Personal Finance Blog for Retirement and Investment Advice

Two New 401k Revelations

May 13th, 2014 by Pamela Yellen | 1 Comment

If you’ve been a subscriber for a while or you’ve read my new best-selling book, The Bank On Yourself Revolution, it’s no secret that at the end of the day, I’m not a big fan of the 401(k).

Or the IRA, 403(b), or any other government “blessed” and controlled retirement account. There are many reasons for that. This recent blog post I wrote reveals one big problem – mutual fund fees, which are likely devouring far more of your savings than you realize.

But in the last couple of weeks, there have been new studies revealing just how devastating to your financial health a 401(k) can be:

Recent 401(k) Wealth-Killing Revelation #1:

A new academic study by two Yale and University of Virginia professors argues that millions of workers have been ripped off by excessive fees charged by plan sponsors and financial representatives to these plans.

The study concluded that…

[Read more…] “Two New 401k Revelations”

Dalbar 2014 QAIB Report Reveals the Truth About Investor Returns

April 30th, 2014 by Pamela Yellen | 2 Comments

I’m holding in my hands a hot-off-the-press Report from the well-respected research firm, DALBAR, Inc., about the actual returns investors have been getting in the stock market over the last 30 years. And it ain’t pretty… hot off the presses

The average investor in asset allocation mutual funds (which spread your money in a blend of equities and fixed-income funds) earned only 1.85% per year over the last 30 years!

These investors didn’t even come close to beating inflation, which averaged 2.8% per year.

The average investor in equity mutual funds averaged only 3.69% per year – beating inflation by less than 1% per year. (Was that worth the roller-coaster ride and sleepless nights?)

Mutual Fund Fees are Silent but Deadly Wealth Killers

April 18th, 2014 by Pamela Yellen | Leave a Comment

How would you feel if you discovered that every time you put $10,000 into your retirement account, $4,000 or more of it ended up going to pay fees over the next 20 years? And another ten years later, nearly $8,000 of your initial investment had vanished into other people’s pockets? High Fees

I’m guessing you wouldn’t be a very happy camper. In fact, you’d probably be mad as heck.

I hate to be the bearer of bad news, but this is exactly what’s happening to most investors right now. Which means there’s a VERY good chance it’s happening to you.

You see, I’ve been burning the midnight oil researching the fees in popular mutual funds – including the ones in many 401(k) plans – for a new course in financial literacy we’ll be rolling out soon.

The course will give you a step-by-step plan for ending all your financial worries in as little as 90 days… and it contains breakthrough strategies you won’t find anywhere else. I’ll be giving you more details about it over the next month or two, so stay tuned.

But in the meantime, what I discovered about what experts have called “the silent enemy in our retirement accounts” – fees that compound against you that are charged by mutual funds and 401(k) and IRA plan administration costs – will stun you.

Let’s start with the cost of popular Target Date Funds or TDF’s,” the “default investment” in many 401(k) plans.

Is Wall Street rigged?

April 8th, 2014 by Pamela Yellen | 3 Comments

How would you feel if you went online to buy something – for example, a TV that’s listed at $495.00 – but when you get your order confirmation and credit card statement, you realize you got charged $535.00 for it instead?

sticker shock When you inquire about the price hike, you’re given the run-around, but eventually you’re told that there was only one TV available at that price, and someone else bought it a split second before your order got processed. So they filled your order with the same TV at the then-available best price, which was higher.

And, they remind you, they have an “all sales are final” policy, so you’re stuck with the deal.

You’d probably raise holy heck, wouldn’t you? Or you’d vow never to patronize that company again, right?

So, you make your next online purchase from a different company… and the exact same thing happens! In fact, it happens every time you make an online purchase, adding up to significant lost dollars to you over time.

Well, as it was revealed last week, this is exactly what’s happening to stock market investors every day – and it’s been going on for years. And it’s costing every-day investors billions of dollars.

60 Minutes just did an exposé on it, titled “Rigged,” just as a much-anticipated new book by Michael Lewis called Flash Boys blew the lid off this latest scandal.

Lewis summed it up this way:

[Read more…] “Is Wall Street rigged?”

Bank On Yourself Revolution hits New York Times best-seller list!

February 28th, 2014 by Pamela Yellen | 6 Comments

I just found out my new book, The Bank On Yourself Revolution, hit #4 on The New York Times best-seller list the first week it was released!

It also hit #1 on Amazon and the Barnes & Noble website.

And it hit the USA Today best-seller list.

Order your copy here today and save 27%!

One week after the book was released, my publisher had to rush to do a second printing, because they said the book has been flying off the retailers’ shelves.

I’m incredibly gratified by this response, as I poured my heart and soul (along with a lot of blood, sweat and tears) into this book.

If you haven’t gotten your copy of The Bank On Yourself Revolution yet – or you’d like to get additional copies for friends and relatives – why not grab yours now, before the current stock runs out?

Order The Bank On Yourself Revolution at a 27% discount right here.
[Read more…] “Bank On Yourself Revolution hits New York Times best-seller list!”

The good, bad and the ugly of the new myRA

February 20th, 2014 by Pamela Yellen | Leave a Comment

You’ve probably been hearing about the new “myRA,” a new government-run retirement account that President Obama unveiled at his State of the Union address and plans to create with a stroke of his pen.

Its primary purpose is to offer a savings option to the 50% or so of U.S. workers who have no access to employer-sponsored retirement plans and have little saved for retirement.

The appeal is that it “guarantees a decent return with no risk of losing what you put in,” according to Obama.

Sounds okay so far, right?

I did some digging into the details to understand more about how this program will actually work… and to help you sort through the pros and cons of programs like this.

Below I’ve listed the good, the bad, and the ugly about this new program. But really, most of the bad and the ugly points apply to all government-run retirement accounts, including 401(k)’s, 403(b)’s, IRA’s, etc. So if you have one of these plans, I urge you to read this today.

The good…

A profound lesson on investing from the Wolf of Wall Street

February 6th, 2014 by Pamela Yellen | Leave a Comment

If you haven’t seen the Oscar-nominated movie, The Wolf of Wall Street yet, I’m not necessarily suggesting you see it.

It’s based on a true story of Wall Street’s excesses, and it’s chock-full of graphic scenes of sex, drugs and debauchery. And it’s l-o-o-o-o-o-n-g – about three hours.

The WOLF of Wall Street Poster But whether you decide to see it or not, there’s a scene in it that is so profound, I’m going to spill the beans about it here. It’s the best ten seconds of any movie I’ve seen in quite a while, especially given the 1,200-point drop in the Dow over the last couple weeks. But first, here’s a little background info…

The movie, directed by Martin Scorsese and starring Leonardo DiCaprio, is based on the autobiographical book by Jordan Belfort, which details his rise and fall on Wall Street.

Belfort had just finished training at a major Wall Street firm, and on his first day as a licensed stock broker, the world markets crashed. It was “Black Monday” – in October, 1987.

The firm was one of many that soon closed down, and Belfort was out of a job. But not for long. He soon discovered a world of white-collar crime, taking over a Long Island penny-stock cold-calling boiler room, and was soon making millions by convincing investors to buy stocks his company had invested in, and then selling the stocks for a huge profit. The investors were left with worthless holdings.

Ultimately, after a Federal investigation, Belfort pleaded guilty to securities fraud and charges of money laundering. Rather than face decades behind bars, he became a government witness. He ended up serving 22 months in prison and was ordered to pay his fraud victims $110 million in restitution. He was also barred from the securities industry for life.

Believe it or not, today Belfort gets paid big bucks by major corporations to teach their sales reps “the art of Straight Line Persuasion – how to create instant rapport, control the sales conversation and close every single deal that’s closeable.”

Really! You can’t make up stuff this good!

And he hasn’t paid most of the $110 million he owes to his victims, but that’s another story.

Nothing has really changed on Wall Street, as I reveal in the article I wrote this summer, “A Month of Scams and Scandals on Wall Street.” And JP Morgan Chase just gave a 74% raise to Chief Jamie Dimon in a year in which the bank paid more than $20 BILLION in fines and other legal costs.

Now for the Best 10 Seconds in the Movie

Infographic: The Crisis in Pensions and Retirement Plans

January 22nd, 2014 by Pamela Yellen | Leave a Comment

A brief history of retirement in the U.S.

Source: Accounting-Degree.org

How to become your own “banker”

January 10th, 2014 by Pamela Yellen | Leave a Comment

Over the holidays, I received a number of emails with good wishes for the New Year from subscribers who use the Bank On Yourself method to grow their wealth safely. Many also told me how they’re using their plans.

Derek Logan with his newborn granddaughter

One of those emails came from Derek Logan, a corporate accountant who is the textbook “poster boy” for someone who did all the right things we were taught to do financially, who decided to stop feeding the insatiable Wall Street Casino with his hard-earned dollars after seeing his retirement account value slashed in half several times.

Derek started his first Bank On Yourself plan about four years ago and wanted to update me on how he’s been able to actually use his plans to become his own “banker” during that time. Derek said he’d be happy to share his experience with subscribers to this newsletter, because…

It’s not about what I have done, but about what Banking On Yourself can do for anyone.”

Recent 401(k) Wealth-Killing Revelation #1:

The good…

Really! You can’t make up stuff this good!

Now for the Best 10 Seconds in the Movie

A brief history of retirement in the U.S.

This could be you… [Read more…] “How to become your own “banker””