Stock Market Timeline
The only thing for certain in the stock market is there will be ups and there will be downs. When you compare our method to the traditional long-term stock and mutual fund investing strategies, you’ll see that there are absolutely no guarantees that the market’s performance will match up with your expectations. You’ll always be in for some surprises.
And there’s a dirty little secret Wall Street doesn’t want you to know: studies show that the typical equity mutual fund investor has actually lost 1% a year, over the last 20 years, after adjusting for inflation. (Source: DALBAR 2008 Quantitative Analysis of Investor Behavior) This simply isn’t the case with Bank On Yourself.
1. Do you receive a guaranteed increase every year?
Bank on Yourself
Plans receive a guaranteed increase every year – your statements always have good news, and no ugly surprises
During 2008, the third worst in history for the stock market, the policies used for the Bank On Yourself concept received their contractually guaranteed increase, plus a dividend. See an example here of how one of these policies grew in 2008, while the stock market plunged
Stocks and Mutual Funds
There are no guarantees that your money will increase in any given year. On August 1, 2009, the S&P 500 Index was still 30.5 percent below where it was when the new millennium started almost ten years earlier, a fact you can verify by looking at any stock market timeline (such as those available at Finance.Yahoo.com)
Investors have no way to predict the value of their investments at any given point in time
Over the last 80 years, the Dow was in a stall that lasted 12-25 years 65% of the time (as the stock market timeline charts also reveal)
2. Is your principal protected during a market correction?
Bank on Yourself
No loss of principal due to a market downturn
Stocks and Mutual Funds
You can lose part or all of your principal in a stock market correction
3. Are your gains locked in during a market downturn?
Bank on Yourself
All gains credited to your plan are locked in – they don’t disappear when the market tumbles (the financial guarantees of the policy are backed by the claims-paying ability of the insurer, so be sure to use a financially solid company. You can request a referral to a Bank On Yourself Authorized Advisor, who is a life insurance agent with advanced training on this concept, and who can recommend the best companies for Bank On Yourself)
Stocks and Mutual Funds
You can lose part or all of your gains in a market downturn
4. Are your results dependent on luck, skill, or guesswork?
Bank on Yourself
You don’t need to pick the right stocks, funds, real estate or other investments – Bank On Yourself lets you focus on other, more fun things and worry less. Imagine not having to know the best way to invest money and not having to figure out how to bump up your returns
Before making your first premium payment, you can know your guaranteed minimum annual increase, and the minimum value of the plan in any given year
Stocks and Mutual Funds
Results depend on picking the right stocks, funds or money managers. 80% of all mutual funds and 80% of all investment advisory newsletters underperform the overall market over the long term (Source: Hulbert Financial Digest – July 2009 cover story)
5. Does your money grow more efficiently every year?
The growth in the policies recommended for Bank On Yourself is both guaranteed and exponential. The chart represents an example of a typical pattern of growth in a this type of policy over 36 years, based on the 2009 dividend scale. (Dividends are not guaranteed, however they have been paid by some companies for over 100 years.) The specific example here shows a 30-year-old male paying a $10,000/year total premium, so you can see the growth pattern until he turns age 66:
Note: Your cash value is guaranteed to be equal to your death benefit at maturity, and your death benefit increases due to the features of this kind of policy. No two policies are alike. To find out your bottom-line results if you added Bank On Yourself to your financial plan, request a free Analysis
Growth Pattern of the Dow Over Past 36 Years
Stocks and Mutual Funds
Money invested in the stock market grows unpredictably, can stall for lengthy periods of time, and can plunge just when you planned to tap into your funds.
6. Can you use your money without selling your assets?
Bank on Yourself
You can borrow the equity in your policy (without selling any assets) and your plan could continue to grow as though you never touched a dime of it, because these policies receive the same guaranteed annual increase regardless of any loans, and any dividends you may receive are not affected by loans (this feature is not offered by all insurance companies, so work with a Bank On Yourself Authorized Advisor who knows which companies have policies that meet all the requirements to maximize the power of the concept)
Stocks and Mutual Funds
To get access to your equity, you typically have to sell your assets, and you stop getting the interest or investment income they provided. If you have to liquidate assets when the market is down, you’re breaking Rule #1 of Investing (”buy low, sell high”)
7. Can you rely on it for a predictable income at retirement?
Bank on Yourself
You can know the minimum annual income you could take from your policy, and for how long you could take it, so you don’t have to pin your hopes for a secure future on luck, skill or guessing games
Any dividends credited to your plan, on top of your annual guaranteed increase, would increase the amount you could take from your plan
Stocks and Mutual Funds
There is no way to predict the value of your investment in 10 years, 20 years, or whenever you hoped to retire. The market can crash just as you’re approaching retirement, or after you retire, and undermine your best-laid plans
8. Does it “self-complete,” so your family or heirs also receive the money you had planned to save?
Bank on Yourself
Provides an income tax-free death benefit, providing peace of mind for your family or heirs, if you were to pass away. This benefit could be many times more than the current value of the plan at your death
Stocks and Mutual Funds
Only the current value of your investments would go to your loved ones
With the exception of Roth plans, taxes would be due and leave your loved ones with far less money
9. Are your assets protected from creditors and lawsuits?
Bank on Yourself
Both your cash value and death benefits may be protected from lawsuits and creditors in many states (check with legal counsel to see what applies in your state)
Stocks and Mutual Funds
Money invested outside of certain qualified plans does not enjoy protection from lawsuits and creditors
