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Financial Planning: The Special Needs Family

Posted by Larry Jones on Aug 11, 2022 9:30:00 AM

No Greater Love

Jesus said, "There is no greater love than this, that a man lay down his life for his friends."

If you are the parent of a special needs child that statement has YOU all over it.

Every parent agonizes over the health and well-being of their children. The smallest scratch, or illness, is a matter of prayer and attention for us. We know, however, that one day our precious child will grow to be self-sufficient, and our role will change.

The parent of a special needs child may have no such expectations. It may be that care will need to be provided for a lifetime, and maybe even beyond the lifetime of the parent.

Is that legally and financially possible? Yes!

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Topics: special needs

The Dreaded 401(k) Rollover

Posted by Larry Jones on Aug 9, 2022 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

There's a Lot to Like About Life Insurance

Posted by Larry Jones on Aug 4, 2022 9:30:00 AM

Perception isn't everything 

A while back I wrote a piece entitled "In Defense of the Used Car Salesman." It was meant to be tongue-in-cheek, and was really designed to point out the contrasts between the car salesman and the stockbroker. The typical stereotype of a car salesman is that he doesn't care about his customers at all, and that he has no problem with costing you thousands of dollars by putting you in a piece of junk, all the while smiling and slapping you on the back. The stockbroker, on the other hand, enjoys a stellar reputation and immediately has the complete trust of his client, why I don't know, other than that he has passed some sort of test, therefore he must be honest and trustworthy. In many cases that stereotype is wrong, just as it's wrong many times for the car salesman. There's one other fellow out there who finds that he needs to battle a very negative sterotypical impression: the life insurance agent.

"He only wants to sell me something," many will say. Well, that's right. The life insurance agent definitely wants to sell you something. Perhaps if he were more honorable, instead of working hard at his profession and putting up with lots of discouragement and abuse every day to make the lives of others better, he would just give up and take unemployment, and let you support him anyway. Get my point? He's trying to earn an honest living. By the way, trying to improve the financial position of complete strangers is a noble profession. Maybe we should cut him a little slack.

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4 Steps to a Sound Long Term Retirement Plan

Posted by Larry Jones on Aug 2, 2022 9:30:00 AM

 

Are you an optimist or a pessimist?

I believe that the vast majority of people are pessimists when it comes to religion and politics, but when it comes to their finances they are mostly optimists. The banker loves to sell you a variable mortgage because he knows that rates will go up, but you, being the eternal optimist, are sure they won't. We buy things on credit because we believe we'll have more disposable income next year than we do today.

But when it comes to retirement planning, it might be a good idea to take a "what if?" frame of mind as you make your decisions. Here are 4 areas that you should consider.

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Topics: Retirement Planning

Debt is the Enemy of Freedom

Posted by Larry Jones on Jul 28, 2022 9:30:00 AM

I Owe, I Owe, It's Off to Work I Go

A number of years ago I met with a lady who was turning 65 years old, and going onto Medicare. She was all alone in the world, except for a couple of unemployed children who occasionally needed to borrow money from Mom. She shared with me that she collected $714 a month from social security, still had 25 years to go on paying off her mortgage, and was making two car payments, one for her and one for her son. Social security was her only income.

How does anyone survive on such an income?

Barely.

If you have read my book, "Compounding Wisdom" you'll recall that one of the Biblical financial principles is to avoid debt as much as possible. Although a little debt can be used as a healthy leverage in some cases, too much of it will begin to suck the life out of your finances. How long do you think that you can get away with paying off your Visa card with American Express? Common sense will tell you that eventually that train must come into the station.

It's nonsense to believe that you, as an individual, can use credit to pay off more credit for the rest of your life. Interest will begin to compound against you until you reach the point where you just can't pay anymore. At that point your financial freedom is lost and you will be dancing to someone else's tune for awhile.

Yet we as a nation are being asked to believe that these same Biblical principles don't apply when it comes to Macroeconomics.

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Financial Planning in a Volatile Environment

Posted by Larry Jones on Jul 26, 2022 9:30:00 AM

The Approaching Storm

In the last blog I spoke a bit about our amazing debt burden in 2021, and how the majority of Americans don't seem to consider it a very big deal. I think I can safely promise you that history books will one day consider it a very big deal. When the powers that be no longer are able to generate enough revenue through taxation, fees, fines, and sanctions to pay the interest on the debt, the issue of governmental debt will become the number one concern of Americans. I believe that it nearly happened in 2008.

Since then our economy has been in a very strange pattern. Slow growth in general has been mocked by Wall Street, with some fairly good returns being generated in the last five years. What many have not noticed is that these market returns have been closely linked with QE (quantitative easing), which is an abnormal infusion of printed money into the market. In other words, the market has responded well during the time that QE was going on, but now that the infusions have stopped, so has the market. Is this the sign of a healthy economy? I don't think so, but with great "irrational exuberance" (an expression made famous by Alan Greenspan), investors seem to rush in where others fear to tread. Greece is defaulting? Market drops. EU bails out Greece? Market rises. Indeed, neither of these events is good news, but investors are grasping for any sign of hope. The result is a stock market bubble, bid up to "irrational" highs far above the true value of the underlying businesses.

Like we used to say in the Navy, "stand by for heavy rolls!" 

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

Posted by Larry Jones on Jul 21, 2022 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

7 Good Reasons to see a Financial Planner!

Posted by Larry Jones on Jul 19, 2022 9:30:00 AM

The Rugged Individualist

Americans are known for being able to stand on their own two feet. When I was a boy, my hero was John Wayne. He was the epitomy of the rugged individualist. He always knew the right thing to do, and had the courage to do it. America loved "the Duke" and by and large we wanted to be self-sufficient as well. 

There's nothing wrong with that idea, as long as it's not carried to the nonsensical level. For example, just because Albert Einstein knew how the basic parts of the universe behaved, he probably would still take his car (if he had one?)  to a qualified mechanic. Al knew that there were some things that were outside of his area of expertise. Not only was he great on that E = MC squared thing but he was smart enough to know that he didn't know everything.

When it comes to your financial picture, do you think that you have all of the expertise you need? Do you understand your risk tolerance, and can you make your portfolio meet that tolerance? Many would say "yes." Here's a more difficult question: Are you taking the minimum amount of risk that you need to take to reach your goals? Do you know how to calculate that? Are you familiar with all of the financial solutions that are available to you, and how they work? Do you understand the tax code, and the implications on your nest-egg, as well as your legacy?

In other words, do you know what you don't know?

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Topics: Financial Planning

Busy? Try Virtual Financial Services?

Posted by Larry Jones on Jul 14, 2022 9:30:00 AM

Life in the Fast Lane

If you are a typical American you are a multi-tasker. Chances are that as you are reading this blog you are also reading e-mails, watching "Days of our Lives," changing the baby, and talking on the phone, while having lunch. Whew! How do we keep up this pace?

No doubt that as you read these blogs you are thinking things like, "I really need to get in to see that Larry guy before my portfolio does a repeat of 2008," or, "if I ever get a day off I'm going to get into NavStar and turn my financial life around." Those feelings are only natural (see The Busy Professional)  and entirely reasonable. Bless your heart. You want to do the right thing....it's just so hard to fit NavStar into your busy schedule.

At NavStar we feel your pain! Knowing that the only valid reason for intelligent people not doing business with us has to be time limitations, we've taken the first step toward solving that problem for you. We offer virtual meetings.

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Topics: virtual services

Case Study: Reduce taxes by augmenting your 401-K

Posted by Larry Jones on Jul 12, 2022 9:30:00 AM

What is the largest item in your monthly budget?

If you said, "my mortgage" or "my grocery bill" you'd most likely be wrong. The correct answer for the vast majority of Americans is "my tax bill!"

By the time you finish with your Federal and State returns, property taxes, sales taxes, hotel taxes, phone taxes, cigarette and liquor taxes, etc. you've really forked over a hefty sum to our benevolent governors.

Is there anything you can do to soften this tax burden? Yes! I have written in the past about the three main vehicles used for sheltering investment growth from future taxation: (1) Municipal Bonds, (2) Roth IRA's, and (3) Life Insurance. In this case study I want to take a look at the beauty of life insurance as a tax-shelter.

"Wait a minute, Larry! I have a great tax-deferred, employer sponsored 401-k. I know that this money is not taxed, and it will grow that way. I don't have to pay taxes on this money until I retire. So there...", you might say.

But hold on there, buckaroo. Here's what the government doesn't want you to know: Tax qualified plans don't avoid taxation. They just delay it. And eventually that tax bill will be worse...much worse.

Let's suppose you put away $100 a month into your 401-k for 30 years. Assume you earn an average of 10%. You'll end up with a little over $226,000. Using a conservative 20% tax rate, you will have saved $7200 in taxes over those years. Sounds good, huh?

Now you retire and begin drawing on the money. At the same 20% rate you'll now owe more than $45,000 in taxes. At a 40% tax rate you'd owe more than $90,000! Reducing taxes was your goal. How well did you do? You will have effectively spent $90,000 to save $7,000. 

 

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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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