re: are you getting your financial advice from the same people who told you looked awesome on prom night?

(No, this is NOT my prom picture, lol!)

by Teresa Kuhn, JD. RFC. CSA
Authorized Bank on Yourself (r) Advisor

One of the most pervasive pieces of financial misinformation I have heard over the years is the venerable and oft-repeated mantra:

"Buy term and invest the difference"

You've heard it on TV...

or from your mom who waggled her finger at you while she said it...

Your insurance guy friend swears it is the ONLY WAY TO GO...

your plumber, barber, fishing buddy, etc...

they're all true believers in this concept...

"Buy term and invest the difference sounds simple enough...

it evens makes sense on the surface..

However, when you dig a little deeper,

there are issues which "buy term and invest the difference"  doesn't address.

For example:

1. Most of the term policies advocated by financial "experts" do not increase the 

    death benefit level during the policy term.  This means there is no remedy for inflation.
   (and I believe that inflation is bound to be much higher in the future!). 

   Bestselling author (Bank on Yourself) Pamela Yellen did the math and 

   she figured it out.  According to Pamela:

   A $250,000 20 year term policy,adjusted for 4% inflation, will have
   lost 56% of  its' value! 

   Even policies which include an "increasing benefits rider" may not increase at a rate that
   will overcome the demon of inflation. 

2. Your future poor health:  Some term policies are written so that if your health 

     deteriorates during the policy term- your renewal rates increase.  

     And if you don't renew and try to seek coverage elsewhere, you might discover that 

     you are uninsurable- at ANY price.

3. You can invest the difference easily enough, but you can't "time the market" or 

     accurately predict how much money will be in your account when it comes time to retire. 

     With the types of accounts I design for my clients, they always know exactly how much 

     they have.  They don't have to worry about timing the ups and downs of the stock 

     market.  When they need it-the money is there.

4. "Buy term and invest the difference" advocates usually know nothing about the
      specially-designed whole life policies I use to structure my financial plans. 

 
     These policies are only written by a few select companies and have special provisions 

     which are unlike those of traditional whole life.  Any advisor who assists their clients with  

     these policies must have thorough training.  

     That agent must also be willing to forego the usual high commissions on whole

     life in order to make the plan work for their clients.
 
    The policies used in self-financing are far beyond regular whole life policies in both 

    complexity and purpose.

5. When evaluating plans such as the one I recommend to my clients, the financial gurus
    don't factor in the tremendous amount of money my clients save on interest and fees.
    By financing your large purchases (ex: your car) yourself, you avoid having to pay 

    thousands of dollars in interest and fees. (my clients LOVE this!)

Now, just for the record...

I believe that everyone who can afford to do so should have as much life insurance as possible. 

Term IS a great way to get more coverage for less money and if you can get term- you should have it.

However, the primary reason for getting one of the specially-designed whole life policies has little to do with with the death benefit...
 

Instead, the idea behind these policies is to provide you with a savings vehicle that gives you growth, stability, and safety in sharp contrast to the ups and downs of the stock market. 

Also, you will be able to pay YOURSELF the interest you used to pay when you borrowed from banks or loan companies, enabling your account to grow at a much faster rate than ordinary whole life...

The permanent insurance you also get is just icing on the cake...

To learn more about how I can help you avoid paying too much money to banks and finance companies...

Call me today

Teresa Kuhn, JD, RFC, CSA
www.safeharborboy.com
www.ibankonme.com
www.ibankonmyself.com

Seeking What They May Devour...

re: America's last great source of personal wealth makes politicians drool...

by Teresa Kuhn, JD, RFC, CSA
Authorized Bank on Yourself (R) Advisor
 
If you're like most people... you participate in a 401 K or similar qualified plan.  401 K's, in fact are hands down the most widely held type of retirement savings account in the United States today.

The majority of the few Americans who have any sort of retirement savings  have most of that savings invested in the 401 K plans at their work.

That's why, when I discuss"Bank on Yourself" with clients and prospective clients,the subject of 401 K plans usually comes up, with people asking questions such as:

"How much should I contribute to my work plan? Is it truly as safe and secure as I have been lead to believe?   What are the tax issues of which I need to be aware?"

Philosophical issues (and there are many) aside, I see many problems with 401 K plans as they now exist.

These include: structural flaws, lack of accountability on the part of fund managers, obfuscated tax requirements and implications,lack of desire on the part of many people to do the work needed to manage their account for maximum benefit,and hidden fees.

For me, however, one of the most overlooked, yet potentially devastating problems with qualified plans such as the 401 K is that participants have virtually no input into rule changes which could prove detrimental to their financial well-being.

In other words, it is a GOVERNMENT plan and the GOVERNMENT can decide at any moment to change the rules and requirements without your knowledge or permission.

Some people think it is "scare-mongering," but many financial and political experts have suggested that, as the pressure to meet unfunded liabilities (aka: "debt") mounts, politicians will begin finding ways to tap into America's last great source of wealth:

The estimated 3.6 trillion dollars Americans have invested in 401 K plans is simply too great a temptation for them to avoid.

While outright confiscation is probably not going to happen, I believe that politicians will concoct a variety of stealthy ways to siphon off 401 K money. 

A recent article in the Wall Street Journal discussed these types of stealth moves which should send up ten thousand red flags for anyone with money in a 401 K plan.

Here are some of the proposed changes floating around Capitol Hill according to the Journal:

• IRAs that would automatically enroll workers with no access to a workplace retirement plan, creating a means to save through regular payroll deposits.

• Capping retirement-plan contributions at $20,000 a year or 20% of compensation, whichever is less—including employer contributions. Currently, the limits are 100% of compensation or $50,000 a year.

• Replacing exclusions and deductions for retirement savings with an 18% tax credit, deposited directly into an individual's retirement savings account.

• Accelerating "automatic enrollment" of workers in retirement-savings plans, along with their default savings rate, and automatically increasing workers' savings rates each year.

• Simplifying the paperwork involved for small employers' adopting existing types of plans, with the goal of increasing access for more workers.

When you read between the lines, it's easy to draw the conclusion that most of these changes are being proposed with a view toward increasing the tax revenue coffers rather than really helping Americans plan their financial futures.

(read the rest of the article here:
http://online.wsj.com/article/SB10001424052702304331204577354024207255032.html?mod=rss_markets_main)

I'll be talking more about issues with qualified plans in future editions of the blog.  If you have specific questions regarding your unique financial situation, including questions about your 401 K plan, please email them to me at: tbkuhn@gmail.com.

PS: Don't forget to ask me for your free copy of Bank on Yourself, by Pamela Yellen.  I have a limited number of these available to people who want to learn how to get the most out of their money.

Shocking truth about paying those HIGH Commissions

re:about those big commissions...

by Teresa Kuhn, JD, RFC, CSA

Authorized Bank on Yourself Advisor


A question which is often asked of me and my fellow Bank on Yourself (r) advisors is

"Isn't Bank on Yourself just another way to sell whole life and make big commissions?

The fact that this question is so often asked is very telling:

Wall Street and banks want you to believe that BOY advisors are just out to make a wad of money by hawking over-priced policies while their agents and brokers are always"acting in the best interests of the client."  (selling risky and sometimes questionable securities

My friend and colleague Pamela Yellen, author of the bestselling book "Bank on Yourself" puts the myth of high Bank on Yourself commissions to rest once and for all in an informative and entertaining video.

Here is the link.

http://www.bankonyourself.com/busting-high-commission-myth

Financial Week In Review...

 
re: I read A LOT... and pass on the good stuff to you!

 Here are some of my favorite financial and lifestyle posts for the week of April 8:

In :The Rising Price of A Falling Dollar, Charles Kadlec, founder of the Community of Liberty


04/13/12 

"Do you know why oil and prices are moving sharply higher? Some blame the oil companies, charging they are manipulating prices. Others cite US sanctions on Iran and the threat of a military encounter that would disrupt the flow of oil from the Middle East.

Speculators, too are blamed for ostensibly bidding up the price of oil. In the political arena, President Obama is taking credit for increased domestic oil production even as his critics point out the slow pace of drilling permits issued by his Administration soon will hamper additional increases in the US oil production.
Yet, the basic reason for higher energy prices is being overlooked, even though it is right before our eyes: Oil prices are up because the value of the dollar is down.

Our common sense hides this source of higher prices because we view the dollar as fixed, and prices as moving. News reports explain the sharp rise in consumer prices in February were caused by higher energy and food prices, implying that higher prices cause inflation. Of course, higher prices do not cause inflation. Higher prices are inflation..."


(see the rest of the article at: http://dailyreckoning.com/the-rising-price-of-a-falling-dollar/)


Interesting tidbit from Bloomberg shows how long the major banks have been doing the things they do to us.

"Fortune magazine began publishing annual rankings of U.S. corporations by revenue in 1955. Ever since, scholars and forecasters have analyzed changes in the Fortune 500 to help inform their judgments about industry concentration and the relative importance of different sectors of the economy.

Historians would love to have snapshots of the nation’s largest corporations at earlier dates. Unfortunately data are scarce, especially before the Civil War. Based on our research, however, it is now possible to create a sort of historical “Fortune 500” ranked by corporate capitalization -- the total sum stockholders were supposed to pay for their shares.."

(check out the whole story: http://www.bloomberg.com/news/2012-04-10/-fortune-500-of-1812-shows-u-s-banks-early-influence.html)

Is Groupon the Next Enron? Insiders and bankers are getting rich- but what will happen to investors. (this is a snapshot of how hard Wall Street works to drain your wallet!)

"Before the company even went public, there were signs that internal financial controls weren’t up to snuff.  Now I’m hearing refrains of “three blind mice” as “defrauded” investors line up to have their day in court. You might as well say the “dog ate my homework.”

The U.S. Securities and Exchange Commission (SEC) made management redo Groupon’s financial statements and accounting practices not once, but twice before the company’s January 2011 initial public offering (IPO).

The first time involved including the cost of marketing in operating income – duh. The second was to force the company to deduct merchant payments from revenues – double duh!"

(full story http://www.investorplace.com/2012/04/is-groupon-the-next-enron-grpn-aig-lehm/)

It's Not A Get Rich Quick Scheme

by Teresa Kuhn, JD, RFC, CSA
Authorized Bank on Yourself (R) Advisor
President, Living Wealthy Financial Group

More than a few times I have been asked if Bank on Yourself , the personal financial system designed by best-selling author Pamela Yellen, is another "get rich quick" scheme.

I almost laugh when I get that question because not only is Bank On Yourself (aka BOY) not designed to make you rich... it is also not quick.

There is an educational process that takes place whenever a person decides to become his or her own finance company and a certain amount of discipline and patience are required.

There is also, perhaps even more importantly, a change of mindset that has to occur in order for this approach to work.  After all, the logic behind Bank on Yourself  runs contrary to everything most of us have been conditioned to believe about how money really works.

Someone who chooses this method of getting solid returns that will never go down does so with the understanding that he or she is in it for the long haul.

Why Become Your Own Source Of Financing?

For too many years, I was a big believer in traditional financial wisdom.  You know... the "buy term and invest the difference" and  "no pain, no gain approach."   Not only had I heard this advice from friends, relatives, colleagues, and financial gurus, but I was taught the same things in college.

I learned, for example, that taking on risk in order to grow your wealth was absolutely necessary, that only the stock market could provide solid returns, and that taking a slow and steady approach to financial security was something little old ladies did.

It took me a long time and a lot of research to discover that much of what you and I have been taught about money is just plain BALONEY!  Wall Street marketing is some of the best around and the picture they constantly paint of the sexy, exciting world of the stock market is extremely alluring.   It is hard to step back from it and re-educate oneself on the truth about money.

Even someone like me, who has finance and law degrees, finds it difficult to resist the temptations of playing on "The Street."  It wasn't until after I found out the games the stock market and the government were playing with my hard-earned cash, that I began to search for alternatives for myself.  What I found shocked and saddened me: Wall Street and banks were playing everyday Americans for fools, charging them outrageous interest rates and fees, and laughing behind their backs.

When I finally accepted that I had been wrong about money... wrong about how the stock market really works, and wrong about the correct foundation upon which to build a secure financial future, I decided to make it my life's work to educate others about how money really works.

If you or someone you love is searching for answers in an increasingly unstable and volatile economic climate, then please direct them to this blog.

I intend it as a resource for anyone who has ever thought "there must be a better way" when they looked at their decimated 401 K statement...or added up all the interest they were paying to banks... and nearly had a coronary.

I will be adding as many articles, supporting documents, videos, and audio interviews as I can find in order to help you discover your own path to financial security and freedom.