• You’re not stupid. Your financial picture may not be as solid as you want it to be, but not because you didn’t pay attention. You listened to the experts and did what they told you to do. You probably consult a financial advisor, have a CPA do your taxes, and follow trends in the economy. Maybe you’ve educated yourself by reading books on personal finance or taking classes. You don’t just rely on hearsay, you want the facts. (Me, too.)
• You’re not lazy. You work hard and earn every penny that comes your way. You’re not looking for a free ride and wouldn’t feel good if you got one. You’re proud that, by working hard and using your talents, you can earn a good living. You will do almost anything it takes to provide for your family and secure their future. (Yep, me, too.)
• You’re not looking for a magic bullet. Okay, it would be nice if there were some genie in a bottle to grant you the financial well-being you want. (If you find one, feel free to give me a call.) But you’re not counting on it or even looking for it. (I’m not into fairytale finance either.)
Did We Fix What Was Broken with Small Investors?
Having missed out on much of the recent rally on Wall Street, individual investors are now starting to pour in again—in spite of the fact that, in the history of the S&P 500, there have only been four times that the market gained a larger percentage than the current one.3
Small investors also have rediscovered margin debt (borrowing against their portfolios to buy more investments) at levels not seen since right before the last crash. Margin debt hit a peak right before the last two bear markets. “It’s a warning sign that the Federal Reserve’s easy-money policies are creating a bubble mentality among stock traders.”4
• You are misguided. Say what? Yep, you’re misguided. You’ve been following that same conventional financial wisdom that isn’t working for anyone! You’re pouring as much as possible into your 401(k) or IRA—and seeing its value decline or remain stagnant. You may be trying to pay off your mortgage early—only to see that the worth of your house is less than what you still owe on it. You’re sinking money into a 529 college plan—only to worry that the market may tank again right when your child is ready to go to college.
You’ve been misguided. (And so was I.) It sucks.
• You are willing to see it differently. Okay, here’s where you either toss this book in the trash or you keep reading further. Are you willing to see it differently? Are you willing to absorb the stats, validate the research, do your homework, and see if maybe the conventional financial wisdom you’ve followed is flawed? Are you willing to entertain the possibility that there might be a solid, time-tested strategy that few financial gurus will acknowledge but that hundreds of thousands of people like you are using successfully? (I was willing, and so now I’m one of those hundreds of thousands!)
I’ve Been There and Done That, Too
I’m not stupid. I’m not lazy. I wasn’t looking for a magic bullet. But I was misguided. And I was willing to see it differently.
My husband Larry and I had invested in all sorts of financial products and vehicles starting in 1987, but we had never come close to getting the returns we were told we should be able to get.
At one point, we figured the problem must be us. You know how some people seem to be unlucky in love? Well, we seemed to be unlucky in investing. So we decided to hire an expert to manage our money for us. We ultimately hired three oh-so-pricey experts—and all three of them lost us money during what turned out to be the longest-running bull market in history!
We picked ourselves up, dusted ourselves off, and continued searching. Since 1990, I’ve coached tens of thousands of financial advisors on how to build their businesses, so I had access to a multitude of financial vehicles. I ended up investigating more than 450 different financial products, strategies, and vehicles, and only a few passed my due diligence tests.
But even those few turned out to be disappointments. What sounded great in theory and looked seductive on paper simply didn’t show up in reality.
Did They Fix What Was Broken in Financial Products?
The financial products that played a role in the crisis are coming back. In just the first quarter of 2013, banks sold about $1 billion of synthetic collateralized debt obligations (CDOs)—the same stuff that caused the credit bubble to burst in 2008. The former head of the Troubled Asset Relief Program, which oversaw the $700 billion bailout, said, “History is repeating itself. Because banks profited from the credit bubble and then faced no jail time when it popped, there’s little reason to think that [these instruments] are going to be significantly better this time around.”5
Finally one of my financial advisor clients said, “Pamela, have you ever heard about this?” This turned out to be a little-known twist on a financial asset that’s increased in value every single year for more than 160 years: dividend-paying whole life insurance.
Okay, so now you’re ready to throw this book in the trash! But hold on. Don’t tune me out, because this is nothing like the whole life insurance policies Suze Orman, Dave Ramsey, and most financial advisors love to hate.
Properly structured, the policies I’ll show you grow cash value as much as forty times faster than the ones Suze and Dave, et al., talk about. They pay the advisor or insurance agent 50–70 percent less commission. And you can use them as a powerful financial-management tool right from the start to fire your banker, bypass Wall Street, and have financial security for life.
I’ll explain it all in detail in this book.
About the Bank On Yourself Revolution
This isn’t a pitchforks-and-bayonets kind of revolution. It started quietly and without a lot of fanfare. People who were tired of doing “all the right things” financially and ending up with little or nothing to show for it simply decided that enough was enough. They didn’t throw Molotov cocktails or storm the castle walls of the Federal Reserve. They just quietly stopped putting their money into financial vehicles that didn’t deliver.
They put less money into their 401(k)s and IRAs, and some stopped funding them altogether. They pulled back on their mutual funds and stocks and bonds. They pulled the plug on some of their real estate investments. They stopped letting their futures be determined by the hysteria of Wall Street and the seductive advice of financial gurus.
They took back control.
For the first time in their lives they had a solid financial foundation to build their futures on. They could move forward without the stress, worry, and uncertainty they had lived with, in the past.
And even though everyone from Bloomberg to MSN to Yahoo Finance swore up and down that there was no place to hide from the recession that rocked the world, these quiet revolutionaries found one.
Hundreds of thousands of people embraced the Bank On Yourself method and saw their money grow safely and predictably every single year—even when the markets tumbled.
• Their plans never even skipped a beat when the stock and real estate markets crashed.
• They didn’t have to gamble on Wall Street to accumulate a sizeable nest egg. They didn’t have to worry about when the next crash would come and
