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Monday, March 11, 2013

Tired of Seeing YOUR Life Savings MURDERED by banks?




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By Teresa Kuhn, JD, RFC, CSA


With interest rates at historic lows, it’s no wonder many people, perhaps even you, have decided that the mattress/coffee can method of cash management is looking better every day.


The virtual freezing of interest rates by the Federal Reserve, which has been a boon to mortgage applicants but a punch in the gut for savers, does not look headed for a thaw anytime soon.  The Fed has repeatedly indicated its’ aims to keep the rate between 0% and 0.25 %  until at least 2015.


Couple that with the steady, erosive force of inflation, which some experts believe is actually around 8% (versus the 2-3% of “official” statistics) and you get some insight into just why it seems the average American can’t get ahead.


Obviously, traditional safe cash management tools are coming under scrutiny from savers who are looking for any relief they can get from artificially low interest rates.


One popular way to achieve a measure of liquidity, safety, and higher rates of return in the past was to “ladder” certificates of deposit. 


Laddering involves buying a series of CD’s with incremental maturity dates and was a method employed by people looking for higher returns than a money market account, but still in need of some liquidity.


 Bankrate.com’s Craig Guillot gives an example of how the laddering strategy is supposed to work:

For instance, a person might invest $50,000 by buying 10 CDs with maturity dates every six months. Each CD acts as a rung on the ladder and as each CD matures, the money is reinvested in a long-term CD, typically five years. The proceeds are then reinvested into more long-term CDs, but as each maturity date arrives, the holder of the CD ladder has the opportunity to put those funds into higher yielding CDs or access the cash penalty-free if need be.”


Success using laddering, however, is dependent upon excess yields stretching out for many months and years, and most financial experts just don’t see that happening anytime in the near future.


Add to that the fact that laddering ties up your money for five years or longer and you can easily see why it’s not a very appealing idea for most people.


So, if you can’t rely on banks and their products, such as CD’s, where CAN you park your cash so that you can keep pace with inflation, access your funds when YOU need them, and have a measure of proven safety?


Of course, I recommend Bank on Yourself ® as the ultimate cash management tool.


Now, I know what many of you are thinking:  


How can becoming one’s own personal bank possibly address the issue of inflation if true inflation is over 8%?

Well, for one thing, the type of insurance companies approved for use by authorized Bank on Yourself advisors have most of their investable assets places in long-term, high-yield bonds.  


These bonds are exceptionally high quality instruments whose interest rates generally increase as inflation increases.  After all, the Fed can only keep the lid on the boiling cauldron so long before they are forced to start raising interest rates.  The kinds of bonds backing a BOY plan are poised to take advantage of this when it happens.  


I have found that BOY plans do as well, or even much better, than other vehicles when it comes to keeping pace with inflation.  An additional advantage of BOY is the fact that with investments such as stocks and mutual funds, you could wind up losing not only the purchasing power of your money, but your ENTIRE investment.  Many of us have seen large chunks of our money disappear just that way.


Also, if you build up equity in your Bank on Yourself policy, you have the flexibility to use that money to take advantage of investment opportunities that come your way, knowing that the balance of your BOY money is still growing, no matter what happens to your other investments.     This is priceless peace of mind that most other financial strategies just can’t provide.


Another great feature of a correctly-designed BOY policy is that its’ efficiency will actually increase every year, giving you a cash value and death benefit which are guaranteed and which grow exponentially.  This is due to the special way in which Bank on Yourself policies are structured.


The dividend-paying whole life policies backing BOY ensure that it is a much more solid, stable, and secure cash management tool than anything offered by banks these days.  Add to this the attractiveness of being able to call your own shots when it comes to accessing and using your money, and you can see why I recommend BOY as the cornerstone of all my clients’ financial plans

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But, don’t just believe me.  Do your own research. 

Call my office at (800) 382-0830 or go to  www.livingwealthyfinancial.com  and I will be glad to send you a free information packet loaded with resources to help you determine whether or not Bank on Yourself is right for you and your family.

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