Bank on Yourself(TM) - Discover How to Stop Paying Interest to Banks, Credit Card and Finance Companies! (c) 2007 Pamela Yellen

BEWARE of these Wealth DESTROYERS... 

Why Conventional Financial Planning Doesn't work! (c) 2007 Pamela Yellen

1. Lack of Financial Diversification by relying on the stock market...
   
   [CONVENTIONAL FINANCIAL PLANNING MYTH: "The Stock Market is the best hedge against inflation- over the long-haul you should expect great returns!"]
   
   - It IS A FACT that Most Investors Don't Come Close to Equaling or Beating the Stock Market, and here's why...
   This was reported in the January 2004 issue of Bottom Line Tomorrow:
   
   From 1984 through 2002, according to a study done by Dalbar, Inc., a leading market research firm:
   
   "The average investor earned only 2.6% annually, even less than the inflation rate of 3.1%. Main reason: Investors "chase performance" by buying the best-performing investments of the past few months-after their hot run is over. Then when they find themselves in a low performing investment, they do it again. And with each switch they incur extra expenses."
   In other words, when you factor in inflation, the average investor actually lost money during the longest-running bull market in history!
   
   Even if you are making money in the stock market, are you able to do it without losing sleep?
2. Passing on the Retirement Buck by relying on Pensions Plans, Social Security and Medicare:
   
   - You see, MOST people have put their retirement in hands of their employers and their politicians-just ask the workers at United Airlines, General Motors or Enron to mention a few.
   
   - Are you going to do the same?
   
   - Do you think that your Pension or Social Security will be around to provide for you and your family in retirement?
3. Consumer Debt...
   
   [CONVENTIONAL FINANCIAL PLANNING MYTH: "You're always better off using Other Peoples Money for Financial Leverage"]
   
   -According to the National Consumer Credit Council:
   
   The average credit card balance is $8,000
   
   For people 50 and older, debt nearly doubled in the 9 years between 1989 and 1981 (AARP, April 2002).
   
   For those in the middle half of the population, income-wise, median debt jumped from $10,500 to $22,001 (AARP, April 2002).
   
   For the top 25%, income-wise, median debt increased from $43,000 to $80,0001 (AARP, April 2002)
   
   If you're a baby boomer, on average, your unsecured debt has risen to 50% of your income (Amerix Corp. quoted in Arizona Republic, May 11, 2003)
   
   We have WILLINGLY subjected ourselfs and our families to a LIFETIME of paying INTEREST and FINANCE charges to financial institutions.
   
   Just think about this- On a home mortgage, after you factor in closing costs, approximately 86% of every dollar you pay goes to the cost of financing--and a $100,000 mortgage will typically end up costing you nearly $250,000!
   
   It is clear that someone's getting rich here- but it isn't you!
4. Tax Deferred Government Sponsored Retirement Plans (i.e. IRA's, 401k's, 403b's, SEP's etc.)...
   
   [CONVENTIONAL FINANCIAL PLANNING MYTH: "Save as much money as you are allowed into these plans- your taxes will be deferred until retirement when your tax rate is sure to be lower"]
   
   - Do you really think that taxes will be LOWER when you retire?, just take a look at tax rates over the last 20 years to find an answer to that question.
   
   - With the VERY RARE EXCEPTION of an EMPLOYER matched contribution plan - Tax Deferred Government Sponsored Retirement Plans should be avoided like the plague.
   
   - In the words of Mr. R. Nelson Nash, author of Becoming Your Own Banker: "When the government creates a problem (read onerous taxation) and then turns around and creates an execption to the problem they created (read tax-sheltered retirement plans, etc.) aren't you just a little bit suspicious that you are being manipulated?"