A review of my book, Bank On Yourself, in the December 2010 issue of the American Association of Individual Investors (AAII) Newsletter declared that the concept is “too good to be true.”
The reason given was, “A life insurance policy loan is not truly a loan. Rather, it is an advance that the insurer must eventually pay out. Worse yet… policy loans can erode a life insurance policy over time.” It also pointed to “potential tax liabilities.”
This review brought to mind one of my favorite quotes…
If you’re looking for an excuse, any one will do.”
– Dan Kennedy
So I wrote the editor and explained there was some misinformation in the review, and that I would like an opportunity to correct the record, pointing out that their motto is “Unbiased Investment Education.”
The editor told me to let him know what I think is incorrect, and he “will take a look at it.” I suspected he was just “humoring me,” but gave him the benefit of the doubt. However, when I submitted my rebuttal, he replied that they would not publish it because “there are no factual corrections to be made.”
I informed AAII I would be publishing my rebuttal on this website, and let YOU decide who is taking things out of context, committing sins of omission, and twisting the “facts”… and who is being fair and unbiased. We’ll pick three of the most interesting, insightful and/or humorous comments made on this blog and award the posters their choice of a $25 gift certificate for a restaurant in your area or a personally autographed copy of my “too good to be true” book.
Besides that, there are several points made in my rebuttal that I have not made elsewhere, so you will find value in reading this (I made it a bit more colorful for your reading pleasure)…
It often shocks me to see what passes for “journalism” these days in publications many people put their trust in, like the Wall Street Journal.
A recent article in that publication titled, “Slow and Steady Saving Still Pays,” is a classic example of what happens when you use fuzzy thinking and math… and expect to convince readers of your position.
Sadly, I suspect many readers did lap this article up because, after all, it was published in the Wall Street Journal. They wouldn’t lie to us or lead us astray, would they?!?
I don’t think this article was intentionally written to mislead you. I believe the author has just been as brainwashed by Wall Street as most Americans have been.
check out this article
“The Unrealized Loss Riddle”
for an eye-opening comparison of saving money in a Bank On Yourself policy versus investing in the stock market.
-$62,734.06. That’s the “unrealized” loss we’ve had in one of the mutual funds in our retirement account, according to the statement we just received.
A $62,734.06 unrealized loss.
I keep staring at the statement, hoping that number will somehow magically turn positive. After all, we’ve had a nice run-up in the stock market recently, and that mutual fund has one of the best long-term track records of any fund.
What the heck is an unrealized loss, anyway?
I realize I’ve lost a whole bunchof money. And I remember working my butt off to make that money!”
A $62,734 “unrealized loss.” Is that an oxymoron, like “Great Depression,” “small fortune,” “accurate forecast” and “quickly reboot”?
I dunno if it qualifies as an oxymoron. But I do know it’s moronic that we pin our hopes and plans for financial and retirement security on things we can’t predict or count on!
My husband Larry is 61 and theoretically four years away from retirement. He probably won’t retire when he’s 65 because he says he’d get bored. But if we were relying on the conventional wisdom about saving for retirement, it wouldn’t even be an option for him.
Did you know that 40% of retirees were forced to retire sooner than planned, due to health problems, job layoffs and other factors beyond their control?
Of course, none of us want to think that could happen to us… but what would you do if it did?
Another mutual fund in our retirement account shows an $8,012.16 “unrealized” gain.
And there lies the rub: You don’t actually lock in a gain or loss until you sell an investment.
(November 22, 2011 Update: Our most recent retirement account statement shows our “unrealized loss” is virtually unchanged since I wrote this blog post almost a year ago. And looking at the Dow’s ups and downs over the past year makes a day on the roller coasters at Six Flags look tame.)
Unfortunately, studies and history show that most of us arefar more successful at locking in our losses than ourgains.
Can you tell me what your retirement account will be worth on the day you plan to tap into it? (Not what you hope it will be.) If your answer is “no,” how can you even call it a plan? And what will you do if the market plunges by 50% – again – right before you planned to retire?
In every economy – whether boom or bust – opportunities arise. Unfortunately, most people don’t have the financial resources to take advantage of them.
This is an inspiring story of how people are using the Bank On Yourself method to be in a position to take advantage of some amazing opportunities…
Here’s a new reality: You need cash now more than ever. Not credit. Not equity. Cash.” – “Why Cash is King,” Men’s Health, November, 2010 issue
“Bank On Yourselfers” Joni and Dave Schultz
Take Joni and Dave Schultz, who just happen to be my sister- and brother-in-law. Joni is a hospital department supervisor and Dave just retired from his job in construction.
“Bank On Yourselfers” Joni and Dave Schultz
They came to visit us recently, and Joni’s first comment when she walked in the door was, “Now I get it! I understand why Bank On Yourself is so much better than using a credit card or finance company, and why it’s even better than paying cash for stuff!”
Joni and Dave started a Bank On Yourself policy about five years ago, in order to supplement their retirement income and add predictability to their financial plan.
But they’d never used it to finance any purchases… until now.
Scary Fact #1: 40 percent of all workers plan to delay retirement
61% blamed the decline in their 401(k) for this. And a majority said they’re prepared to spend less in retirement according to a new survey by Towers Watson.
A recent study revealed Boomers and Generation X’ers are coming up frighteningly short on their retirement savings.
And when nursing home and home health care costs are added in, that shortfall doubles, according to a study released this month by the Employee Benefit Research Institute (EBRI).
Nearly half of both Baby Boomers and Gen X’ers won’t have enough funds to cover living expenses, according to an EBRI report released earlier this year.
Scary Fact #3: New 401(k) disclosure rules don’t put a lid on fees
New regulations announced this month by the Department of Labor will require better disclosure of all the hidden fees you’ve been paying in your 401(k), starting in January, 2012.
But, for all the noise on Capitol Hill about this horrifying issue, NO regulations have been proposed or even discussed to reduce the confiscatory fees you pay!
Even a one percent higher fee can cost an employee $64,000 or more in realized savings by age 65, according to the DOL’s own estimates.
The 401(k) situation is so bad that you will probably need to get an average annual return of 8% to 10% – just to break even!
Not convinced? Check out the shocking exposé Pulitzer Prize-nominated journalist Dean Rotbart and I recently co-wrote on this.
Scary Fact #4: Hope is not a strategy
We’re headed for a retirement train wreck, and it’s going to get really ugly over the next 15 years” – Rob Arnott, a widely respected market strategist
In a well-researched article in this month’s Fundamentals Index Newsletter, the authors point out that the return assumptions built into pension and retirement plans today assume that “everything will go right.” They’ve relied on unrealistic assumptions. The authors also go on to demonstrate why returns are likely to be much lower in the future.
We’re relying on hope. But hope is not a strategy; hope will not fund secure retirements. We’re planning for the best and denying that worse can happen. It makes far more sense to hope for the best, with plans for realistic outcomes – and contingency plans for worse ones.”1
Scary Fact #5: 40 percent of retirees were forced out of work early
Remember the scene from the 1983 movie classic, “The Big Chill,” where the character played by Jeff Goldblum asks…
Have you ever gone a week without a rationalization?”
Well, many boomers today are trying to rationalize away the fact that they won’t be able to retire when and how they had planned by trying to convince themselves that retirement is overrated. They now talk about continuing to work in some capacity as long as they can.
While there’s no question that this can give you more of a sense of purpose and fulfillment and keep you from dying of boredom, the reality is that many people are being forced to retire earlier than they can afford to. Job layoffs and health issues are the primary reasons for this.
I love what I do, and I hope to be doing it for a long time. But shouldn’t the decision to retire – or not – be a matter of choice, not necessity?
The reality is that you may not have a choice. Nearly 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, according to EBRI.
Scary Fact #6: All Bank On Yourself policy owners received a guaranteed increase and a dividend – again
I was just checking to see if you were paying attention! That’s not a scary fact (unless you’ve been procrastinating on starting to Bank On Yourself).
Whole life insurance is an asset class that has increased in value during every stock market decline and every period of economic boom and bust for more than a century.
A dividend-paying whole life policy grows by a guaranteed and pre-set amount every year. In addition, the growth is exponential, meaning it gets better every single year with no luck, skill, or guesswork required to make that happen.
A Bank On Yourself-type policy includes an option that turbo-charges the growth of your cash value in the policy.
You can know (rather than hope) the minimum guaranteed income you can take from the policy in retirement.
And, you can access the money in retirement with little or no tax consequences, under current tax law.
You can also have access to capital when you want it and for whatever you want. No nosey credit apps or pledging your first born.
So, if you haven’t added Bank On Yourself to your financial plan yet, doesn’t it make sense to request a free Analysis and find out what your bottom-line numbers and results could be?
There’s no obligation, it’s not scary, and no one’s going to twist your arm! If you haven’t already started to Bank On Yourself, please take the first step today and take back control of your financial future!
1. “Hope is Not a Strategy,” Fundamentals Index Newsletter, October 2010 Issue
What started in 2002 as a quest to educate Americans and help them achieve financial security and peace of mind using the Bank On Yourself method came to uncover an all-American treasure more exquisite than I ever imagined.
The revelation was gradual.
At first, my concentration was tightly focused on helping people reach their savings and retirement planning goals and objectives using a seldom-trumpeted, but proven variety of whole life insurance. After laborious and extensive research, a system was created that would permit almost anyone – rich and poor, young and old – to wean themselves from dependence on banks, credit cards, auto leases, mortgage companies and the risks and volatility of the stock and real estate markets and traditional retirement plans.
People could sleep well at night knowing that their savings were growing – safely and predictably – even when the markets tumbled.
Soon, the American public began to come around to my way of thinking – or at least that’s what I believed at the time. People from all walks of life made initial inquiries, read up on Bank On Yourself materials, met with the specially trained advisors and then made the choice to bank on themselves.
Clients became our most potent marketing tool, as they began sharing the Bank On Yourself concept with their family, friends, neighbors and colleagues, as well as increasing their own commitment to this proven savings and money management philosophy.
I’ll admit I was pretty pleased with myself…
To be honest, I was pretty self-satisfied both by the consistent growth in the number of folks who were using the concept, and by what we professed to be our innovation. There was no question that our Bank On Yourself precepts were changing how people viewed investing and financial planning.
A couple months ago, I interviewed Dan Proskauer. Dan lives below his means and has significant savings discipline. But after decades of saving and investing and “doing all the right things” we’ve been taught to do, he realized he had nothing to show for it.
Dan is a vice president of technology engineering, very analytical, and he has spent hundreds of hours investigating .
His conclusion? “The more I look into Bank On Yourself, the better it looks,” says Dan. And he has implemented it for his family in a big way.
Dan shared the findings and conclusions of his research in a fast-paced interview. I encourage you to check it out now, if you haven’t already done so.
But what if you’re in debt?
Dan told me he was talking to a friend who was complaining that he and his wife were always in debt and confessed, “There are things we want to do – we don’t want to deprive ourselves of life. We can’t really afford them, but we do them anyway.”
Maybe you can relate to Dan’s friend’s situation. It’s a seemingly endless cycle of living beyond your means, using high-cost borrowing, which means you have interest to pay – leaving that much less for everything else.
C. Northcott ParkinsonPerhaps surprisingly, it has little to do with how much you make – people of all income levels suffer from this. After all, as the late British economist, C. Northcote Parkinson noted…
Expenses rise to equal income”
It’s part of “Parkinson’s Law.” He also said that, “a luxury, once enjoyed, becomes a necessity.” I can definitely relate to that, can’t you?
When Dan described to his friend how Bank On Yourself could be used to become his own source of financing and help free him from the endless cycle of debt, his friend’s first reaction was, “Yeah, it sounds great, but we could never do it – we have to get ourselves out of debt first.”
But as Dan explained more about it, his friend realized he didn’t have to wait. He could start now and reduce or eliminate debt while at the same time increasing savings. He realized Bank On Yourself could help his family “move to the right side of the line.”
What side of the “line” are you on now?
If you’re on the “wrong” side of the line, you know it. You’ve probably tried to get to the other side of the line, but it’s not an easy journey to make.
The good news is that if you’re truly fed up with your situation and ready to make a change, Bank On Yourself can help you get there. My New York Times best-selling book, is filled with stories of folks of all ages and incomes who have done just that.
One woman who shared her story in the book is Rose Hillbrand (Chapter 8). Rose knew the feeling of hopelessness that came with the crushing debt she had incurred. The video below updates her inspiring story of how Bank On Yourself helped her move to the other side of the line. It was filmed when I was in Ohio speaking to a standing-room-only crowd of over 250 people…
And, if you’d like to get a no-obligation Analysis and a referral to a knowledgeable Bank On Yourself Professional like the one Rose got referred to, who can show you how much your financial picture could improve if you added Bank On Yourself to your financial plan, simply request a free Analysis here.
Better than debt free?
Most financial experts say that the way to avoid getting into debt is to save up and pay cash for things.
They are wrong! There is actually a better way to purchase things. I call it the “better than debt-free” method, and it actually beats paying cash.
How is that possible?!? The conventional wisdom says that paying cash for things is the answer. But this ignores an important, but little-known principle of finance…
What do I mean by that? Let’s say you’ve decided you’re going to beat the financing and leasing rackets by paying cash for major purchases. So you start putting money aside into a savings or money market account. When you hit your savings target, you pull your money out to pay cash for that item.
Now how much interest are you earning on that money?
You’re earning ZERO interest, of course. Which is why financing, leasing and paying cash are all losing scenarios.
Fact: You’re either going to pay interest to others to finance things, or you’re going to lose the interest or investment income you could have earned, had you kept your money invested instead.
When you Bank On Yourself, you do pay interest on your policy loans. But the interest you pay ends up in your policy, as I explain in detail on pages 100-102 of my book.
But far more important, as Dan Proskauer puts it…
The Bank On Yourself method offers something you truly deserve, but may not have – financial security and peace of mind. With Bank On Yourself, you can sleep well knowing your savings can only grow, never shrink. With Bank On Yourself, you know, rather than hope.”
Bonus: Some companies have a feature that allows you to continue to earn the exact same interest and dividends – even on the money you’ve borrowed!
However, only a handful of companies offer a dividend-paying whole life policy that meets all the requirements to maximize the power of this concept AND pay you the same interest and dividends, regardless of whether you’ve borrowed from your policy .
And if your policy isn’t structured properly, your cash value won’t grow nearly as fast, you could lose the tax advantages, or both.
So, whether you’re on the side of the line that Dan Proskauer is on, and you want to strengthen your financial position and have predictability and peace of mind… or you want to be on that side of the line, chances are excellent that Bank On Yourself can help!
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!
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.
It was almost two years ago that Dan Proskauer – a Vice President of technology engineering for a major health care company who holds three U.S. patents – first heard of Bank On Yourself.
Dan lives below his means, has significant savings discipline, and is a sophisticated investor. But when the financial crisis hit, Dan realized he had nothing to show for decades of saving and investing his hard-earned money and “doing all the right things” we’ve been taught to do.
Dan Proskauer
He felt angry, betrayed… and willing to open his mind and find out if there was something better out there.
Dan is very analytical and has since spent literally hundreds of hoursinvestigating Bank On Yourself. He has already started seven Bank On Yourself-type policies because, as he puts it, “the more I look into Bank On Yourself, the better it looks.”
Dan recently contacted me and generously offered to share his findings with you. Whether you already use Bank On Yourself, or you’ve been considering adding it to your financial plan, you’ll learn something of value from this interview. You can listen to the interview by pressing the play button below, or you can download the entire interview as an MP3 and listen on your own player or iPod…
The surprising result of Dan’s research into the rate of return of a Bank On Yourself-type policy – and why he feels the additional “intangible” benefits make it the best way to build a financial foundation in both good times andbad
Why Dan has seven different policies – and is getting ready to start more
Why Bank On Yourself will hold its own against things people worry about – including inflation, deflation and fluctuating interest rates
The two downsides to Bank On Yourself that Dan found
Why Dan believes it’s critical to use a Bank On Yourself Professional to set-up your policy… and how getting knowledgeable, on-going coaching and advice can result in your having far more wealth over your lifetime, while ensuring you don’t lose the tax advantages of Bank On Yourself
Why Dan – like hundreds of thousands of others who use the Bank On Yourself method – says the onlyregret he has is that he didn’t know about this sooner
Dan’s advice to anyone who’s still sitting on the fence and hasn’t started yet
You can listen to the interview by pressing the play button below, or you can download the entire interview as an MP3 and listen on your own player or iPod…
The more I look into Bank On Yourself, the better it looks.”
– Dan Proskaur
The ultimate financial security blanket
If you haven’t started to Bank On Yourself yet, it’s free and there’s no-obligation to request an Analysis and find out what your bottom line numbers and results could be if you added Bank On Yourself to your financial plan.
When you request your Analysis, you’ll also get a referral to one of only 200 financial advisors in the country who have taken the rigorous training and meet the requirements to be a Bank On Yourself Professional, like the one Dan is working with.
Request your free Analysis now, so you can have the peace of mind that comes with knowingyour financial future will be one you can predict and count on!
We want your feedback! Tell us what below what YOU think of Dan’s interview below…
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 articlesays. 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?
Whole life insurance is an asset class that has increased in value during every stock market decline and every period of economic boom and bust for more than a century.
