Bank,Yourself,Pamela,Yellen,Fi finance, share, loan Bank on Yourself by Pamela Yellen
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First, realize that Ms. Yellen is a protege of one of the greatest direct marketing geniuses of our time -- Dan Kennedy.Therefore, it should not come as any surprise that this book is little more than disguised marketing for her company. That by itself is not bad -- many good books were written to further some other aspect of the author's career.What irritated me was the ratio of fiction and case studies to factual explanation. The factual explanations -- such as they are -- are buried in a fictional narrative of a hypothetical couple meeting with a Bank on Yourself financial adviser.It's so full of mentions of how you can use BOY to buy cars, take trips, and so on that you forget that you're writing big checks to a life insurance company on a monthly basis. Maybe I'm wrong, but I see the hand of Mr. Kennedy behind this, because he knows very well that people want to read about what they'll get rather than what they'll have to pay for it. You can read large parts of this book and easily forget that you have to write large checks to a life insurance companies to get all these goodies. And that if you do borrow money from your policy to finance a car, vacation or other purchase, you have to write more large checks to the life insurance company for years afterward, to pay for those things.And you're not paying it to yourself, you're paying it to the life insurance company which loaned you the money (with the cash value of your life insurance policy as collateral).I didn't see any answer in this book to my question -- how can the life insurance company afford to do this? So I'm left with what I think is the most logical answer -- they pay a lower yield. Although, to be fair, they apparently don't spend most of your first three years' worth of dividends on the commission to your life insurance agent, as other whole life companies do -- that's a good thing.Ms. Yellen evades the central criticism against whole life in general -- that term is cheaper because it provides only life insurance, not life insurance plus a forced savings plan. And that's why Dave Ramsey, Suze Orman and other financial experts advise against whole life.And she doesn't cover how the life insurance company can do so much better than stocks and real estate. They guarantee you a certain rate of return because they invest their money conservatively, in low-yield, low-risk bonds. A life insurance company can't obtain the same long-term returns that stocks can. I find it hard to believe -- and this book is too fact-deficient to go by -- that you could not obtain a better low-risk yield yourself from a good money market account or certificates of deposit.I believe that personal use real estate should be looked at totally as an expense, not an investment. I agree that's a mistake.And I also agree people shouldn't put their money into stocks hoping for price appreciation. I believe in investing for income -- dividends and interest.I do realize whole life insurance has some legitimate estate-planning functions, so you should check with a good financial adviser on that. And perhaps one of the few "mutual" type life insurance companies left in the United States would give you a better value than most whole life insurance. It's worth checking out.However, don't get all carried away and think you've found a magic way to finance your cars and vacations now and your retirement later. BOY requires money -- money that may be put to better use paying off debt instead of "restructuring" it as this book advises or, once you've paid off your debts, buying income-producing investments. Article Tags: Life Insurance Company, Life Insurance, Insurance Company, Whole Life
Bank,Yourself,Pamela,Yellen,Fi