In The News

Axiom | Vol 271

Client Axiom | Vol 271

How Transitory Is Inflation?

Meet The Axiom®’s Guest Editor: Suzy Lopez, CFP®

I’m Suzy Lopez, a Wealth Manager at Annex and I meet with Annex clients to review their investments and financial plan and help make sure they are on track to reach their personal goals as well as help them through transitional times such as retirement. I truly enjoy helping people, which is why I love working at Annex. The expertise of the entire team allows us to help our clients in so many different areas.

My husband and I are expecting a baby boy this November and we can’t wait to be parents! We spend a lot of our time with our families who we are lucky to have close by. In the summers you can usually find us boating in Milwaukee or Lake Geneva.

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I like the Axiom because it keeps people up-to-date on hot topics, law changes that may impact them, and gives them a quick synopsis of what happened in the markets last week. For people who are busy, it’s perfect! Five minutes of what you need to know and maybe some fun information as well and you’re on your way!

– Guest Editor: Suzy Lopez, CFP® | Wealth Manager

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How Transitory Is Inflation?

Annex Wealth Management’s Deanne Phillips and Todd Voit discuss two key factors impacting the transitory nature of inflation, and if relief is in sight.

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Drivers, Start Your Engines!

From the “horseless carriage” to Formula One, racing is as old as the engine itself.

It was German engineer Carl Benz that was first to apply for a patent for a “vehicle powered by a gas engine” in 1886, but the distinction of creating the first American automobile was taken by the Duryea brothers out of Massachusetts in 1893.[1] The brothers created the gas-powered engine and completed their first test run in September in Springfield, MA with an overhauled used horse carriage which achieved a top speed of 7.5 mph with its one-cylinder, three-speed engine.[2]

Of course, it wasn’t long before the inventors sought to test their new automobile against any other who wished to challenge them. The first organized American race featured Frank Duryea driving an improved second model of the Duryea Motors automobile. The race, which took place on a 54-mile course in Chicago on Thanksgiving Day in 1895, consisted of six cars, four of which were gas powered. Of the four gas powered vehicles, only Duryea’s was American made.

After a grueling 11 hours of racing through snow covered streets, which included stops at a black smith to repair the steering arm and an engine repair when one of the two cylinders malfunctioned, the Duryea vehicle won the race ahead of the German imported Benz.[3] And if you do the math, even to account for a potential three hours for maintenance stops…that puts them at a mind blowing 6.75 miles per hour average speed. Pretty wild, right?

Fast forward to today, and the world has seen about every variation of racing style and car class that you can imagine including stock car, drag racing, and Formula One, all designed to push what an automobile can do. The speed, tracks, technology, and equipment that surround racing today would make Benz and Duryea blush.

Though NASCAR is the most popular racing format in the U.S. with its stock cars, Formula One cars, driven in “open-wheel” racing, are known as the top dogs of the racing world. These cars run solely on road courses all around the world and are recognizable by their extremely low profile and their ability to be heard rather than seen if you do more than blink.

Modern day Formula One cars are fitted with 10,000 horsepower engines, the equivalent of 22 Corvettes, and consume 65-80 gallons of high-octane fuel per minute at full power, all which combine to produce hair-raising speeds. Because of the sheer power produced by these machines, the exhaust from a Formula One car is hot enough to melt aluminum, the material used in traditional tailpipes. In order to make these cars run, a set of tailpipes using exotic metal is required to withstand the heat and costs more than an average car.[4]

The cars are engineered to keep a low profile on the ground which creates a vacuum that keeps their lightweight bodies from overturning at high speeds and tight turns. Race organizers in Monaco, France learned the hard way that these cars produce enough vacuum to pull up manhole covers on the streets they race on. Now, before each race, organizers make sure the covers are welded down to avoid any further incidents that cause accidents during the races. [5]

Today, cars are going so fast that drivers constantly face g-force pressure as they make turns and change speeds frequently. As part of the physical training regimen, drivers specifically work on the strength of their neck to be able to withstand hours of constant force. The force of a Formula One car whipping around a tight curve in Monaco can be more than the force an astronaut feels during a shuttle launch!

Given the internal heat of the car and the constant strain on their bodies, drivers can also lose eight or nine pounds of water weight during a long race. This makes hydration key for drivers to maintain critical focus – modern day race suits and helmets have a hydration unit built in so that drives do not have to take their hands off the wheel to get a drink.

All these improvements have been designed to keep the driver safe and the equipment running at top performance. Because of racing’s long history, many of the things we see in our cars today can be credited to the engineers involved in the sport throughout the years, such as the need for rearview and side mirrors, lightweight yet strong engine components, and a built-in roll cage that is hidden beneath the headliner and interior features of your everyday car to protect drivers.[6]

For racing fans, the Monaco Grand Prix, Indianapolis 500, and the 24 Hours of Le Mans are the trifecta of racing events, all showcasing unique driving abilities and the high-performance cars that the sport is known for today. But for those looking to get a taste of what live racing is like before booking a trip to Le Mans or Monaco, both located in France, try checking out a local short track where you can still see some high intensity racing and get a feel for that rumble in your chest as the cars fly by.

Anyone who has been to any racing event, whether short track or a Formula One race on one of the biggest stages will agree that there is something in the air, other than the smell of fuel and the roar of high horsepower engines, that is. The history of the vehicles, the long-standing tradition of the sport, the atmosphere of watching a race unfold before your eyes, and watching the endurance and skill of the drivers draws many people to the sport worldwide.

From the first car to ever drive at a speed of 6 miles per hour to the incredible power of the fastest racing car out there averaging 220 miles per hour today, the world of racing has certainly changed. Respect for the car, and love of the sport started from the first day the engine roared to life, and shows no signs of slowing down.

 

[1] https://www.history.com/news/car-history-timeline

[2] http://www.eyewitnesstohistory.com/duryea.htm

[3] http://www.eyewitnesstohistory.com/duryea.htm

[4] https://www.thrillist.com/cars/facts-about-race-cars-surprising-details-about-the-world-s-fastest-vehicles

[5] https://www.thrillist.com/cars/facts-about-race-cars-surprising-details-about-the-world-s-fastest-vehicles

[6] https://auto.howstuffworks.com/under-the-hood/trends-innovations/top-10-car-tech-from-racing.htm

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Poll Recap: Does Labor Day mark the end of summer?

In this past week’s poll, we asked readers a controversial question: Does Labor Day mark the end of summer?

The responses were almost split, but a slight majority of respondents felt that yes, after Labor Day it’s time to pack away the swimsuit and grab a pumpkin spice latte.

The reality is, respondents on both sides of the argument would be correct. Labor Day is considered the “unofficial end of summer” while September 22 is the actual calendar end of summer.

It may just be a matter of mindset. Some folks feel that first chill in the air and welcome the season change with open arms. Others cling to the warmth as long as they can – perhaps because they know after a quick fall comes a long, cold winter.

 

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Basis Points.

So, what’s that? Our own Tom Parks explains.

It’s a term we see and hear often when scrolling through financial news, and most of us just gloss over it assuming it has something to do with the markets.

Take a listen as Tom Parks from Annex explains what the term means and how it is used in the financial world, and next time you are talking finances with your family, friends, or coworkers, you may just be able to impress them with this knowledge too.

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

I have 2 kids, a freshman and senior in high school, how do I prepare for college and retirement at the same time?

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We asked Annex Wealth Management’s Randy Winkler, CFP®:

Whenever you fly, you’ll hear the flight attendant say, “In the unlikely event of a sudden loss of cabin pressure, oxygen masks will drop down from the panel above your head… secure your own mask before helping with your child’s.” It’s the same with the Retirement/College planning decision – secure your retirement before taking on the demands and concerns of college planning.

You may have heard the adage, “You can take a loan for college, but not for retirement.” Unless your retirement plan is for your kids to go to college, get a great job, and then host you as you live out your retirement years in their home, you’ll have to plan for retirement first.

As you meet with an advisor you can trust and get on track with your retirement plan, remember, helping your kids get to college doesn’t mean you must fully pay for their entire experience. Anything you can save will be a help. So, if your retirement plan is on track, and you have some additional cash flow you can invest for college, 529 plans are generally the best vehicle for college savings. 

Any money invested in a 529 plan, and the growth on that investment, comes out tax free as long as it is used for qualified educational expenses. Some plans even offer tax deductions, depending on your state of residence and the plan you chose.

Planning of this magnitude often requires additional input – so I’d recommend finding an advisor you can trust to talk about the best plan. Wealth managers here at Annex will be able to illustrate the projected impact of these choices on your retirement plan, and based on that, you could also look at helping with college expenses.

 

Randy Winkler, CFP®

Financial Planning Manager

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KNOW THE DIFFERENCE MINUTE:

Walmart Looking To Add 20,000 Supply Chain & Logistics Jobs

KNOW THE DIFFERENCE MINUTE:

Unemployment Benefits Ending, Jobs Urgently Hiring

ANNEX RADIO

Part 1 | Financial Planning For Military Families: Retirement, Health Insurance & Benefits

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Annex Wealth Management has always been committed to client growth and education. Planning and saving can be demanding. We’ve found that when our clients master key concepts, it often enhances working together to reach their goals. Because these are not sales presentations, our clients benefit from a truly informative experience.

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