Posts Tagged ‘best way to invest money’

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Retiring Boomers’ Savings Fall Far Short

February 23rd, 2011 by Pamela Yellen

“The 401k generation is beginning to retire, and it isn’t a pretty sight.”

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

Sad Baby BoomerLike 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?

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Posted by Pamela Yellen Tags: , , , , , , , , ,
Posted in 401(k) withdrawal rules, best way to invest money, Media Coverage, Retirement Plan Alternative, Stock Market Investing | 2 Comments »


Mission Not Impossible: You Can Teach Teens Financial Responsibility

February 9th, 2011 by Pamela Yellen

Executive Summary: While teens can be hard to reach, the teenage years are the perfect time to teach kids the saving, spending, earning and investing habits they’ll require to enjoy a lifetime free of financial strain and worry.

teenager withdrawing money

These days, money in and money out is mostly electronic, meaning the speed at which our children must make the right or wrong financial decisions has accelerated.  Launch your teens’ money management education by explaining to them why most adults fail.

Let children know that the solution can be found in the proven strategies of fiscal self-reliance that are embodied in the Bank on Yourself system and help your teens create their own vision of a secure and rewarding financial future.

There are plenty of practical steps you can take to make the entire subject matter more interesting to teens.

By Pamela Yellen and Dean Rotbart

Russ Bragg has a higher financial IQ than most parents. He started out as a credit analyst for an international bank and began offering comprehensive financial planning services in 2000.  He is an expert at helping clients define and then achieve financial independence.
Teenager saving
For Bragg, you might imagine, educating his teenage son and daughter about proper money management would be a no-brainer.

If, on the other hand, you have teens of your own, you already know better

Enticed by credit card solicitations with low interest rate come-ons, Bragg’s independent-minded son was in credit counseling by the time he was 18.  Bragg’s daughter, on the other hand, while still a student, applied for and received a prestige credit line that even some of Bragg’s agency clients are unable to qualify for.

“Same mother, same father, same food, same air” and two very different outcomes, observes Bragg wryly of his children’s money management styles.

Many otherwise more-than-adequate moms and dads – those who’ve mastered subject matter as sensitive as teenage smoking, drinking, and drugs – have found their skill sets sorely lacking when it comes to the topic of money.

Welcome to Survivor: Teen Money…

A sprawling multi-year marathon and obstacle course that pits a tribe of well-intentioned parents, grandparents and other adults against the strong-willed, often perplexing sensibilities of the untamed adolescent mind. The challenge? One of modern family life’s most difficult: teaching teens to handle money responsibly.

I remember writing once that as a society we are more comfortable talking about sex and those other issues than we are about money”

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Posted in Cover Story | 5 Comments »


AAII vs. Bank On Yourself: Total Knockout in Round One

January 26th, 2011 by Pamela Yellen

Last week, I posted the rebuttal I wrote to the American Association of Individual Investors (AAII) review of my best-selling book, which declared the concept “too good to be true.”BOY Boxing Gloves

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.”

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Posted in 401(k) withdrawal rules, Bank On Yourself Nation, best way to invest money, Endorsements, Media Coverage, Retirement Plan Alternative, Success Stories | 5 Comments »


Sure-Fire Results: How Old Sensibilities Are Proving a Potent Balm for Modern Personal Finance Ailments

December 1st, 2010 by Pamela Yellen

The ’10/10/10′ Formula of Savings Rescues Many Overstretched Family Budgets

Executive Summary: Most modern Americans overspend, assume too much debt, and fail to invest wisely for retirement.  Tim Austin, a leading proponent of ‘old-fashioned’ spending and savings strategies, recommends a time-tested 10/10/10 financial formula: saving 10% of gross income for the near-term; 10% for the mid-term; and setting aside 10% for the long-term.  Austin’s favorite savings tool is specially-designed dividend-paying whole life insurance policies such as those structured by Bank On Yourself’s specially trained and authorized advisors.

Love_and_death.jpg‎ (233 × 358 pixels, file size: 34 KB, MIME type: image/jpeg)

By Pamela Yellen and Dean Rotbart

Even back in 1975, the year comedian Woody Allen wrote, directed and starred in the movie Love and Death, the perception of whole life insurance as a savings instrument designed for fuddy-duddies and masochists was already commonplace.

There are some things worse than death”

…deadpans the film’s protagonist, Boris Grushenko, played by Allen…

If you’ve ever spent an evening with an insurance salesman, I’m sure you know what I mean”

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Posted in Cover Story | 8 Comments »


When opportunity knocks, will you be ready?

November 9th, 2010 by Pamela Yellen

In every economy – whether boom or bust – opportunities arise.  Unfortunately, most people don’t have the financial resources to take advantage of them.

This is an inspiring story of how people are using the Bank On Yourself method to be in a position to take advantage of some amazing opportunities…

Here’s a new reality: You need cash now more than ever. Not credit. Not equity. Cash.”

- “Why Cash is King,” Men’s Health, November, 2010 issue

joni-schulz-and-dave

"Bank On Yourselfers" Joni and Dave Schultz

Take Joni and Dave Schultz, who just happen to be my sister- and brother-in-law.  Joni is a hospital department supervisor and Dave just retired from his job in construction.

They came to visit us recently, and Joni’s first comment when she walked in the door was, “Now I get it!  I understand why Bank On Yourself is so much better than using a credit card or finance company, and why it’s even better than paying cash for stuff!”

Joni and Dave started a Bank On Yourself policy about five years ago, in order to supplement their retirement income and add predictability to their financial plan.

But they’d never used it to finance any purchases… until now.

Opportunity knocks…

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Posted in $100000 Challenge, best way to invest money, Retirement Plan Alternative, Success Stories, Tax Advantages of Bank on Yourself | 6 Comments »


How will the debt crisis affect Bank On Yourself?

May 13th, 2010 by Pamela Yellen

A question we are getting frequently right now is how safe is your money in a Bank On Yourself plan if the debt crisis in Europe continues and spreads to the United States?

Let’s start by answering the question…

What do life insurance companies invest in

Life insurance companies are highly regulated and required to maintain sufficient reserves to ensure they can pay all future claims.

They are regularly audited by the state insurance commissioners’ offices, and sometimes by dozens of states, to ensure they are on solid financial ground.  And a multi-layer safety net exists to assure your money in a life insurance policy is secure.Safety Net

You may be wondering, “What about AIG?”  Many people missed the fact that AIG’s problems were caused by a holding company, not its life insurance subsidiaries.  Their insurance companies were walled off from the problems, have always been solvent and did not receive a bailout.

The companies recommended by Bank On Yourself Authorized Advisors are among the financially strongest life insurance groups in the world.

They enjoy some of the strongest surplus positions in the industry, approximately double the industry average.

These companies are, in essence, owned by policyowners, rather than stockholders, which allows them to focus on the long-term interests of policy holders, rather than the short-term demands of Wall Street.

Here’s what the companies used for Bank On Yourself invest in:

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Posted in $100000 Challenge, best way to invest money, Retirement Plan Alternative | 25 Comments »


Bank On Yourself: A financial plan you can count on

December 11th, 2009 by Pamela Yellen

Oh what a roller-coaster year this has been!  Our entire financial system and economy almost fell off a cliff.Bailout

And while there are some hopeful signs of new life in the economy, this year has also brought us:

  • Massive bailouts
  • A tripling of an already-bloated federal deficit
  • A falling dollar
  • Rising foreclosures (and likely to spike as billions of dollars in ARM’s are now coming up for adjustment)
  • Major banks and investment houses taking on three times (!) the risk they were before the collapse

So what do you think next year has in store for us?

No one really knows for sure.  (Well, except maybe the folks at the Psychic Hotline.)  So how do you prepare for a very uncertain future?
Here’s a quick quiz that may reveal an answer for you…

What’s the one financial asset that increased in value during the market crash of 2008?  And in 1929?  And in every period of economic boom and bust in between?

Answer:  The product used for Bank On Yourself:  Cash-value life insurance.

As I’ve mentioned, my husband Larry and I now have 18 Bank On Yourself policies.  I’ve picked one of them to show you how a dividend-paying whole life policy like this can grow over time – even when the markets are plummeting.  It’s a great example of how Bank On Yourself gives you the peace of mind that lets you sleep at night.

Here’s how much this plan has grown each year since the beginning of 2000, a period that includes not one, but TWO devastating market crashes.  In four of these years, the S&P 500 was down for the year, as you can see in this side-by-side comparison:

chart

If you had put $10,000 into an S&P 500 Index fund at the beginning of 2000, how much do you think it would be worth today?

Take a guess before you read on.

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Posted in Bank On Yourself Policy Statement, best way to invest money, Retirement Plan Alternative, stock market timeline, Success Stories | 28 Comments »


Video Overview: Bank On Yourself in a Nutshell

October 2nd, 2009 by Pamela Yellen

We just completed a short, fast-paced video explaining what Bank On Yourself is and how it works, that I think you’ll find very helpful.

Click on the play button to discover…

  • How Bank On Yourself grows your savings both predictably and guaranteed… even when stocks, real estate and other investments tumble
  • How it can beat the pants off your best saving or investing method
  • How the kind of policy used for Bank On Yourself is different from the ones Suze Orman, Dave Ramsey and 99.9% of all financial advisors talk about
  • Why it’s an excellent alternative to traditional retirement plans
  • How you can use it to get back what you pay for major purchases
  • Where to find the money to get started

After you watch the video, I’d love to hear your thoughts and feedback – so please speak your mind below.

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Posted in Retirement Plan Alternative, Stock Market Investing, Video Casts | 159 Comments »


Think you have to risk your money to get big returns? Hogwash!

April 28th, 2009 by Pamela Yellen

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.”

InflationThe 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.

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Posted in Dave Ramsey, Stock Market Investing, Suze Orman | 1 Comment »


How financially secure are you? Take the 3 question test…

February 17th, 2009 by Pamela Yellen

I often get asked by subscribers if they should sell some of their investments and put those funds in a Bank On Yourself plan.

Of course, everyone’s situation is different, and I can’t make that call for you.

But I can suggest a few questions to ask yourself, that can help guide you to a decision:

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Posted in Retirement Plan Alternative, Stock Market Investing | No Comments »


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