 10%

      Source : http://www.federalreserve.gov/monetarypolicy/reservereq.htm

      Money in the bank is insured by the FDIC (Federal Deposit Insurance Corporation).
      FDIC Annual Report
      FDIC has a deposit fund reserve ratio of 1.2 percent of deposits in FDIC banks (Page 33). The FDIC has the funds available to cover 1.2 percent of total deposits.
      Source: http://www.fdic.gov/about/strategic/report/2007highlight/2007highlight.pdf

      How do you feel about the security of your bank deposit?

  4. Just had my first interview and I could NOT punch a hole in this anywhere. I’m excited to get my first policy started.

    • DEREK LOGAN says:

      Way to go Drew. You’ll never regret it!!

    • Congrats Drew. I started my policy over a year ago and I am still trying to punch holes but no luck yet. I was shocked that I could use my funds as early as the 1st year after maxing my rider! Welcome to the club.

      Don T.

  5. Money can be borrowed from the account without losing the principal or growth.

  6. Savings accounts don’t pay dividends.

    • No, but they earn interest. What’s in a name?

      • Policies pay dividends PLUS interest (and what is the current interest rate on a savings account?? Certainly no where close to a BOY policy….)

        • Bruce Maltzen says:

          And this money would not have been in a bank account it would have been in a 401k. Not earning anythi.g and not useable now!

      • intrest is taxed as earned…dividends in an insurance policy are considered return of premium….no taxes until you exceed all premiums paid in.

  7. Oh boy have I thought a lot about this question! I will recuse myself from eligibility to win a prize since my quote appeared in Pamela’s blog post, but I want to enter anyway…I also want to state that Dividend Paying Whole Life (DPWL) policies are Life Insurance products and any comparison to banking or investment product is purely for educational purposes.

    Ignoring the death benefit, I think of dividend paying whole life insurance as a combination of a dividend paying blue chip stock in which I am participating in a Dividend Re-Investment Plan (DRIP) owned in a ROTH IRA and a front-end load high-return municipal bond mutual fund. Why?

    The base policy is the DRIP. Obviously the reinvestment of dividends is a key similarity there, but due to the way the dividend scale on the base policy changes over time, it also acts like there is some capital appreciation. Owned in a ROTH IRA because gains and dividends are not taxed – but there are no restrictions on withdrawals unlike a ROTH.

    The Paid-Up Additions is like the front-end load fund. Front-end load because of the 6% fee associated with the initial purchase of PUA. Similar to a high-yielding municipal bond fund because the dividends are not taxed, the long-term return is pretty high (4% – 5% for most policies now at a historical low point), and the assets *and* dividends are safe and secure.

    Now to the contest question: Why is dividend paying whole life insurance not like a savings account (besides the death benefit)?

    1. You cannot “borrow” funds from a savings account and still earn interest, they must be withdrawn and no longer earn any interest

    2. The long-term rate of return on dividend paying whole life insurance is far higher than any savings account interest and always will be no matter what interest rates do

    3. When your savings bank makes extra money it does not pay you extra interest – Mutual insurance companies return excess premium to policy holders, not share holders.

    4. When you put money into a savings account you can immediately take it back out without losing any – this is not true for dividend paying whole life. DPWL is a long-term commitment and if you are forced to liquidate early you will lose capital.

    5. Savings accounts have a single interest rate and dividend paying whole life insurance really has two – the base policy and the PUA which are treated a little differently

    6. If you wanted to borrow money from a savings bank using your account as collateral, you would have to go through an approval process, with a policy loan against a DPWL policy you simply specifiy how much of a loan you want

    7. If you were to borrow money from a savings bank using your account as collateral, you would be obligated to repay that loan on a pre-arranged schedule, with a policy loan against a DPWL policy you can repay to your own schedule and change it at any time without asking anyone for permission

    8. Interest earned from a savings account is taxed at the federal and usually state level, dividends from a DPWL policy are “return of capital” and are not taxed since the initial invested capital was already taxed (tax law for the past 80 years or so anyway)

    9. Assets in an FDIC insured savings bank are insured by the FDIC up to $250,000, assets in a DPWL policy are not federally insured although there are state insurance pools that do provide insurance to varying degrees. DPWL companies are far more rigorously regulated than savings banks fortunately…

    That’s all I can think of for now!

  8. The cash value of a policy often referred to as a savings account because it’s money that can be used while the insured is still alive.

  9. Oh no. My daughters would kill me if they knew I gave up the chance to win an iPod Touch! 🙂

  10. Savings accounts don’t continue to appreciate if you borrow from/against them!

  11. Jake Yetterberg says:

    Wow, where to begin?
    Based on yield (growth, interest, dividends…whatever you’d like to call it) a properly designed “Bank policy” can have tangible benefits over and above a true bank—for sure. By the way, alluding to an insurance policy with the word “bank” in the marketing title pushes the insurance suitability sales ethics just a bit…because it’s not a bank.

    Anyway, most advisors “over sell” this and say things like “you get your cars for free” and other such nonsense. Likewise, it is very hard (if not impossible) to put more money back into a whole life policy than what you take out via a loan. Therefore, marketers of this system talk in euphemisms and make lots of ‘grey’ statements and generalizations.

    There are several inconvenient questions that do not get answered, but are just kind of swished around when you talk to people who push this as the be-all-end all strategy.

    Now, do not think I am against these types of policies…quite the contrary. I have been utilizing similar versions for many years. However, I have watched the industry digress and stretch the truth the last few years as people become more desperate for yield.

    The sad part is that you do not need to stretch the truth in order to highlight the benefits of plans like this. You can call a policy a policy (not a bank) and, when explained correctly you do not need to over-hype the benefits. Benefits such as:
    • Guaranteed minimum values
    • Tax deferred growth
    • Tax free death benefit
    • Creditor protection in many states
    • Probate avoiding, if structured correctly
    • Compounding advantages
    • Flexibility
    • You do not have to keep you money in the greedy (corrupt? Politician buying?) banker’s hands
    • Feel good sleep at night benefits

    Respectfully, Jake Yetterberg

  12. Jeremy Couch says:

    Once upon a time, I was a licensed insurance salesman for one of the top mutual insurance companies in the USA. Although, taking that job was the worst financial advice I could have taken, I learned a lot about whole life insurance. I can say that I believe in it. I will give one caveat though, this is not for the undisciplined. So if you are reading this blog and are thinking about doing it, make sure you have your head on straight. You will only hurt yourself and the reputation of the process if you are not able to listen to the advice of your BOY representative and follow thru with the plan that you implement.

  13. The withdrawal amounts on a whole life policy that you want to cancel is limited to the cash surrender value on the policy plus any accumulated dividends accrued and unused,whereas the savings account may be closed with the amount paid to the saver based on all savings left on deposit plus interest accumulated and remaining unpaid by the bank or savings institution.

  14. Simply put, you bank on yourself for a nice dividend instead of paltry savings rate returns. Also, with banks charging fees, you theoretically could end up losing money with savings accounts.

  15. Jeff Haswtings says:

    The savings account has lower interest than your Bank On Yourself insurance plan. I also continue to earn interest on my BOY plan even when I take money out as a loan that I can pay off on my own schedule.

  16. I’m rather new to this but loving what my small policy is already doing …

    The biggest difference I see is that my money will still be able to grow even when I take out a loan. As I repay that loan with interest I’m NOT just rebuilding my “savings” account – I’m therefore boosting and growing my account balance even faster!

  17. Keith Lopes says:

    It’s LIKE a savings account in that you’re depositing money you might use in the future. That’s where I’d end the similarities! My BOY earns over 5% interest plus a dividend. If I need a loan, it takes just a couple of days for a check to arrive in the mail which I arrange for all online. Due to recent realty, credit and financial setbacks, nobody would loan me money for a cup of coffee. With BOY, getting a loan or charging a purchase becomes obsolete. I’ve been able to travel, pay medical bills and still have peace of mind, something my conventional bank’s savings account doesn’t provide.

  18. Teresa Ward says:

    Bank on Yourself, unlike a bank savings account, is like constantly recycling your money to use over and over again. Plus, you aren’t paying interest on any of the dividends you earn unlike interest you earn in a traditional bank.

  19. ” The growth in a Bank On Yourself-type policy is not set at a fixed rate, like the rate you get on a savings account or CD. Instead, the growth is both guaranteed and exponential, meaning it gets better (more efficient) every single year, simply because you stuck with it (and slept like a baby!), rather than jumping from one stock, fund or investment to another. ”

    The above paragraph is my answer to Pamela’s question, ” How is dividend-paying whole life insurance different from a savings account (besides the death benefit)? However, it is a direct quote from her blog, ” What the financial gurus think they know about Bank On Yourself that just ain’t so “. – I just don’t think I can say it any better than that!

  20. Savings bank is not like a BOY plan in that:
    Interest is paltry and is taxed so real growth is nil. If you take money out interest is less. Putting back in with interest to compensate is difficult. Two steps backwards, one step forward.
    With the BOY plan, dividends are not taxed, much higher, still earned on the value of the policy even if money is “borrowed”. Pay it back with interest …at your own rate , whenever you decide…and you have taken half step back and three steps forward. It snowballs. Plus the life insurance benefit for peace of mind.

  21. Withdrawing any money from a savings account depletes the account, which in turn lowers the amount of interest you receive, which is minimal at best. Regardless what the bank receives, you only receive a set percentage of interest from a bank (very low). There is a tremendous amount of paperwork and time involved in getting a loan using for savings account as collateral and you must pay the set amount on time to avoid any late fees. Some banks charge a fee if you try to pay more to cut the amount of principle.
    When you borrow against your insurance policy, just tell them what you want with no hassles! The interest rate is higher than a savings account, putting more money in YOUR pocket! You are in control of payments and dates to repay the loan because it is yours. There is no fixed rate so each year you earn more!

  22. Joe Goldsmith says:

    Where else can you borrow money and earn interest and dividends as if you had not borrowed the money at all? Certainly not from the local bank, your 401K, IRA, credit card company, etc. Be the Bank; it just makes so much sense.

  23. marvin gay says:

    the only diffence i see is that the dividends are not fixed and can be higher or lower but they will always be more than the interest on a bank account.

  24. Too many good anwers already to try to compete for being one of the top 5. I’ve just finished reading the book and have not yet done a free analysis. Good luck to the rest of you that answered! Besides, I already have an iPad 🙂

  25. Plan working as projected. Already financed and paid off: remod. new car-20K, used truck 10K
    AND have the $$$ back in my policy!

  26. Mike Madison says:

    Dividend-paying whole life is not that rare.
    The key ingredient is non-direct recognition.
    This allows the policy loan, but keeps the amount ‘off the radar’, allowing the company to reward annual cash value and dividends as if the loan was not outstanding.

  27. sherry gibbs says:

    I bought a whole life policy on my daughter when she was 9…she is now 29. I make more with dividends on this policy than the policy costs each month. One difference between the bank and the whole life policy is the whole life policy makes you save your money by making you pay a ‘bill’ to keep your policy in force. Sometimes it is easier to be ‘forced’ to save money.

  28. I would prefer to save through my credit union and earn interest that way. It is your money and there are no hassles.

    • how much interest are you earning?

    • Bev M, don’t forget that that earned interest from your bank you get to share that with the government when you file your taxes at the end of the year. Not so with bank on your self. The difference is your put your money in the bank and the bank lets you borrow your money for a fee (interest) and they report it as interest earned. When you borrow from your BOY your interest is not reported and you do not pay taxes on it. BOY is a win win. At least that is my limited understanding.

      Don T

  29. Seth Friedman says:

    I’ve come to see BOY like a cycle: my money go in to a great, circulating vortex fund that I can dip into/ borrow against without disturbing its dividend-yielding flow. The ROR is greater than just about any banks’ Savings accounts, without the close anxiety-ridden dependence on world finances and the stock market. Borrowing based on the policy is easier to arrange and has more flexibility than my ‘banking on THEM-selves!’ I get inspired to add to the value and riders of my policy like when I was first given a Savings Account as a kid– AND the interest rate was enough (like 7-9%) so that you could really see and feel like you were Building something, not just donating funds for the banking industry to get fatter on!

  30. You can use it as collateral to borrow against.

  31. Reading through each of these post thus far has been an incredible opportunity to learn more about a BOY!
    We are about to receive a modest inheritance so I have been researching the best place to put this money. We already have savings in a credit union and are very disappointed with the interest rate we are getting. So, needless to say, we don’t want to put the money there.
    A BOY policy is by far the best I have found in my research to date.
    The difference between a dividend paying whole life insurance policy and bank account are already listed above; to which I could add very little.
    However, I especially love the tax saving features and being able to borrow from myself! Now, I can be the borrower and the lender. Incredible!!
    My next step will be to request the free analysis.

  32. Jim Greathouse says:

    Dividend paying, whole-life insurance offers protection and access to capital while guaranteeing that what you want to happen will happen.

  33. I am very interested in this concept and studying hard to try and understand it and thus make a decision about participating in it. As I understand your question, savings acct versus part. whole-life ins., one difference is that life ins is front end loaded. Given (1) time, (2) cash flow, and (3) keeping it under MEC, participating whole-life ins is better than a mere savings account.

  34. There are many specific answers that have been covered in excellent detail by my fellow bloggers; the primary differences I see when comparing a savings account to a whole life dividend-paying instrument are: flexibility, impact of external influences, risk/reward differential, and leverage opportunities. BOY strategies re-confirm what my wife and I had discovered many years ago, when we had purchased a dividend reinvestment policy with double death benefits that we cashed out recently with a much greater appreciation in value than would have been possible through alternative strategies. 🙂

  35. There is no downside with a with a bank on yourself policy. I win by having an instrument that grows in any economic cycle. It grows in good economic times, it grows in bad economic times, and it grows best of all when I want to invest in myself by taking out a loan. The more I invest in me and my family, the more I will have when I start retirement. Its a win, win, win for me.

  36. Let’s see…There are so many differences. You don’t have to worry about some government official deciding that your “interest” will suddenly disappear. BOY keeps growing and growing all the time. Any loans you take against it actually benefit You instead of only benefitting the bank. Money grows tax free for you and your heirs. You don’t have to wait for a loan committee to decide if you should receive money to redecorate/buy a car/expand your business/etc. BOY means more freedom of choice.

  37. I just found out that the money in my life insurance policy is not included in the amount that can be taken if someone sues me.

  38. First of all, thanks for all the educational material in this blog. Its an excellent reference tool! I didn’t see this difference but have experienced the bank’s savings’ rate changes often, whereas the dividend paying whole life policy doesn’t. Please correct me if I am wrong about the BOY. We have just went over our financial worksheets and are going to have the analysis done this coming week.

  39. Ken Laird says:

    In addition to a higher return, you are not subject to a set of rules and regulation that you have no control over.

  40. Great discussion(s) about BOY. What can I say already that others haven’t? I guess the most simple way to answer this question is that a dividend-paying whole life insurance policy/account is different because it’s growing tax free, you can access the money via a loan without affecting the growth of the account, and the interest that is charged is being paid back to YOU (in essence- you are getting paid to use your own money instead of a bank that “borrows your money” and charges you or others up to 1000% more than what you are receiving in interest from the savings account).

  41. I think that one of the biggest thing we need to remember is the drawbacks in holding a modern currency is inflation. Inflation is often described as an increase in the price of goods and services, but it’s really an increase in the money supply. To inflate means to increase the money supply. Specifically, it means an undue expansion of the money supply.

    When the central bank inflates the money supply through the monetization of debt, it is buying up debt obligations of a government. For example, if the U.S. government needs money, it can issue debt obligations (bonds). These bonds can then be purchased by a central bank. When the bonds are purchased, the central bank uses money that it creates out of thin air.

    This eventually erodes the real value of the money you hold in your wallet or in your bank account. To overcome this effect, you’ll have to purchase assets that can keep pace with the rate that the money supply is being inflated, or you need to purchase assets that are not tied to or dependent on the currency you are holding. However,one way to over come this effect is by using a whole life police that pays dividends and a limited pay structure. This means that the whole life policy generates a cash reserve based on a fixed interest rate plus a dividend that is the result of the insurance company’s cash surplus generated by the insurance company’s investment gains and a favorable mortality experience (fewer people die during the year than expected). with this you are building a cash value right from the start and you do not have to go through the hassle of buying up debt obligations of a government to do it.

  42. Cash value offers several great options that savings account lack.
    In whole life insurance cash value is always available to policy owner at any time for borrowing for any purpose, without qualifying, and is not required to be paid back, and even if borrowed it continues to build value as if it had not been borrowed.

    May also be used as collateral or as security on a loan.

  43. My favorite is you still earn dividends, even on the money you have borrowed!

  44. My basic comprehension (actually doing it) is that I get/have a custom policy that I can live with that is determined by me and my advisor based on my financials. This is the vehicle that is driven daily for the plan to work. I add to the vehicle a rider that has a max amount that I can contribute to yearly. The rider is my good friend that I can borrow and pay back with interest to help my plan grow and at the same time change how I pay for items I want/need in life and instead of paying the interest to someone else I pay it to my self and keep using it over and over and over again.

  45. Interest + dividends vs interest-only = very good deal 🙂

  46. James Slechta says:

    The intrest rate is less in a bank. You can bowwer against the insurance and the interist amount goes in you acct. rather than the banks. So it is a win win.

  47. Michael S says:

    I’m no expert at this, but I have had 3 similar policies for going on 4 years. One for me, my wife, and my 4 year old grandson. (he is saving for his first car)
    Every once in a while, I think I’m just taking money out of one pocket and putting it the other, and paying a commission for the privilege. I ask myself, WHY am I doing this? I then go back to my policies, read the policy cost and benefit information, and blogs like this. This reminds me of all the benefits to stay with the plan. I see my BOY plan continue to grow, while my equities are in the tank.

    Another HUGE option for this strategy that I have not seen discussed here.
    If you are a business owner, lend your company money from your “bank”, the company pays the interest you decide, on your terms, the company has an interest expense, the same as it would going to a “real” Bank, without all the fees, and hassle of a Bank loan. In this manner, your company actually funds your policy pre tax. As a business owner, you get to double dip.

    For you experts out there, is anything wrong with this idea? Am I missing something?

  48. Savings A/C pays interest only (and that too, a paltry one).

    Dividend-paying Whole-Life Insurance – pays Dividend, which could translate to a better interest rate than the Savings A/C.
    You can borrow against the cash component of your life-insurance.

  49. Craig Yenni says:

    There once was a land where only did it shine, everyone had an umbrella provided for just a dime. This dime was collected per month at a time
    by the banker and his assigned. He then used all the dimes to buy more umbrella’s, over and over, yes, multiple times.

    The banker had so many to share, which he would do without a care. Miss Molly, Uncle Jack and even the animals could keep the rain off of their back.

    Every citizen carried their umbrella to here and to there, it was certain that they would all be prepared.

    Then, one strange and gloomy day, the sun ran away. To all their demise, the people got such an awful surprise. The banker laughed with such delight
    as he demanded way more dimes for the umbrella’s at this time. No one could pay such a hefty price, since all was spent on their daily rice.

    The banker laughed with such a noise as he gathered the umbrella’s from the girls and boys. They sat inside all day long wishing and hoping for
    the sun to return.

    Pamela and her BOY rode into town and saved all the people with a new found plan. They all had umbrella’s forever to enjoy without the fear of the
    bankers ploy.

    It goes to say that a banker will gladly loan you his umbrella on a sunny day, but once it rains he will take it away.

    What Pamela told the people you see is for all to live independently. As she rode off with her BOY she shouted to all…

    Banks are in business to make money for the banks
    BOY is in business to make money for you

    Banks use your money to make more money
    BOY allows you to use your money to make more money

    Banks require you to qualify to use your money
    BOY allows you to use your money when you want

    Banks do not pay you interest on money you take out of your savings account
    BOY pays you dividends no matter if the money is in the account or not

    And the land of sunshine was restored to peace… The End.

  50. SAMPAT JAIN says:

    The interest earned in a savings account is taxable whereas dividends in whole life policy is not unless the total of dividends taken out from a whole life policy is greater than the total of whole life policy premiums paid.

  51. Using dividend-paying whole life insurance as your BOY will save you $$$. Once you capitalize your BOY, then you borrow from your BOY (tax free), enjoy paying the interest on your personal loan (nice to fund YOUR OWN bank). The reason the tallest buildings downtown are banks (and not your home/business) are because they understand banking. Banks do not practice though what they teach their customers. A bank teaches customers the Accumulation of Wealth theory (you put away 1 dollar and you will get 1 benefit at some point in the future) while they practice the Velocity of Money Multiplier …a Bank does not let its money sit still.

    With a Bank, people are making deposits and borrowing again, and making payments and borrowing again on a multitude of loans. And all of these loans are earning the bank a higher rate of interest than what they credit to their customers. Banks have expanded that and compounded that using the multiplier effect earning them a very nice return off your money. That’s what banks do, and that’s what you can do with a BOY type policy.

  52. Eileen Stuart says:

    Since learning of BOY I’ve thought that the fact that I can borrow from my account and still earn interest on the borrowed amount is pretty incredible. And now that I’ve lost more in the market I’m ready to listen to more of its advantages.

  53. Paul Korinko says:

    As indicated above, the benefit is the continued growth of the investment of the money that may have been taken in loan. This lets you compound the interest from your payment back to the account in addition to earning dividends.

  54. Bankrate.com provides a nationwide list of current interest rates for savings and money market accounts. As of today, the range is .10% – 1.05%. A dividend-paying whole life insurance policy will provide a fixed interest rate as well as dividends enhancing your cash value.

  55. James Oliver says:

    The differcnce between a dividend paying whole life policy and a savings is very simple. When you are putting money in a savings account you are not investing. You are really not even saving it. You are parking your money in vehicle that is just holding your money. If you $25,000 in a savings account and if you put $25,000 in a mattress for 20 years, with average of returns of most savings account are paying today, the difference between the 2 pots would not be much. Putting money into a dividend paying whole life policy
    is investing without the risk. You can earn a real rate of return without the risk of the stock market.

  56. Valerie Coffman says:

    If I put $500 per month into a savings account earning 1% interest compounded monthly, I would gain about $30k in 30 years, and that’s only if I don’t touch it! By putting $500 per month into my BOY policy, I not only have a $250k death benefit, but my BOY advisor estimates that after about 30 years I’ll be able to take out about $30k PER YEAR from my accrued cash value for retirement without losing the $250k death benefit. Let’s see, enough to live for 1 year of retirement versus enough to live on for many years after retirement. That’s a no brainer.

    That scenario does not include the great benefits of being able to access my cash value now to pay now credit card debt. If it weren’t for BOY, I wouldn’t be saving money at all yet.

  57. The more I read and hear , it seems to me that BOY is the alternative for people with large capitol.
    I there a way for people who understand the principle of this awesome concept, but only have a month to moth pay check to participate?
    No where do I read what is the lowest amount of funds one has to have to start an account.
    for me this is a daunting factor. how do young people start
    I get the distinct feeling that you are instantly outside the loop as soon as counselors realize that you do not have a fat wallet. Am I wrong here?

    • The idea that only the wealthy can “afford” to use the Bank On Yourself strategy is one I have tried very hard to dispel. 

      People of all ages and incomes use and benefit from this concept – as they have for over a century!  In 1950, 50% of ALL families owned dividend-paying whole life policies.

      My best-selling book even tells the story of a 14-year old girl who started a plan with the money she earned from cleaning out the stable’s of her families horse breeding stables.

      We do note that plans with a premium of $250 or $300 a month grow more efficiently than smaller plans.  But we also encourage you not to count yourself out if you’re not sure you can fund a plan at that level.

      The Bank On Yourself Authorized Advisors are experts at helping people restructure their finances to free up more money for a plan.

      Why not get a Free analysis, and a referral to one of the Authorized Advisors, and find out for sure?

Speak Your Mind

*