Comments on: What’s the rate of return on a Bank On Yourself plan? http://www.bankonyourself.com/whats-the-rate-of-return-on-a-bank-on-yourself-plan.html Grow and protect your financial future Thu, 02 Feb 2012 17:25:01 +0000 hourly 1 By: Motley Fools | TALKING BOOK http://www.bankonyourself.com/whats-the-rate-of-return-on-a-bank-on-yourself-plan.html/comment-page-2#comment-53159 Motley Fools | TALKING BOOK Sat, 19 Nov 2011 03:09:40 +0000 http://www.bankonyourself.com/?p=3835#comment-53159 [...] whole life policy grows by a guaranteed and pre-set amount every year.  In addition, the growth is exponential, meaning it gets better (more efficient) every single year you have the policy, simply because you [...] [...] whole life policy grows by a guaranteed and pre-set amount every year.  In addition, the growth is exponential, meaning it gets better (more efficient) every single year you have the policy, simply because you [...]

]]> By: Pamela Yellen http://www.bankonyourself.com/whats-the-rate-of-return-on-a-bank-on-yourself-plan.html/comment-page-2#comment-45662 Pamela Yellen Mon, 24 Oct 2011 18:57:01 +0000 http://www.bankonyourself.com/?p=3835#comment-45662 What I explained in this blog post IS the internal rate of return based on the current dividend scale, which is at historic lows right now. When interest rates and dividends are higher, so is the internal rate of return. You’ve really missed the point- it’s NOT about the return <em>on</em> your money, it’s about the return <em>of </em> your money. The idea of a “buy and hold” investor is a myth - almost no one actually does that.  The typical mutual fund is held less than 3-5 years. And all the stats show the typical investor way underperforms the market. For more insight, check out the <a href="http://www.bankonyourself.com/beware-the-behavior-gap-interview-with-carl-richards.html" rel="nofollow">interview I did about the behavior gap</a>. If you’ve truly been successful investing, you’re in the minority, so knock yourself out. (Most people who actually pull out their investment statements and do the math discover they way overestimated their actual return.) And if investing in the market worked for most people, why are pre-retirees now having to postpone their planned retirement by an average of 5 years? It’s one of the biggest lies ever perpetrated on the American public. And the ONLY thing Wall Street <em>guarantees</em> is that <em>they</em> get paid whether you win <em>or</em> lose. What I explained in this blog post IS the internal rate of return based on the current dividend scale, which is at historic lows right now. When interest rates and dividends are higher, so is the internal rate of return.

You’ve really missed the point- it’s NOT about the return on your money, it’s about the return of your money.

The idea of a “buy and hold” investor is a myth – almost no one actually does that.  The typical mutual fund is held less than 3-5 years. And all the stats show the typical investor way underperforms the market.

For more insight, check out the interview I did about the behavior gap.

If you’ve truly been successful investing, you’re in the minority, so knock yourself out. (Most people who actually pull out their investment statements and do the math discover they way overestimated their actual return.)

And if investing in the market worked for most people, why are pre-retirees now having to postpone their planned retirement by an average of 5 years?

It’s one of the biggest lies ever perpetrated on the American public. And the ONLY thing Wall Street guarantees is that they get paid whether you win or lose.

]]> By: Robert http://www.bankonyourself.com/whats-the-rate-of-return-on-a-bank-on-yourself-plan.html/comment-page-2#comment-45160 Robert Sat, 22 Oct 2011 17:21:01 +0000 http://www.bankonyourself.com/?p=3835#comment-45160 I just started the BOY concept, yet I still have hesitation. I still believe the stock market/equities are the best investment for a buy and hold investor. The data on historical stock returns say around 9% year (probably 7% after taxes if we are changing the capital gains to ordinary income of 35% not 15%, fees, etc) probably holds true if you stick it into a Roth and leave it for 20-30 years. My own rate of return 15+ is about 7-8% on blue chips. Pam, do you have some documents for the last 20 years on internal rate of return for some of these policies? I am getting estimates at around 4-4.5% (20 year), let's say 6% at a taxable equivalency, not what you have above. For me, I'm basically getting a bond fund with some life insurance guarantee, and the ability to draw as a emergency fund, but not necessarily a investment of any sort. Please do not include inflation into the analysis because it will be equivalent whether we use BOY or equity returns. Thank you. I just started the BOY concept, yet I still have hesitation. I still believe the stock market/equities are the best investment for a buy and hold investor. The data on historical stock returns say around 9% year (probably 7% after taxes if we are changing the capital gains to ordinary income of 35% not 15%, fees, etc) probably holds true if you stick it into a Roth and leave it for 20-30 years. My own rate of return 15+ is about 7-8% on blue chips.

Pam, do you have some documents for the last 20 years on internal rate of return for some of these policies? I am getting estimates at around 4-4.5% (20 year), let’s say 6% at a taxable equivalency, not what you have above. For me, I’m basically getting a bond fund with some life insurance guarantee, and the ability to draw as a emergency fund, but not necessarily a investment of any sort.

Please do not include inflation into the analysis because it will be equivalent whether we use BOY or equity returns. Thank you.

]]> By: The truth about investing in mutual funds | Wealth Building http://www.bankonyourself.com/whats-the-rate-of-return-on-a-bank-on-yourself-plan.html/comment-page-2#comment-44515 The truth about investing in mutual funds | Wealth Building Thu, 20 Oct 2011 17:14:15 +0000 http://www.bankonyourself.com/?p=3835#comment-44515 [...] take my word for it – I exposed the mutual fund “rate of return” myth” here: http://www.bankonyourself.com/whats-the-rate-of-return-on-a-bank-on-yourself-plan.html ]]> Investor Trap #3: If you’re investing in mutual funds inside a 401(k) plan, fees can [...] [...] take my word for it – I exposed the mutual fund “rate of return” myth” here: http://www.bankonyourself.com/whats-the-rate-of-return-on-a-bank-on-yourself-plan.html ]]> Investor Trap #3: If you’re investing in mutual funds inside a 401(k) plan, fees can [...]

]]> By: The truth about investing in mutual funds | Index Investing http://www.bankonyourself.com/whats-the-rate-of-return-on-a-bank-on-yourself-plan.html/comment-page-2#comment-44201 The truth about investing in mutual funds | Index Investing Wed, 19 Oct 2011 08:07:56 +0000 http://www.bankonyourself.com/?p=3835#comment-44201 [...] Investor Trap #2: You could get a 25 percent “average annual return” for years and still not make a single dime or even lose money! This is due to the smoke and mirrors the Wall Street illusionists have been using to pull the wool over your eyes for decades. Don’t take my word for it – I exposed the mutual fund “rate of return” myth” here: http://www.bankonyourself.com/whats-the-rate-of-return-on-a-bank-on-yourself-plan.html [...] [...] Investor Trap #2: You could get a 25 percent “average annual return” for years and still not make a single dime or even lose money! This is due to the smoke and mirrors the Wall Street illusionists have been using to pull the wool over your eyes for decades. Don’t take my word for it – I exposed the mutual fund “rate of return” myth” here: http://www.bankonyourself.com/whats-the-rate-of-return-on-a-bank-on-yourself-plan.html [...]

]]> By: Pamela http://www.bankonyourself.com/whats-the-rate-of-return-on-a-bank-on-yourself-plan.html/comment-page-2#comment-33814 Pamela Fri, 26 Aug 2011 18:43:15 +0000 http://www.bankonyourself.com/?p=3835#comment-33814 That graph only shows the growth pattern on the cash value, not the premiums paid in, which of course, they were. That graph only shows the growth pattern on the cash value, not the premiums paid in, which of course, they were.

]]> By: Fred http://www.bankonyourself.com/whats-the-rate-of-return-on-a-bank-on-yourself-plan.html/comment-page-2#comment-32337 Fred Thu, 18 Aug 2011 04:16:28 +0000 http://www.bankonyourself.com/?p=3835#comment-32337 Your 30 year chart above shows zero ($0) growing to about $1,700,000 in thirty years. I will buy all of those you can sell me!-- nothing in and millions out. What am I missing? Your 30 year chart above shows zero ($0) growing to about $1,700,000 in thirty years. I will buy all of those you can sell me!– nothing in and millions out. What am I missing?

]]> By: Four Lies Wall Street is Telling You? And How You Can Fight Back! | Stock Picks Every Day http://www.bankonyourself.com/whats-the-rate-of-return-on-a-bank-on-yourself-plan.html/comment-page-2#comment-32188 Four Lies Wall Street is Telling You? And How You Can Fight Back! | Stock Picks Every Day Wed, 17 Aug 2011 02:26:01 +0000 http://www.bankonyourself.com/?p=3835#comment-32188 [...] whole life policy grows by a guaranteed and pre-set amount every year.  In addition, the growth is exponential, meaning it gets better (more efficient) every single year you have the policy, simply because you [...] [...] whole life policy grows by a guaranteed and pre-set amount every year.  In addition, the growth is exponential, meaning it gets better (more efficient) every single year you have the policy, simply because you [...]

]]> By: The truth about investing in mutual funds | Top-Investment-Tips-A1 http://www.bankonyourself.com/whats-the-rate-of-return-on-a-bank-on-yourself-plan.html/comment-page-2#comment-25383 The truth about investing in mutual funds | Top-Investment-Tips-A1 Thu, 14 Jul 2011 07:07:59 +0000 http://www.bankonyourself.com/?p=3835#comment-25383 [...] Investor Trap #2: You could get a 25 percent “average annual return” for years and still not make a single dime or even lose money! This is due to the smoke and mirrors the Wall Street illusionists have been using to pull the wool over your eyes for decades. Don’t take my word for it – I exposed the mutual fund “rate of return” myth” here: http://www.bankonyourself.com/whats-the-rate-of-return-on-a-bank-on-yourself-plan.html [...] [...] Investor Trap #2: You could get a 25 percent “average annual return” for years and still not make a single dime or even lose money! This is due to the smoke and mirrors the Wall Street illusionists have been using to pull the wool over your eyes for decades. Don’t take my word for it – I exposed the mutual fund “rate of return” myth” here: http://www.bankonyourself.com/whats-the-rate-of-return-on-a-bank-on-yourself-plan.html [...]

]]> By: maggie http://www.bankonyourself.com/whats-the-rate-of-return-on-a-bank-on-yourself-plan.html/comment-page-2#comment-20011 maggie Tue, 07 Jun 2011 22:50:55 +0000 http://www.bankonyourself.com/?p=3835#comment-20011 It is like taking ten dollars out of your own pigbank and putting back ten dollars plus interest...in your own pigbank. Now your ten dollars is that much fatter. It is like taking ten dollars out of your own pigbank and putting back ten dollars plus interest…in your own pigbank. Now your ten dollars is that much fatter.

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