Frugal Living, Lifestyle

They Said It First . . . and Better

The hardest part of writing a personal finance blog is finding fresh material. Most things have been said before and better. All the important points have been regurgitated onto the screen thousands of times before. If a PF blogger wants to make a difference she needs to find something to add to the already large heap of material available.

The trick to wealth is a very short story: save half your income, invest in index funds, avoid debt like the plague. Everything else is opinion. Everything else is nothing more than ways to spend less and learning to live on half your income without feeling cheated so you stay the course. The real trick is to get readers to apply the simple message.

Then the truth hits home. Even brilliant new ideas come crashing to earth as the blogger reads the PF universe. The new idea was said before and without a doubt, better. It is a sinking feeling when it happens. You pour your soul out onto the page only to discover weeks or months after publication another PF blogger already wrote the story. You feel like a hack.

You keep writing, keep hunting for the elusive fresh story. It’s new to you so it does not matter. Your story, your writing, is a journey of discovery; a story you can’t keep inside; a story you must tell. So, several times a week you sit in your chair and push your index finger (in honor of index funds) down your throat until you ralph up another classic. And you hope and pray it all makes a difference for at least one person. Otherwise you are only wasting your time.

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Early Retirement, Frugal Living, Lifestyle

Stop Working for Money

Have you ever wondered why Elon Musk keeps pushing so hard? A hundred million from PayPal wasn’t enough, I guess. Building the greatest all-electric car is not enough for Musk, either. He also wants to fundamentally change the way humans see the world by starting a company called SpaceX. As I write, Musk promised to take two people to the other side of the moon and back next year! Talk about pushing yourself.

Before you start thinking Musk is a slacker, he also has this thing he manages called Solar City. If you want to build the greatest electric car ever you may as well figure out a way to fuel the darn thing for next to nothing. Right?

You would think running three large companies at the leading edge of technology would be enough for a 45 year old man with plenty of money to kick back and spend the rest of his life gloating. If you think that you don’t know Elon very well. He wants to put mankind on Mars in the next decade and send the species even further into space. His dreams never stop flowing and he makes them real against all odds. Just one great feat of Musk’s would make anyone’s career complete. So why does he do it? Why does Musk keep dreaming and then putting those dreams into action?




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Lifestyle

Preparing for Growth at The Wealthy Accountant

TWA was turning into a turkey without some updates.

The Wealthy Accountant is growing and with growth comes growing pains. A local web designer was hired to bring this blog to life. But blogs are different from static web pages most small businesses use. A blog lives and breathes change every day as people read and interact with it. The writer provides a steady stream of information until the amount of data contained is immense.

This is the 202nd post here. Close to 350,000 words of information and storytelling are contained within. This is the equivalent of four fairly long novels. It is hard to believe The Wealthy Accountant reached these levels only after slightly more than a year in existence.

Traffic continues to grow as well. More people are reading more material. Requests to bring order to the large number of posts and subjects has been steady. This past weekend some of these changes were implemented.

The Wealthy Accountant changed hosting services this past weekend. There were a few unscheduled service failures. It was necessary. The page loading speed was slow and getting slower. The new system installed will allow me to scale this blog to greater heights while providing a better user experience.

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Early Retirement, Frugal Living, Lifestyle, Taxes and Investing

Here is How You Can Piss Off Donald Trump

Disclaimer: This is not a political rant! The time is ripe for this message and Trump happens to be President. It is meant as satire wrapped around a serious message you must follow or suffer the financial consequences.

Nothing is more fun than good times. The recent run in the stock market in nothing short of incredible. After years of slow growth economy and low inflation coupled with a rising stock market, the stock market has exploded. The chart has gone parabolic! But this is not a story about investing or the stock market, however. This story is about pissing off Donald Trump.

Promises of faster economic growth and more high paying jobs face reality after Election Day. President Trump has hitched his wagon to a promise of hyper economic growth, in the neighborhood of 4% or higher. Depending on the day, a lot higher. I’m guessing if things go well we can see wages double every three, maybe four, years. And the best part, no inflation while the government pays off the national debt and increases spending across the board. Such are the promises of politicians.

And in these “best of times” you think it will last forever. Think 1929 or 1987 or 1999. Oh, for the heady days on 1999 when broad stock indexes sported triple digit P/E ratios. How can you lose? The future is clear to the horizon. Life is good, just ask the government.

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Small Business, Taxes and Investing

Get a $100,000 Gift from the IRS Using Cost Segregation

In the past I shared ideas that saved you $10,000 or more per year. I also shared numerous other ways to reduce your tax burden by smaller amounts. And, of course, retirement accounts and the Health Savings Account provide plenty of tax reducing power, too.

That is all small change compared to what I share today. Today the gloves come off. Today you will learn how to peal massive amounts off your tax bill. I am talking about taking six figures and more from the IRS and putting it into your pocket legally. No jail required.

This program applies to investment properties and businesses with a building. All other can safely skip today’s post. Or you can read it and share it with someone who owns rental properties or a commercial building. You will make a lifelong friend if you do.

What is Cost Segregation?

The risk I take is getting too technical. You don’t need to understand all the deep tax terms to use this strategy so I will avoid technical jargon as much as possible.

The first thing you need to know is that cost segregation only works on buildings with an original cost basis (purchase price, plus additions) of $250,000 or more. Residential income properties, commercial properties, additions and build-outs all work. This does not include the value of the land. Example: You but a property for $450,000. Land value usually comes in around 20% of the purchase price. Therefore, $360,000 is for the building. Cost segregation works on the building portion of a property only. Also note, the higher the value of the property, the more tax benefits cost segregation provides.

The IRS says you have to depreciate a residential rental property over 27.5 years and commercial property over 39 years. This means you put a lot of money down upfront without a tax benefit.

The IRS says you can use cost segregation to separate the components of the building for faster depreciation. A typical building under cost segregation may have about half the value reclassified as 5-year property, 20-25% as 7-year property, and the remainder as either 27.5- or 39-year property.

Pictures around this post show some illustrations of tax savings with cost segregation.

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Lifestyle

An Open Letter to My Children

Normally when a parent leaves a letter to his children the doors and windows are closed. However, when your dad is a business owner and somewhat known due to decades of publishing, the public will want to look in the window. Regardless, this letter is for you girls and no one else.

My fondest hope is you will print and carry this letter with you. There are many things I want to share with you about life. I know it looks daunting and impossible at times, but it isn’t that bad. During those darkest hours, hours when you doubt your own judgment, you can reference this letter and know that your father has felt this way many times in his life. Watching me over the years you probably think it comes easy for me. It doesn’t. I fight as hard as or harder than the next guy to achieve goals.

The same applies for those moments of excessive glee. Honing the highs and lows is an important part of living a joyful life. Always keep an optimistic attitude. Regardless the situation, it helps. Things are never as bad as they seem and rarely perfect either. Life is in the middle.

Life is a journey best taken at a gentle pace. Don’t rush! Goals are fine as long as there is more. The only real goal life offers is death and you will get that right the first time, same as everyone else. What matters is what you do now, at this very moment. Yesterday is a memory; tomorrow a dream. All that is real, all that matters is this moment in time. The universe is not 13.7 billion years old. It is one moment only. This moment. The one you live in.





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Lifestyle

The Easy Way to Wealth: Deferred Gratification

 

Sometimes it is hard to wait.

Instant gratification is the hallmark of a good economy according to the government wonks and marketers. It is also the hallmark of the impoverished souls forced to work forever in a soulless job to cover the debt payments.

Watching clients for decades has made it clear there are only a few golden rules to wealthy. Automatic investing is one; deferred gratification is the other. Deferred gratification is what funds the investment account so I think deferred gratification is by far the more powerful of the two traits.

Instant gratification is sometimes hard to see. Today I will point out all the signs you are satiating your lusts a bit too quickly for your own good. By recognizing your overzealous spending habits you can delay gratification to your benefit. You give up nothing, but gain plenty of freedom, less (or no) debt and financial independence. It is a stress-free way to conduct life.

Support this blog. Thank you.

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Early Retirement, Small Business

Starting a Successful Seasonal Tax Preparation Business

Readers of this blog are always looking for a side hustle. Seasonal tax preparation is a perfect fit for many early retirees. A small tax preparation business allows for an earlier retirement as the side income can easily be enough to live on for even a modestly frugal person. Another large reader demographic involves the accounting industry. There are plenty of blogs talking about tax issues, but few discuss the realities of starting, promoting and maintaining a tax practice.

I touch on the subject of practice building periodically, but my email folder is filled with requests for a more detailed post. A recent email from someone called Speed (I love it!) asked a series of questions that encompasses the bulk of practice management requests.  Much of what I discuss can be applied to most other business ideas with only slight modifications.

Rather than give a play-by-play on starting and managing a tax practice, I will take each of Speed’s questions and answer them. The reason for avoiding the play-by-play is because there are many ways of starting a successful business. I don’t want to give the illusion you are locked into one pattern to win. Life is rarely that neat.
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