October 2018 Was Among the Most Volatile Month for Stocks in 118 Years

October was one of the most volatile months for the Dow since 1900. Back then, we were hopping on the first electric buses in New York City and enjoying a new kind of sandwich called a “hamburger” in New Haven. And, we were piling onto an early “Loop the Loop” roller coaster on Wall Street.

Fast forward to October 2018… and enter the Zero-G Inversion Coaster. The Dow fell by over 1,000 points in two days. The S&P 500 dipped in and out of correction multiple times. The Nasdaq plummeted 700 points mid-month, soared over 300 points the next week, and then tumbled back down over 500 points toward month-end. It comes as no surprise that the Fear Index also hit a 3-month high.

It wasn’t Halloween that spooked the markets last month…

Investors had plenty to fear with trade wars, tariffs, rate hikes, Fed policy, underwhelming earnings, slumping housing data, and political partisanship run wild. And as the sugar high of tax cuts, low interest rates and low inflation wears off, there’s a pervading sense that we’ve reached some sort of flashpoint.

What keeps economists up at night? One very sobering question:

What if This Economy is “as Good as It Gets”?

[Read more…] “October 2018 Was Among the Most Volatile Month for Stocks in 118 Years”

Setting the Record Straight on What Bank On Yourself Is – and Isn’t

There are a lot of misconceptions about the meaning of Bank On Yourself. Some folks think it’s just glorified whole life insurance. Others think Bank On Yourself is merely the name of a book.

So, the Bank On Yourself team has created two separate articles. The first explains what Bank On Yourself is, and the second explains what it is not.

What Bank On Yourself Is

Our article on What Is Bank On Yourself? explains that Bank On Yourself is a safe wealth-building strategy – one that puts you in charge, by showing you how to fire your banker, bypass Wall Street, and take back control of your finances. That’s the meaning of Bank On Yourself in a nutshell.

But the article also discusses the benefits of the Bank On Yourself concept. We explain that Bank On Yourself is also the name of our company, and the words “Bank On Yourself” are in the titles of two New York Times best-selling books by Pamela Yellen.

What Bank On Yourself Is NOT

[Read more…] “Setting the Record Straight on What Bank On Yourself Is – and Isn’t”

Why You’ll Lose Money in the Market Even When You Invest Rationally

In his 1865 poem “If,” Rudyard Kipling famously wrote, “If you can keep your head when all about you are losing theirs … yours is the earth and everything that’s in it.”

That’s a big “if” at the moment. Let’s face it; few people are “keeping their heads” right now.

We’re drowning in a reactionary stew where everything from an exchange of ideas to a “taper tantrum” seems to cause a convulsive panic in the stock market.

And even if you don’t lose your head, you can STILL lose your money! Here’s why…

Admittedly, October has always been a devilish month for Wall Street. Black Tuesday was October 29, 1929. Black Monday was October 19, 1987. And the crash of 2008 happened on October’s doorstep on September 29, 2008,  when the Dow dropped over 777 points. On October 10 of this year, the Dow dropped 832 points – the third-worst point drop in history.

These are the days of falling acorns and Chicken Littles! It’s in this climate – despite historically low unemployment, robust GDP, and soaring consumer confidence – that 800-plus point sell-offs are even possible.

The problem is not just the prevailing concerns about high debt, trade wars, and rising interest rates; it’s the collective uncertainty and reactionary group-think over which we have no control.

Contagion Has Become the Wild Card Enemy of Wealth Accumulation

[Read more…] “Why You’ll Lose Money in the Market Even When You Invest Rationally”

Flat Earthers and Blind Faith Stock Market Bulls – What Do They Have in Common?

They are the ultimate conspiracy theories – the beliefs that the earth is flat and that economies are not cyclical.

The Flat Earth Society (a movement that is active and growing today) finds the notion of a horizontal earth far more plausible than a round planet perched on an axis. To their members, gravity is an illusion and objects are not pulled down, but rather continually accelerate upward.

Adopting this notion requires one to reject all prevailing scientific wisdom and research. And despite centuries of empirical evidence, some Flat Earthers believe that one could literally walk off the end of the world.

Those who think the current bull market will continue to rise without a crash or major correction are equally illogical. Despite generations of economic theory, Blind Faith Bulls have sunk most of their net worth into equities on the unquestioning belief that stocks will climb unabated.

Flat Earthers and Blind Faith Bulls Share a Common Suspension of Disbelief…

[Read more…] “Flat Earthers and Blind Faith Stock Market Bulls – What Do They Have in Common?”

Inside Mayer Rothschild’s Secret Counting House: How to Live Like the Rich Do

Ah, to be of the privileged and cultured class – butlers, trust funds, planes, yachts, and race cars. What’s it like to have all that money? Dudley Moore, in the 1981 film Arthur, a comedic flick about a cavorting socialite and heir to a massive fortune put it most succinctly – “It doesn’t suck.”

Wealth Doesn’t Just Happen

While it certainly helps to inherit millions, according to Forbes, an astonishing 67% of the world’s billionaires, made it on their own. And the majority started out as either middle class or downright poor.

Likewise, most of America’s wealthy didn’t win the lottery or inherit their money. Many current millionaires have earned their fortunes in tech, finance, fashion, and media, while prior affluent generations took advantage of the rapid advancements of the industrial revolution by investing in railroads, oil, steel and land.

Mayer Amschel Rothschild, the founder of one of the world’s most storied banking dynasties, was an orphan from a Jewish ghetto in Frankfurt. He went to work at 13 with little formal instruction in money or finance and taught himself the intricacies of collectible coins.

John D. Rockefeller, the oil tycoon and America’s first billionaire, grew up middle class. His father was a traveling salesman who sold a tonic and elixir called “Rock Oil” that he claimed cured cancer. The younger Rockefeller went to work at 16 as a bookkeeper earning 50 cents a day.

The forefathers of these influential families shared common traits of hard work, discipline, and principled investing.

Their rise to power and prosperity was neither haphazard nor accidental. Rather, it was part of a careful plan that involved the strategic growth and preservation of wealth

[Read more…] “Inside Mayer Rothschild’s Secret Counting House: How to Live Like the Rich Do”

When Will the Next Market Crash Occur… and What Will Cause It?

I recently promised to answer two questions we’ve been getting…

When will the next market crash happen? And what will cause it

As the physicist Niels Bohr noted,

Prediction is very difficult, especially if it’s about the future.”

But here are five things we do know…

  1. Last month we entered the longest-running bull market in history, at 9½ years
  2. No bull market has ever made it to its 10th birthday
  3. The second-longest bull market was the dot-com-fueled rally of the 1990s which caused investors losses of nearly 80% when it flamed out
  4. While there’s no guarantee this bull market will crash before it hits its 10th birthday in early 2019, we do know that, historically, the longest-running bull markets go out “with a bang, not a whimper”
  5. As the experts who study behavioral finance note again and again, we humans have an enormous capacity for forgetting the lessons and pain of past crashes, and most people will be as woefully unprepared for the next crash as they were for the previous ones

Let’s Look at What Will Cause the Crash…

There are a number of things brewing that might trigger the next collapse. Take your pick: [Read more…] “When Will the Next Market Crash Occur… and What Will Cause It?”

3 Key Ways You’re Underestimating Your Retirement Costs

Take a moment and think about how much savings you’ll need in retirement.

Write that number down.

Now here’s a reality check: That number is probably low.

Not because of your math skills, but because most people underestimate what their costs will be in three critical ways.

A new study found that 37% of retirees say their overall retirement cost estimates turned out to be low.

And when it comes to healthcare, 44% of retirees said they’re facing higherx costs than they expected. (Source: 2018 Retirement Confidence Survey by Employee Benefit Research Institute)

Three Ways You’re Probably Underestimating Your Retirement Expenses…

#1. Assuming you’ll spend less in retirement than when working

[Read more…] “3 Key Ways You’re Underestimating Your Retirement Costs”

Have You Seen This Amazing Amazon.com Review of The Bank On Yourself Revolution Book?

I’ve seen hundreds of reviews of my latest book, The Bank On Yourself Revolution, since its publication in 2014. And they’re fascinating to read because they’re all over the map. Most readers praise the strategy, although a few have damned it. (I could be mistaken, but I don’t believe anyone who has actually used the strategy for themselves has written a review saying they are unhappy.)

In any case, you can see some of the Bank On Yourself reviews here.

As you can imagine, the Amazon reviews for The Bank On Yourself Revolution are highly opinionated!

On the day I wrote this post, there were 138 reviews of The Bank On Yourself Revolution on Amazon.com. I’m thrilled that Amazon customers are giving us their two cents’ worth about the book.

A Very Unusual Review of The Bank On Yourself Revolution on Amazon.com

[Read more…] “Have You Seen This Amazing Amazon.com Review of The Bank On Yourself Revolution Book?”

Wall Street Journal Study: 40% of Pre-Retirees Will Have to Reduce Their Lifestyle

A new study by the Wall Street Journal confirms it: Many Americans will have to trade their “golden years” for a retirement filled with scrimping and sacrifice.

Pre-retirees aged 55 through 70 today are the first generation that was “left on their own” to prepare for retirement, according to Alicia Munnell, Director of the Boston College Center for Retirement Research.

As pension plans that provide a guaranteed income for life disappeared, 401(k)s, 403(b)s, IRAs and similar government and employer-sponsored plans replaced them.

It’s an experiment that has failed many. According to the Wall Street Journal, for Americans approaching retirement age…

“Their median incomes, including Social Security and retirement fund receipts, haven’t risen in years, they have high debt, are often paying off children’s educations and are dipping into savings for aging parents.

“Their paltry 401(k) retirement funds will bring in a median income of under $8,000 a year for a household of two.” [Read more…] “Wall Street Journal Study: 40% of Pre-Retirees Will Have to Reduce Their Lifestyle”

How Your Credit Score Affects Your Life – Another Reason to Fire Your Banker

I just got something in the mail that made me madder than a mosquito in a mannequin factory.

It ought to tick you off, too, and give you some really good reasons to fire your banker. Here’s the scoop…

I just got a bill from our auto insurance company – one of the biggies which shall remain nameless, for now.

They informed us that our premium was jacked up because of information they got from consumer reports.

Specifically, they cited information they obtained on li’l ole me (gasp!) about my “percent balance to high credit for bank revolving accounts reported in the last 6 months.”

Yeah, I know it sounds like gibberish, but here’s what really ticked me off…

I show people how to fire banks and finance companies and become their own banker! [Read more…] “How Your Credit Score Affects Your Life – Another Reason to Fire Your Banker”