Bank on Yourself, by Pamela Yellen

Review by W. J. Rayment / ConservativeBookstore -- As we all know, who you borrow from can make a huge difference. Credit card companies charge more than 20% interest. Banks charge fees and some require an annual review of your account. It is also evident that some of the biggest money making organizations in the country are the companies loaning out money. So the questions for any conservative on the make must be: "How do I get a piece of the billions pulled in by the big banks and credit card companies every year? How do I borrow from the right people when I need money? And how do I do all this in a safe, conservative manner?"

As incongruous as it may seem, it is possible to have your cake and eat it, too. Pamela Yellen in "Bank on Yourself" gives the gritty details on how it can be done. The concept itself is actually quite simple. Instead of borrowing from a credit card company or from a bank, you borrow from yourself. You may ask how you can borrow from yourself. You would not be borrowing the money if you had it already. Nevertheless, as Ms. Yellen points out in her book, if you were to borrow the money from yourself, and paid back the same amount in interest that a mortgage company collected, you would be way ahead.

In reality, there is a way you can borrow from yourself without building up a pile of cash first. You can create an asset that will loan you the money. This asset is a mutual whole life insurance policy. And if you get the right kind of policy, you can borrow on the cash value that builds in these types of accounts. But the key to retaining some of the interest you pay for yourself is to make sure the policy is with a mutual company, that is, one in which the policy-holders are part owners (not the stock-holders). In such cases, the money made by the insurance company in the difference between claims and premiums and the interest collected on loans, gets credited back to the policy-holder's account in the form of dividends.

As Ms. Yellen points out, the upside here is tremendous. Not only does the borrower get all the benefits of the loaner, but also gets a life insurance policy that protects the family in the case of the demise of the breadwinner. If there is a need for a payment or two to be skipped, it can be done. Meanwhile money is building up in an account that can eventually be used for retirement. Is there a downside? Like all good things, there are a few caveats. The Policy does require a certain amount of cash value to build up, and this requires an initial and continuous investment from the policy-holder. Yet, it would seem that the benefits ultimately out-weigh the costs.

There is much more depth to the Bank on Yourself idea. To get the details on Paid Up Additions Riders (PUARs) and MECs, as well as all of the possibilities, requires a thorough reading of the book.

It is true that "Bank on Yourself" is selling a product, and it encourages the reader to go to the Bank on Yourself website. But the book is packed with interesting information on finance, and conservative money handling. It is well laid out, with plenty of examples from private individuals revealing the inter-workings of these policies. The book is definitely worth the read if only to explore the possibilities.

Bank on Yourself is available at Amazon.