Monthly Archives

March 2016

Early Retirement, Lifestyle

Retire Before You Start Working

I met independent film producers Ric Sternberg and Annie Borden at the Green Bay Film Festival years ago. There comedy "Camp Kickitoo" is one of the funniest movies I ever watched. It was a thrill meeting them. This image is linked to their movie available on Amazon.

I met independent film producers Ric Sternberg and Annie Borden at the Green Bay Film Festival years ago. Their comedy “Camp Kickitoo” is one of the funniest movies I ever watched. It was a thrill meeting them. This image is linked to their movie available on Amazon.

There are a lot of blogs out there telling you how to retire early. It seems 35 is the new 65 or whatever age we were supposed to retire. I think it is all crazy talk. Why would anyone ever want to start working in the first place? According to my own father I never worked a day in my life and I turned out just fine. Okay, bad example.

There was a momentary lapse of sanity in my grand design back when I met Mrs. Accountant. As we prepared for marriage the minister of the church knew I was not working and offered me a job as janitor. What was I going to say? I accepted the job. A year later I quit because I did not want to swill toilets for a living. Don’t get me wrong. The people were awesome! I loved the people over at Trinity Lutheran Church, but I did not want to be janitor.

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Early Retirement, Frugal Living, Lifestyle, Taxes and Investing

The Tragedy of the Commons in Investing

Just one more cow.

Just one more cow.

Back in the early 1980s a CPA named Herb Vest had this crazy idea to merge the investment and tax preparation fields. By the 1990s both HD Vest Financial Services and your favorite wealthy accountant’s tax firm were hitting full stride.

My first career choice was not tax preparation or accounting, it was financial services. I fell in love with the stock market crash of 1929 my sophomore year of high school and from that point on wanted to be a stock broker. Tax preparation was a seasonal job I preferred over working all year long, putting the stock broker idea on hold. Besides, I invested most of my income and the library was filled with great books on the stock market and its history.

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Early Retirement, Small Business, Taxes and Investing

Why I Know Your Tax Return Is Wrong

20160323_165144I sometimes play a little game with people to prove most tax returns are prepared wrong. Before any tax professionals reading this start writing nasty comments I confess I also make errors on tax returns. I get it. Tax season is more triage than solid tax planning. However, once tax season slows down it is time to put your tax preparer to work saving you money, building your net worth, helping you with early retirement and making your life easier from a financial and investing point of view.

Certain errors on a tax return are understandable. Maybe you did not know the tax law or you forgot to tell your accountant about a certain income or expense. Other errors are unacceptable. These include transposed numbers or forgotten elections. This is sloppy tax work and it drives me insane. Anyone plugging numbers on a tax return must review their own work and reduce the number of issues on the return to zero before sending it to the final reviewer.

The game I mentioned at the beginning of today’s lesson involves people bringing me their tax return without any receipts or other tax documents and by glancing at the return tell them if their tax return is correct or wrong. Over half are wrong. Then I ask a few short questions. The answers confirm my suspicions and provide a solution. With the new information in hand I send the client back to their regular tax preparer to amend the tax return.

How accurate am I in my little game? I can tell you if your tax return is wrong with over 85% accuracy and without seeing any supporting documents. So how do I do it?Continue reading

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Frugal Living, Lifestyle

Caveman TV

800px-Moon_at_nightWhen I was a little boy I loved watching the stars and dreaming. Then I grew up and, for a short period of time, lost the awesome wonder of the universe. Truth is I lost sight of the big picture for a better view of the small picture.

In the early years of my marriage we forwent cable television. The local free channels were enough entertainment for us. Even after children entered the scene the TV remained free. Massive wealth later caused me a moment of insanity where cable TV entered my home; a decade later it was gone.

An addiction to football* grew in me as I got older. In my defense the football game was nothing more than background noise as I worked around the house, garage or barn. But addictions have a habit of taking over a person’s life. Soon I was watching several games on Sunday and college ball on Saturday. And don’t forget the Monday and Thursday night games. If they had a Tuesday at two in the morning game I am sure I would have tuned in.

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Lifestyle

Card Counting

20160317_080351Last year I inherited a client with 23 years of unfiled tax returns. Normally I enjoy multiple years of unfiled returns. The extraordinary number of years in this instance put me at risk of potentially preparing a tax return by hand for the early years and the tax return contained rental real estate, a trucking business and a farm. I have an allergic reaction to preparing tax returns by hand; it brings up memories of my early days in the business.

The exact year eludes me when we converted the office to 64 bit computers. Old tax programs only run on 32 bit systems so I keep an old computer at the home office for just such an occasion. I had to check the old computer to see if I still had a tax program available all the way back to 1992. I breathed a sigh of relief when I found I did.

The box of paperwork for all 23 years was huge. I lugged it upstairs and fired up the antique computer. The hamsters took a while to get up to speed, but it felt good to visit an old friend. The tax returns peeled away, one after the other, until it was break time. Rather than take a walk I decided to see what goodies I had hidden on the old desktop tower.

A familiar icon was tucked in the lower left corner of the screen; a blackjack game created to mimic real life casino play. The program was built to train card counters and I acquired the program due to a fluke accident.

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Early Retirement, Frugal Living, Lifestyle, Small Business

What I am Reading

20160312_113046Charlie Munger, the right hand man of Warren Buffet at Berkshire Hathaway, is quoted as saying he never met any wise person who did not read a lot. Reading is how we learn about the world around us. We live better when we educate ourselves. Every year I read 20 – 30 books of substance and a handful of entertaining novels I think have a value lesson to teach. Reading is as important as breathing. Many of the greatest books I’ve read were introduced to me the same way you are being introduced to books here, from a blog.

This list is by no means comprehensive. Periodically I will add more posts with a list of books I feel are significant. Most of you have already read several books on this list. No surprise there; people interested in bettering themselves will discover these gems on a regular basis all on their own. There will be a few you have not heard of and now is your opportunity to add to your wealth of knowledge.

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Have All the Clients You Want

20160308_124457

Clients are stacking up.

There is an interesting stream of questions hitting my mailbox. My recent suggestion to cut back and retire early has led to one interesting question. I recommended cutting back to a part-time seasonal job and enjoying all the free time. I used tax preparation as a business idea perfect to live the relaxed lifestyle. CPA's and other tax professionals came out of the woodwork with the same question: How do you get clients?

Getting clients has always been the easy part for me; finding qualified people to help me with the abundance of clients is a different story. What I am sharing today is something I charge a minimum of $3,000 for a personalized plan to increase your clientele. For free I’ll share my business growth story and few example businesses to help you create your own growth plan.

In the Beginning

Starting a business is always the riskiest time. All the start-up costs strain working capital while you have the least community recognition and the fewest clients or customers. Advertising can be a budget killer which leads us to:

Keith’s Rule # 7: If somebody is selling you on a great advertising idea it rarely works and costs plenty, while your own cheap promotional ideas frequently work.

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Lifestyle

Why I Don’t Smoke Marijuana and Don’t Care If You Do

I did not have any marijuana growing around the farm so I used what the government had. Source: drugabuse.gov

I did not have any marijuana growing around the farm so I used what the government had.
(Source: drugabuse.gov)

Last year I attended a conference forty miles east of Seattle. The venue was nestled in a wooded area with hiking trails and mountain climbing. Meals were provided and some of the best home cooking I’ve ever eaten. I was honored with an opportunity to speak at the conference and made several new friends and gained a few new clients. I’m headed back again this year with a new presentation ready to go.

I was one of the first speakers at the conference and word soon traveled that I had a pretty good offering. The only thing I can think of is I made taxes into an interesting subject. (Taxes are boring until you hear how much you can save on yours. Then taxes are the most interesting subject in the world. Go Figure.) More people wanted to be my client than I could handle. The rest of the day I was grilled non-stop with tax questions. There is a real hunger for good tax advice out there and only one me. Exhaustion set in by the end of the day.




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