is to reject something you know nothing about.
—DR. WAYNE DYER
THIS BOOK may make you crazy angry.
It might make you feel uncomfortable, anxious, confused. It might make you question some of your long-held beliefs about money, the stock market, investing, how to get ahead, and how to build wealth. You may start doubting the very validity of the financial strategies and vehicles you’ve poured your blood, sweat, tears, and dollars into.
And if this painful truth hasn’t dawned on you previously, you might feel more than a little squeamish to realize that you’ve built your financial future on a house of cards that can—or has—come tumbling down through no fault of your own.
INSIDE THIS CHAPTER …
• You Can’t Predict the Future—But That’s Okay
• How I Figured Out What Doesn’t Work
• What’s the Bank On Yourself Revolution All About?
• Who Bank On Yourself Isn’t Right For
• Stop Losing Money to the Randomness of the Market and Create Real Wealth
Yep. I’m the bearer of bad tidings.
But if you can get through all the angst and anger and fear and sadness those bad tidings will cause you, I’ve got some good news for you as well. And if you’re willing to keep an open mind, I can show you a way out.
A way out of the constant worry about whether you’ll ever be in a financial position to retire. Out of the stress of figuring out how you’ll ever be able to afford your children’s college education. Out of the crazy-making exercise of trying to second-guess a stock market whose strings are pulled by people whose greed is only outstripped by their ingenuity for coming up with complex smoke-and-mirrors financial schemes.
A way out of the discouragement you feel paying steep credit card fees, the panic you feel when unexpected and shockingly expensive emergencies strike, the sadness you might feel when you realize that you worked really, really hard for decades to end up with … not very much at all.
Is It the Best of Times or the Worst of Times?
I have no idea what the economic climate will be as you read this book. Absolutely no clue. We could be in a screaming bull market, or in the throes of a financial crash and recession, or somewhere in between.
The critical question is:How much does your financial security depend on things you can’t predict or control?
The critical question is: How much does your financial security depend on things you can’t predict or control?
When my first book on Bank On Yourself came out in 2009, we were two years into what turned out to be the deepest and longest recession since the Great Depression. The stock market crashed, losing almost half its value—the second horrific crash in a decade. The housing market collapsed, ultimately wiping out a decade of home equity. Millions of people lost their homes, and many more homeowners found themselves owing more on their mortgages than their homes were worth. The government bailed out the too-big-to-fail companies, and all the little people like us were left to fend for ourselves.
It was the biggest financial crisis in decades, yet how many people saw it coming? As Nobel Prize–winning physicist Neils Bohr reminded us, “Prediction is very difficult, especially if it’s about the future.”
As I update this at the end of 2015, central banks around the world are still running their money printing presses 24/7, and government debt levels have hit unprecedented nosebleed territory. This is creating a level of debt that may mortgage our children’s and grandchildren’s future for decades. The Fed’s easy-money policies have forced money into riskier assets and created new bubbles.
The stock market reached new highs, and over the past year it has experienced renewed volatility and gone nowhere. Investors have gone nowhere since 2000, when inflation and fees are taken into account. Home values are recovering (though still below their highs) and some real estate markets have become hot again, with investors and home buyers swarming all over anything that hits the market (déjà vu all over again?).
Are things getting better? Or are we in the eye of the hurricane, the lull before the trailing edge of the storm whips through and lays us flat again?
I don’t know—and neither does anyone else. And that’s the problem.
Economic growth is sluggish, and many countries around the world remain vulnerable to economic collapse. The typical household nearing retirement has an average of only $111,000 in their combined retirement accounts, according to the latest Federal Reserve Survey of Consumer Finances. It’s estimated that will provide an income in retirement of only $500 per month, which won’t cover groceries, let alone health care, heating, transportation, and other necessities. And that $500 per month is likely to be a household’s only source of retirement income other than Social Security.
Did They Fix What Was Broken in the Financial Markets?
Are they still rigging the system?
Banks were fined billions of dollars for rigging a key interest rate (Libor) in their favor, and regulators are now investigating them to determine if they’ve manipulated pricing in Treasuries around the dates of government auctions. It was also discovered that high-speed traders used a hidden facet of the Chicago Mercantile Exchange’s computer system to get an edge before other traders get the same information.1
In the last few years, no major market has been immune to being rigged—currencies, commodities, precious metals, foreign exchange rates, default swaps, stocks—you name it.
They’ve passed a passel of new regulations in the past few years, but has anything really changed?
Warren Buffett, who’s considered to be one of the most successful investors of all time, told CNBC, “We will have a bubble, and it will burst. It won’t be the same as the last one. That’s been the history. You don’t have one Internet bubble after another. You have [the] housing [bubble] after the Internet [bubble].”
Eye of the storm or economic recovery? I don’t know (though I’d definitely land on the storm side of the debate because I just don’t see that they fixed what was broken). But in many ways, it just doesn’t matter.
It doesn’t matter because the wealth-building strategy I’m writing about has survived and even thrived during every period of economic boom and bust for more than 160 years. Whether interest rates were high or low. During bull markets and crashes. Even during the Great Depression. Housing market that’s tanked or steaming hot. Dow Jones up or Dow Jones down.
Whatever’s going on, there is a way to secure your family’s future, without being at the mercy of the economic climate that swirls around you, and without relying on banks and Wall Street.
Warren Buffett, one of the most successful investors of all time, has on several occasions predicted another financial crisis that will shock the markets.
What I Know About You
Pardon me for being bold, but if you’ve picked up this book, I think
