Monthly Archives

September 2016

Frugal Living, Lifestyle

Screw the Rich

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In the market for a freezer? Have I got a deal for you.

The rich are sanctimonious pricks that deserve every insult thrown at them.  Who do they think they are? Just because they didn’t spend every penny they earned and invested their money wisely does not give them the right to be treated like everyone else. Just because they never wasted their money on fancy SUVs, luxury vacations, or kept up with the Jones’s does not give them the right. It does not give them the right! Who are these rich I speak of? Well, anyone with a net worth above zero.

About half of Americans are below the waterline in net worth. These normal people who succumbed to the mass media brainwashing of spend everything you got are the normal people. You, my friend, saved and invested. You are an idiot. If you were poor, like a normal person, you would be treated like a normal person. But, no. You and your almighty attitude of spend less than you earn is as annoying as it is ignorant.

I Can’t Take Anymore

The opening to this post was darn hard to write. It goes against every fiber of my being, yet is the attitude of the majority of people. When you get to see the world from my side of the desk you have the opportunity to see large numbers of people and how they handle their finances up close. You also hear disturbing stories.Continue reading

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Lifestyle, Small Business

Priming the Pump

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When I was a young boy growing up on the family farm we had three sections to the farm: the homestead, Newhouse place, and “up by the other place”. Yeah, we really called it “up by the other place”. We were sophisticated hillbillies, I tell ya.

Up by the other place there was a well with an old style pump you worked by hand. Toward the end of our farming days the pump was fitted with an electric motor, but that doesn’t help with our story.

The old well pump up by the other place was a job I hated. Feeding the animals was okay, but getting the tank filled with water was a chore. And a lesson. That old well taught me more about life and success than any seminar or college class I ever attended. The lesson was so simple. It amazes me to this day more people do not understand the lesson of the pump.

The Investment

That old well was deep. Getting water out of that darn thing prit’ near (yes, I am writing this way intentionally) killed me every day I went over there. The only saving grace is water from wells so deep is ice cold and sweet. There is no water in the world that tastes as good or refreshed as well. Getting the water is the issue.

The job was simple. You started pumping the long handle vigorously, up and down, up and down, up and down. You put your whole body into it. In the summer sweat would pour down my face as I gave it all I had. After several minutes I wanted to quit or at least take a break. But that is a mistake. It takes a long time to get the water flowing. With each pump of the handle the water works a bit higher, but if you stop it goes all the way back down and you have to start all over again.


Continue reading

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Small Business, Taxes and Investing

Why I Like Credit Card Debt in a Small S Corporation

downloadThe tax advantages of organizing as an S corporation or an LLC electing to be treated as an S corporation are significant. Self-employment taxes disappear with the corporate structure and with an S corporation there is no income tax either as all profit flows to the owners. As with all good things, there are pitfalls. The S corporation is no different.

Most small businesses in my office use the S corporation structure. There are a few rules that need to be followed, like the owners paying themselves a reasonable wage. The wage issue is easy to handle; I require S corporation clients to do their payroll in my office. Problem solved.

The other major issue with S corporations is basis. Before your eyes roll back in your head, hear me out. Basis is one of those animals many accountants screw up on or fail to track accurately. You need to have a fundamental understanding of basis if you are business owner. If your accountant messes it up the IRS still sends you the bill, not the accountant.


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Early Retirement, Lifestyle

Wake Up and Die Right

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Practicing dead. Eventually I'll get it right.

We are going to do an exercise today. Nothing that will work up a sweat or anything, but might bring a few tears to your eyes or even abject fear of how bad you have been screwing up.

I want you to close your eyes. (Not now! Finish reading this first, then do the exercise. Did I have to mention that? Okay, back to our story.) Find a comfortable place where you can lay back and close your eyes. We need to do some time travel today and until scientists invent a time machine we will use our mind to get the same results.

Now that you are comfortable and relaxed, your eyes get heavy and slowly close. Your mind races you to a time in the future, maybe the near future, maybe decades down the road. In this future you are lying on your deathbed. You are old and tired. It is only a matter of time before the Grim Reaper claims his prize.

With these last moments of life you have the opportunity to review the life you have lived. What do you see? Are you smiling? Crying? Are you happy with the life you lived?

I Wish I Would Have. . . 

How depressing it would be to lie on your deathbed reviewing your life and muttering, “I wish I would’a. . .” Imagine the tears streaming down your cheeks as friends and family look on wondering why you are in such pain. They pity you as the last spark of life leaves your body. Death is a welcome gift.


Continue reading

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Lifestyle

Destroying Fear with Stoicism




20131025_173740Fear destroys dreams and happiness faster than any other thing can. Fear of failure prevents us from starting a business; fear of rejection causes us to pass on a dream date; and fear of the unknown forces us to keep working a job well beyond the point we could retire. This simple four-letter word pushes us back against the wall, draining all the vitality of life from us.

Fear paralyses. The opportunity to speak to a group is unrealized because our stomach turns and our heart stops due to fear, as if the audience will rush the stage and beat you. (Well, there was this one time I was speaking. . .) All the happiness you deserve in life is passed each time you allow fear to rule your decisions. There will be failures and rejections. Once you understand this is part of life you can focus on the important stuff and say “yes” to the opportunity for a date with the girl of your dreams or start that business.

Fear is nothing new. Mankind has felt the fight of flight response from the beginning of time. The ancient Stoics knew uncontrolled emotions destroy faster than anything known to man. And it is all self-inflicted!

FEAR: False Evidence Appearing Real.

It is all in your head. Failing at business is a possibility. When you see as many business owners over the years as I have you start to see a pattern. It becomes obvious who will fail. Most businesses fail because they neglect to take appropriate steps, which all lead back to some sort of fear. If we do that we could lose clients. If we invest in the company we might not earn the investment back. And, of course, once you allow fear to rule it becomes a self-fulfilling prophecy.Continue reading

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Lifestyle

Get Ready for Suicide Season




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Bipolar is not a life of extremes as this drawing illustrates. Bipolar is learning to live along the edges, struggling to control the overwhelming flood of emotions.

September is Suicide Prevention Awareness Month. Suicide is the 10th leading cause of death and 3rd among young adults. The issue is too serious to let slip by without an honest discussion. According to Centers for Disease Control and Prevention (CDC), 41,149 people committed suicide in the United States in 2013, 12.6 per 100,000. The suicide epidemic crosses all age groups and racial barriers, however, young adults (2.5%) made a suicide plan at a higher rate than older adults (1.35% for middle aged adults and .6% for older adults). People of mixed race have the highest rate of suicide while blacks have the lowest. All this is according to the CDC.

Statistics are cold and not what I want to talk about today. The story I want to share is about depression and more to the point, Seasonal Affective Disorder. It might seem like a strange topic for a personal finance blog until you consider socio-economic status does not insulate you from depression, suicidal thoughts, or actually killing yourself. Wealth is not a prescription for awesome mental health. Wealthy people may seek help because they have the money to pay for treatment or might have a stronger support group, but financial independence is not an elixir that cures depression or prevents suicide.

Confessions

This is a hard article for me to write. Most people have a hard time understanding what I am about to say, especially if they know me or have seen me in a business setting. I suffer from manic-depression and came this close to being one of the statistics listed above. For a long time I could not understand why I felt the way I did when my life was so good. My marriage is great, I have two wonderful (and moral) daughters, a successful business, and financial independence. Drugs are not a part of my family. So why the deep bouts of depression?Continue reading

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Small Business

Reader Case Study: Deciding When to Start Your Own Business




accountantSean is a CPA who sent me an email asking a list of questions about how I started my business, how I operate successfully, handle problems, and balance work and personal life. It is a common request from members of the accounting industry. They want to know how I pulled this stunt off. In the past I touched on the subject; today I will dig deep using Sean’s email to drive the narrative.

Even though this story is about my experiences in my business, most of what I do works for other business models with slight modifications. The hardest part for a professional earning good money is to jump into the unknown of private practice and the certain decrease in income as a business is started; the money comes later. There is also fear of the unknown. I will share how I managed these issues. This will sound different from what you hear from other people or the media. The only reason I can give for the dichotomy is 1 in 10 businesses survive the first five years. Since I am one of the survivors, my story will differ from the majority, 9 out of 10 crowd.Continue reading

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Early Retirement, Frugal Living, Lifestyle

Library Millionaire




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This is your new best friend, the librarian at the reference desk.

How would you like a cool $850 every month in your pocket tax-free? Invested in the Vanguard S&P 500 index fund you should be booking around a million dollars in 30 years, assuming historical averages of 7% returns compounded per year after inflation. Okay, I lied. $850 invested every month for 30 years at 7% comes to $1,049,923.39.

But 30 years is a long time to wait for your million dollars. Well, I didn’t say you couldn’t take a bit out of your paycheck and drop it into your retirement account to supercharge your wealth building (and tax savings). Regardless, a free $850 every month in the First National Bank of Wallet is nothing to sneeze at. And anybody can get the free stuff and the money. In fact, the folks handing out the goodies want you to have the money. Who are these crazy people?

Librarians! Yeah, those people you haven’t visited since your junior year of high school have made some changes to the place while you were gone and you might want to check it out.

You know how some businesses can be rude to paying customers. Well, at the library I have never had that experience. These people are happy to see me and allow me to walk out of the place with stuff you would not believe. Sometimes they actually let me keep it forever! And they still have the regular goods you would expect at a library, like books; you know, those thing made of paper, held together with glue, and have pages. The library likes those back after three or four weeks, however.Continue reading

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