Financial Planning

Hold your financial course or change your course?

June 15th, 2010 by Pamela Yellen | 5 Comments

“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:

How will the debt crisis affect Bank On Yourself?

May 13th, 2010 by Pamela Yellen | 29 Comments

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.

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.

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:

Dow 11,000: Déjà vu all over again?

April 12th, 2010 by Pamela Yellen | 13 Comments

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.

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

This is like deja vu all over again”

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…

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

March 18th, 2010 by Pamela Yellen | 141 Comments

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.

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?”

Bank On Yourself: A financial plan you can count on

December 11th, 2009 by Pamela Yellen | 28 Comments

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.

Six Frequently Asked Questions about Bank On Yourself

November 13th, 2009 by Pamela Yellen | 14 Comments

I thought you might find it helpful to have the answers to the six questions about Bank On Yourself we’re most often asked – right at your fingertips.

How many of these questions have you been wondering about?

FAQ #1: How does Bank On Yourself compare with traditional investing and savings strategies?

You can compare the Bank On Yourself method to traditional investments here, including stocks and mutual funds, a 401(k), a ROTH plan, real estate, gold, commodities and several other investments.

If there’s a different financial product or strategy that you think can match or beat the Bank On Yourself method, I encourage you to take the $100,000 Challenge. If you’re right, you could pick up an easy $100K!

FAQ #2: How does Bank On Yourself let you recapture every penny you pay for major purchases like cars, vacations, business equipment or a college education?

I’ve summarized this in a short video overview of how Bank On Yourself works.

However, for a more detailed explanation, you’ll want to review Chapters 2, 6, and pages 52-54 of my best-selling book, Bank On Yourself. If you don’t have the book, we offer a 35% discount on it.

FAQ #3: I’ve heard people like Dave Ramsey and Suze Orman say whole life insurance is a lousy place to put your money. Is a Bank On Yourself-type policy different from the kind they’re talking about?

7 Really Scary Facts about Your 401(k)

October 29th, 2009 by Pamela Yellen | 17 Comments

Before you put another penny in a 401(k), find out what the government and your employer aren’t telling you that will scare the living daylights out of you! Here are seven frightening facts you should know about 401(k)s…

Frightening 401(k) Fact #1:

Your employer can – and probably is – making risky decisions on how to invest your money for you – without your knowledge or approval.

Watch Pamela Yellen being interviewed about the problems with 401(k)s on the #1 TV station in Los Angeles

Watch Pamela Yellen being interviewed about the problems with 401(k)s on the #1 TV station in Los Angeles

Many employers are now automatically directing more of your pay into your 401(k)… and automatically moving it into more risky investments – even if you had previously chosen your own investments!

And most of that money is being re-directed into “target-date” funds, which lost so much money during the last market crash, it sparked scrutiny from lawmakers and regulators. Many funds for people who pinned their hopes on retiring in one year had losses far exceeding 20%, and some funds suffered losses of 32 to 41 percent, according to Morningstar.

Shockingly, stock allocations among those funds were found to be 26%-72% of assets!

Not to mention that the fees charged by target-date funds are “significantly higher than those charged by other funds on plans’ investment menus”.

(Source: “Companies take reins of workers’ 401k’s”, MoneyCentral.msn.com, October 10, 2009)

The growth in a Bank on Yourself policy is both guaranteed and exponential. You can predict the minimum guaranteed value of the plan on the day you want to tap into it, and every point along the way.

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Frightening 401(k) Fact #2:

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The important decisions about your 401(k) are made by someone with no training or education in most companies.

Dow 36,000? What were they smoking?

September 25th, 2009 by Pamela Yellen | Leave a Comment

Ten years ago this week, the book, “Dow 36,000: The New Strategy for Profiting from the Coming Rise in the Stock Market” was published.

It became a best-seller. And, according to a recent article in the Wall Street Journal titled “Lessons of a Bull Market That Never Happened” (9/20/09):

Back then, the only people subject to sustained derision on Wall Street were those who dissented. Anyone who warned that shares might disappoint was ignored. The few predicting a crash — let alone two — were considered cranks.

Yet, in spite of the current stock market rally – one of the steepest in history – the Dow is STILL below where it stood in September 1999!

How many times during those years were your hopes raised, only to be dashed again and again?

Wall Street has some “dirty little secrets” they don’t want you to know about, but I reveal them all here.

Interestingly, one of the authors of that book recently said he still believes the Dow will hit 36,000. Meanwhile, there’s some guy now predicting the Dow will go down to 1,000!

What do YOU think will happen… and why? You can voice your thoughts below…