Client Axiom | Vol 267
Stellar Financial Climate Causes Some To Increase Year-End Targets
Meet The Axiom®’s Guest Editor: Mike Venturini
Hi! My name is Mike Venturini. I’m part of the team here at Annex.
My role as Wealth Manager is to help guide clients to meet their unique family’s investment and retirement goals.
I love it when we can bring the strength of the Annex team together to help clients with financial planning, tax, and estate planning, while always working in their best interest as a fiduciary.
My wife and I moved up to Elm Grove 5 years ago from Racine. We love it here! I like to play golf and I’m a big Wisconsin sports fan. Go World Champion Milwaukee Bucks!
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“My favorite the Axiom is all current events that we talk about and how that can relate to your portfolio and your financial plan.”
– Guest Editor: Mike Venturini | Wealth Manager
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Stellar Financial Climate Causes Some To Increase Year-End Targets
Fantastic earnings, low interest rates, and great employment news have some analysts changing how they see 2021 closing out. Will the specter of inflation change the rosy present? Annex Wealth Management’s Dave Spano and Derek Felske discuss.
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The taste for something good.
Craft breweries and the trend they have inspired.
At last count, there are 8,764 craft breweries in the nation.[1] That’s a lot of beer making. How can the economy support what seems like a brewery on practically every street corner?
In short, technology has allowed brewers to serve diverse and refined tastes – for a price.
For years, the big names in beer seemed to hold the beer-crafting monopoly. These massive breweries had the money to house all the big equipment, hire teams of brewers, and import all the hops and yeast they needed. And they continually stocked the shelves at every local grocery store. Everyone – almost anywhere – could have beer. And when something works well, why change it? The flavors and styles of these larger beer companies remained the same, and it’s what people were used to.
Like almost anything that becomes popular, the beverage created a broad fan base, which helped bring about a refined taste for diverse flavors. Enter the craft brewer. Leaving the mega stainless-steel vats and miles of tubing behind, beer enthusiasts found craft options developed by small (sometimes even home) brewers. Add a pinch of this, and a dash of that, an entrepreneurial spirit, and voila! A new brewer!
The trend of craft brewing started to take off in the United States in the 1970s, a decade well known for all sorts of experimentation. The industry has grown substantially since then, but how did craft brewing come about, and what makes it different, you might ask?
The demand for beer hasn’t wavered. But left-over prohibition laws surrounding alcohol production and distribution prevented large beer conglomerations from growing. Small breweries grew and flourished, each carving out a small place in local markets. Diversity of brewers, available ingredients, and brewing styles along with natural ingenuity saw increased experimentation with new flavors and ingredients that weren’t found in the brews of big name beers. Consumers took notice.
Even after federal regulations were relaxed by Ronald Reagan in the 80s, craft breweries had established a toehold in the market and were still able to compete with the quickly forming megabrewers. The product craft brewers offered was just different, and the demand for higher quality, more variety, and bolder taste stuck around even as the big companies were able to produce faster and at a cheaper price.[2]
Today’s global economy would seem to make it especially hard for a craft brewer to survive. In a world that seems driven by low prices and convenience, how is it that craft breweries are not only popping up, but thriving? The cost of a pint or a flight of samples is generally higher than your average case of a MolsonCoors (formerly MillerCoors) or Anheuser-Busch branded beer, which are the two largest beer conglomerates in the U.S., and yet growth in the craft industry is still booming.
Though there are a few factors to this, one thing is clear: taste and quality over all else. Those who are serious about their beer do not bat an eye knowing that the price tag reflects the higher quality and crafting it takes to create unique tastes.
The shift to support local small businesses also helps, but these small businesses are also providing a superior quality product for those who enjoy a more exotic style of beer. Beer is meant to be savored and enjoyed, and the quality of a craft brewery will allow you to do just that.
Cities in the U.S. with the most craft breweries include Portland, Denver, San Diego, Seattle, and Los Angeles. Denver, for example, has 72 breweries within the city, 55 of which have taprooms open to the public.[3] That’s a lot of choices, and we bet that each one does things a little differently. And that’s the beauty of it: they’re unique.
You could pick just one of these cities to visit and have an almost overwhelming number of options to choose from – and no one said that’s a bad thing.
Along with the uptick in craft brewing interest came the investment by many in trying their hand at homebrewing. Local home brew supply stores and online companies popped up, allowing many to try the craft for themselves. Not only does homebrewing allow you to experiment with ingredients and flavors just for you, but it also gives you the opportunity to join the growing American Homebrewers Association or similar groups of likeminded and dedicated brewers. They even have a yearly conference and competition for the best home brew!
Whether you’re traveling to breweries to taste the emphasis on flavor and quality that craft beers are known for, or you are joining in on the popular trend of creating your own brews, know that as an enthusiast, you are taking part in a long-standing tradition, dating back at least 5,000 years to ancient Mesopotamia.[4]
If you intend on sampling beers and developing your tasting abilities, here are a few tips[i]:
- The Pour
Pour gently from the bottle down the side of the glass, keeping in mind that if the beer has visible yeast at the bottom, you’ll want to drink that with your glass. If you see yeast, stop your pour, swirl, and then make sure that delicious sediment makes it into your glass.
- The Look
Hopefully you poured something like a two finger head[ii]. What does the head look like? What colors do you see – pure white, tan, medium-brown? Is the beer itself cloudy or clear?
- The Aroma
What scent do you pick up from the glass? Spend some time before you begin to understand what hops and malt smell like, so you can help discern what your beverage is suggesting. Many experts will take several whiffs of the glass to get a good understanding of all that’s inside.
- The Sip
No, it’s not a Bud commercial. Sip a bit – observe what your senses tell you from that tiny sample. Sweet? Bitter? You’ll find that what you sip at the beginning often differs from what you notice at the end.
- The Mouthfeel
This might sound super odd – but think of this as what happens when the beer is in your mouth. You taste something, but what physically happens to your cheeks, your tongue, your gums? Some will notice fizziness, silkiness, or even chewiness. It’s all part of what that beer is.
- The Finish
Note what happens after your swallow. Are you left with a bitterness, or sweetness from the malt?
Make sure to write it all down, and share your notes with friends. You’ll find that your experience may differ from theirs, but you may end up discussing that shared experience.
Shared experiences are what makes the finer things so enjoyable. Small brewers give those with a taste and the resources to discover them an opportunity for a unique experience.
The world of beer and brewing has been upturned by the small brewers in the past decades, and it doesn’t show any evidence of slowing down. The next time you’re thirsty, maybe all you’ll need to do is drive down the street to the nearest local brewery. Chances are there is one nearby, and they will be ready to treat you to the product of their creativity and skill, and share their passion for the craft!
[1] https://www.brewersassociation.org/
[2] https://www.theatlantic.com/business/archive/2018/01/craft-beer-industry/550850/
[3] https://www.westword.com/restaurants/how-many-breweries-does-denver-have-a-list-of-every-denver-brewery-9546998
[4] https://www.history.com/news/who-invented-beer
[i] https://www.thespruceeats.com/how-to-taste-beer-353293
[ii] https://www.beeradvocate.com/beer/101/taste/
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Poll Recap: Do You Have A Will?
According to a 2021 poll by caring.com, 18-34 year olds are now more likely to have a will than 35-54 year olds. And only 21% of people over 55 have a will. (1)
In our latest poll, we asked readers if they had a will – and 83% of respondents said they do. The majority of those who said yes were 60 or older. Only 1 respondent fell into the 18-34 year old age bracket, and said they did not currently have a will set up.
Out of those who currently have a will, the majority said it was prepared by an attorney rather than going the internet route. When asked if they also have an estate plan, the number dropped to 67%.
Our Axiom poll results may not have reflected caring.com’s, however Americans as a whole are beginning to understand the need for a will, earlier – and COVID may have played a role. Many younger Americans had delayed creating an estate plan by assuming (incorrectly) that estate planning is only for older people and not relevant for young, healthy people. The unknowns that came along with the Covid pandemic caused many younger Americans to see the importance of having a plan in place.
1.https://www.caring.com/caregivers/estate-planning/wills-survey/
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Getting Ready for Retirement?
See just a few of the many things we look at with you when you are ready for this big step.
Retirement is a big transition, and one of the more stressful ones because it involves changes in habit. Without planning, it can be too easy to fall into a situation where one goes from having purpose, pay, and personal relationships to feeling lost, lonely, and left uncertain about personal finances. But don’t worry, we’re here for you.
At Annex, we work as a team to guide you through the process, starting with a discussion around your goals, what you want to do in retirement, and where you want to do it.
Often, we first turn to the financials, which we plug into our interactive planning software. This tool considers all sources of income, financial accounts, and expenses and enables us to plot those out into a cash flow plan with a focus on distribution strategies and tax consequences. We are then able to “stress test” the financial plan to gauge success throughout retirement by adding different life situations and goals, from snow birding and travel to long term care incidents and how that would impact the remaining spouse’s finances.
After we look at financial impact, we turn to other important factors such as continuing healthcare coverage. Should you go on a spouse’s plan or do Cobra, or look to the healthcare exchange? If it’s time for Medicare signup, how and when do I do it? We sit our clients with a healthcare expert to help examine options and find the choices that are best for them.
But it goes beyond health insurance needs, to discussing life insurance and long-term care insurance as well. We talk through if you should look into long term care and if your policies are living up to what you need them to do in retirement. We also consider navigating when to take social security. There are many options for what is best for the couple, and when to take their benefits. Our Financial Planning specialists will investigate all of this with you and help you to make these decisions and more.
We recognize there is no cookie cutter retirement, and that each family situation is different. Unique circumstances demand unique planning, and that is why our team of investment specialists, estate planning attorneys, tax specialists and certified financial planners are standing by to assist you on your unique journey to and through retirement. And since we don’t sell product and operate as a fee only fiduciary, you can expect we will always be acting in your best interest.
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This week’s Ask Annex comes from Randy, who asks:
“Solve a friendly debate with my wife: A Will avoids probate, right?”
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We asked Annex Wealth Management’s Jill Martin, JD:
Dear Randy,
I’m always ready to resolve marital strife. Short answer: Wrong! The question you have regarding avoiding probate is likely the number one misconception about estate planning. A Last Will & Testament is designed to provide instructions about what happens to assets and accounts in your name when you die. Before those assets can be distributed, your Last Will has to be “proven” as the final version through the court of law, i.e. probate.
By having the Will proven in court, it provides beneficiaries, creditors and financial institutions assurances that the document is legally valid and should be followed. A Last Will is intended to be the ultimate instruction about how to distribute ALL assets upon your death. The rules and process for probate depends on the state where the probate proceeding occurs.
Often probate is initiated in the county of residence for the person who died, but there can also be secondary (or ancillary) probate proceedings if the individual owned real estate in multiple states.
Remember, probate only applies to assets that are solely titled in your name when you die that do NOT have beneficiary designations. There are other ways to avoid probate. For example, if your IRA has a beneficiary designation that says it is payable to your 3 children after your death, the IRA custodian only requires a death certificate, and then will pay the account out to your 3 children.
As such, the IRA is not subject to the court-supervised, probate process. The main reason for this is that beneficiary designations are a legally binding element of the account agreement so financial institutions do not need to rely on the Last Will for the instruction about who to pay the account to after your death.
It’s important to note, that unlike a Last Will, a beneficiary designation only applies to the specific account it is attached to, so you would need to make sure you have them on ALL your accounts to try and avoid probate.
Another option to avoid probate is to use a Revocable Trust as part of your estate plan. A Revocable Trust operates very much like a Last Will, in that it is intended to apply to ALL your assets, but the benefit is that Revocable Trusts are not subject to the probate court’s jurisdiction. As such, people often utilize a revocable trust and beneficiary designations together to help avoid the probate process when developing their estate plan.
Hope this resolves the debate. I’m ready to help with any more questions you may have.
-Jill Martin, JD | Estate Planning Attorney
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KNOW THE DIFFERENCE MINUTE:
Back To School Shopping Will Be More Expensive This Year
KNOW THE DIFFERENCE MINUTE:
US Capital Goods Orders Increase
ASK ANNEX
What do you know about the new tax cut and how will it affect me?
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