planned for. If your money is in CDs, savings and money market accounts, you’re probably concerned about the low returns you’re getting. You may be worried about the forced distributions (RMDs) you’re required to take from your retirement account. You also may be thinking about passing a financial legacy to your children and grandchildren. (See Chapter 10 for ways Bank On Yourself addresses the specific concerns of seniors.)
Who Bank On Yourself Isn’t Right For
Bank On Yourself is not a get-rich-quick scheme. It takes some patience and discipline. If you have those traits, it pays a lifetime of benefits. But if it takes pie-in-the-sky promises of 12 percent, 20 percent, or more in annual gains to get your attention, this book is not for you.
And if you regularly spend more than you make, wait until you’ve got that under control before looking at this strategy. (Chapter 6 has some helpful tips for gaining control of your money and spending.)
The Bank On Yourself strategy gives you a rare combination of guarantees, safety, liquidity, and control. Your money grows by a guaranteed and predictable amount every year, and that growth gets better every year you have it. Bank On Yourself is for those who want to grow their wealth consistently every day and have control of their money and finances.
This strategy is so safe and so consistent that it’s actually really pretty boring. If you need something sexier, try your hand at pork bellies or gold futures on the commodity exchange. Trust me, Bank On Yourself is not the stuff that makes for titillating cocktail party conversation.
If you’d like to find a financial strategy that doesn’t promise you the moon (but will deliver impressive results), and if you’re more interested in truth and pragmatism than blue-sky fantasies, then let me introduce you to someone who now thinks boring is pretty darn exciting.
When Boring Takes Your Breath Away
Dan Proskauer is vice president of technology engineering for a major health care company who holds three U.S. patents. He lives below his means and has significant savings discipline. Dan is a sophisticated investor, but after the two financial crashes of 2000 and 2008, he realized he had nothing to show for decades of saving and investing his hard-earned money and “doing all the right things.”
Dan is very analytical and has spent literally hundreds of hours investigating Bank On Yourself and, as he puts it, “The more I look at this, the better it looks.”
In late 2012, Dan sent me a chart showing how his family’s net worth has grown since he started his first Bank On Yourself plan three and a half years earlier, and how that growth compared to the previous ten years of rolling the dice in the Wall Street Casino.
When Dan saw this chart on his financial tracking software program, he said his jaw dropped so hard it left a dent on his keyboard. He told me the story this way when I interviewed him for my Bank On Yourself blog: “One chart I track shows me our family’s net worth, which is the value of our assets minus the value of any liabilities we have.
“I look at this chart every time I start up Quicken, or I at least glance at it, and I was thinking, ‘Man, this chart just hasn’t changed very much. It looks pretty much the same as it has for a long time.’ I was expecting to see some difference as we embarked on our journey with Bank On Yourself.
“So, just two weeks ago, it was bothering me so much I opened up the chart and took a closer look at it.” It turns out that two years previously, Dan had set the chart for a specific date range and forgot that he’d done that. So for two years it was just showing him the same data over and over again.
“When I removed that date restriction and saw the data from my whole record, I was stunned!
“When I compared what happened to the left of that arrow to the time we started to implement the Bank On Yourself method, the picture was completely different. After starting our Bank On Yourself plans, the volatility is largely gone. It’s a very smooth slope, and the slope is tremendously steeper—in a good way—than I ever expected. That just floored me.”
NET WORTH OVER TIME: EXCLUDING HOME/REAL ESTATE
High Expectations Exceeded
Dan continued, “When I saw this chart, I realized that my high expectations had been really exceeded. I felt a tremendous sense of accomplishment that I made this decision. Frankly, it’s working out far better than I could have expected. I feel really good about it, and I want to shout it from the rooftops!
“The other thing is, I go to sleep every night knowing I don’t have to worry about ‘What’s going to be the news out of Europe when I wake up in the morning? What’s going to be the news out of Asia?’ Or when I get up and go to work, ‘What’s going to happen during the day in the U.S.?’ I just don’t really worry about any of that. I know that our family has a solid and predictable financial future, with this as a foundation.
“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.”
Eliminate Volatility and Create Real Wealth
“The reduced volatility you see in the chart is completely expected, obviously, because we’re out of the stock market. We’re not having those ups and downs, so I’m not surprised to see the volatility be lower. But the growth! That just blew me away.”
Here’s a more detailed version of Dan’s net-worth chart that makes it clear how market volatility was affecting his wealth:
NET WORTH OVER TIME: EXCLUDING HOME/REAL ESTATE (WITH ANNOTATIONS)
Because all of your principal and growth is locked in when you use the Bank On Yourself method to grow your nest egg, you have real rather than paper wealth. The numbers you see on your annual statements represent the real values of your plan. They don’t go backward when the markets crash. And that makes all the difference in the world. The next chapter shows you why.
Dan noted that his income has increased some in the last four years, as has the amount he saves each year. But the significant difference is that he now has a great place to put that income—his Bank On Yourself plans—where he no longer loses any of it to the randomness of the market. Dan’s convinced that the picture of his net worth wouldn’t look nearly this good if he hadn’t discovered Bank On Yourself.
That’s the kind of story I consistently hear from folks who use the Bank On Yourself wealth-building method. Because you can see the growth and you have access to your money in the plan, you’re actually more motivated to save. You don’t have to worry about losing your hard-earned dollars due to the events of the day in the U.S. or in some faraway place. And that gives you the confidence to save more.
Why would someone be willing to discuss something as personal as his net worth for the whole world to see? Because, in Dan’s words, “If I can help a few people start Bank On Yourself this year, instead of next year or instead of never, then it’s well worth it.”
