Apex News

Like a fine wine, some things get better with age. Birthdays often serve as a time for reflection and offer a perfect opportunity to take stock in the past make plans for the future. As Apex celebrates another trip around the corporate sun, collectively, our advisors bring over a century of experience helping families plan for their future. 

Bob Connell, our founder, has been advising clients in Yardley since opening the first national brokerage firm in Bucks County in 1980. And while the corporate name on the door has changed, Bob has been the constant since day one. Through Apex, he fulfilled his dream of building a firm that matched the needs of his clients. Apex is a multi-family office offering trusted tax, estate, retirement, investment planning, including a tax-efficient source of income through private investments in commercial real estate—all in one office.

"I'm always a believer, 'if you can't find what you want, create it,' so that's what I do."

Speaking of birthdays, did you know that September 9th is the most common birth date in America? Fall babies have a lot going for them as people born in the fall are far more likely to live until 100; thus, one might deduce that Apex has a long, vibrant life ahead. But living a long and prosperous life involves planning, just like planning for that perfect gift.

A Million Reasons to Gift $6,750

According to an MIT study, did you know that less than 45% of Americans die with less than $10,000? Couple this data with the Social Security Trust Fund's announcement that it will run out of money by 2034 means that the majority of American's (using my best Ricky Ricardo's impression) have "some 'plannin to do." 

Some intelligent investors have offered up various solutions to combat these fears. Still, the most straightforward approach is to utilize the gift of compound interest—the gift that keeps on giving. Bill Ackman recently proposed funding an investment account for every newborn in the US that makes every American an owner of the compound growth in value of corporate America. He dubs this the "Birthright fund," if invested in zero-cost equity index funds and assuming an annual rate of 8%, the initial investment would grow to $1mm by the age of 65 and $2mm by 74.

Sounds great, but I think we can all agree that none of us want to rely on the government to provide income through our retirement years. Perhaps, just perhaps, we can start a trend. Instead of allocating copious amounts of funds for a gender reveal extravaganza, we should be encouraging our family and friends to have a "Birthright fund" party so our children can retire as millionaires. Although there are two economic lessons here, the time value of money and inflation, we set the tone and start the actual conversation. 

When A Million Isn't Enough?

While Ackman's proposal of turning $6,750 into a cool 'milli sounds enticing, he's ignoring one of the fundamental laws of economics, inflation. Inflation is the rate at which the value of a currency is falling, and consequently, the general level of prices for goods and services is rising. The inflation rate in the United States averaged 3.23% from 1914 until 2021, and after crunching the numbers, that $1mm in today's dollars roughly equates to $7.8mm at the age 65 and $10.5mm at 74. The proposed $6,750 gift needs to be $55,000 for inflation-adjusted figures, which increases the projected annual cost to fund this proposal from $26 to $212 billion. It looks like Ackman has some more 'plannin to do. 

The proposal, at its core, is all about securing income for Americans in retirement. Finding tax-efficient, inflation-resistant income during retirement is extremely difficult, and this is the premise on which Apex founded our affiliate, AFA Real Estate Partners. Using the same investment timeline suggested, the growth of our minimum investment of $100,000 would be $158mm at the age of 65 and a staggering $438mm at 74 versus $15mm and $30mm, respectively, for the investment in the equity ETF. You can now see the value of both the time value of money and higher yields are needed to keep up with inflation and continue to grow your capital base.

Albert Einstein once called compound interest the "Greatest mathematical discovery of all time." Since the time value of money needs, well, time, there is no time like the present to create a blueprint for you and your family's financial success. 

Every Successful Party Needs a Planner

A plan is simply a blueprint for success, and the missing verb between them is execution—queue Apex Financial Advisors. Working with our team, we will listen to your goals and help you create a blueprint for your family's financial success, help you execute, and be an accountability partner to ensure its success. 

Happy Birthday to our fellow fall babies! Regardless of what plans you make to celebrate, our wish for you is simple, "May you all live a long and prosperous life."



Disclosure:  Past performance is not indicative of future results. The $100K investment in real estate, assumes the reinvestment of dividends. This is neither an offer to sell, nor a solicitation to buy securities, nor an invitation to subscribe to specific services. This overview is for information purposes only and nothing contained herein shall be construed as investment advice.