Financial Services

Company Information Risk Tolerance Retirement Myths

Investment Consulting Process Life Insurance Quotes

Our Mission Statement

Our passion is helping our clients succeed in the world's rapidly evolving financial markets.

Our mission is to offer investors the finest (available) asset accumulation, investment and wealth management products*, services and support. We want to empower clients to make informed financial decisions through communication, education and service. Our purpose is to enrich the lives of the people we touch. We endeaver to know you, your financial situation and help you build a better tomorrow.

Company Information

Jack M. Carstens is the Principle of Headway Financial Group LLC and JMC Consultants LLC. He is an independent financial advisor and financial planner who formed the Headway Group in November of 2006. The name Headway was chosen because we work closely with our clients to help move their investments forward or make “headway”. Our company logo is a sailboat, a vessel that seeks to move forward in any type of wind.

The Headway Financial Group is a part of the Mid-America Financial Group, a group of 57 independent offices located throughout Indiana, Illinois and eastern Missouri.

Our group has chosen to utilize SagePoint Financial, Inc. as our broker/dealer. They are a registered broker/dealer, member FINRA/SIPC and a registered investment advisor. There are over 2,300 independent advisors that enlist SagePoint as their broker/dealer.

A broker/dealer is a company that supplies us with research, technology, industry training and business development support. They also supervise our business to make sure we abide by all the laws and rules established in our industry. By law all financial advisors must run their brokerage and advisory business through a registered broker/dealer.

Pershing LLC is the firm chosen by Sagepoint to clear all the trades and transactions through the appropriate exchange(s). Pershing also acts as a custodian for client assets. Each account carries $500,000 SIPC insurance and Pershing also maintains other insurance up to the full value of the account.*

If we utilize an institutional (third party) money manager, your assets will be held with them. They also are SIPC insured and carry insurance similar to Pershing.*

Headway Financial Group is committed to your financial independence. We were founded with the goal of assisting our clients in every aspect of their financial lives. Our staff consists of experienced professionals with a "hands on" approach to financial guidance.

Not only do clients find our team members knowledgeable, but they also discover that our staff truly cares about making their dreams a reality. We do everything in our power to keep our clients focused on where they want to go, advise them on how to get there, and continually remind them of the importance of maintaining a disciplined approach to realizing their dreams.

We are here to help “navigate” your financial life plans.

**Member of SIPC, which protects securities clients of its members up to $500,000 (including $100,000 for claims for cash). Explanatory brochure available upon request or at SIPC. Securities in your account are protected up to $500,000. For details, please see www.sipc.org.**

Our Client Philosophy: Relationship-Based Financial Planning

One thing that sets us apart is the way we view relationships. Specifically, we mean the relationship that exists between Advisor and Client. We place a premium on creating an environment in which Advisor and Client work together at every step in the process. Our motive from beginning to end is to look out for our Client’s best interests. As the Client-Advisor relationship progresses, the collaborative process results in a carefully crafted plan that is unique to you, your life and your financial goals.

Goal Setting: Thinking together about what you want to do

While the journey toward an independent financial future requires a sound chart or well thought out plan, it first requires a specific destination. Not only do we draw the chart as financial advisors, but first we listen and work with you to discover where you really want to go.

What is your “What I Want To Do”? If you don’t know, or have only a vague idea, how do you plan for your financial future? For many, uncertainty about a goal results in neglect of financial planning altogether. We will help you think about your dreams and plans within the comfort and confidence of a focused, respectful relationship. We begin with “What I Want To Do” and together we focus on your dreams and ideals. Only then do we begin to formulate and develop your personal financial plan. We listen carefully to what you say in order to help identify what you really want.

Investment Planning: Thinking together about risk while someone else does the math

Risk

Risk is an inherent part of life. Your views of risk are an integral part of your financial plan, and identifying your risk level requires more than just placing yourself in one of the traditional categories of conservative, moderate or aggressive. Through our relationship, we work with you to determine your unique risk tolerance. Often this tolerance turns out to be lower than you might have thought. When it comes to investing your financial resources, spectacular returns, like a hole in one, is thrilling. But over the course of a round of golf, or earnings lifetime, keeping the ball in play is the key to success.

Technology

Having taken the time to understand your goals and risk tolerance, we then employ some of the very best analytic software available for financial planning in order to develop a plan.

This blend of thoughtful attention to individual needs combined with technical savvy creates a sophisticated approach to retirement planning, education funding and estate planning that our clients find stimulating and even highly enjoyable.

Thinking together about…

Retirement Planning

What are your plans for retirement? Will your present savings plan get you there? Are you taking advantage of all the resources available to you? We examine your goals, your present savings and investments, and other relevant factors in order to develop a realistic strategy for your retirement. You will learn how to manage your savings and spending now, while focusing on your retirement goals.

Education Funding

As tuition continues to outpace inflation, financial planning for education becomes crucial for you and your family. There are many kinds of savings vehicles available, but which one, or which combination, makes the most sense for you and your family?

Estate Planning

Estate planning joins together your desire to take care of your family while striking a balance with your desire for charitable giving. Our initial discussions concerning goals and risk tolerance are key ingredients as a first step in this complex process.

Comprehensive Planning

Putting it all together. Taking a look at your entire situation and developing a logical plan that helps you achieve your goals, realizing that each aspect of your financial live can impact all of the other parts.

Our Commitment to You

Complete transparency of process and fees.
Unbiased, independent solutions.
Understanding of your family’s situation; needs, goals and financial objectives.
Source and coordinate outside financial experts when necessary.
Risk-tolerant asset allocation regarding your investments.
Organize and update all financial documents.
Open lines of communication.
Coordinate all investments.
Comprehensive financial planning.
Help make your life a little easier.

Investment Consulting Process

As your Financial Life Planner, our goal is to understand your financial circumstances and create a customized investment strategy and/or financial plan to help achieve your desired objectives. Throughout this process, we will work closely with you to keep you informed and in control of your financial plan and portfolio. By carefully allocating your assets, monitoring the progress, and communicating with you regularly, our aim is to ensure that you fully understand the progress of your plan toward meeting your goals.

To ensure that you are fully informed and engaged in meeting your financial and investment goals, we work within the context of the formal Multi-Step Investment Consulting Process below:

Step One - Introduction

We’ll review any obstacles and uncertainties facing investors today and explain the importance of utilizing a disciplined investment and planning approach. We’ll also introduce our Statement Portfolio, methods of investing and your management team.

Step Two - Discovery

Next we’ll work with you to complete our Discovery Workbook and Analysis Questions. This allows us to develop an in-depth picture of your financial position, family and health information, your goals and objectives, and your tolerance for risk.

Step Three - Review & Recommendations

Once we clearly understand your financial objectives and have established your Risk/Return Profile, we will review your Discovery Agreement, which recaps what you want to accomplish. We will discuss the guidelines of how we will invest your money and work towards preparing an Investment Policy Statement, which enforces these guidelines. We will talk about some general strategies and recommendations to help solve your concerns and work towards meeting your goals.

Step Four - Solutions/Implementation

At this meeting we will answer any questions you may have about our approach and have you sign all of the necessary documents to establish and fund your investment account. We will then review our strategies, present a two year road map and our investment solution(s). We can also decide if you require a complete financial plan or specific sections.

Step Five - 1st-Statement Review

After we’ve established your investment account, we’ll meet again to discuss your investment strategy, review your first statement, materials you’ll receive and answer any questions you have.

Ongoing Progress Monitoring

Quarterly or bi-annually, we’ll deliver a comprehensive review, discuss roadmap topics and show you exactly where you stand in relation to your goals and objectives. When and if your financial circumstances change, we’ll be ready to suggest changes to your financial plan strategy.

As your Financial Life Planner, we believe that maintaining regular contact is essential to keeping you well informed about your financial life. We’re always available to meet with you and we provide an ongoing communication program that offers you far more than a statement.

“It is not only about the return on investments, but also the return on life.”

Asset Allocation

At first glance, "asset allocation" sounds like a technically complex term but the concept is really quite simple. It refers to how you divide your investable assets among various options including stocks, bonds, real estate, and cash.

Why is this important? Let's consider two examples. A 25-year-old worker who wants to retire a millionaire won't get very far putting all of her money into a bank savings account earning 2% per year. And a 90-year-old retiree certainly wouldn't sleep very well at night knowing his retirement portfolio made up solely of aggressive stocks could suffer major drops in value, which stocks did recently during the bear market of 2000-2002.

Asset allocation is the process of dividing your assets among stocks, bonds, real estate, and cash in a way that fits your financial goals, risk tolerance, and time horizon. Younger workers with decades until retirement and who plan to work for many years can afford to be more aggressive, with a higher percentage of their portfolio in stocks and high-yield bonds. Middle-aged workers approaching retirement and college funding for their children tend to opt for a more conservative approach, with higher portions of their portfolio invested in bonds, real estate, and cash. Retirees who can't afford to risk the volatility of the stock market and living on a fixed income will likely focus on bonds and cash.

Diversifying your funds among different types of investments is an important way to help minimize your investment risks. It can also play a large role in the return you can expect. The objective of any asset allocation plan should be to find the asset mix that provides the appropriate combination of expected return and expected risk that will allow you to pursue your financial goals. Choosing the optimal asset allocation for your investments can be pose serious challenges, however.

What may be appropriate for one investor may be entirely inappropriate for another of the same age, income, and wealth - if only because of their tolerance for risk. And the asset allocation that might be right for someone who desires a simple lifestyle might be wholly wrong for someone who dreams of making their retirement truly their "golden years."

**Investing involves risk including the potential loss of principal. There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio in any given market environment. No investment strategy, such as asset allocation, can guarantee a profit or protect against loss in periods of declining values.**

Risk Tolerance

By definition, all investments involve a trade-off between risk and return. A certain amount of risk is inevitable if you want your money to grow. The key is determining how much risk you feel comfortable with.

Understanding Your Risk Tolerance
Are you uncomfortable with change? Can you stick with your long-term strategy even if you face short-term losses? Will you be overly anxious the first time your investments drop in value? These are all questions to answer before developing your strategy.

Understanding your personal risk tolerance will help you create a plan you can stick with through good times and bad. Many investors forget the risks involved with buying stocks when the market is soaring. It's easy to be tempted by the lure of sky-high returns and to forget the possibility of a market downturn, or worse, of a bear market. Likewise, during a bear market or a sharp drop in the market, many investors suddenly become extremely risk averse. But if you create a plan built around your personal risk tolerance and stick with that plan, you will avoid having to make sudden changes in your investment strategy as the market changes.

Factors That May Affect Your Risk Tolerance
Although your personality will affect your underlying risk tolerance, your stage of life also will affect it. Are you just getting started, supporting a growing family or approaching retirement? The amount of risk you feel comfortable taking may be very different at each of these stages in your life.

Most people aren't prepared for the risk posed by being 100% invested in stocks. But younger investors saving for retirement may be able to afford the risk of placing the bulk of their money in stocks. In modern U.S.stock market history, investors have a limited likelihood of losing real money investing over a 15-year period. Over a 10-year period, the odds of making money are more than 90%. So stocks have historically performed better over the long term and we believe will likely continue to be unless the U.S.economy crashes to a halt. What's more, younger investors have the ability to "catch up" by continuing to earn money they can put away toward retirement.

On the other hand, as you move closer to retirement, or if you will need a portion of your money in the short term, you may be better off foregoing the highest returns and putting your money in conservative investments, such as short-term bonds or money market accounts.
But even investors with similar personalities and in the same stage of life may have different risk tolerances because of the following factors.

Job security and future employment prospects - If you work in an industry with high turnover, you may be willing to risk less than if you are in a stable position with room for growth.

The amount of disposable income available for investing - If you are investing millions you may be more comfortable taking risks than if you have only a few thousand dollars to work with.
The risk of an unexpected financial burden - If you are the sole income provider for your family, your risk tolerance may be lower than if your spouse’s income can be relied upon to make ends meet during difficult economic times.

Though exercise gurus might utter the phrase, "No pain, no gain", investment gurus know quite differently. While there can be painless gains in the short term there can also be painful losses that last long term. Recent history has taught us that staying the course and recognizing our tolerance for risk can ease the pain even as we pursue gains. Yet, there is not a better solution than regular consultation with a qualified investment advisor that will help steer the course. Let us help you determine what your risk tolerance is, then develop a program that suits your personal outlook.

**Past performance is not a guarantee of future results. Fixed income investments are subject to various risks, including interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications, and other factors.**

Professional Advice

You wouldn't think of being operated on by anything less than a board-certified surgeon, going into court without qualified legal representation or even repairing your late-model car without a trained mechanic. Then why do so many people believe they can manage their own financial affairs without professional guidance?

Investing is often a complex and confusing process. Even success can throw your investment strategy out of kilter. For instance, let's say you want to have 60% of your portfolio invested in stocks. If the market does really well and you are realizing higher than expected returns on your stock investments, after a couple of years you may find that you now have 80% of your portfolio invested in stocks, even though you haven't changed a thing. Without rebalancing to your target asset allocation, you might find yourself getting whipsawed by a volatile market, which happened to literally millions of investors in 2000 through 2002.

No matter what type of investor you are, it's crucial to keep your plan on track. Revisit your asset allocation periodically (every year or so, depending on market conditions) to determine whether it needs adjustment. You should also periodically re-examine your risk tolerance and investment profile, especially as you get closer to your goal. You may discover you need to tweak your portfolio's risk exposure over time.

Sitting down regularly to re-assess your goals, time frame, and asset allocation allows you to fine-tune your strategy, keep your risk within acceptable levels, and make sure you're on track. A skilled professional can help you identify investments that not only achieve the greatest absolute return over the years, but also subject you to the lowest overall taxes along the way. Your advisor will also show you how to properly allocate investments among your various accounts and work with you to integrate your investment and financial goals. A truly knowledgeable advisor will also help you stay abreast of developments in the financial marketplace as innovative new products and services become available.

Just as you see your doctor for checkups, your lawyer for legal advice and your mechanic for tune-ups, consult a qualified financial advisor for financial planning.

**Please note that rebalancing investments may cause investors to incur transaction costs and, when rebalancing a non-retirement account, taxable events will be created that may increase your tax liability. Rebalancing a portfolio cannot assure a profit or protect against a loss in any given market environment.**

Life Insurance

Some people equate life insurance with tragedy and death. In truth, life insurance is for the living. Without it, the sudden demise of a key breadwinner could leave a family stranded without the resources to maintain their lifestyle - or even retain their home.

Not so long ago, experts recommended that families carry a life insurance policy with a death benefit of between five and seven times their annual household income. Today, however, in light of rising house prices in many parts of the country and spiraling college costs, most advisors now recommend eight to 10 times income.

Unfortunately, most American families are underinsured. According to statistics from industry research and consulting firm LIMRA International, the average American household carries just $126,000 in life insurance - approximately $300,000 less than they actually need - and only 61% of adult Americans have life insurance protection, a decline from 70% in 1984._¹

A Cornerstone of Sound Financial Planning
Financial experts generally consider life insurance to be a cornerstone of sound financial planning, for two key reasons. First, it can be a cost-effective way to provide for your loved ones after you are gone. And second, life insurance can be an important tool in the following ways:

1. Income replacement - For most people, their most valuable economic asset is their ability to earn a living. If you have dependents, then you need to consider what would happen to them if they could no longer rely on your income. A life insurance policy can also help supplement retirement income, which can be especially useful if the benefits of your surviving spouse or domestic partner will be reduced after your death.

2. Pay outstanding debts and long-term obligations - Without life insurance, your loved ones must shoulder burial costs, credit card debts, and medical expenses not covered by health insurance using out-of-pocket funds. The policy's death benefit might also be used to pay off a mortgage, supplement retirement savings, or fund college tuition.

3. Estate planning -- The proceeds of a life insurance policy can be earmarked to pay estate taxes so that your heirs will not have to liquidate other assets to do so.

4. Charitable contributions -- If you have a favorite charity, you can designate some or all of the proceeds from your life insurance to go to this organization.

Determining How Much: A Four-Step Process
Determining how much life insurance coverage you need is a four-step process:

Step 1: Determine Your Family's Short-Term Needs

Short-term needs are financial obligations and/or expenses arising within six months of death. Examples of short-term needs include expenses you pay now such as:

Loan balances (automobile loans, etc)
Outstanding credit balances (credit cards, revolving lines of credit, etc)
Mortgages (first and second mortgage, home-equity loans, lines of credit)

Add to these current expenses any death-related expenses that must be paid in the short term:

Funeral expenses
Final medical costs
Estate settlement costs and probate
Estate taxes due
Charitable bequests you would like to make upon your death

If you don't already have one, your survivors should be left with a liquid emergency fund sufficient to get them through any unexpected financial needs. Most advisors recommend between three and six months' worth of living expenses.

Step 2: Determine Long-Term Needs

In addition to covering your survivors' short term needs, some level of monthly income will be needed to maintain their current standard of living and meet financial goals such as saving for retirement and funding college for children.

The value of these future obligations is discounted back to present value amounts to provide a dollar amount that, if invested, could provide an adequate income stream to fund all of your long-term goals.

Step 3: Calculate Your Total Available Resources

By this point, you should have a good idea of your family's total cash needs in the event of your untimely death. With any luck, you have already begun to set money aside to cover some of these costs. Other resources that may be available to your family include pensions, annuities, funds from retirement accounts, employer-provided life insurance, and Social Security.

The Social Security program offers benefits to survivors under age 17, and those whose spouses were receiving retirement income from Social Security can also count on survivorship benefits.

The total value of these future resources is discounted back to present value amounts. This gives us a single dollar amount that we can use to offset your total needs.

Step 4: Provide Funds To Cover A Shortfall

In most cases, comparing total needs to total resources will result in a shortfall. That's where life insurance comes in. Without it, your survivors will be left with the choice of either finding or creating additional resources (such as having the surviving spouse return to work) or experience a decline in the quality of their lifestyle.

Life insurance is uniquely suited for covering such a shortfall. It is a means of sharing the financial risk of premature death with many, many others who have similar concerns.

You pay a relatively small premium to an insurance company in exchange for their promise to pay your beneficiaries a specified death benefit in the event of your death. You may find it ironic that a financial need arising from death can be alleviated by a financial resource that is created after death. That's why life insurance, although something no one hopes to ever need, is indeed for the living. It's also a vital issue we can help you investigate in greater detail to ensure your family's financial future will be protected.

1. "Life Insurance Awareness Month," LIMRA International, August 2004

Seven Myths That Can Help Wreck Your Retirement

Many of our notions about saving for retirement are dangerously out-of-date. Sure, these ideas may have worked for our parents or grandparents, but they don't typically add up in today's world.

Read on to see how many of these financial myths may have crept into your retirement plans.

Myth Number 1: I'll get an inheritance

The Truth: With Americans living longer, their living expenses and health-care costs are eating up retirement savings that might have been earmarked for their kids, says Dallas Salisbury, President and CEO of the Employee Benefit Research Institute (EBRI). "And for those who do get an inheritance, across that population it's about $60,000. On the one hand, that's a lot of money. But it's certainly not an amount that's going to allow somebody to avoid saving for retirement," he adds.

Myth Number 2: I'll work longer

The Truth: Even if you want to work well into your senior years, the odds are against you. About one-third of workers leave their jobs involuntarily because of layoffs, health problems, or obsolete skills, says Andrew D. Eschtruth, Communications Director at the Center for Retirement Research at BostonCollege.

And those who do return to the workforce after retirement often find themselves in part-time jobs with few benefits, says Ted Sarenski, CPS, PFS, CFP and Chairman of the ElderCare/PrimePlus Task Force with the American Institute of Certified Public Accountants (AICPA). Even factoring in Social Security, that's hardly a recipe for a satisfying lifestyle.

Myth Number 3: My house will fund my retirement

The Truth: Many homeowners who plan to downsize to a smaller home when they retire and free up assets won't be able to access 100% of their equity, says Sarenski. But as the real estate bust of the mid-2000s showed, home values can fall as well as rise. What's more, over a long period, the average home's value increases only at about the rate of inflation, which is far less than the return from a well-diversified investment portfolio. The bottom line: a house makes a great home but it's a risky retirement plan.

Myth Number 4: Once I'm 65, Social Security will take care of me

The Truth: Social Security is a nice supplement, but according to Sarenski it doesn't replace the income most boomers have come to expect. For example, "someone who's earning $30,000 to $40,000 today would get Social Security in the range of $12,000 to $14,000 a year." What's more, the age at which you can collect full benefits is climbing. According to the Social Security Administration, if you were born after 1960, you'll need to wait until age 67 to get full benfits. And many experts expect the "full retirement" age will increase as part of any plan to save the program from bankruptcy.

Myth Number 5: My health-care costs will be covered in retirement

The Truth: Some costs will be covered, but far from all. A growing percentage of companies are scaling back on the retired workers' health-care coverage. And Medicare typically covers only about half of retirees' health-care expenses. Even with Medicare there's still a need for a supplemental Medigap policy to cover what Medicare doesn't, says Sarenski. Based on the 2007 EBRI Retirement Confidence Survey, EBRI estimates that a couple who turned 65 in 2006 might need to spend as much as $550,000 just on insurance premiums and out-of-pocket medical costs, over a 30-year retirement.

Myth Number 6: My employer's pension will help me in retirement

The Truth: The traditional employer-funded defined-benefit pension may have been something that the last generation of retirees could count on, but not anymore. Today, fewer than 20 percent of nongovernment workers can count on receiving a specific amount of pension income at retirement, according to Andrew D. Eschtruth, Communications Director at the Center for Retirement Research at Boston College, — and that percentage is declining. And although many companies contribute to 401(k) plans and other employer-sponsored retirement plans, workers need to add their own contributions if they expect to retire with a nest egg capable of providing a decent income.

Myth Number 7: I'll spend less in retirement

The Truth: Retirement doesn't mean you stop living. Chances are, you're still going to want to enjoy a nice meal out from time to time, take vacations, and enjoy your hobbies. And although work-related expenses go away when you retire, you may face higher costs for medical care. So before you buy into the "common wisdom" that you can retire on 60-80 percent of your pre-retirement income, ask yourself what you would have to give up if your paycheck dropped by 20 percent.

Better yet, start planning for a full and enjoyable retirement lifestyle right now. After all, unlike our parents' generation, when it comes to retirement, you get to call the shots.

Quotes

"The safest way to double your money is to fold it over and put it in your pocket."
- Kin Hubbard

"Investing is simple, but not easy."
- Warren Buffet

"Each of us has a choice-we must make money work for us, or we must work for money."
- Conrad Leslie

"Never spend your money before you have it."
- Thomas Jefferson

"I have enough money to last me the rest of my life, unless I buy something."
- Jackie Mason

"Risk comes from not knowing what you're doing."
- Warren Buffet

"My definition of financial freedom is simple: it is the ability to live the lifestyle you desire without having to work or rely on anyone else for money."
- T. Harv Eker - Secrets of the Millionaire Mind