Some Common Sense Thoughts on the Need for a Declaration of Financial Independence

Executive Summary: Given the poor track record of the government and private sector when it comes to safeguarding the financial security of Americans, the authors propose a Declaration of Financial Independence in which individual citizens pledge to take responsibility for their own lifelong financial well being.

Americans need a financial revolution in 2011 as surely as we needed a political revolution in 1776.

Our system of earning, saving and investing money simply is broken.  It relies way too heavily on the tag team of government and mega-banks and financial institutions, and way too little on the self-reliance and individualism that made our nation great.

The federal government, by every reasonable standard, has proven to be a poor steward of our money and financial security.

The lockbox that was supposed to be Social Security – with Uncle Sam holding our funds – repeat, “our” funds – for us, turns out to be a thinly veiled Ponzi scheme that is rapidly draining to insolvency.  Ditto Medicaid.

It was the circus-like policies of the government-backed Fannie Mae and Freddie Mac that led directly to the housing crash in 2008 and turned the American Dream – owning one’s own home – into a financial nightmare for tens of millions of us.

The federal government poured close to $600 billion taxpayer dollars into the bailout of unstable private businesses, including AIG, Bank of America, Citigroup, Goldman Sachs, Morgan Stanley, General Motors, etc. – rather than permit the free market to right its own wrongs.

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How Everyone Can Love Paying Bills and Taxes: No, We’re Not Crazy!

A core tenet of the Bank on Yourself Nation is that money should always bring pleasure or satisfaction, never regret or guilt.

overwhelmed by bills

For so many people, that principle seems unrealistic, especially considering how very hard it is most months just to stay afloat – paying for necessities such as groceries, medicines, utilities, transportation, insurance and the like.  Oh yes, let’s not forget the always hungry tax monster!

overwhelmed by bills

Seems to so many of us that our paychecks are swallowed whole by our obligations before we ever get the chance to even sample the flavor of having some accumulated cash in our pockets and bank accounts.

To which we can only respond… how wonderful!

Wonderful? Really? Paying Bills! And Taxes?”

Absolutely.

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The “5 P’s” of Successful Goal Setting

UPDATED August, 2019 

Your Path to Victory – At Long Last – Begins Here

Executive Summary:  Goal setting is a vital life skill that can be practiced year-round.  Most people don’t succeed on their first attempt.  Ironically, each setback increases the probability that the next try will come closer to the mark, if not directly hit the bulls-eye.

There are five basic tools that all goal setters should equip themselves with to increase their odds of success: Passion, Persistence, Planning, People and Positivity.

The 5 P’s of Successful Goal Setting
The 5 P’s of Successful Goal Setting

Most of us give up on our New Year’s resolutions within two weeks. They were the best of intentions, but life and reality once again got in our way.

If you are one of the millions of lapsed goal setters, today is the perfect time to reboot.  Whether it’s cold and blustery outside or the trees are blooming and a warm breeze is blowing, the process of setting and reaching goals should be a year-round, all-weather, life skill.  No champagne required.

In fact, goal setting is one of life’s most important skills, given that very, very few of us are handed exactly what we want without ever having to ask and work for it.

In our busy lives, it requires determination and focus to take a “time out” and think about our ambitions and how we’re doing in pursuit of them.  Perhaps that’s why so many people try goal planning only once a year – at New Year’s – because the holiday season offers more down time to think about the Big Picture and our life’s direction.

Reading and taking action on these tips will take less than 10 minutes

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Top 16 Investing and Savings Myths

All the statements listed below are common financial myths.  Accepting any of them as fact could lead to costly financial missteps…

See how many of these common beliefs you already recognize as flawed and which ones you have yet to unmask.

Unmasked Myths

As you may discover, what we’ve been taught by mainstream money experts and well-intentioned friends and family isn’t always accurate.

The Myths:

  1. Over time, the stock market has consistently proven the best and most reliable investment vehicle for the vast majority of Americans
  2. Investors need to accept risk and volatility in order to generate meaningful profits
  3. Home ownership and appreciation is a reliable vehicle for protecting and growing your wealth
  4. 401(k)s make effective investment vehicles, if only because your employer matches your own contributions
  5. Your 401(k) plan administrator must be a licensed, professionally trained and carefully screened financial expert
  6. The fees you pay for your IRA, 401(k) and other retirement funds have only a trivial impact on your ultimate returns
  7. You will not require as much income when you retire as you need now, especially since you’ll qualify for a lower tax bracket
  8. It is never possible to know with any certainty the value of your retirement account at intervals down the road, because market fluctuations are unpredictable
  9. Wise retirement planners recommend you aim to make your retirement income last to age of the average American life expectancy, currently 77.9 years
  10. Always defer taxes as far into the future as possible, especially when you wish to accumulate a larger retirement nest egg
  11. People of modest income can’t possibly set aside $1 million or more for their retirement
  12. Before you can begin saving for the future, first you have to dig your way out of debt
  13. Paying cash is the ideal method of purchasing big-ticket items, such as cars and vacations
  14. Effective savings and investing strategies are too complex for amateurs.  Only professionally trained money managers consistently succeed
  15. If you follow the advice of mainstream financial experts and don’t stray, your nest egg will be safe and grow large over time
  16. To receive quality, personalized attention from highly trained financial advisors, you have to already be wealthy, or close to it

©2011 Hayward-Yellen 100 Ltd Partnership

How Good of An Investor Are You Really? Ask Your Doctor!

Executive Summary: The life-long costs of neglecting your health can be staggering.  Expenses include out-of-pocket medical bills as well as losses of productivity and quality of life.  Too many people watch their investments more closely than they do their health. Illness brought on by lifestyle choices, such as smoking, overeating, lack of exercise and stress, accounts for as much as 70% of nationwide health care spending.

By Pamela Yellen and Dean Rotbart

In mid-December 2008, a skeletal Steve Jobs, CEO of Apple Inc., canceled his scheduled presentation at the annual Macworld conference, triggering investor fears that the company’s visionary co-founder was seriously ill.  A month later, Jobs announced his first health-related leave of absence.  He began a second leave this past January.

During the 30-day period when concerns about Jobs originally surfaced, the shares of Apple stock dropped 14%, or $12 billion in market value.Healthcare Costs

The shareholders of Apple weren’t worried about the potential hospital bills and other medical costs that Jobs would incur.  Comparatively speaking, those expenses would be a drop in the bucket.

But Apple shareholders – confronted with the loss of Jobs’s services, perhaps for good – instantly realized the true cost of sickness must also be measured in loss of productivity, leadership and innovation, among other attributes a key executive brings to his or her company.

For tens of millions of Americans who are otherwise mindful of how and where they stake their money and retirement savings – including many successful Bank on Yourself participants – the importance of investing wisely in their physical health is a lesson they have yet to master.

That’s a huge fiscal mistake

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7 Ways You Can Build Your Wealth Through Better Health

By Pamela Yellen and Dean Rotbart

Lose weight, buy a new car.  Spend a half hour exercising at least three days a week, take a luxury cruise.  Reduce your stress at work and at home, remodel your kitchen.  Quit smoking, sock away a couple hundred thousand dollars for retirement.

How sweet life would be – and what a great motivation to stay or get healthy – if we all received  such direct benefits from investing more effectively in our health.out for a walk

The truth is, while there isn’t a cruise awaiting us at the end of every jog, the lifetime returns that better health deliver are real, sizeable and far more reliable than any money you risk on the stock market or other trendy investments.

A good, strong heart may be priceless to you and your loved ones.  But there is also a financial benefit that you can count in terms of a longer and more productive work life, and fewer doctor, medicine and hospital bills.  What you don’t spend or lose tending to your sick self can really be better used for life’s many pleasures – including building a secure retirement nest egg.

There are library shelves full of advice on how to get healthier.  Here are seven of our favorite tips that don’t require a Herculean effort or cost a fortune.  But each will immediately set you on a better path to wellness:

1. Get more sleep. Not a bad way to kick off your new healthy lifestyle.  Most of us short-change our sack time to crowd in more and more activities and chores.  The price we pay?  High blood pressure, type 2 diabetes and impaired concentration.  Try for at least 7 or 8 hours each night.

2. Got milk? If not, get some.  More precisely, get some extra vitamin D, ideally 800 to 1,000 international units (IU) daily.  A single glass of milk will deliver about 125 IU.  You might also try cheeses, yogurt, salmon, almonds and fortified orange juice.  A lack of vitamin D is linked to osteoporosis, depression and chronic fatigue, among other common symptoms.

3. Chill out. People who live stressful lives suffer more heart attacks and strokes.  Beating stress needn’t be painful.  Go for short walks.  Take mini-vacations by listening to your favorite music on a break.  Take up yoga. Throw darts.

4. Get a pet. The Centers for Disease Control and Prevention reports that pets can lower both your cholesterol and triglyceride levels.  Petting your dog or brushing your cat has a calming effect on both of you.  Moreover, pets increase the likelihood that you’ll get outdoors more and socialize with other pet owners – both activities that the CDC says are good for your health.Eat less salt

5. Lose the Salt Shaker. None of us need extra salt in our diets.  We’re already showered with the sodium crystals contained in the packaged and restaurant foods we consume.  Experiment with the many varieties of salt-substitutes if you otherwise find your meals too bland.  The Center for Science in the Public Interest reports that high-salt diets cause 150,000 premature deaths in the U.S. each year.

6. Wash Your Hands More Often. Handshakes, stair banisters, elevator buttons, door handles and a million-and-one other objects that we come in contact with routinely are breeding grounds for germs and the infectious diseases they can bring.  Carry a pocket-size container of hand sanitizer for those times when soap and water are unavailable.

7. Stop Speculating on Wall Street. Okay, so this is blatantly self-serving.  But entrusting your life’s treasure to the ups-and-downs and further-downs of the stock market really can shorten your life – or at the very least, squash your enjoyment of it.  Just ask anyone of the tens of millions of Americans who saw 40% to 50% of their wealth evaporate in a flash during the stock and real estate crashes of 2008 (not to mention the crash of 2000) how many years of aggravation those disasters cost them!

The cure: Substitute a Bank on Yourself plan for your mutual funds or stock portfolio and sleep better at night, afford a new pet, take a sunny vacation (and soak in some natural vitamin D), eat quality packaged foods and at restaurants that don’t need to salt their food to make it taste great, buy hand sanitizer by the case, and wave goodbye forever to your investment stress.

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 Authorized Advisors 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.

Mission Not Impossible: You Can Teach Teens Financial Responsibility

Executive Summary: While teens can be hard to reach, the teenage years are the perfect time to teach kids the saving, spending, earning and investing habits they’ll require to enjoy a lifetime free of financial strain and worry.

teenager withdrawing money

These days, money in and money out is mostly electronic, meaning the speed at which our children must make the right or wrong financial decisions has accelerated.  Launch your teens’ money management education by explaining to them why most adults fail.

teenager withdrawing money

Let children know that the solution can be found in the proven strategies of fiscal self-reliance that are embodied in the Bank on Yourself system and help your teens create their own vision of a secure and rewarding financial future.

There are plenty of practical steps you can take to make the entire subject matter more interesting to teens. By Pamela Yellen and Dean Rotbart

Russ Bragg has a higher financial IQ than most parents. He started out as a credit analyst for an international bank and began offering comprehensive financial planning services in 2000.  He is an expert at helping clients define and then achieve financial independence.

Teenager saving

For Bragg, you might imagine, educating his teenage son and daughter about proper money management would be a no-brainer.

Teenager saving

If, on the other hand, you have teens of your own, you already know better

Enticed by credit card solicitations with low interest rate come-ons, Bragg’s independent-minded son was in credit counseling by the time he was 18.  Bragg’s daughter, on the other hand, while still a student, applied for and received a prestige credit line that even some of Bragg’s agency clients are unable to qualify for.

“Same mother, same father, same food, same air” and two very different outcomes, observes Bragg wryly of his children’s money management styles.

Many otherwise more-than-adequate moms and dads – those who’ve mastered subject matter as sensitive as teenage smoking, drinking, and drugs – have found their skill sets sorely lacking when it comes to the topic of money.

Welcome to Survivor: Teen Money…

A sprawling multi-year marathon and obstacle course that pits a tribe of well-intentioned parents, grandparents and other adults against the strong-willed, often perplexing sensibilities of the untamed adolescent mind. The challenge? One of modern family life’s most difficult: teaching teens to handle money responsibly.

I remember writing once that as a society we are more comfortable talking about sex and those other issues than we are about money”

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