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College Planning: Do you know where the money will come from?

Posted by Larry Jones on Apr 19, 2018 9:30:00 AM

You have just experienced a major paradigm shift:

As you stand in the maternity ward at 3:12 AM staring at little Bernie, you can't believe how your life has just changed. An hour ago life was all about you. Now, as Junior grasps your finger and holds on for dear life, you realize for the first time that your entire life from now on will revolve around this little fellow who's counting on you. You'd happily step in front of a bus for him if necessary.

The doctors come excitedly into the room to tell you that little Bernie holds the hospital record apgar score! He'll surely be a neurosurgeon or nuclear physicist.

But Harvard or Oxford won't be cheap....

How will you manage to pay for his education (even though you're sure the little genius will graduate in only 2 years)?

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Topics: College Planning

Do you know where that retirement income will be coming from?

Posted by Larry Jones on Apr 17, 2018 9:30:00 AM

Have you done your homework?

I have met with many folks who have some general idea of how much money they'll have in retirement. One of my roles as a planner is to try to determine exactly where your income will be coming from, and in what amounts. Wouldn't you like to know these things before you retire?

For some reason the Wall Street system has educated consumers on the idea that you should have everything in the stock market, leave it there forever, and assume you'll draw some magical percentage (such as 4%) for the rest of your life. Hopefully you'll be alright.

That plan scares me to death!


Let's take an example. Suppose you had accumulated $1 million dollars by the summer of 2007. Your plans were to retire at the end of August. Taking 4% would give you an annual income of $40,000 a year, which is fine with you, and you call it quits on schedule. 

By the fall of 2009 you would have been in a panic situation. The value of the S&P 500 declined by more than 50% over that time period. Now your million dollar portfolio is worh only $475,000. In order to keep taking a $40,000 a year distribution you'll now need to take nearly 8.5%! At this rate of drawdown your nest egg is not long for this world. Of course, the market came back, but on average it took 5 years to do it. Are you going to have to take a job at Wendys?

Instead, you should analyze all of your sources of potential retirement income, look at alternatives, tax scenarios, etc. and not put all of your eggs in one basket. 

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Topics: Retirement Income

Tax Free Retirement Income part 2

Posted by Larry Jones on Apr 12, 2018 9:30:00 AM

In the last post

I spoke about the use of cash-value life insurance to grow wealth with very little risk to principal, a very competitive rate of long-term growth, and tax-free withdrawals through the use of policy loans. What's not to like?

How is this accomplished? Through the overfunding of your policy. Let's say your monthly premium is $100. What if you contributed $1000? Universal life policies are designed to allow excess contributions. Now...a word of caution here: a few years ago the IRS caught on to this concept of insurance policy overfunding, for the purposes of avoiding taxes, and set some rules (mainly the 7-pay rule, which I won't go into here) to prevent the abuse of these tax rules. Basically, if a policy violates the 7-pay rule, it is then designated a Modified Endowment Contract by the IRS, and the tax advantages largely disappear. However, the 7-pay rule is very generous, and overfunding of policies can still be done to a high level without creating a MEC. This is why you want the help of an advisor to avoid making a tax mistake that can bite you when you begin to take distributions.

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Topics: Retirement Income

Tax-Free Retirement Income

Posted by Larry Jones on Apr 10, 2018 9:30:00 AM

In the last post I spent

some time describing the benefits of supplementing your retirement income with cash value life insurance. My favorite is Equity Indexed Universal Life. I believe that, for a young person, these products deliver the most growth over time with the least risk. But there's another aspect of these solutions that I'd like to talk about- the tax benefits.

I heard a story about an insurance agent who was up against a stockbroker in trying to win the business of a client. This person had a certain amount of money to invest, and he had approached both of these fellows to prepare illustrations of future results. Of course, the stockbroker used an average rate of return north of 9% to calculate his, while the insurance agent was more conservative, using a 6% rate. As the two fellows presented their results to the client, the stockbroker was beaming. His future values were nearly 20% more over the time period. It was clearly, to the broker, no contest. Until the insurance agent interjected to the client, "Oh, I'm sorry. I didn't know that we were supposed to have to pay taxes on this money." 

The agent got the account.

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Topics: Retirement Income

Wealth Accumulation: What the Wealthy Know That Most Don't

Posted by Larry Jones on Apr 5, 2018 9:30:00 AM

What do the wealthy know that we don't?

When it comes to "old money" wealthy families in the United States, there are some similar traits to be observed in how they accumulate assets and pass them on from generation to generation. When it comes to wealth accumulation, I believe the number one secret that they have is this: They know how to turn time into their ally rather than their enemy!

Did you know that the average mutual fund investor earns only 3.83% (Dalbar Study 2010)? Then those earnings are taxed at a greater rate than they need to be. At death, even more of those assets disappear into the government coffers. Time has become the brokers ally, or Uncle Sams, but not his.

Now let me ask you a question.

If you knew that you had all the time in the world to accumulate assets in your estate and for your family, would you do anything differently?

The wealthy have learned ways to make time their friend, and to use it to grow their assets, and to pass them along efficiently to the next generation.

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Topics: Wealth Accumulation

Financial Services for a Busy Professional

Posted by Larry Jones on Apr 3, 2018 9:30:00 AM

We may be the most stressed out generation in history!

The statement above may be a little over the top. After all, probably nobody reading this has ever been kidnapped and sold into slavery, or watched half of the population of his city die of the plague.

But having said that, we are a generation on information steroids. Our grandparents embraced new "time-saving" appliances, such as washing machines and toasters, microwave ovens, etc. With all of the things we have to help us in our work we should be awash in leisure time. But is that the case with you? Certainly not with me.

Today, I'm not so sure we're not a slave to our devices. E-mails, tweets, and text-messages scream for our immediate attention. Our social life consists of wierd virtual friends whom we'll never meet in person, and really know nothing about. Responsibilities are endless, and especially if you're a working professional, the hours in the day don't seem to be enough.

Trying to keep all these ducks in a row can be too much. Many times the management of your finances is a chore that is always pushed out to the future.

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Topics: Subscription Services

That Dreaded 401(k) Rollover

Posted by Larry Jones on Mar 29, 2018 9:30:00 AM

Have you recently changed jobs?

If so, you may be wondering what you should do with your old retirement plan. Over the years you have accumulated quite a sum of money and now you are no longer with the company. Or you may still be there, but are just unhappy with the investment results that you're getting. Can you move that money somewhere else? Should you?

 The answer is: it depends.

It's possible that you're being approached by financial professionals who are happy to tell you what to do with that money. Here are some things that you need to know before making a decision on your 401-k rollover.

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Topics: Retirement Plan Rollovers

Some Big Estate Planning Mistakes

Posted by Larry Jones on Mar 27, 2018 9:30:00 AM


Your Legacy: Does it matter to you?

I'd like to take a minute to discuss how your estate plan and your legacy are tied together. How will you be remembered by your children and your community? 

If you're a high-income earner, the way that you arrange your affairs for the day when you are no longer in the picture may make a great deal of difference to those that you leave behind. 

You have worked hard all of your life. It was you that studied for exams, rose at the crack of dawn, and sacrificed your time and energy to accumulate the assets that you have today. You are where you are today because you've worked very hard to be. 

Don't let a government that doesn't even know you or care about your family take 40-60% of your assets from your family when you die.

Proper estate planning will ensure that your positive image survives intact. Here are 5 absolutely essential steps you should take to protect your legacy.

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Topics: Estate Planning

Are you getting your moneys worth when it comes to investment advice?

Posted by Larry Jones on Mar 22, 2018 9:30:00 AM

Do you remember how you felt in 2008 watching your investment portfolio decline?

Most folks do. It wasn't a happy time, especially for retirees. Many saw their portfolio's go south as much as half it's value! 

Why do we do this to ourselves?

Is this the only way to grow assets and have security during retirement? Absolutely not!

I'm always amazed when I meet folks in their 70's and 80's who still have 80% of their portfolio in high risk stocks. Inevitably, they tell me, "well, where else am I going to get growth?" I'd like to go on record here and now by saying that, in my opinion, a 70 year old retiree needs to be more concerned with income than growth. That's why my first goal, if possible, is to reproduce the income you had when you were working in a guaranteed income stream that isn't dependent on the market, or subject to loss. That's happiness! Then, once that base is covered we'll try to grow the remainder, and perhaps take a little more risk. But the Wall Street system doesn't want you thinking that way.

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Topics: Investment Advice in a volatile world

Some Retirement Income Issues for Women

Posted by Larry Jones on Mar 20, 2018 9:30:00 AM

Why Women are Special:

James Brown sang "This is a man's world. But it wouldn't be nothing without a woman or a girl." It's debatable whether it's still a man's world in 2016, however, when it comes to financial planning for the fairer sex, there can be some unique challenges. In my parent's day planners were accustomed to formulating financial plans primarily for families. Divorce and cohabitation was much less common. But today, nearly every situation is unique, and any planner that doesn't take the 21st century into account may be missing things.

There are a number of financial issues that are unique to the X chromosome dominant person.

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Topics: Financial Planning for Women

What you don't know can hurt you!

As a fiduciary I am required to always act in your best interests, and as a professional planner, it's my job to be familiar with all types of possible solutions and financial vehicles. In short, I have no interest in selling any particular product or any affiliation with a particular company. I work for my clients.

Are you:

  • concerned that your tax bill is too high?
  • tired of watching your nest egg decline by significant amounts every 5-7 years?
  • wishing you could find more free time?
  • looking for ways to help protect yourself against litigation that could destroy all you have worked for?
  • worried that Uncle Sam is going to enjoy your retirement more than you are?

If any of the above describes you and you'd like to get a question answered then just click the button below and we'll be in touch.

Let's Meet!

p.s. we have the ability to meet virtually regardless of your location! Give us a shout!


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