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

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.”

Reuben echoed that by saying…

Is anyone really surprised, it’s the fox guarding the chicken house, the blind leading the blind, the king has no clothes.”

And Daniel summed it up in one sentence…

Bank on Wall Street or Bank on yourself…a very simple decision.”

One thing we know for sure about life is that it’s unpredictable – stuff happens

The only actual reason or “excuse” given in the AAII review for why Bank On Yourself is “too good to be true”  had to do with policy loans.  But the ability to take loans from your life insurance policy has proven to be a real boon, and sometimes a life saver, for several commenters…

James wrote about how his wife Verna broke her wrist a few months ago.  Even though they had only been participating in Bank On Yourself for less than a year, they were “able to borrow enough to get us through surgery, the therapy, and all the physicals that were needed to allow my wife to get back to work.”

Medical BillsDeana says her Bank On Yourself policy “saved me a lot of hassle, frustration and money when I needed a loan to replace a transmission on my car, pay off medical bills, purchase a much needed storage shed and buy a used car.” It also helped her after her income from work was reduced.

“Unlike a bank loan, I set up my own payment schedule and set up how much I can afford to pay back every month and when I want to pay it back,” wrote Deana, who notes she did a lot of research into the concept before moving forward.  Now she says, “as with many other people (Bank On Yourself) is the best money investment I have ever made in my life.”

Troy says “Bank On Yourself is a life saver” and “we use our policy to buy every thing from our boats to repairs for our rentals – it’s a great way to borrow money when needed, pay it back, borrow it again, and watch the cash value continue to grow.” He ends by saying, “Keep up the fight, Pam, and thank you for educating all of us.”

Rik just started his Bank On Yourself policy six months ago, but “just took a loan out for $29,000 for a down payment on a new condo.  Compare that with the hassle of taking money out of a 401k.”

Bank On Yourself saves businesses, too

Allen wrote, “I, too, used my policy to expand my business in the last few months when no banks were (and still aren’t) lending money and have had similar results with my return on investment.”

And David Brimhall started a policy in 2004, “after losing 80% of my retirement account.” His money is now doing double duty for him and he has taken 9 loans, investing some of those funds.  As a result, “I have real retirement now,” and investments making money for him.Bank On Yourself can be a real lifesaver...

As I noted in my rebuttal to AAII, you do not have to sell assets to use your equity in a Bank On Yourself policy to invest it elsewhere or to make purchases.  And some companies will even pay you the exact same guaranteed cash value increase and dividend as though you hadn’t borrowed a dime.

This is true for “non-direct recognition” policies, which don’t “recognize” you have taken a loan when crediting dividends.  The policies recommended by the Bank On Yourself Professionals meet the requirements that maximize the power of the concept.  These Professionals also have advanced training in how to structure policies to maximize the growth of your cash value and minimize the taxes.  To get a referral to a Bank On Yourself Professional, simply request a free Analysis that will show you how much your financial picture could improve if you added Bank On Yourself to your financial plan.

And Will posed the question…

How can you tell the difference between a Bank On Yourself user and an ordinary person?  The BOY user can buy a business with the BOY policy loan, and the non-Bank On Yourselfer can work for that business.”

Bank On Yourself lets you have a retirement income you can predict and count on

“Ahhhh – let AAII say what they may… but I know what my retirement will look like… I cannot wait to start another policy.  Keep up the great work, Pam,” wrote David.

“My hard-earned dollars have always lost money with any commodity/stock/bond type investment.  I have never had a gain except with a CD and that barely kept up with inflation,” noted Ang. “My Bank On Yourself policy gives me such security.  I can sleep at night.  It reminds me of  (the movie) ‘It’s a Wonderful Life’ – we are all banking on each other (instead of padding corporate executives’ lifestyles).”

do not give up - motivational reminderI am thankful I found Bank On Yourself, otherwise, I may never see retirement in my future,” wrote Karen, who is starting her first policy now, at the age of 59. “Yes, I have a financial representative and am a very disciplined investor in my 403(b) and, yes, I rode out the downturns and have not nearly recovered to this point… If I had known about this even 10 years ago, I might be looking at retirement, instead of working an additional 8-10 years.”

And William bemoaned how he lost 30% in his 401(k) between 1999 and 2001, and then another 40% in 2008 – after he had retired, because “I followed the advice of those who are paid to know and each time ‘rode it out.’ I do not want to go through any more of these ‘cycles.’”

Improve Your Financial Picture…

To find out how much your financial picture could improve if you added Bank On Yourself to your financial plan, request a free Analysis. If you’re wondering where you’ll find the funds to start your plan, the Bank On Yourself Professionals are masters at helping people restructure their finances and free up seed money to fund a plan that will help you reach as many of your goals as possible in the shortest time possible.

Paul made some excellent points with this comment:

How easily people forget the lessons of history.  Our ancestors survived the Great Depression by using Cash Value Life Insurance and fixed annuities.  They didn’t use the investment vehicles touted by so many.  They relied on… the asset class so often overlooked today when all else is in flux.”

Paul also made a point I hadn’t even thought of when I wrote my AAII rebuttal – that…

Other loans must be repaid with taxable and probatable cash from elsewhere in the estate.  Death doesn’t cancel (other) debt.”

One of my favorite comments was this tongue-in-cheek response from Jim Vana…

WOW! After reading all the glowing posts about the Bank On Yourself system, I’m afraid I may have a different viewpoint. I set up plans for me and my wife and we recently received our first annual reports. But I hate to inform you, it’s no dang different!! Yes the policy loans need to be paid back. Yes interest is paid as well. And just like those typical “FAT CAT” bankers, my B.O.Y. banker is using MY MONEY to buy fancy cars, take exotic vacations and do all the other fun stuff at MY EXPENSE.  And he’s probably socking away tons of MY MONEY for HIS RETIREMENT!!!!!!! Oh wait a minute. THAT’S ME!!!!!!!! Never mind.


And Steve summed up the beauty and simplicity of Bank On Yourself this way: “My Bank On Yourself plan consolidates my emergency fund, liquid savings, retirement and life insurance into a single flexible vehicle. This makes it really easy to manage my money!”

AAII gets poor marks from former members

“I joined AAII a few years back because their publicity made it sound simple and profitable.  But when I got their newsletters with investment recommendations, they left me in a fog,” wrote Val.  Park Red Xechoed that with, “I subscribed to AAII several years ago, but my eyes always glazed over trying to submerse myself into their data.”Red X

I will confess that I delighted in JC’s comment: “I’m glad you revealed this about AAII – I had a membership application sitting on our table, and was intending to join. Due to the ‘contrarian indicator’ effect of AAII’s member surveys mentioned, and to the closed-mindedness of the organization to even print your response and let its members decide, I have decided AAII is not for me.”

I believe they call that “pay back”!

Thank you to Mark for this very appropriate quote from Stephen Covey…

“He who is good with a hammer will see everything as a nail.”

Steve may have summed it up best with this insight:

The AAII comments sound like they were drawn from the good ole’ boy tank of sour grapes.  I’m excited about Bank On Yourself, which has provided a much needed transition to a vehicle that is safe, predictable and provides not only a solid nest-egg for retirement, but also a funding pool over which I have complete control. I’ve seen nothing else that allows you to have your cake and eat it too.”

Don’t envy these commenters – you can join them! If you haven’t already requested a Bank On Yourself Analysis, it doesn’t cost anything to find out what your bottom line numbers and results could be. You can take the first step now.

Now for the list of prize winners…

As I mentioned, there were so many thoughtful and entertaining comments to my AAII rebuttal blog post that I simply couldn’t narrow it down to just three winners. So, I decided to award 10 commenters their choice of a $25 dining gift certificate or a personally autographed copy of my best-selling book.  Those 10 winners are listed below and if your name is on the list, you should already have received an email asking you which prize you prefer.

And I want to thank everyone who commented from the bottom of my heart for your support.  I will keep fighting the good fight with your help!

Here are the 10 prize winners (listed by the name they used in their post):

Steve Hiss Jim Vana
Jeffrey Smith Lloyd Keller
Jef Allen
Val Greenwood Deana Downing
Jake Yetterberg Paul

We want to hear from you, too!  Just enter your comment in the box below…


  1. I have two questions that still linger after talking to two different BOY agents;
    1. How does a 60 year old benefit from using BOY?
    2. Let’s say I have a cash value of $500,000 in a BOY account and the U.S.Dollar takes a 30% to 40% hit. My cash is stuck in the Dollar, so I will have wiped out the growth.
    The only way I know to protect dollars held in financial instruments is to hold them in commodity dollars (CAD, AUD) or in hard assets.
    Any suggestions?

  2. Good morning or good afternoon depending when you read this e-mail, I am not presently with (BOY) Bank On Yourself, Iam waiting on my taxes to come back this year so that I can join what I think is a very good investment, what I really like about it is the flexability, to borrow from my self and to pay myself back, finally something americans can count on and have some kind of peace at the end of the tunnel.I which I found something like this years ago, thank you.

    God Bless

  3. Wait a minute! You say that “Rik” took out a loan from his policy after only 6 months for $29,000! More evidence that this idea is really for those who are wealthy. If any one had enough cash available to fund a policy in less than 6 months with well over 29k is not really in a lot of financial trouble are they? You state this like the policies are magic and that the cash value grew to that amount because the benefits are so wonderful. Look, the only way for the cash value to be that high in 6 months is to pay much more than that out of pocket. Nothing magical about that. Come on! Oh, and what’s the face value of that policy? Too many details left out in my opinion.

    Frankly, anyone who had to borrow from their policy so soon and borrow that much was not in a position to start the BOY plan in the first place. Sounds like poor planning on his part not an example to use to celebrate what BOY can do.


    • Wait a minute! I did NOT say that “Rik” took out a loan from his policy after only 6 months for $29,000. Rik said he did that, and if you actually bothered to pay attention to the facts, Rik also noted that he “took a loan out for $29,000, in case I need it for a down payment on a new condo.”

      Rik is obviously “not really in a lot of financial trouble,” but then that is not a requirement to use the Bank On Yourself strategy.

      If you read Rik’s comment, you’ll also note that his policy was “back-dated,” which increases the early cash values of the policy. You are correct in saying that not everyone is in a position to fund a policy with that much premium. However, some people are, which is why I have said (at least) 100,000 times that no two policies are alike and each is custom tailored to the client’s unique situation.

      And many people actually start the policies with the specific idea in mind that they will turn around and borrow against it shortly after issue, in order to use it to become their own financing source. That is the policyowners option, which Rik took advantage of.

      Dean, I have already tried to explain to you the many misunderstandings you have about this concept and why I do not feel it is appropriate for you. (Did you even bother to read it?!?!) At this point, my best advice to you is to move on and channel your abundant energy towards something more constructive. I’m done explaining this to you.

  4. Looks like $10 invested for 9 years on the “growth pattern graph” grows to $200K …. a 200% compound annual growth rate ( CAGR ) . That’s twice as good as Apple Computer’s Growth rate; one of the highest growth rates in U.S. corporate history !! Go BOY !!

    • Not sure what graph you’re looking at, but Bank On Yourself is not a magic pill. The return on these plans is equivalent to about 6-7% in a tax-deferred plan.

  5. I recently completed reading “Becoming Your Own Banker” fifth edition (copyright 2003) by R. Nelson Nash. I would like to know how your banking concepts compare and/or are related to Mr. Nash’s?

  6. That’s an awful lot of cash value in a short period.The one example I looked at showed a return in one year of 2600.on a policy with 5200. a year premiums. The money has to go somewhere in order to produce that kind of a return.

  7. hey, Are physicals required before being approved for setting up a policy? I understand a policy can be set up in my children name,but will they be required to take a medical exam? how does this work?

  8. She broke her wrist and still had to pay out of pocket? Why did her insurance not cover her wrist fracture? Was she employed at the time? Believe it or not but the insurance company is still making money every time you “take out a loan on your own policy.” Not to mention the extremely high cost of a whole life insurance policy. That facts show that it is better to buy term life and invest the difference of cost between whole life and term life.

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