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education

Early Retirement, Lifestyle, Taxes and Investing

Why Saving Half Your Gross Income is Better and Easier Than Saving Half Your Net Income

People frequently look to their accountant for sound financial advice. Good accountants are up to the task; other, not so much. Finding a good one is easy; they tell you what you don’t want to hear even if you threaten to leave.

Advice sought from accountants runs the gamut. Selling or buying a business requires in-depth analysis and most people trust their accountant’s judgment regarding this matter.

Then the bizarre requests come. Over the years I have been pulled to the side by clients wanting advice on how to raise their children, gambling problems, infidelity, and divorce issues. Some of the requests have a hint of tax built into them. Gambling problems are also tax problems. I’m never comfortable helping anyone decide if they should end their marriage. It’s not my place or at least shouldn’t be. And even if it was I want nothing to do with that kind of conflict.

My favorite requests are about personal finance, intelligent tax reduction and retirement. These are the moments when I can shine. It is also an area of massive risk. My mantra, oft repeated, is simple, yet rarely followed. First the client is in denial (which is a river in Egypt last I checked). Quickly the client moves to tell me my advice is impossible to follow and nobody does it. (Oh, yes they do.) Finally, the client starts to bargain her way into a deeper hole. They think they can change the rules and make it easier. Don’t they know I already thought of every twist and shortcut possible? Clients usually bargain themselves into a deeper hole without even knowing it.




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Lifestyle

Secret Messages

Sometimes accounting can be a downright boring subject. It is the job of your favorite accountant to spice it up a bit with stories and jokes so the message resonates and therefore gets through. No matter how brilliant my idea to increase wealth or lower taxes, it is worth nothing if I can’t keep you reading to the end.

Many people find blogs like this by accident. The people hunting for blogs like this already are open to the concepts. Not so the wayward traveler finding her way here from search engines. I write for the choir, but always consider the wayward, too.

I use stories to convey the message. Money is fun to read about and have. To keep readers engaged I impose secret formulas to keep them coming back. It’s almost like a sickness the reader can’t quite put her finger on. How come I am so draw to this blog about (egads!) accounting, saving money, investing and retirement? the wayward soul asks.

Let me be clear. The message is simple: Save half your gross income and invest in a broad based index fund. All done. Now you have another 23 hours and 58 minutes to fill today. Money stuff is done.

Easy as it is, I still need to make a living writing this blog. I enjoy the writing process and telling stories. Changing people’s lives for the better is a bonus.




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Lifestyle, Small Business

It’s a Small World

There is a ritual the accounting profession goes through every autumn. Eager tax professionals attend continuing education programs to hear all the latest tax law changes with interpretation. Large hotel venues fill with CPAs, enrolled agents, and even attorneys eager to learn. The room is filled with tax professionals all from within a hundred miles.

It amazes me how small the accounting profession is. Tax professionals are an even smaller crowd. A handful of conferences draw nearly the entire industry in each geographic region of the country. Smaller programs abound, but the annual refresher courses with tax law updates bring out the vast majority of the industry.

The same people attend year after year. We know each other. Sometimes personally, sometimes we are only aware of each other’s existence. Many times we talk and share ideas, talking taxes, clients and business management. There is respect in the air. We have something in common and feel comfortable together.  Some of us worked in the same office or worked together on a client’s file. Few members of the crowd feel we are competition.




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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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Lifestyle

The Worldview of the Financially Independent

IMG_20170112_134557What started as a grand idea has morphed into a changed worldview. For decades I focused on the local community in my practice. I would speak for various organizations around the area, rarely traveling more than 50 miles. And I was happy with that.

My speaking engagements and traveling expanded during the 1990s when I entered the securities field. As memory serves, every presentation I have given outside the State of Wisconsin was for something related to securities. Until two year ago.

Two years ago I had this brainstorm to expand an area of my practice that had been an itch I had to scratch. It went horribly wrong and changed my life in ways I never expected. It was a simple idea. Swoop in on a personal finance conference, dazzle them with my usual charm, and sell an idea. It didn’t go according to plan.

My idea was accepted in a modified form. The problem arrived when I was offered an opportunity to expand my worldview like never before. Remember, I am an old farm boy from the backwoods of Wisconsin. This shit doesn’t happen around here. I was totally unprepared.

The result was this blog and a shout out by Mr. Money Mustache. I had to write this blog; I had no choice. The idea was on the back burner for years. Now I had to push forward with the project. People wanted to hear what I had to say.

And then there was the growing demand for my services and requests to speak to more groups. As I started to attend these events and communicating with many people in the FIRE (financial independence, retire early) community, I started to build friendships. I missed these people when they were not around.


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Lifestyle

The Very Best Books I Read in 2016

5193adhz9hl-_sx352_bo1204203200_Now is the time to start a tradition of sharing the best books I read over the past year. The first full year of The Wealthy Accountant is fast approaching. Each December as the year draws to a close I will list my three favorite books I read during the year. Many books I pick up from the library, but the best books really belong in your personal library to read and reread. If you are like me you keep books close at hand for research. There is still time to order from Amazon and have these books in your hand to fill in  the quiet time during the holidays.

Some books I consider the best were already reported earlier. Of the three books recommended, there will be additional books mentioned that compliment the recommended book. Time is precious. Books are a must if you want to succeed and reach your goals. A good life starts with learning and books are the only way. Neither the internet nor formal training can do what books can. Sure, the internet, college, and formalized training are part of the learning process, a part you also need to seek out.

I read 30-50 books every year, depending on the size of the books. Reading is part of every day. Your schedule is just as tight as mine is. You still make time to eat, drink, breathe, and sleep. Time for books is as important as food. Food for the mind is vital. The short list allows you an opportunity to read the most books that convey a powerful message without reading as much as I do.


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Early Retirement, Frugal Living, Lifestyle

Is a College Education Worth It?




imag0319The cost of a college education has risen faster than inflation for so long the discussion can no longer center on what your major is in college, but whether you should even go at all. We have all heard the statistics on how much more you earn with a college degree which begs the question: How much do you need?

Outside medical, education has seen prices skyrocket more than any other category of spending. According to the College Board, tuition and fees for the 2015-16 school year for state residents of public colleges is $9,410. Out-of-state and private colleges are significantly higher. Add room and board and the cost for the school year is $19,548. Now toss in the cost of textbooks and living expenses and the cost of a college education is a major investment.

There are ways to decrease the cost of an education. Starting at a two-year college and living at home or renting your own apartment versus living on campus can lower the total cost. The one nonnegotiable item is the tuition fee. Scholarships and grants can reduce or even eliminate the cost of higher education except for the time investment.Continue reading

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Lifestyle

How I Find Time to Read So Much




IMG_20160904_174915In the course of a normal week I write three blogs, run an accounting practice, jog three hours, lift 3 hours, and read 3 or 4 books. I have thousands of books in my home and read countless more from the library. Some weeks I read fewer books, some weeks none at all, but I still spend plenty of time reading online and during the course of my work.

How can someone read so darn much while running a business and keeping his body fit? You smokin’ somethin’ WA? No, I am not smoking something. Besides, I always understood cocaine was supposed to keep you going until it burns you out and I don’t do that either. (Can you smoke cocaine?)

There is some truth about my sleep habits. During a normal week I sleep approximately 30-40 hours and meditate 10 hours. Meditation time can happen while walking or while sitting in a quiet room alone.

So let’s add up the numbers. There are 168 hours to a week the last time I checked. For arguments sake we will say I sleep 40 of those hours and meditate 10. I spend 40 hours dealing with issues in my tax practice and another 25 hours writing blog posts. Exercise takes another 10 hours (3 hours running; 3 hours lifting; 4 hours light aerobic). Mrs. Accountant and the junior accountants get 20 or so hours of my life each week. That leaves over twenty hours for reading and research. In fairness I sometimes read at the office (okay, I read a lot at the office).Continue reading

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