The 5 Essentials for Smart Investing: “Save more in guaranteed, safe, and liquid assets” With Pamela Yellen and Jason Hartman

Jason Hartman
Authority Magazine
Published in
10 min readSep 24, 2019


Save more in guaranteed, safe, and liquid assets. Put more of your savings into financial vehicles that aren’t subject to the high volatility of markets such as stocks, real estate, and other risky assets. For money you need to keep safe and liquid, consider high cash value, low-commission dividend-paying whole life insurance, which enjoys a combination of safety, liquidity, guaranteed growth, control of and access to your money, and tax advantages as well.

As a part of my series about The 5 Essentials of Smart Investing, I had the pleasure of interviewing financial security expert Pamela Yellen. Pamela Yellen is founder of Bank On Yourself, a financial investigator, and the author of two New York Times best-selling books, including her latest, “The Bank On Yourself Revolution: Fire Your Banker, Bypass Wall Street, and Take Control of Your Own Financial Future.” Pamela investigated more than 450 financial strategies seeking an alternative to the risk and volatility of stocks and other investments, which led her to a time-tested, predictable method of growing wealth now used by more than 500,000 families and businesses.

Thank you for doing this with us! Our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to the finance industry?

I have coached more than 40,000 financial advisors and insurance agents since 1990, helping them build their businesses. Over that time I investigated over 450 financial products, tools, concepts, and methods that were touted as sure bets for growing wealth. Most turned out to not even be worth the paper they were printed on. My husband and I tried managing our investments ourselves but we were disappointed with the results. We successively hired three of the country’s top investment and planning firms over a decade to manage our retirement account.

These companies were always on the lists of the country’s top-ten financial advisors and asset managers. They all charged hefty fees and we lost money with all three, despite the fact that this period included what was then the longest-running bull market in history.

I began to wonder whether a blindfolded monkey throwing darts could have done as well. My husband and I would be in the same boat as so many Americans today — wondering if we’d ever be able to retire, and what we’d have to go without to do it — had we not finally stumbled across a strategy I call “Bank On Yourself,” which puts a unique twist on a safe and proven financial vehicle that’s been around for over 200 years. It’s never had a losing year. At first I was skeptical — it sounded “too good to be true.” I spent months investigating it before we put it to the test with our own money. It turned out to be one of the best financial decisions we ever made.

Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?

When my husband had to have emergency quadruple heart bypass surgery, we got stuck with $15,000 of medical bills our health insurance didn’t cover. That’s when we discovered that medical emergencies cause 50% of bankruptcies — and that 75% of these folks had health insurance at the time. Fortunately, we were able to borrow enough from our Bank On Yourself plan to pay off the bills in full — no questions asked! Within two years we had paid back the loan we took and recaptured the interest we would have paid if we had been forced to use a credit card or other lender. That’s when we realized what a lifesaver this savings strategy really is for covering any kind of emergency expense.

Are you working on any exciting new projects now? How do you think that will help people?

I just finished writing a new book titled “Rescue Your Retirement: Five Wealth-Killing Traps of 401(k)s, IRAs, and Roth Plans — and How to Avoid Them!” It’s very well researched and has some very up-to-date information on why traditional retirement plans have failed to deliver financial security and peace of mind to most Americans. Sadly, the typical 65-year-old will outlive their savings by almost a decade, according to a new study by the World Economic Forum.

Ok. Thanks for all that. Let’s now jump to the main core of our interview. According to this report in Fortune, nearly two-thirds of Americans can’t pass a basic test of financial literacy. In your opinion or experience what is the cause of these unfortunate numbers?

A few years ago I conducted a similar survey I called “What’s Your Financial IQ?” to see if people could answer basic questions about financial literacy. Among nearly 4,000 people who took the quiz, only 3% got an A, and only 3% got a B. The average score was only 52%. I had braced myself for the worst but was still surprised that 64% of the quiz-takers flat-out flunked it.

So yes, most people lack the critical knowledge they need to make informed financial and retirement planning decisions and avoid becoming a victim of deceptive and predatory practices. There are several reasons why. Financial literacy is not something that schools excel in teaching — if they teach it at all. Parents have a large influence over their kids when it comes to developing financial attitudes and behaviors, but most parents admit they feel unqualified or incapable of teaching their kids about money.

So most people learn by watching and following what other people do. Too often, like financial lemmings, we follow the trends, patterns, and habits of people around us without ever stopping to question why. The financial insecurity that millions of families are feeling is proof that this is not working.

If you had the power to make a change, what 3 things would you recommend to improve these numbers?

I always tell people not to make financial decisions based on who shouts the loudest and don’t follow the guidance of the majority just because it’s the majority. As Texas Bix Bender wryly noted, “Just cuz you’re following a well-marked trail doesn’t mean that whoever made it knew where they were goin’.”

People can improve their financial security, literacy, and decision-making by asking themselves three questions when considering any financial product or strategy:

· Will this advice give me peace of mind and let me sleep at night?

· Will this advice help me get where I want to go without taking unnecessary risk?

· Will this advice allow me to be in charge of my money and my financial future?

Ok, thank you! Now to the main question of our interview: You are a “finance insider.” If you had to advise your adult child about 5 non-intuitive essentials for smart Investing, what would you say? Can you please give a story or an example for each.

1. If you don’t have a significant portion of your savings in safe and liquid financial vehicles, you are in for some serious pain that could last for many years or even decades. We are in the longest-running bull market in history, but it is only a matter of time before it ends. Historically, the longest-running bull markets go out “with a bang, not a whimper,” according to investment strategist Sam Stovall. When this happens, it causes almost unimaginable pain as people lose their jobs, homes, life savings, and sometimes marriages. It has taken the market up to 25 years to recover from a major market crash.

Adding to the problem is the fact that most people have little to no savings outside of the volatile stock and real estate markets, according to the Federal Reserve Survey of Consumer Finances. They also have very little in safe and liquid emergency reserves, which leaves them extremely vulnerable when the you-know-what hits the fan.

2. Avoid excessive debt at all costs. U.S. credit card debt hit a record $868 billion in August, up $20 billion from the prior quarter and making credit cards the fourth-largest portion of consumer debt after mortgage, student loan, and auto debt. This advice is not just for younger folks. Americans over age 60 hold nearly one-third of all credit card debt in the country — and they’re seeing their accounts go delinquent at an increasing pace. If your credit cards are maxed out and you’re faced with an emergency expense, you may be forced to borrow more money at an exorbitant interest rate, or skip a payment and take a hit on your credit score. Then you’re stuck in a vicious circle effect: The higher your debt, the lower your credit score. The lower your credit score, the higher the rate you’ll be charged for the privilege of spending money you don’t have.

3. Build a safe and liquid reserve fund equal to two years of your household income. Most people have little or no cash reserves to get them past an emergency. Although most financial talking heads will tell you that you only need three to six months’ income in your “rainy day” fund, I strongly disagree. In the last recession, many people were out of work for a year or more.

Loss of income, medical emergencies, divorce, major home repairs — it doesn’t take much to run through savings that represent just 3–6 months of income. You really need safe and liquid savings equal to two years of household income.

4. Don’t rely too much on volatile, unpredictable, government-sponsored retirement accounts for income in retirement. According to the 2019 DALBAR study, the typical equity mutual fund investor has earned only 3.88% annually for the past 20 years, beating inflation for that period by only 1.7% a year. Asset allocation and fixed income investors actually lost ground when factoring in inflation. This underscores a point I always make: If you don’t know the minimum guaranteed value of your savings when you want to tap into them, you don’t have a plan — you’re gambling.

5. Save more in guaranteed, safe, and liquid assets. Put more of your savings into financial vehicles that aren’t subject to the high volatility of markets such as stocks, real estate, and other risky assets. For money you need to keep safe and liquid, consider high cash value, low-commission dividend-paying whole life insurance, which enjoys a combination of safety, liquidity, guaranteed growth, control of and access to your money, and tax advantages as well.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

An early career mentor of mine, Somers White, encouraged me to not try to be all things to all people. He showed me how I could make a bigger impact in a shorter period of time by leveraging my natural strengths and by focusing on the insurance and financial services industry.

Being a “big fish” in a smaller pond has enabled me to help far more people take back control of their money and finances.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

I have taken a lot of flak and criticism from Wall Street for my contrarian approach to building wealth without the risk of stocks and other volatile investments. It’s been tough to take at times and has made me think about giving up on my mission and just going back to the quiet life I had before my books hit the New York Times best-seller list.

But prominently placed on my office wall is a quote from Dan Kennedy, the mentor who’s had the most profound positive influence on my life:

“If you don’t offend somebody by noon each day, you’re not doing much.”

And isn’t that true? If I weren’t stirring up the waters or getting any pushback, it would be because I was parroting the same old financial strategies which clearly haven’t been working. That quote has kept me going when quitting would have been so much easier to do.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. :-)

My mission is to help people achieve their financial goals and dreams without taking any unnecessary risks. I want to help people take control of their money and finances so they don’t have to rely on Wall Street, banks, and finance companies or the government for their financial security.

I’ve helped many people achieve that already, and my goal is to help one million families and businesses.

Thank you for the interview. We wish you continued success!

About The Author:

Jason Hartman is the Founder and CEO of Platinum Properties Investor Network, The Hartman Media Company and The Jason Hartman Foundation. Jason has been involved in several thousand real estate transactions and has owned income properties in 11 states and 17 cities. His company, Platinum Properties Investor Network, Inc. helps people achieve The American Dream of financial freedom by purchasing income property in prudent markets nationwide. Jason’s Complete Solution for Real Estate Investors™ is a comprehensive system providing real estate investors with education, research, resources and technology to deal with all areas of their income property investment needs. Jason’s highly sought after educational events, speaking engagements, and his ultra-hot “Creating Wealth Podcast” inspire and empower hundreds of thousands of people in 164 countries worldwide. While running his successful real estate and media businesses, Jason also believes that giving back to the community plays an important role in building strong personal relationships. He established The Jason Hartman Foundation in 2005 to provide financial literacy education to young adults providing the all important real world skills not taught in school which are the key to the financial stability and success of future generations. We’re in a global monetary crisis caused by decades of misguided policies and the cycle of financial dependence has to be broken, literacy and self-reliance are a good start.



Jason Hartman
Authority Magazine

Author | Speaker | Financial Guru | Podcast Rockstar