Category: Retirement Plan Alternative

The truth about investing in mutual funds

May 5th, 2010 by Pamela Yellen | 6 Comments

Investors earn returns over time that are far lower than those quoted by mutual fund firms. In fact, it’s not even a close race.”

This is the conclusion of DALBAR, Inc., the well-respected independent investment research firm.¹

For the past 20 years, “the average equity investor barely managed to eke out an annualized return that outpaced inflation.” The average return was 3.49% per year – just slightly more than the inflation rate for that period!

Asset allocation and fixed income investors weren’t so lucky (if you can call that “luck”); they lost ground after adjusting for inflation.

Why most investors don’t come close to getting the returns touted in mutual fund prospectuses…

There are plenty of reasons for this. For starters…
[Read more…] “The truth about investing in mutual funds”

Does money buy happiness?

April 28th, 2010 by Pamela Yellen | 3 Comments

There is probably nothing in the world that people spend more time discussing than money.

Countries go to war because of money. People marry and divorce because of money. And we spend the biggest part of our waking hours working to earn it.

The age-old question, of course, is, does money buy happiness?

While writing a fascinating book, John Stossel, the highly regarded former anchor of the investigative TV show, 20/20, did some research into the answer to this question.

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?”

Will the Government’s new plan to increase Americans’ retirement security work?

January 28th, 2010 by Pamela Yellen | 12 Comments

With much fanfare, the White House has announced the highlights of what they are recommending to help you save for a secure retirement. Will it help you… or hurt you?

Let’s take a look at the major provisions…

1. More Americans will be herded into a retirement plan system that most experts agree is broken

According to a newly released White House Fact Sheet, the administration wants to force many of the 78 million working Americans not currently covered by employer-based retirement plans into them. They will do this by requiring employers to enroll their employees in automatic direct-deposit IRAs, unless the employee opts out.

Experience shows most employees do not opt out. The result? Many more people will be relying on the same investment strategies that have lined the pockets of Wall Street and dashed the retirement hopes and dreams of millions of Americans.

On the other hand, those who use the Bank On Yourself method have been able to move closer to their financial goals and dreams each and every single year. To find out how you could turn your back on the stomach-churning ups and downs of stocks, real estate, and other investments, request a free, no-obligation Analysis today.

2. Proposed tax credits for retirement savings contributions mean you will be paying for other people’s investment mistakes!

Even millions of Americans who pay no taxes will receive these credits, under the administration’s proposal.

3. Employers will be expected to do what even the experts can’t

Employers who offer so-called “target-date” mutual funds will be expected to “evaluate their suitability for their workforce.”

These funds, which automatically shift assets over the individual’s lifetime to lower risk as the person approaches retirement age, failed miserably to accomplish that goal during the 2008 crash.

In addition, studies consistently show that 80% of all investment advisors and 80% of all mutual funds underperform the overall market¹. Yet employers with no training or experience will somehow be expected to determine which funds will do well.

4. The government wants to “promote” the availability of annuities and other forms of guaranteed lifetime income in 401(k) plans

Unfortunately, the growth and returns of some of these products may not even keep up with inflation.

5. Beleaguered small business owners will face new costs and administrative burdens

According to the National Small Business Association, 64 percent of small business owners surveyed said revenues declined in the past 12 months.

When small businesses are struggling to stay afloat, we oppose mandates such as this that stand to create a new administrative burden” – Molly Brogan, vice president of public affairs for the NSBA

6. The government controls your money in retirement plans, not you

The government determines when and how much you can take out of your retirement plan, and can change the rules any time they want.

Proposals to do just that have already been floated through Congress.

And if the government wants to force you to buy Treasury debt with part or all of their retirement plan money, because China and Brazil won’t take the risk any more, they can do it.

7. While expert after expert agree that the current systems of saving for retirement are broken, few offer any viable alternatives

Yet hundreds of thousands of people who use the Bank On Yourself method did not lose a penny during the market crash of 2008, or during the “lost decade” of the 2000’s.

Their plans have all continued growing – safely and predictably, and without the risk or volatility of stocks, real estate and other investments. Which may explain why my offer to pay $100,000 to the first person who uses a different strategy that can match or beat Bank On Yourself remains unclaimed.

Bank On Yourself isn’t a magic pill. It takes a little patience and discipline. But if you have those traits, it pays a lifetime of benefits.

To find out what your bottom-line numbers and results could be, and how much income you could count on at retirement, just request your free, no-obligation Analysis.
REQUEST YOUR
FREE ANALYSIS!

If you take the first step now, you could start taking back control of your money and your future financial security in as little as 60 days!

1. Hulbert Financial Digest, The Motley Fool

Lessons from a lost decade

January 15th, 2010 by Pamela Yellen | 2 Comments

I’ve lost a bet. I’ve lost my keys. But I’ve never lost a decade – until now.” – Sam Stovall, S&P’s chief strategist

The S&P 500 ended the past decade down almost 25 percent below where it was ten years earlier. And that doesn’t even factor in the 29% inflation we experienced during the decade.

since the end of 1999, the S&P 500 stock index has lost an average of 3.3% a year, on an inflation-adjusted basis, even after including dividends, according to the data compiled by Charles Jones, finance professor at North Carolina State University.¹

Hmmm… so what does that mean to the typical family in dollars and cents?

You may want to grab a bottle of Pepto-Bismol, because it isn’t very pretty…
Here’s what inflation and negative returns have done to a nest egg invested in an S&P 500 index fund (the way most Americans’ retirement savings are), over the past decade…

You now need a 39.9% increase just to get back to where you were ten years ago!

Given that the stock market has just experienced its fastest climb since 1933, how likely do you think it is that we’ll have another 39.9% rise this year? Especially given soaring government spending, stubbornly high unemployment, and looming tax hikes.
[Read more…] “Lessons from a lost decade”

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?

Video Overview: Bank On Yourself in a Nutshell

October 2nd, 2009 by Pamela Yellen | 159 Comments

We just completed a short, fast-paced video explaining what Bank On Yourself is and how it works, that I think you’ll find very helpful.

Click on the play button to discover…

How Bank On Yourself grows your savings both predictably and guaranteed… even when stocks, real estate and other investments tumble
How it can beat the pants off your best saving or investing method
How the kind of policy used for Bank On Yourself is different from the ones Suze Orman, Dave Ramsey and 99.9% of all financial representatives talk about
Why it’s an excellent alternative to traditional retirement plans
How you can use it to get back what you pay for major purchases
Where to find the money to get started

After you watch the video, I’d love to hear your thoughts and feedback – so please speak your mind below.

An alternative to an active retirement?

July 14th, 2009 by Pamela Yellen | Leave a Comment

Humorist Dave Barry proposed one possible solution to the retirement crisis:

The key to eliminating retirement uncertainty is to plan carefully, save as much as possible, invest wisely, and then, at age 65, get hit by a bus.”

A rather grim solution, to be sure, although one subscriber to my Bank On Yourself Ezine did write me to explain that his retirement “plan” was to make sure he died on the day he retired.

Just when I thought I’d heard every possible bizarre way to ensure retirement security at a time when most people’s nest-eggs have been scrambled, I got an email that flabbergasted me…