Category: Financial Planning

Record-High Credit Card Debt Promises Problems for Many

March 18th, 2019 by Pamela Yellen | Leave a Comment

According to the Federal Reserve, credit card debt in the U.S. is at its highest level ever. In December 2018, credit card debt was $26 billion higher than it was just three months earlier.

Americans over age 60 hold nearly one-third of all credit card debt in the country – and they’re seeing their accounts go delinquent at an increasing pace.

We’re not surprised. Eighteen months ago, we at Bank On Yourself bemoaned the fact that household debt at the end of 2017 was at a then all-time high of more than $13 trillion. Now credit card debt is poised to overtake auto debt as one of the “big three” consumer debt millstones (after mortgages and student loans).

Carrying significant credit card debt can cause serious problems

Living with a large balance on your card(s) can be like trying to cross Niagara Falls on a tightrope: You hope and pray nothing goes wrong.

What could go wrong while your cards are maxed out? [Read more…] “Record-High Credit Card Debt Promises Problems for Many”

How Complex Is Dividend-Paying Whole Life Insurance?

February 13th, 2019 by Pamela Yellen | Leave a Comment

Some financial representatives say whole life insurance is complicated, and that “you should never invest in something you don’t understand.” … Then they try to sell you stocks, bonds, mutual funds, and EFTs that most laypeople can only begin to truly grasp!

Dividend-paying whole life insurance is so simple an average 10-year-old can understand the concept in 10 minutes. We’ll prove it to you now …

The Simplicity of Dividend-Paying Whole Life Insurance

The concept behind a dividend-paying whole life insurance policy is extremely simple. It’s based on five easy-to-understand ideas:

1. Your Risk Is Minimized by the “Pooled Risk” Approach of Insurance

This timeless concept is at the foundation of all forms of insurance. In its simplest form, policy owners pay an insurance company a relatively small sum of money in advance. This is called a “premium.” In exchange, they are covered for a potentially much large expense later. In this case, they receive an agreed-upon amount to cover the costs and loss of income related to the death of the insured, which is called the “death benefit.”

2. You’re Guaranteed to Have “Level-for-Life” Premiums with a Whole Life Insurance Policy

Get Financially Naked With Your Partner to Avoid Relationship Mistakes

February 12th, 2019 by Pamela Yellen | Leave a Comment

Do you remember the first time you got naked with your beloved?

Along with the passion of the moment, if you’re like most of us, you were probably a bit self-conscious. After all, for the first time, you may have had had to reveal that paunch you’d been hiding, those patches of cellulite or that outie belly button you’ve hated since the third grade.

But because you overcame those concerns and let yourself get naked – well, I don’t need to remind you what happened next!

The point is, when you allow yourself to get financially naked with your partner, amazing things can happen. You not only have a better understanding of one another, but you’ll also work better as a team to achieve your goals and tackle your problems.

It turns out that being clear and open with each other about financial issues is one of the most positive things you can do to ensure a “happily ever after.”

Couples May Argue About Sex, Kids and In-Laws, but It’s Their Arguments About Money that Best Predict Whether or Not They’re Headed for Divorce Court…

The Most Important Lesson Learned from the Government Shutdown: Americans’ Finances are Fragile

February 5th, 2019 by Pamela Yellen | Leave a Comment

The longest U.S. government shutdown in history laid bare an uncomfortable truth: Americans aren’t saving enough and the majority of us have no rainy-day fund to protect us when the inevitable you-know-what hits the fan.

More than 70% (!) of all types of employees at all income levels surveyed live paycheck to paycheck and said they’d have difficulty meeting their financial obligations if their paycheck were delayed for just one week! That’s according to the 2018 “Getting Paid in America” Survey by the American Payroll Association.

This explains why, after missing just one or two paychecks, we heard so many heart-breaking stories from government workers who weren’t being paid or were furloughed. For example… [Read more…] “The Most Important Lesson Learned from the Government Shutdown: Americans’ Finances are Fragile”

How Much Money Do You Need to Save for Retirement?

January 24th, 2019 by Pamela Yellen | Leave a Comment

People need to save between 10% and 17% of their income if they plan to retire at 65 but are putting away only 6-8% of their income, according to a new study by the Stanford Center on Longevity. That’s only half of what they should be saving.

What percent of your household income are you saving? It’s important to be brutally honest with yourself because a shortfall of the magnitude most Americans will experience means more than just not being able to live the retirement lifestyle you dreamed of. It may mean…

Having to choose between putting food on the table and the medical care you need
Not being able to afford to pay for heating and air conditioning
Having to rely on the charity of your children
Foregoing travel and even life’s little luxuries

I doubt you worked hard all your life so that you can scrimp and sacrifice just to get by in retirement.

Fully 60% of U.S. households are at risk of not having enough money to make ends meet in retirement – even if they cut back to spending just 75% of pre-retirement levels – according to a 2018 study from the Center for Retirement Research.

The Rule of 25 for Determining How Much You’ll Need to Have Saved

Reviews for Saving for College Using the Bank On Yourself Method

January 15th, 2019 by Pamela Yellen | Leave a Comment

When you think about saving for your children’s college tuition, what savings vehicle comes to mind?

Families often use traditional investment and savings accounts, 529 College Savings Plans, UGMAs (Uniform Gift to Minors Accounts), and UTMAs (Uniform Transfers to Minors Act).

But there’s a big problem there. Who’s going to guarantee you won’t lose your money – and your kid’s chance for a great education – in a stock market crash?

Nobody.

Absolutely nobody. Not your broker, certainly. (Try asking him if he’ll guarantee your stock market investment. Get ready to be laughed at.)

Not Uncle Sam. And not the college. Nobody’s going to guarantee that your money in the market will grow. And nobody’s going to guarantee you won’t lose it in the next market crash.

And that’s the thing. This is your kid’s future you’re gambling with, for Pete’s sake. This is money you can’t afford to lose!

And if you can’t afford to lose it, you can’t afford to risk it. Because “Risk = possibility of loss.”

If you can’t afford to lose it, you can’t afford to risk it.”

That’s why the Bank On Yourself strategy for saving for college is becoming more and more popular. [Read more…] “Reviews for Saving for College Using the Bank On Yourself Method”

Shhh! Your Bank Has a “BIG” Dirty Little Secret – it Could Crush Your Retirement

November 15th, 2018 by Pamela Yellen | Leave a Comment

Who can forget those dark days of the housing market crash of 2008? The vacant homes and neglected lawns. The abandoned swing sets and forgotten barbecues. The bright signs and bold arrows that needed little explanation: “Foreclosure.” “Auction.” “Bank Owned.”

We’re told that the housing bubble and collapse was about predatory lending and high-risk borrowers who were duped into loans that they couldn’t afford. The massive regulatory response to the subprime crisis meant that banks were no longer allowed to behave BADLY… so they chose to behave DIFFERENTLY.

Shhh. Your Bank Has a “Big” Dirty Little Secret. Read this Very Carefully…

The largest source of mortgage lending in the United States is now being done by non-banks – financial entities that offer unsecured personal lending, business loans, leveraged lending, and mortgage services… but do not hold a banking license. As a result, they’re not subject to standard banking oversight and can engage in risky lending.

But where do they get the money to make these loans? You guessed it: Wells Fargo, Citibank, Bank of America and everyone else who got their hands dirty ten years ago. [Read more…] “Shhh! Your Bank Has a “BIG” Dirty Little Secret – it Could Crush Your Retirement”

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

November 9th, 2018 by Pamela Yellen | Leave a Comment

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”?

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

November 7th, 2018 by Bank On Yourself Admin | Leave a Comment

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

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

October 29th, 2018 by Pamela Yellen | Leave a Comment

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.