Because of this, most baby boomers have been forced to postpone retirement an average of five years.¹

I’m often asked how using the Bank On Yourself method to save for retirement compares to traditional plans, so I put together this short video that reveals seven reasons Bank On Yourself makes an excellent retirement plan alternative.

Click the play button in the video below and see how many of these seven advantages you’d like to have in your financial plan…

1.  Bankers Life and Casualty Center for a Secure Retirement, May 2011

Here is how the responses to each of our 10 survey questions have broken down.  The percentages reveal which option our survey-takers find more scary!

You’ll see that snakes, blood, public nudity, eating fire-hot peppers, and even close proximity to a psychotic killer caused far fewer trembles than did the terrifying prospect of winding up in a serious financial jam.

Here’s what Americans find most scary…

1. Which of the following is more frightful to you?

• 22.2% – Death

• 78% – Outliving Your Money

  

2. Which of the following is more frightful to you?

• 28.6% – Having all of your investment decisions — good and bad — published in your local newspaper

• 71.4% – Walking naked down a fashion runway while being photographed

3. Which of the following is more frightful to you?

• 17.5% – Having to remain awake for 48 uninterrupted hours

• 82.5% – Having to memorize all the fine print on your 401(k) plan in no more than 48 hours

4. Which of the following is more frightful to you?

• 64.3% – Watching your stock portfolio lose 40% of its value in only a few weeks

• 36.4% – Ingesting 40 habanero peppers within 24 hours

5. Which of the following is more frightful to you?

• 58.8% – Sitting for 30 minutes in a tub of live snakes

• 41.7% – Explaining to your family or other loved ones that you’ve lost your home to foreclosure

6. Which of the following is more frightful to you?

• 49.2% – Having to pick the one mutual fund (among hundreds) that will outperform all others during the year

• 52.1% – Bobbing for a 10 oz gold bar in a vat containing 50 gallons of cow’s blood

7. Which of the following is more frightful to you?

• 9.4% – Going on twelve once-a-month blind dates with a randomly selected bachelor or bachelorette

• 91% – Entrusting your retirement portfolio to an anonymous fund administrator, who may or may not have any special education or training

Editors Note: Although 9 out of 10 Americans fear entrusting their retirement to an incompetent administrator, millions of Americans may unknowingly be doing exactly that right now! Read our shocking exposé and learn the facts!

8. Which of the following is more frightful to you?

• 64% – Having my personal tax returns audited by the IRS

• 37.3% -Walking around for a week wearing pants with pockets overflowing with live worms

9. Which of the following is more frightful to you?

• 31.7% – Be strapped atop a vintage stunt plane while it performs a typical aerobatics routine

• 70.% – Be tied to the Social Security program as your sole source of retirement income

10. Which of the following is more frightful to you?

• 66.1% – Losing my job and having to live only off of my current savings for a year

• 34.6% -Renting an extended-stay room in the Bates Motel and sharing a shower with Anthony Perkins

Were you surprised by any of your responses?

These results are a sad commentary on the financial condition and current state of mind of so many of our family members, friends, neighbors and colleagues.

The definition of insanity is doing the same things in the same way and hoping for different results.  So, if you’re ready to find a better way to save and invest for your financial future that gives you peace of mind and lifetime financial security, check out the Bank On Yourself method.

To find out how much brighter your financial picture could be if you added Bank On Yourself to your financial plan, request your free, no-obligation Analysis now, while it’s fresh on your mind!

I just held an urgent Teleconference on what you should do right now to protect your family’s financial security.

A number of people told us they weren’t able to attend and asked if it was recorded so they – and the people they care about – could still listen to it.

You can listen to a replay of it below, or you can download the recording as an MP3 and listen to it on your own player or iPod now at:

I urge you to shut the door and put out a “do not disturb” sign while you listen to this critically important information which includes answers to timely questions such as:

• Should you stay in the market despite the turbulence and wait for the market to rebound?
• Is now the time to shift into gold?
• Where else can you find shelter from the storm?
• What can we do to encourage Washington to get its act together?

Find out what you need to do right now to protect your hard-earned savings and take back control of your financial future here:

Nobody is going to twist your arm, and you won’t even be asked to buy anything at your first meeting with your Authorized Advisor.

But at least you’ll know whether Bank On Yourself makes sense for you and your family.  So please request your free Analysis today.

For so many people, that principle seems unrealistic, especially considering how very hard it is most months just to stay afloat – paying for necessities such as groceries, medicines, utilities, transportation, insurance and the like.  Oh yes, let’s not forget the always hungry tax monster!

Seems to so many of us that our paychecks are swallowed whole by our obligations before we ever get the chance to even sample the flavor of having some accumulated cash in our pockets and bank accounts.

To which we can only respond… how wonderful!

Wonderful? Really? Paying Bills! And Taxes?”

Absolutely.

If you haven’t done so already, it is time to come to view your monthly financial obligations in a fresh, new light.

In fact, it will prove most helpful if you consider your recurring expenses with two questions in mind:

1. What benefits do I actually receive in return for my monthly outlays?

2. What is my return on investment for the dollars spent?

Let’s begin by examining the second question first.

What would you guess is the better long-term investment?

Your monthly grocery bill or your monthly contribution to a 401(k) or other retirement plan?

Most people don’t view their grocery bill as an investment, so they automatically assume the answer is a long-term savings or investment fund.

But the correct answer is – in fact – a matter of perspective.

The money you contribute to a 401(k) or similar plan is locked in place for many years, even decades.  What you have to show for it are some numbers on a monthly or quarterly portfolio statement that might give you a sense – often undeserved – of financial security.

You really can’t enjoy the money in the present or the near future.  Moreover, funds in a 401(k) are subject to market fluctuations, management fees, inflation and eventually taxes.   For tens of millions of Americans, when those numbers on their fund statements implode, as they did during the market dive in 2008-2009 (and many times prior to that), then their retirement investments not only fail to bring them pleasure or satisfaction, but actually cause great pain and anguish.

Strictly in terms of numbers, 401(k) plans hardly stack up to the value we all receive from our monthly grocery expenditures.

Here’s our thinking…

For every $1,000 you place in a 401(k) or similar plan – not factoring in a matching contribution from your employer* – you can expect to earn a reasonable return that might over the long term average 4% to 7% a year (far above what you are likely earning now).

In essence, you tie up all of your principal for a full year, at the end of which you have earned perhaps $40 to $70 in return for allowing some financial institution to utilize your money for 12 months.

Go ahead and tie up the same original $1,000 for a second full year, at the end of which you will have – roughly – between $81.06 and $144.90 in income on paper, before subtracting fees, taxes, and any decrease in purchasing power due to inflation.

And this assumes your investment portfolio actually grows – which is a generous assumption given how often retirement plans actually bleed money.

Stick to the plan, as do most wage earners, and your $1,000 may sit in a retirement account for 20 years (or more).  After two whole decades of confinement, your original $1,000 deposit would generate between $1,191.12 and $2,869.68 in growth (before you deduct fees, taxes, and inflation.)

That is 20 years that some financial institution – but not you– reaps the benefits of YOUR money.

Now let’s compare that with your monthly grocery bill…

The United States Department of Agriculture each year estimates the monthly costs of food at home for an average family of four.  The USDA’s calculation for 2011 runs between $663.60 for a low-cost meal plan to $1,184.50 for a liberal plan.

Let’s call it $1,000 and see how those groceries stack up as an “investment” against laying away the same $1,000 in a retirement plan.

At the end of the first month, assuming you consume all of the food you’ve purchased, you have zero left to show for your money (or at least that is the faulty perception many people hold).

That said, you owe no taxes on the $1,000 in groceries (other than the sales tax already included in the tab).  There are no management fees.  And there is zero chance the supermarket will come to you and ask for more money, even if the groceries you purchased subsequently rise in price.  (Translation: No supermarket “crash” will ever cause you anxiety and the loss of principal.)

One thousand dollars in groceries buys you goods worth a full thousand dollars in value regardless of any Wall Street misbehavior or greed.

It’s when you step back and ask yourself what the groceries, in turn, enable, that you realize their true investment value.

Given that you and your family can’t very well fast for a month, the groceries you purchase are the core fuel of your family’s income-generating and lifestyle machine.  If you bring home $65,000 a year in total household income, then the $1,000 you spend in monthly groceries is a vital cog in generating the $5,417 ($65k divided by 12 months) you earn in return for your labors.

Your $1,000 monthly grocery outlay produces a fabulous return – in just 30 days – actually dwarfing the 20-year yield you might receive placing the food money in a retirement plan.

Grocery bills… when viewed in the context of what they make possible, can be truly loveable.”

The same frame of reference should be applied to housing costs, gas and electricity, transportation, medical bills, etc.

Once you cast your financial obligations in the correct light, paying those monthly bills will take on a whole new positive meaning.

Dollar for dollar, these expenses, rather than being the economic balls and chains that most Americans label them, actually return some of the best values in the investment universe.

Once you cast your financial obligations in the correct light, paying those monthly bills will take on a whole new positive meaning.

Now let’s return to the first question we raised above: What benefits do you actually receive in return for your monthly outlays?

As Americans, we are blessed with an abundance that has no historic or even present-day equal.  As citizens, who pass much of our lives pursuing even better lifestyles, we often fail to pause and conduct a full and candid inventory of the uncountable blessings we already receive.

Reflect upon your present blessings, of which every man has plenty; not on your past misfortunes of which all men have some.”
~Charles Dickens

The true secret to enjoying our bills and applauding our taxes is to appreciate what they buy for us. Most people throughout history – and far too many people living elsewhere today – would consider themselves life’s lottery winners if only they could “suffer” our hardships.

Here are the sober facts of life…

There is no right to housing, much less a safe home that is equipped with clean, running water; electricity, and heat.  Phones, cars and household appliances are not mandatory, nor are computers, paid television services and the Internet essentials.

Yes, health care is expensive and getting more so all the time, especially emergency care and medication for chronic illnesses.

But really, have you got a better use for your money than staying alive? It hardly matters how much you’ve squirreled away for retirement if you are long dead before you ever reach your golden years.

And what about taxes?  How do we ever adopt a mindset that allows us to applaud them?

Simple.

Freedom, in the form of national defense, isn’t free.  Nor is crime fighting, fire fighting, road construction and maintenance, schooling, and a million and one other services and benefits provided to us by local, county, state and federal governments.

Are most politicians wasteful?  You bet.  Could they be better stewards of our public funds.  Duh!  Need you really ask?

We dislike and rail against wasteful spending that means higher taxes and less money in our own pockets.  And all of us can point to dozens of government programs that never benefit us and aren’t worthy of anyone’s tax dollars.

But the exceptions do not disprove the rule.

When we pay our taxes, we are rewarding ourselves and future generations with the greatest investment ever offered to mankind – shares in America and the American Dream

As a rule, there is no finer government, and has never been a better political system, than that enjoyed by the current citizens and residents of the United States.

When we pay our taxes, we are rewarding ourselves and future generations with the greatest investment ever offered to mankind – shares in America and the American Dream.

Those shares pay and have paid huge uninterrupted dividends for more than 235 years, without which our lives could never be as satisfying or great.

* We consider the employer match on your 401(k) as part of your salary – not an investment return.  If you put in $1,000 a month and your employer puts in $30 a month, really you’ve put in $1,030 a month.  Your return on that total remains somewhere between 4% and 7% annually on average.

See how many of these common beliefs you already recognize as flawed and which ones you have yet to unmask.

As you may discover, what we’ve been taught by mainstream money experts and well-intentioned friends and family isn’t always accurate.

The Myths:

1. Over time, the stock market has consistently proven the best and most reliable investment vehicle for the vast majority of Americans
2. Investors need to accept risk and volatility in order to generate meaningful profits
3. Home ownership and appreciation is a reliable vehicle for protecting and growing your wealth
4. 401(k)s make effective investment vehicles, if only because your employer matches your own contributions
5. Your 401(k) plan administrator must be a licensed, professionally trained and carefully screened financial expert
6. The fees you pay for your IRA, 401(k) and other retirement funds have only a trivial impact on your ultimate returns
7. You will not require as much income when you retire as you need now, especially since you’ll qualify for a lower tax bracket
8. It is never possible to know with any certainty the value of your retirement account at intervals down the road, because market fluctuations are unpredictable
9. Wise retirement planners recommend you aim to make your retirement income last to age of the average American life expectancy, currently 77.9 years
10. Always defer taxes as far into the future as possible, especially when you wish to accumulate a larger retirement nest egg
11. People of modest income can’t possibly set aside $1 million or more for their retirement
12. Before you can begin saving for the future, first you have to dig your way out of debt
13. Paying cash is the ideal method of purchasing big-ticket items, such as cars and vacations
14. Effective savings and investing strategies are too complex for amateurs.  Only professionally trained money managers consistently succeed
15. If you follow the advice of mainstream financial experts and don’t stray, your nest egg will be safe and grow large over time
16. To receive quality, personalized attention from highly trained financial advisors, you have to already be wealthy, or close to it

©2011 Hayward-Yellen 100 Ltd Partnership

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

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.

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”

(Read: A Savings Fish Tale: Why the Last Laugh is on Planners Who Mock Whole Life Insurance)

Meanwhile, holders of whole life insurance policies such as those designed by Authorized Bank On Yourself Advisors, were more like the Little Engine That Could, consistently climbing ahead and never once loosing a penny during those 35 years.

While no ‘Whole Life 500′ index exists to document the specific annual average performance of Bank On Yourself-style dividend paying whole life insurance versus the S&P 500, even Love and Death‘s village idiot can calculate that funds saved and compounded with interest and dividends without interruption since 1975 would yield a rich, secure and predictable financial nest egg.

Once Discarded Financial Precepts Reborn

Bank On Yourself-compliant whole life insurance policies, contrary to popular lore, actually turn out to be – and to have always been – a highly reliable savings and retirement vehicle.  Indeed, many discarded money-management precepts – the kinds our grandparents and great-grandparents once treated as gospel – are, with the benefit of 20/20 hindsight, proving to be anything but out-of-date.

(See: When it Comes to Money Management, Grandma & Grandpa Knew Best

Ranging from the value of whole life insurance as the cornerstone of a family’s financial plan, to the concept of setting aside as much as 30% of gross income in savings and investment accounts, old-fashioned financial ideas are getting a fresh new look.

Tim Austin, the 46-year-old Founder and President of the National Association of College Funding Advisors

Among the nation’s most-respected and leading proponents of revisiting the financial playbooks of our grandparents and great-grandparents is Tim Austin, the 46-year-old Founder and President of the National Association of College Funding Advisors.

Austin, who knows firsthand that the old sensibilities enjoy increasing modern day currency, has educated more than 5,000 families since 1994 on how average American families can pay for college without going broke.

Like so many financial advisors, Austin began his career dishing out the same commonplace investment recipes that every other planner was serving their clients: a steady diet of stock and bond funds.  When Austin’s grandmother – who lived through the Depression – asked him to safely invest $10,000 on her behalf, she instructed him: ” I want you to put me in something safe.  I don’t care about the interest rate, I just don’t want to lose any money.”

Grandma’s investment, it turns out, was a defining event for Austin.  Still young and relatively inexperienced, he followed the advice of more seasoned financial planners in his firm and put his grandmother’s entire $10,000 in a bond fund in February 1987.  Everyone assured him her funds would be protected.

Then came October 1987 and the global crash known as Black Monday, which up until that time was the largest one-day decline by percentage in stock market history.  Grandma Austin’s bond fund was not spared as it was supposed to be.

The experience caused him to rethink conventional financial planning.  “It made me look at what other people were doing and I realized I just wasn’t getting – or giving – the right advice.”

So Austin charted a new course – one more aligned with his grandmother’s needs, experiences and sensibilities.

The core tenet: there is no need to ever put money at risk in order to grow it and use it reliably

Today, Austin’s typical client is 47 years of age and faces the dilemma of juggling current debt, paying for one or more children headed to college, and still setting aside sufficient funds for retirement.  With his help and some individual self-discipline, Austin says that in roughly 13 years – or by the time his clients reach age 60 – they will have paid for college, be free of all bank and credit card debt, and be socking away savings.

Austin derives his inspiration from the decades of the 1940s and 1950s, when it was commonplace for Americans to set aside 10% of their gross income for short-term needs, such as a vacation or holiday gift-giving; 10% for anticipated mid-term needs and potential emergencies, including a new car, replacement of major appliances, a new roof, and college tuition; and 10% for long-term retirement planning.

For the first two categories – short-term and mid-term – Austin recommends savings instruments, including certificates of deposit, savings accounts, money market accounts and permanent whole life insurance.

For the 10% of gross income targeted for the long-term, he recommends the acquisition of multiple whole life policies, added strategically over time, and designed for income replacement.  Under current tax law, when properly structured, such layered policies provide a guaranteed and predictable retirement income with little or no taxes due on it.

Austin’s 10/10/10 approach avoids all conventional bank and credit card debt.  Instead, he recommends clients pay cash for their larger purchases, such as a car or even a home, or utilize Bank On Yourself-style whole life policies to self-finance major expenditures, effectively repaying themselves over time with interest ultimately ends up in their policy accounts.

In fact, Austin’s experience has shown that the average family could increase their lifetime wealth by $500,000 – or more – simply by financing their cars and vacations through their policies, without taking on the risk or volatility of stocks and real estate.  (To find out how much more wealth you could have by using this method, request a free Bank On Yourself Analysis.)

While our grandparents and great-grandparents instinctively followed a 10/10/10 style of living, now it’s typical for Americans to spend 30% or more of their gross income on mortgage interest, credit card debt, car payments, and other installment loans.

“Pretty much in today’s world, consumers have swapped debt payments for the 35% of their income that used to go into savings and investing,” Austin says.  Depending upon one’s tax bracket, he notes, 30% or 35% of gross income can actually represent as much as 50% of net income.

Listening to the Wrong Prognosticators

“Over the past 30 years, it has become very easy to accept the idea of  a car payment,” Austin notes, “Whereas in the 40s and 50s, no one would have thought about having a car payment. They would have paid cash for the car.  They would have saved the money and then they would have paid cash for that vehicle and they would have started saving again for the future.”  Except for the ultra-wealthy, the idea of acquiring a new car every two or three years was unheard of.

Not only have Americans come to accept debt-financing for many purchases, Austin says, they also have lost the discipline of saving 10% of their gross income for the long term.  Here, Austin believes, the main culprit is obvious: 401(k) plans and the unrealistic returns promised by the financial advisors who promote them.

The mantra for many employees has been and remains to invest only 3% to 5% of gross income in a 401(k).  Then, assuming their employer matches their contributions and that their 401(k) portfolios will grow at an average annual rate of 12% for decades to come, the typical American now assumes – wrongly – that should be plenty enough money for retirement.

Reality, as tens of millions of 401(k) investors learned in 2008, is not quite as rosy.

(See: A Savings Fish Tale: Why the Last Laugh is on Planners Who Mock Whole Life Insurance)

The 401(k) promise, Austin says…

Allowed people to have this illusion that they really didn’t need to put as much money into the retirement savings category.  The higher you forecast their expected rate of return, the less the consumer believes they actually have to save out of their income.”

“Americans,” Austin adds, “have been substantially misled on what needs to go into their IRAs and 401(k)s in order to hit the numbers they need to have.”

In late 2010, conventional financial wisdom, much like Love and Death’s Boris Grushenko, continues to mock those who recommend or purchase whole life insurance policies.

But back in 1942, according to a report titled, Family Spending and Savings, published by the U.S. Bureau of Home Economics, a majority of Americans viewed life insurance, annuities and endowment policies as a preferred method of savings.  And time has proven them – not today’s naysayers – correct.

“It was very common that the whole life insurance agent would be coming around on Friday mornings to collect the $1 or the $5 premiums,” says Austin, who was born in 1964, but has extensively researched the period.  “Those policies were very commonly used for emergency funds, car loans, business loans and such.”

Austin believes so strongly in the value and utility of permanent dividend paying whole life insurance policies that before his clients ever put another dollar at risk, he advises them to work with a Bank On Yourself Authorized Advisor to structure one or more policies tailored to their needs and budget.

(To get a referral to one of 200 advisors who have met the rigorous requirements to be an Authorized Advisor, request a free Analysis that will show you the bottom-line numbers and results you could have if you added Bank On Yourself to your financial plan.)

Austin’s general rule of thumb is for his clients’ first step toward financial recovery to be to accumulate roughly two years of average expenses in a whole life policy that is consistent with the Bank On Yourself approach.

Austin, himself, helped develop and leads the nationwide Bank On Yourself Authorized Advisor training program, so he understands the power of these advisors to help their clients restructure their entire approach to savings, spending and investing.

Savings Come Before Spending

Ideally, Austin points out, individuals would begin following his recommended 10/10/10 formula at the time they accept their very first job.  After setting aside his recommended 30% of gross income, what remains for the newly employed worker would constitute his or her living expenses.  “What remains is what you’d go out and coordinate your lifestyle around.”  (For those who can, Austin recommends keeping lifestyle expenses under 50% of gross income. His best clients, he notes, knock spending down to less than 40% of their gross income.)

(Read about how the Bank On Yourself method allows people to take advantage of opportunities that inevitably arise.)

While high school and college graduates in the 1940s and 1950s were accustomed to such pragmatic ‘home economics’ – as the field of personal finance was known back then, most men and women who walk into Austin’s Troy, Michigan office these days come peering into what they believe is the financial abyss.

“They are looking at college bills, looking at retirement, and just not seeing how the heck they are going to be able to do all this stuff,” Austin says.  “The reality is that if they stare ahead to age 70, it is going to be overwhelming.”  If he added to their trepidation by recommending that they immediately begin saving 30% of their gross income, Austin realizes his shell-shocked clients would walk out, saying, “Well shoot, I don’t have a chance, I might as well just give up.”

So rather than asking his clients to slam on the brakes and jam their financial throttle into full reverse, Austin patiently counsels those who seek his help: “You begin where you are.”

For starters, Austin asks clients to help him put their monthly budget under a microscope.  His goal: to begin reducing the percentage of their gross income that is directed at debt service to under 20% – and to do it as painlessly as possible.

“I have been specializing in this area for 20 years and I haven’t met a family, no matter what income level they are at – from $40,000 a year to $400,000, to $1 million – that I haven’t been able to find some very simple things within their monthly budget that they can trim using some very simple tweaks,” Austin says.

“So you start where you are, trying to find those dollars — $500, $600, $1,000 a month” to redirect to a whole life insurance policy, he explains.  As the cash value in a Bank On Yourself-style policy accumulates, Austin’s clients are able to use their policies to self-finance short-term and mid-term purchases.

Austin favors whole life policies that are consistent with the Bank On Yourself strategy because they have provisions that permit policyholders to continue earning interest and dividends on the cash value of their policies, even while borrowing funds against that very same cash value to pay for the kind of expenses that families previously financed with bank loans and credit cards.

NOTE: Not all companies pay the same dividend on borrowed funds.  An Authorized Advisor can recommend companies that meet all the requirements to maximize the power of this strategy.  You can get a referral to one when you request a free Analysis.

“If we look at Bank On Yourself from an engineering perspective, it is an economic machine that is built to get better with time,” Austin says.  “What happens, once you get policies going, is they snowball.  The more purchases that you finance through these special life policies, the more that these policies are going to snowball and snowball.”

For some clients who are able to build up a large cash value in their policies, the Bank On Yourself strategy actually permits them to purchase and self-finance a home – forgoing the need for a conventional 30-year mortgage.

“Thirty years from now, not only is all of the money that you paid returned to your (whole life insurance) policy, but you are going to have all of the growth from compounding interest, dividends and then some,” Austin explains.  And when the policies are properly structured, the funds grow in a tax-free environment.

A House is a Home, Not An Asset

Austin believes that housing choices and home mortgages are at the root of many American’s current perilous financial state.

In his grandparents’ day, those who needed to take out a mortgage to finance the purchase of a home put as much down as possible and signed up for a 15-year mortgage, which they paid religiously.  Moreover, once in a home, families remained there.

For baby boomers and subsequent home-owning generations, the trend has been to take on 30-year mortgages with as little down – if anything – as possible.  Moreover, Austin notes, during the course of their lives, today’s adults are likely, on average, to purchase four or five homes – often progressively more expensive – during the course of their lives.

Doing so dramatically reduces the opportunity to build equity, even while monthly principal and interest payments on a mortgage soar.  “During the first ten years of a typical 30-year mortgage, about 86% out of every dollar is interest,” Austin explains.  So for those who flip homes regularly, most of their housing dollars are lost to interest alone.

Many of Austin’s clients eventually come to realize how much better off they’d be trying to pay for their children’s college tuition and approaching retirement had they stopped at home number three or four.

Austin also bridles at the notion put forth by so many accountants and financial advisors that a home is an asset.  He doesn’t view one’s home that way and neither did his parents, who purchased their first house in 1958 and continue to live in it today, long after their sole mortgage had been paid off.

“My father never believed that his home is an asset,” Austin says.  ”He has always believed it’s a liability because my mom asks him every single year to change the carpet or make other improvements. They redid the kitchen a few years back.  He has got a pool to maintain.  And he’s got to pay taxes on the house.”

Austin acknowledges that his parents’ home may one day prove to be an asset for him and his siblings.  But his parents intend to remain in their house as long as their health permits – and even if they do eventually sell it, they’d still have to live somewhere else, he reasons.

Never Too Young To Learn

In addition to working with the parents of college-age students, Austin tries to convey his reborn 1940s and 1950s fiscal sensibilities through programs that he and his staff conduct for high school students and even those children who are elementary-school age.

If past can be made prologue for these students, Austin believes, they will grow up and enjoy a lifetime of fiscal stability and growth, unlike the baby boomer generations who pooh-poohed the common sense wisdom of their Depression-era parents and grandparents and now face such economic turbulence.

Most of today’s students are open to revisiting the financial planning wisdom of a bygone era, Austin says.  To the extent that he meets resistance, either from the students or parents, he is undeterred.

“It is a fight worth fighting,” he concludes.

About the Authors:

New York Times bestselling author Pamela Yellen is the originator of the life-changing Bank On Yourself system and related personal finance strategies. Pamela has worked as a consultant to successful financial advisors for more than two decades.

Pulitzer Prize-nominated investigative reporter Dean Rotbart has reported on business and financial topics since 1979. His editorial and research clients include numerous Fortune 500 companies and leading communications agencies.

© 2010 Hayward-Yellen 100 Ltd Partnership

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:

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.

Based on where the S&P 500 has been trading this past week (week of December 7-14, 2009, it would be worth only about $7,488!  That doesn’t even factor in inflation over that period, which would slash the value of your investment by about another 27% – to $5,466!

Have you considered that maybe – just maybe – return OF your principal is at least as important as return ON your principal?

If you could turn back the clock, where would you rather have put that $10,000 – in stocks, mutual funds and real estate?  Or in an asset that has only one direction – up – and where all your principal and gains are locked in?

If you look at the chart above again, you’ll notice how this policy – like the rest of our other 17 Bank On Yourself policies – has increased in value each year by more than it increased the previous year, even though our annual “contribution” never increases.

I’ll be getting my next annual statement for this plan soon, and – like every other year – I can’t wait to see it!  Can you imagine looking forward to receiving every account statement, because they always contain good news and never any ugly surprises?

Of course, I already know how much growth I can count on receiving this year (and every year).  The growth in these policies is both guaranteed and exponential – with no luck, skill, or guesswork required to make that happen.

But there’s also the potential to receive dividends.  Dividends aren’t guaranteed, but the companies used by Bank On Yourself Authorized Advisors have paid dividends every single year for more than 100 years – including during every market correction, every bear market, and even during the Great Depression.

So, let’s fast-forward 7 years.  That’s when I’ll be 64. (Yeah, I know a woman isn’t supposed to tell her age.)  Suppose I want to retire at 65?  How much will the Bank On Yourself policy I used in the example above grow that year?

This particular policy is projected to increase by $47,709 that year, based on the current dividend scale.  I also know for sure the minimum guaranteed annual income I can take from this policy in retirement. And I can access that income stream with no taxes due on it, under current tax law.

I have NO idea how much my mutual funds will be worth nine years from now.  Or 30 years from now.  And I have no idea how much income I can count on receiving from them.  Same goes for my home value.  Do you?

And that sums up the problem with traditional investing and retirement planning methods.  They never have been – and never will be – anything other than a crapshoot.

It explains why, sadly, so many Americans are wondering, “Will I ever be able to retire?” and “What will I have to give up to be able to do that?”

But it doesn’t have to be that way!  Not when you Bank On Yourself.  Since I love what I do, I probably won’t quit when I’m 65, but it’s nice to know I’ll have a choice.

Every situation is different, and no two Bank On Yourself plans are the same, so your numbers won’t be the same as mine.  Each plan is custom tailored to fit your unique financial goals and dreams.  So if you want to find out what your bottom-line numbers and results could be if you added Bank On Yourself to your financial plan (if you haven’t already done so), you can request a free Bank On Yourself Analysis here.

Key Concept:  Unlike investments like stocks, mutual funds and real estate, where your gains aren’t locked in unless and until you sell them, all the growth you get in a Bank On Yourself policy is locked in! It doesn’t vanish because of a market correction.

Not only will you never have to worry about buying or selling at the wrong time, you will benefit from the continuous compounding of an ever-increasing base.

This also gives you some built-in protection against inflation

Can you see how, when you Bank On Yourself, you can shut out all the noise about the whip-sawing stock and real estate markets and other investments?  The peace of mind it brings you is indescribable.

We are only a few short weeks away from a new decade.  How confident are you that this next decade will give you a smoother and more predictable financial journey than the decade now coming to a close?

If you’re tired of hoping and guessing what the future may hold, and you’re ready to have a financial plan you can predict and count on, why not take the first step now?  Request your free Analysis and get a referral to a knowledgeable Bank On Yourself Authorized Advisor who can show you how a custom-tailored plan can help you reach as many of your short-term and long-term goals and dreams as possible!

These Advisors are also masters at helping you restructure your finances to free up money to fund your Bank On Yourself plan.

Check out what T. Harv Eker, #1 New York Times best-selling author of “The Millionaire Mind,” said:

If you’re looking for more of the same conventional financial advice, this isn’t the book for you. But if you’re prepared to take back control of your financial life once and for all, Bank on Yourself is a ground-breaking method that can put you on the fast track to reaching your goals and dreams.”

As Harv noted, Bank On Yourself really isn’t the same old financial advice people have been getting everywhere else. And that’s a good thing, don’t you think?

Because look where that’s gotten us – we’re deep in the midst of the greatest destruction of household wealth in history, with no quick fix in sight.

But there IS a safe and proven alternative – Bank On Yourself – which may be is the ultimate financial security blanket in both good times and bad. Just ask Gene Pittman, who you’ll meet in Chapter 9 of my book:

“We’re using Bank On Yourself to get out of debt, to reach our retirement goals, and for our son’s college. When everyone says how much they lost in their 401(k)’s, I tell them how much my Bank On Yourself plan is growing. Once you understand this, you’ll jump in with both feet and never look back. It’ll be the best thing that could ever happen for your family.”

To hear how people of all ages, incomes and backgrounds have kept their money safe and their sanity intact during the market crash, visit our success stories page.

“As we’ve watched our IRA, 401(k), and stock portfolio dwindle, we are relieved we have a chunk of our net worth in our Bank On Yourself plan. It creates a place where our money is safe, the value didn’t drop, and in fact, has continued to increase every year. We really have been able to achieve peace of mind with this approach, and I strongly encourage everyone to look into it.”

I’m getting letters and emails echoing what Bill said every day, which is why I became convinced Americans have been brainwashed into believing they must accept risk, volatility and unpredictability to grow a sizable nest-egg.

Stay tuned, because I’m going to do a series of blog posts on why conventional saving, investing and financial planning methods don’t work… and what you can do about it.