Axiom | Vol 261

Does The Bond Market Believe Our Current Economic Conditions Will Persist?

Meet The Axiom®’s Guest Editor: Brandon Lehman, CFP®

I’m Brandon Lehman, Annex Wealth Management’s Director of Branch Development.

I’m responsible for the growth and advancement of Annex’s branch offices and ensuring all clients experience the Annex Difference, no matter where they work with the Annex team.

I live in Lake Country with my wife and three kids. Our favorite pastime is picking a movie from Disney+ and making homemade popcorn. Time all together is the best gift a dad could ask for. I also serve as Battalion Logistics Officer in the Wisconsin Army National Guard and have served in over 9 State Active-Duty missions within recent years.


“I love the Axiom because it shows off all the talented folks who work at Annex. It showcases the amazing team environment here on a weekly basis. The Axiom is a great opportunity to get multiple ideas and thoughts out to everyone and hopefully generate great conversations at home.”

– Guest Editor: Brandon Lehman, CFP® | Director of Branch Development

Does The Bond Market Believe Our Current Economic Conditions Will Persist?

The markets stalled over the “infrastructure two-step” as the bond market appears to remain “stuck.” Could it be that the bond market doesn’t believe our current economic pace won’t last? Annex Wealth Management’s Dave Spano and Derek Felske discuss.


Space Battle. Blue Origin or Virgin Galactic? Jeff Bezos or Richard Branson?

Poll: Who Will Get To Space First? If You Were Given A Golden Ticket, Would You Join Them On Their Trip To Space?


Consider Paying Off Your Mortgage Early

Should you pay off your mortgage early? It’s a question being asked more often today because tax reform law enacted in late 2017 increased the standard deduction, making it harder to claim mortgage interest as an itemized deduction. Without that tax benefit, paying off your mortgage might make sense.

Even before the tax bill passed, paying off the mortgage was a consideration for those nearing retirement and looking to remove a monthly expense, or those who just wanted the peace of mind of no longer having a mortgage.

This week’s MoneyDo: ask yourself a few key questions before you go ahead and write that payoff check.

Ask: Where are the funds coming from?

Use caution if you’re planning on using money from a retirement account. The good you were trying to do – reduce your debt – could be offset by some strong negatives:

  • The money you withdrew is no longer growing for your future.
  • Tax consequences could minimize the benefits of paying off your mortgage. Withdrawing money from traditional retirement accounts could result in a tax burden of as much as half of the withdrawn amount.
  • Because of tax consequences of withdrawing money from your retirement account, your withdrawal amount now must cover taxes and the cost of paying off the mortgage.
  • If you take money from your retirement account, you’re paying taxes sooner than you would have, which could have an impact on your retirement plans. Most retirement accounts are tax-deferred.

Ask: What’s the opportunity cost?

If you have a large cash balance position, take a long look at the opportunity cost of paying down your mortgage. What would you have done with that cash otherwise? Be careful to weigh outcomes – including emotions, like the peace of mind you’d experience by retiring that debt, and your personal balance sheet, which leads us to our second consideration…

Ask: What rate are you paying?

The interest rate you’re paying on your borrowed money is an important factor to take into account as you consider the opportunity cost of a mortgage payoff. What long term rate of return could you get by investing, instead of eliminating your mortgage? Consider what rate of return makes your decision a wise one.

Ask: Will you incur a prepayment penalty?

While most mortgages don’t have a prepayment penalty, it’s worth investigating if there are prepayment terms in your mortgage before you make a decision. Some prepayment penalty fees could be as much as 80% of six months interest, but prepayment penalties and rules vary. Make sure you take a look.

Once you’ve asked the right questions, use your answers to help you understand more about you and your current financial situation. Paying off a large debt like a mortgage is an important decision. Make sure you have all the facts and talk to a financial advisor you can trust before you act.


This week’s Ask Annex comes from Joe, who asks:

“Wanted to get your thoughts about investing in real estate…specifically owning rental properties. Is this something you see people do and have success? Is it a worthwhile investment?”


We asked Annex Wealth Management’s Todd Voit, PhD:

Dear Joe,

Great question – and one we’ve been hearing a lot more lately. Yes, investing in real estate can be a great decision.

One key issue that many new investors overlook is the operational nature of the investment. Despite the fact that you might hire a professional management company to oversee daily activities, your investment may still require your attention and preparedness for key decisions. An investor should consider that real estate is more similar to an operating business, than an equity.

You can’t necessarily count on continuous positive cash flow. Interruptions in tenancy and capital events (repair and maintenance) are common and should be expected.

Despite the challenges, real estate can be a very attractive investment. Low interest rates, tax advantages associated with depreciation, and real assets as a hedge against inflation are a few.

For investors less interested in daily operations, and who want shelter from risk (personal guarantees, limitless liability) – there are some great private and public real estate investment funds to consider.

Todd Voit, PhD


Does Your Advisor Offer Regular Education On Key Financial Concepts?

Annex Wealth Management provides free workshops, open to the public, on key wealth management topics. Missed one of our events? Don’t stress, you can now watch past events here:

In Case You Missed It



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Annex Wealth Management provides free workshops, open to the public, on key wealth management topics.

Each week, we provide links to register for upcoming events.