Bank On Yourself, A Strategy for Any Economy?

With so much uncertainty in the economy and the stock market, people have been asking us how the Bank On Yourself method will hold up under various economic scenarios.

So, I thought you may find it helpful to have the answers to these seven commonly asked questions…


  1. How safe is my money in a Bank On Yourself policy?
  2. What do the companies that offer Bank On Yourself-type policies invest in to protect and grow my money even in volatile times?
  3. How would a decline in the dollar affect this strategy?
  4. How will Bank On Yourself policies hold up if we have high inflation?
  5. How will Bank On Yourself be affected if deflation becomes a problem?
  6. Will I miss out if I put money in a Bank On Yourself policy and the stock market booms?
  7. What if I lose my job and can’t pay my premiums?

Here are the answers to these timely questions:

1. How safe is my money in a Bank On Yourself policy?

The companies recommended by Bank On Yourself Professionals are among the financially strongest life insurance groups in the world. They are, in essence, owned by the policy owners, which lets them focus on the long-term best interests of the policy owners, rather then the short-term demands of Wall Street.

They’ve paid dividends every single year for more than 100 years, including during the Great Depression.

Life insurance companies are strictly regulated and have four layers of protection:

    • They are audited regularly by the state insurance commissioner’s office (sometimes by dozens of states), to ensure they maintain sufficient reserves to pay future claims and are on solid financial ground
    • If a company gets into financial difficulty, the state insurance commissioners office can take over and run the company in the interests of policy holders – usually a failed insurer’s business is then taken over by another company
    • Most insurance companies are audited regularly by several independent rating companies
    • Additional policy owner protections may be available on a state-by-state basis
      • Over 90% of their portfolio is invested in investment-grade fixed-income assets
      • Less than 1% is invested in U.S. Treasury or other government debt
      • Their bond portfolios are well diversified across many industries and companies, with no investment representing more than 1% of assets
      • Due to their financial strength and reserves, they have the ability to hold on to any assets that may decline in value for many years until they recover
      • They had virtually no exposure to the risky investments that caused the market meltdown of 2008
      • They have NEVER missed paying an annual dividend to policyowners for more than 100 years, including during the Great Depression!
    • Bank On Yourself gives you an advantage over traditional investments, where you may not only lose the purchasing power of your money, you could also lose some or all of your hard-earned dollars, if the value of your investment tanks.
    • Bank On Yourself policies are designed to become more efficient every single year. The growth of both your cash value and the death benefit is guaranteed AND exponential, which in itself gives you some protection against inflation.
    • Your premium in a Bank On Yourself-type policy is fixed for life – it will never increase. So if inflation does become a factor, you’ll be paying premiums with ever cheaper dollars

2. What do the companies that offer Bank On Yourself-type policies invest in to protect and grow my money even in volatile times?

To find out what your bottom-line numbers and results could be with Bank On Yourself, request a free Analysis here

3. How would a decline in the dollar affect this strategy?


No one knows for sure what direction the dollar will go. The current economic environment can change any time, and it can turn on a dime, as it has in the past. We are a global economy, and the actions of other nations impact us, as well.

In an article from MoneyCentral when the dollar was taking a beating in 2009 (, on October 13, 2009), it was reported that central banks in numerous Asian countries were “actively buying dollars to check its fall against their currencies.”

Why do you think they would do that?

The reason given is that their exporters “can’t handle a drop in profitability and competitiveness,” if the dollar drops too far. Their prosperity has been in part due to a strong dollar, and “they aren’t going to give up all that easily.”

And, as reported on August 24, 2011, “a weak dollar may be one of the bright spots in the U.S. economy, and it could be the gift that keeps giving.” The article spelled out several ways the U.S. benefits from a declining dollar.

The point being that it’s not a black-and-white issue and no one can accurately predict what will happen, except that it probably won’t be what you imagine.

Since you must “park” your money SOMEPLACE, you would be hard pressed to find a safer, more advantageous place to put your dollars – in good times or bad – than in a Bank On Yourself-type policy. These policies have survived and even thrived for over 160 years in virtually every economic situation imaginable!

If you still think you have a better solution than Bank On Yourself, why not test it out by taking the $100,000 Challenge? If you’re right, you could pocket an easy $100K.

4. How will Bank On Yourself policies hold up if we have high inflation?


The insurance companies recommended by Bank On Yourself Professionals have most of their assets in long-term investment-grade corporate bonds. When inflation drives up interest rates, bond interest rates typically increase, which can increase policy dividends as well. This is precisely what has happened during high inflation periods in the past.

In addition:

One value of having money in a policy is that you HAVE the money, it is guaranteed to continue to grow, and it will be available for you to use when you need or want it.

declining dollar

(Note – I am referring to the mathematical definition of “exponential growth.”)

declining dollar

Compare that with the term insurance policies so many financial “gurus” recommend – your death benefit stays level, which means it loses real value every single year.

Example: If you buy a $250,000 20-year term policy at age forty, and inflation averages only 4% a year during that time, your policy would lose 56% of its value. Your family would get less than half of what you signed on for!

Plus, you have nothing at all to show for the premiums you paid, unless you happen to die during the term of the policy (and studies shows only 1% of term polices ever pay a claim).

Would you like to see what “guaranteed, exponential growth” would look like if you added a custom-tailored Bank On Yourself policy to your financial plan? Simply request a free, no-obligation Analysis to find out.
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5. How will Bank On Yourself be affected if deflation becomes a problem?


In a deflationary environment, income is king. So, investors would be struggling to find safe, dependable sources of income. Which means top-quality bonds which provide that income – and which make up a major portion of an insurers portfolio – would boom.

shrinking dollars

Bonds do well in a deflationary environment because as interest rates decline, the higher interest being credited on existing bonds become more valuable. The companies used by Bank On Yourself Professionals are some of the financially strongest life insurance groups in the world.

shrinking dollars

They have the reserves to be able to hold bonds until maturity, if necessary. So (older) bonds with a higher interest rate help offset (new) bonds that may be purchased at a lower interest rate.

Key Point: It’s important to remember that the guaranteed cash values will continue to grow – and the growth gets better every year, and there’s nothing you can do about it!

6. Will I miss out if I put money in a Bank On Yourself policy and the stock market booms?


If you crave the adrenalin rush you get from the volatile roller coaster ride of stocks and other investments, the safe and predictable growth of Bank On Yourself may bore you silly.

We live in an instant gratification society and some people are looking for a quick fix or magic bullet – they want something they can put under their pillow before they go to sleep at night and wake up rich in the morning.

Well, for most of us, it ain’t gonna’ happen. How many more investment bubbles have to burst before we (really) learn that lesson?

Take a look at this side-by side comparison of the growth in the stock market versus Bank On Yourself over the long-term:

The chart on the right, showing the growth in a typical Bank On Yourself–type policy, is based on the actual growth I’ve received in one of my own polices so far, along with the projected growth based on the current dividend scale.

Remember that dividends aren’t guaranteed, but the companies recommended by Bank On Yourself Professionals have paid them every single year for more than 100 years.

Once credited to your plan, both your guaranteed annual increase and any dividends you received are locked in. They don’t vanish due to a market correction. Your principal is locked in, too.

hot investment

On the other hand, the chart above of the Dow over the past 38 years reveals long periods during which the market went nowhere and then a lengthy period of extreme volatility. There’s also the fact that the market can (and does) tank when you least expect it, ruining your best laid plans for a secure financial future.

hot investment

When you Bank On Yourself, there may be times when you feel “left out” – like when your friends start bragging about the killing they’re making in the latest “hot” investment that everyone’s jumping on – real estate, tech or oil stocks, commodities, currency, gold – you name it.

But Bank On Yourself is all about building a solid financial foundation and a secure future. You’re not going to see those thrilling spikes, but you’re also not going to have those unpredictable, heart-stopping losses that inevitably follow.

And that’s when you’ll thank your lucky stars for your Bank On Yourself plan

Besides, if an investment opportunity comes up that you want to take advantage of, you can do that by using equity from your Bank On Yourself policy. Chapters 7, 8 and 11 of my best-selling book are loaded with examples of people who did just that. And at least you’ll know you’ll get the same guaranteed annual increase and dividends on the money you borrowed, even if the “hot” investment doesn’t pan out.

Note: Not all companies offer a policy that has this feature, which is another reason to work with a Bank On Yourself Professional who knows how to properly structure your plan for maximum growth and knows which companies offer the policies that maximize the power of this concept. You’ll get a referral to one of only 200 advisors in the U.S. who have met the rigorous requirements when you request a free Analysis.

Let’s take a closer look at the typical growth pattern of a Bank On Yourself-type policy. This chart is from one of my own policies, and shows the growth I’ve already received, plus the projected growth, based on the current dividend scale.

No two policies are alike, because each is custom-tailored to the client’s unique situation and goals, so your growth curve will look different. But did you know that you can see what your growth would look like before you make a decision about whether to move forward? You’ll find out when you request a free Analysis here.
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7. What if I lose my job and can’t pay my premiums?


The design of a Bank On Yourself-type policy gives you great flexibility. That’s because typically at least 50% of your premium will be directed into a “Paid Up Additions Rider” (PUAR), with the rest going towards your “base” premium. The PUAR is the little-known option that significantly turbo-charges the growth of your cash value. You could have up to 40 times more cash value, especially in the early years, when your policy includes this rider.

The kind of policies most financial “gurus” and advisors talk about grow much more slowly because they do not include this rider.

Because paying the premium that goes into your Paid Up Additions Rider is optional, in a pinch, you can cut back on or stop paying that premium. Some companies will even allow you to catch up on that premium later, as your financial situation improves.

You can also use your cash value and dividends to pay your base premium, when cash flow is tight.

However, in the first year or so, if you are unable to pay your base premium and you don’t have enough cash value to cover it, your policy could lapse, and you wouldn’t get back every dollar you put in.

Do you suffer from “paralysis by analysis”?

Paralysis by Analysis

I hear from people every day who tell me they want to add Bank On Yourself to their financial plan, but they haven’t quite been able to make the leap yet.

Paralysis by Analysis

They worry about what direction the economy is going. They want to see what the political climate will be. They want to have some kind of certainty in an uncertain world.

You’ve probably heard of “The Serenity Prayer” and this excerpt from it, which seems particularly appropriate today:

serenity prayer quote

There are some things we simply can’t control. Not taking action is actually deciding to let chaos and uncertainty rule our lives.

There may never be a “perfect” time to take the steps that can enable you to take back control of your financial future.

Bank On Yourself is not a magic pill, as I’ve said many times. I don’t believe there are any magic pills.

But what I do know is that Bank On Yourself provides a long-term solution to a long-term problem. And the only regret expressed by most people who use it is that they didn’t know about it sooner.

If you haven’t already started to Bank On Yourself, request your free Analysis now – and start taking back control of your financial future today.

Dust off your Dow 10,000 cap again

As I write this, the Dow is flirting yet again with the 10,000 level – something it has done dozens of times since it first closed above that threshold more than 11 years ago!

Dow 10,000 Commorative Hat

People are understandably nervous, as evidence abounds that the economic recovery is faltering.

An astonishing fact was revealed in a cover story in “The Hulbert Financial Digest” July issue, titled, “Slow and steady wins the race.” The digest is an independent rating service that has tracked investment newsletters for the past 30 years.

[Read more…] “Dust off your Dow 10,000 cap again”

Wall Street Journal Exposes Stock Market Myths!

A very revealing article appeared in the Sunday, July 25 edition of the Wall Street Journal entitled, “Ten Stock-Market Myths that Just Won’t Die.”

Maybe you don’t quite believe what I’ve been saying for years.  This article confirms exactly what I’ve been trying to tell you…

WSJ 10 Stock-Market Myths That Just Won't Die

This article is must-reading for anyone who’s been scratching their head and wondering…

If what they say about the long-term returns you should be able to get in the stock market is true, how come I’m not rich?!?

Please pay particular attention to…

Myth #1: “This is a good time to invest in the stock market”

Myth #2: “Stocks on average make about 10% a year”

And the article author’s insight into Myth #10: “Stocks outperform over the long term” is priceless.

I’ve quoted many sources confirming what this Wall Street Journal article says.  How many more sources do you need to hear it from, before you 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?
Request Your Analysis Button

gambling with your financial future and start knowing how good it could be!

Four fascinating facts that affect your finances

I just came across these four surprising new facts that affect your money and finances…

Fascinating Fact #1: 61% of boomers fear outliving their money in retirement more than they fear death

That’s according to a new study.1

Maybe you’re one of them.  It appears that lots of boomers should be scared out of their wits – almost half of them could run out of money in retirement, according to a new study by the Employee Benefit Research Institute.

In fact, most employees recently surveyed – regardless of age – say they aren’t saving enough money for retirement.2

Many people are No more meals outadjusting to “the new normal” by postponing retirement.

But you may not have a choiceNearly four in ten retirees say they were forced out of work earlier than they’d planned, because of layoffs, poor health, or the need to take care of a loved one.3

And, for those already retired, 60% say they have been forced to do without things they had taken for granted, to make ends meet.4

Things like meals out, new books and movies, travel, new clothes and home improvement projects.

Can you live without those things?  Sure.

But why should you have to, after a lifetime of hard work and sacrifice?!?

[Read more…] “Four fascinating facts that affect your finances”

Famous people who use the Bank On Yourself method

There’s one surprising thing Walt Disney, J. C. Penney and the Pampered Chef have in common – they all used the Bank On Yourself method to start, grow and/or finance their businesses!

Walt Disney borrowed from his life insurance in 1953 to help fund Disneyland, his first theme park, when no banker would lend him the money.1

Following the 1929 stock market crash, famous retailer J. C. Penney borrowed from his life insurance policies to help meet the company payroll.2 Had he not had ready access to capital, the company probably would have been forced to close its doors, adding even more people to the unemployment line.

The Pamperd Chef used dividend paying whole life insurance loan for initial capitalization

In 2002, Doris Christopher sold her kitchen tool company, the Pampered Chef to Warren Buffett for a reported $900 million.  Seven years earlier, she launched the company with a life insurance policy loan.3

The Pamperd Chef used dividend paying whole life insurance loan for initial capitalization

Foster Farms was founded in 1939 when Max and Verda Foster borrowed $1,000 against their life insurance policy to buy an 80-acre farm near Modesto, CA.4

Senator John McCain secured initial campaign financing for his presidential bid by using his life insurance policy as collateral.3

So-called “permanent” or cash value life insurance (versus term insurance, which is like renting insurance) builds up cash value that policy owners can use in difficult times as a ready source of money to cover personal or business expenses for emergencies and even to cover insurance costs.

[Read more…] “Famous people who use the Bank On Yourself method”

Hold your financial course or change your course?

“Those who can't remember the past are condemned to repeat it.” - George Santayana
The Dow has dropped below 10,000 several times recently – a level it first reached more than eleven years ago and has since bounced over and back an astonishing 63 times!

Millions of people who were counting on their homes to help fund their retirement now have no equity to count on, because they owe more than their homes are worth.

Credit is still extremely tight for both businesses and consumers, underscoring just how little control we have when we have to rely on other people’s money.

As we face continuing economic challenges, many people are wondering… what does the future hold?

Ever hear the old saying, “Change is the only constant?”  Today that is clearly true more than ever!  Stephen Covey, author of the run-away best seller, Seven Habits of Highly Effective People, tells the following story:

[Read more…] “Hold your financial course or change your course?”

How will the debt crisis affect Bank On Yourself?

A question we are getting frequently right now is how safe is your money in a Bank On Yourself plan if the debt crisis in Europe continues and spreads to the United States?

Let’s start by answering the question…

What do life insurance companies invest in to be able to deliver on their promises to policy owners?

Life insurance companies are highly regulated and required to maintain sufficient reserves to ensure they can pay all future claims.

They are regularly audited by the state insurance commissioners’ offices, and sometimes by dozens of states, to ensure they are on solid financial ground.  And a multi-layer safety net exists to assure your money in a life insurance policy is secure.

Safety Net

You may be wondering, “What about AIG?”  Many people missed the fact that AIG’s problems were caused by a holding company, not its life insurance subsidiaries.  Their insurance companies were walled off from the problems, have always been solvent and did not receive a bailout.

The companies recommended by Bank On Yourself Professionals are among the financially strongest life insurance groups in the world.

Safety Net

They enjoy some of the strongest surplus positions in the industry, approximately double the industry average.

These companies are, in essence, owned by policyowners, rather than stockholders, which allows them to focus on the long-term interests of policy holders, rather than the short-term demands of Wall Street.

Here’s what the companies used for Bank On Yourself invest in:

[Read more…] “How will the debt crisis affect Bank On Yourself?”

Dow 11,000: Déjà vu all over again?

Bill Clinton was President, the world awaited the potentially disastrous consequences of the Y2K computer bug, and – oh, yeah – the Dow closed above 11,000 for the first time in history.

Yogi Berra

The date was May 3rd, 1999, and to quote Yogi Berra, nearly eleven years later,

This is like deja vu all over again”

Yogi Berra

The Wall Street spin-makers are pointing out what a “big accomplishment it is for a measure that was below 7,000 only a year ago” to recapture the 11,000 level.

Before we pop the cork on a bottle of champagne, here’s a few sobering questions to ask yourself…

[Read more…] “Dow 11,000: Déjà vu all over again?”

What’s the rate of return on a Bank On Yourself plan?

Holding on to stocks and mutual funds

A recent comment made by a reader of this blog inspired this post.  I’ve never gone into detail on the question of how the rate of return on a Bank On Yourself policy compares with investing in stock market and mutual funds.

Holding on to stocks and mutual funds

And is it really true that if you simply hold on long enough, investing in stocks and mutual funds will out-perform just about anything else?

So, I’ve decided to lay those questions to rest – once and for all – right here.  Here’s the comment by a reader who calls himself “Tob” that sparked this post:

This is a ridiculous attempt to compare whole life insurance to the “stock market” after the worst decade. I can show you how investing blows the pants off whole life using investing basics. Balanced Funds. How many funds do you want that have produce 10% per year compounding average to convince you?”

So, has “Tob” really found that elusive investment that gives you a 10% average return, and still lets you sleep at night?

We’ll get to the answer to that question in a moment.

First, let me address the question,

“What the heck is the rate of return on a typical Bank On Yourself policy?”

[Read more…] “What’s the rate of return on a Bank On Yourself plan?”

Bank On Yourself: A financial plan you can count on

Oh what a roller-coaster year this has been!  Our entire financial system and economy almost fell off a cliff.


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.

[Read more…] “Bank On Yourself: A financial plan you can count on”