Posts Tagged ‘happiness’

The FIRE Community Needs to Make Room for Semi-Retirement

The FIRE (financial independence/retire early) community is a growing demographic still trying to find its way. The FI part of the equation is easier to understand than the RE part. The issues revolve around the definition of retirement and what constitutes the appropriate lifestyle once FI is reached.

Some of the wealthiest individuals of the last half century provide an example. When Sam Walton was the richest man alive on the planet he still drove a beat up old pickup truck. He saw no reason to spend money on a new truck when the one he had was comfortable, did the job and gave him pleasure (a bit of a status symbol). In a recent interview with the Wall Street Journal, Warren Buffett confessed he has been semi-retired for decades. Charlie Munger, Buffett’s right-hand man at Berkshire-Hathaway, joked Warren is good at doing nothing.

Like Walton, Buffett doesn’t go for the extravagant spending so common among the rich. Buffett’s suit is off the rack and he eats at McDonalds. He also lives in the same home he bought in 1958.




Spending Decision

This last week an email arrived chastising me for my frugality. I was reminded my net worth is at the top of the list on Rockstar Finance. (I haven’t updated my net worth status in a while so the number listed is a bit shy.) The sender was concerned over how it looked for a blogger like me with an eight figure net worth to have an annual spending habit in the low twenties.

I responded with the same stories on Walton and Buffett above. I also reminded the concerned reader spending more would not make me happy and I was in no way interested in what people thought of my spending habits. If folks think I’m cheap that is their deal and doesn’t concern me.

What the reader missed (and he was exceptionally polite, and worried my spending level might offend some) was what really mattered in my life: joy and happiness.

Living in the boondocks makes it easier for me to spend less. The nearest retail outlet is nearly a half hour drive. I could shop online, but I tend to break out in a severe rash when engaged in the shopping experience. (For Father’s Day — yesterday here in the States — I wasted spent $3 in gas to visit a restaurant in Forest Junction (my old haunt) for a free glass of milk and dish of ice cream for the whole family. Life really is good in boondock country.)

At the end of the day I really don’t want for anything. I have a beautiful, loving wife and two awesome and wonderful daughters. Books are on my shelves waiting for consumption. The level of contentment I feel is greater than any other activity or spending could bring me.




Lessons Learned

There is a difference between happiness and joy; joy is more important. I’m happy most of the time, but always joyful. I found the right path to a joyful life at an early age. I was lucky. The noise of urban living never distracted me. My grandparents lived downstairs of the farmhouse and we lived upstairs until I was in middle school. Growing up in the 1960’s and 70s with grandparents you were sure to hear the lessons they learned living through the Great Depression. Like most kids, the lessons had a hard time sticking. As I grew older I remembered the stories and took them to heart. It made a difference.

There is a significant difference between granddad and me. Grandpa, who we called Doc, would never in a million years have told anyone his net worth. It was none of your damn business. I’m more open, but experience is showing me I should have listened closer to my grandparents in that arena too.

Growing up on a farm in a very rural area of 1970 Wisconsin meant we did things differently. We had more fun than you can imagine. My brother, uncle and I played cops and robbers on our bikes every summer. The dog days of summer always had a water fight or two. Those were good days I miss tremendously. They are gone now and only exist in here (pointing to my temple).

As hard as life was we always found time to laugh and tell jokes. We worked and played hard. Free time frequently meant a quick run to the creek (we pronounced it “crick”) to fish. When we were older we raced around the back forty on mini-bikes. The best we could do was 40 mph; we could also jump ramps.

We missed out on nothing. Nothing! I was as oblivious to the world at large back then. Buried deep in the recesses of my mind I was aware of a brave new world that hath such people in it as I am now.

We were happy as a tight knit family. We felt joy with rare exception. These days we play cards Friday night at my parents’ house. Afterwards I hug my mother and father and tell them I love them. Yes, even my dad. You see, money will never buy you the things that matter, will never buy you joy. And the happiness money buys is fleeting.

Money, after a certain point, is nothing more than a game to occupy one’s time. Money is a scorecard in the grand scheme of daily life. Nothing more.




Back to the FIRE Community and the Nouveau Riche

The FIRE community is comprised of highly intelligent people with honorable intentions. Lately we see the focus turning more toward the FI part of the equation. I like to pretend I had a bit to do with that.

Retirement is still a hotly discussed topic! Professor Jordan Peterson said it best when he stated most people don’t have a career and will never have a career. What they will have is a job. A job is what you do to keep a roof over your head and put food on the table. It is rarely a lovely experience. It’s work you have to do to earn money. A career, on the other hand, is something you enjoy immensely. Only 5% of people ever have a career. Most only have a job.

That explains the reason why so many in the FIRE community want to save like crazy so they can check out of the job and into a life that fills them with joy. Too many people trade a traditional job for a self-imposed job: income properties, small business or side hustle even though it doesn’t bring fulfillment, only a bit more free time.

Warren Buffett is pushing toward 90 and still goes to the office. I understand his drive. There is a certain comfort in doing what one loves. Charlie Munger is 94 and spends a serious percentage of is waking hours reading. He, like Buffett, is still dedicated to learning daily even at their age. Some might argue it’s a waste of time, but Buffett has expressed on numerous occasions the pleasure he gets searching for good companies to buy at a good price.

Retirement is a trap! I see plenty of people in this demographic on my social media pages. They fill their days with all kinds of activities. Before long they are doing things that create value. This is no surprise. The human spirit is designed to build, grow, share, experience, create. One recently semi-retired member of the community is working on stained glass projects. Good for her. Many start blogs or podcasts. Many travel, at least for a while. Then they invest in real estate (the other RE) or start a business or fill their days with a variety of side hustles.

Hear the Wisdom

My grandparents imparted powerful advice to us kids all those years ago. It shaped and formed our lives. Warren Buffett admits he is semi-retired. What he is really saying is that he has to do something to fill his days so it may as well be something he enjoys.

The uber-successful seem to never want to quit. Elon Musk had it made financially and put it all on the line to start a litany of businesses which promise to revolutionize the world we live in. Steve Jobs worked until his body gave out less than a month before his death.  Even then he worked as much as possible from home.

Here is an old and often told story:

A scorpion came to the edge of the river and wanted to cross. The river was wide and deep. The only way across was if he received help.

The scorpion said to a nearby frog, “Frog, please take me to the other side of the river. I can ride on your back while you swim across.”

“Are you crazy!” said the frog. “If I let you ride my back you will sting me as we cross the river and I’ll drown. Scorpions sting frogs; it’s what scorpions do!”

“Why would I do that?” said the scorpion. “If I sting you while crossing the river  I’ll drown with you. My request is honorable. Let me ride your back across the river.”

The frog saw the logic of the scorpion’s argument. The scorpion would die if he stung the frog while riding his back across the river.

The frog relented and allowed the scorpion to climb on his back. The frog stepped into the river and started swimming across. About half way across the scorpion stung the frog. As the poison started working the frog began to drown. The scorpion fell into the water as well.

“Why?” asked the frog as he started to go under. “Why did you sting me? Now you will die! Now you will drown with me!”

The scorpion replied words of wisdom before he went under the waves, “I am a scorpion. Scorpions sting frogs. It’s what scorpions do.”

Do not be fooled. We are what we are. Our minds and bodies were not made to be unproductive. We play and work to our happiness, joy and health.

You and I are human. Humans play, love and create. It is our nature. It’s what humans do.

Don’t be in a hurry to RE. FI is an honorable and noble goal I strongly encourage. Find the things which bring you joy and happiness, then do them. And don’t let anyone convince you to live their version of life because therein lies sorrow.



Wealth Building Resources

Personal Capital is an incredible tool to manage all your investments in one place. You can watch your net worth grow as you reach toward financial independence and beyond. Did I mention Personal Capital is free?

Medi-Share is a low cost way to manage health care costs. As health insurance premiums continue to sky rocket, there is an alternative preserving the wealth of families all over America. Here is my review of Medi-Share and additional resources to bring health care under control in your household.

PeerSteet is an alternative way to invest in the real estate market without the hassle of management. Investing in mortgages has never been easier. 7-12% historical APRs. Here is my review of PeerStreet.

QuickBooks is a daily part of life in my office. Managing a business requires accurate books without wasting time. Quickbooks is an excellent tool for managing your business, rental properties, side hustle and personal finances.

A cost segregation study can save $100,000 for income property owners. Here is my review of how cost segregations studies work and how to get one yourself.

Amazon is a good way to control costs by comparison shopping. The cost of a product includes travel to the store. When you start a shopping trip to Amazon here it also supports this blog. Thank you.

How Much You Need to Retire is a Lot Less Than You Think

You can travel the world or stay closer to home. Beauty is everywhere. This piece is showing at a Beijing, China jewelry expo.

A common question in the FIRE (financial independence, retire early) community involves how much money you need to retire. Before I became a card-carrying member of the community I would hear the question something short of a dozen times per year. This blog means I hear the question a lot more these days. And people still don’t believe my answer.

There is a great misperception over how much money is needed to cash a check and walk your own path. I’ve consulted with 70 year old men worried they don’t have enough to retire. In the FIRE community younger people are more interested in the same question with a different set of rules.

Social Security changes all the rules. The 4% rule is wildly off the mark because they forget two simple facts; facts we will cover right now.



How Much is Enough

I will use one example to outline how much you need to retire. It is easy to adjust to fit your personal circumstances.

This exercise began when I started to wonder how much Social Security I’ll receive monthly at 70. We will not use my actual numbers. Instead, we’ll use a hypothetical married man my age. (I don’t use my actual numbers since they are atypical.)

Later this month I’ll tip the age scale at 54. Yeah, I know. Never thought I’d live that long either. It also brings up a few interesting facts. First, I qualify for early retirement (qualify for early discounted Social Security) in eight years. (Where the heck did the time go?) Full retirement for Social Security is 13 years away and I can get a bump in my benefits every year I wait until 70, or 16 years. Regardless, Medicare is for the taking at 65, or 11 years for your favorite accountant.

My daughter, Heather (age 23), and her friend, Katie (age 27), at the centerpoint of Beijing, China. They’re getting paid to travel.

So how much do you think I need to call it a career? A million? More?

It all depends on my spending habits really. Depending on the circumstances, most years I spend about $20,000. Some years I spend as much as $30,000 in the event the car dies (every twenty or so years) or some other personal adventure arises. Summertime is low spending season. An average summer month sets me back $600 – $800. Rare is the non-winter month that sees a four-figure reversal on my spending fortunes. Winter is another matter. December is property tax month. January (February, too) is cold in backwoods Wisconsin. The utility bill gnaws at me the entire time.  By the time the frost clears I’ve lost $20,000 of weight from my money belt.

The 4% rule (bantied about in the FIRE community a lot) says you need a cool $625,000 to be safe with a $25,000 annual withdrawal rate. This is just plain stupid! You don’t need $625,000 to retire with a $25,000 annual budget!

Here are the two mistakes most people make. First, it assumes you’ll never earn another penny after you retire. Oh, for God’s sake people! You will earn money after you retire, if only by accident. Heck, you can sell tradelines if you’re allergic to work and need a thousand or so each month to supplement your wants.



Time for Math Class, Accountants

Let me ask you this. If you have $625,000 at age 54 and withdraw 4% ($25,000) annually, how much do you have at age 70? Answer: More than Zero! The 4% rule is considered a safe withdrawal rate to never run out of money in retirement.

But this assumes you want to leave a legacy at least as big as your net worth pile right now! If 4% is a safe withdrawal rate then in all but the rarest of circumstances the account balance will continue growing!

The second mistake people make when deciding how much they need to retire is using the 4% rule rather than amortizing the liquid net worth balance over the maximum years needed before another form of income kicks in.

There are plenty of amortization calculators around the web. I’m using the program inside my tax software. I asked my amortization program a simple question. How much will I need today to withdraw $25,000 annually for 16 years (remember I’m 54 and want to wait until 70 before drawing Social Security) at a 4% return? Since many people consider the 4% rule safe (as do I) it is acceptable to amortize the liquid net worth balance at a 4% investment return rate.

My tax software says I need $291,307 (I rounded) to make this work. I’ll have exhausted my liquid cash at the same time Social Security kicks in. (Assumptions: withdrawals for the year are in one payment in advance with the money market holding the funds prior to use earning 0% with the first payment drawn the first day to account for an immediate retirement and the next full year withdrawal of the first day of each fiscal year.)

This is a far cry from $625,000! The amortization solution doesn’t take into account several factors. You are likely to earn at least a small amount of income in the next 16 years, but inflation is not factored in so  buying power slowly erodes. It also assumes the stock market (I assume we’re using broad-based index funds) only performs at half its historical average. That is a serious assumption! Odds are the market will do better and you will still not use up your nest egg by the time Social Security kicks in. If fact, it’ll probably be bigger than when you started.



The Crazy FIRE People

The crazy FIRE community needs even less than my calculations indicate. When a 35 year old walks into my office and wants to know how much more he needs to retire when he has $200,000 stashed away already with no debt I tell her she can retire today. After they break the dead stare they think I’m joking. I’m not!

Once again we are assuming the $200,000 will only throw off $8,000 per year under the 4% rule. Not so. Once you give up on the rat race you can join a race you really enjoy! If you’re 35 you need something to fill your time. First, you are likely to move to a lower cost area if you don’t already live in one. (My low living expenses are partly a product of geography. New Your City or most of the West Coast would force me to talk out of the other side of my mouth.)

You can live the good life with spending a fortune. This museum piece in Beijing, China requires a King’s Ransom, but you can enjoy the jewels for less than a $10 admission fee.

Second, you’re 35 years old!!! There is only so much travel or golf a guy can handle. It gets old fast, becoming the new rat race you want out of.  Then reality sets in and your interests bubble to the top. A side hustle you always wanted to try is now a viable option. It doesn’t have to pay tremendous amounts of money. Your cost of living will decline unless you engage stupid spending habits. If you have said habit it is unlikely you’ve read this far. (For the rest of you, this way.)

Using the assumptions above, the $200,000 amortized over 32 years will throw off a bit more than $11,000. Still not enough to retire.

But if you spot a 35 year old $11,000 per year and she only needs $25,000 per year to live you have a helluva start!

If you can swing $1,200 per month with a side hustle you can retire at 35! Yes, Social Security might be pretty small, but your side hustle will add to your account when calculating benefits. At full retirement a husband/wife team should realize around $2,000 a month even with the low earnings assumed here! Retiring at 35 with $200k is doable if you have any interest at all in any activity with potential to throw off an income stream.



Crybabies this Way

The information above has the tendency to bring out the crybabies. “I can’t do that! Waaaa!” “It’s impossible! Waaaa!”  “I want my mommy! Waaaa!”

Your mommy isn’t here so pull up your shorts and listen. $200,000 is a bit light to retire on at 35, but not bad for someone a certain accountant’s age. Amortized over a shorter period means you will have enough until pensions and Social Security kick in.

At 35 you will be required to still earn some coin. Notice I didn’t say work. Please don’t break out in a rash.

A seasonal or part-time job can provide enough money to enjoy a very joyful and full life. The first ingredient is cutting out all the stupid spending! The more you spend annually, the more you will need at the start to make it to the finish line!

If you live in a high-cost area it many require a move. If you stay put you need to adjust my numbers. Younger people need to calculate on their age, not mine! If you have a higher lifestyle than mine you’ll need more to start unless you plan on spending more time on your side hustle.

Until your health gives out or you die, you will bring in more income than you realize. Just doing the stuff you enjoy doing has a tendency to become an income source. Even small income sources do wonders to your investment account. Using your favorite accountant as an example, the lower spending habits of summer means money is left to earn more before it is spent. Every nickel earned on the side is one nickel less needed to appreciate the awesome retired life you’re living.

You probably worry as much as my clients about how much you need to retire. Financial advisors always scare you with big numbers. It’s good for them when they get more of your money. The truth is you don’t need as much as you think to have a comfortable retirement with spare change for some travel and entertainment.

And for God’s sake, please don’t be that guy who has $200,000 in cash, a $25,000 annual spending budget and is 65 with Social Security checks for him and his wife totaling over $3,000. Just don’t be that guy. You’re never going to run out. Now go and enjoy your life.



Wealth Building Resources

Personal Capital is an incredible tool to manage all your investments in one place. You can watch your net worth grow as you reach toward financial independence and beyond. Did I mention Personal Capital is free?

Medi-Share is a low cost way to manage health care costs. As health insurance premiums continue to sky rocket, there is an alternative preserving the wealth of families all over America. Here is my review of Medi-Share and additional resources to bring health care under control in your household.

PeerSteet is an alternative way to invest in the real estate market without the hassle of management. Investing in mortgages has never been easier. 7-12% historical APRs. Here is my review of PeerStreet.

QuickBooks is a daily part of life in my office. Managing a business requires accurate books without wasting time. Quickbooks is an excellent tool for managing your business, rental properties, side hustle and personal finances.

A cost segregation study can save $100,000 for income property owners. Here is my review of how cost segregations studies work and how to get one yourself.

Amazon is a good way to control costs by comparison shopping. The cost of a product includes travel to the store. When you start a shopping trip to Amazon here it also supports this blog. Thank you.

The Best Speech Ever Given

Jordan Peterson is one of the greatest thinkers of our time.

When you think of the most powerful, motivating speeches ever given, Abraham Lincoln’s Gettysburg Address comes to mind. In less than three hundred words* Lincoln encompassed the issues facing the nation. As great as the speech was, it was backward looking (Four score and seven years ago) with hope to the future. Lincoln was able to clearly articulate his message in a few minutes. He struggled up to the moment of addressing the crowd as Gettysburg. It was the planning and preparation that lent to the quality of the message.

Closer to home we might consider the commencement address Steve Jobs gave at Stanford in 2005. At fifteen minutes, Jobs communicated a narrower message with significant reinforcement of his theme. Once again, serious planning took place prior to the presentation. Jobs was legendary in his drive toward excellence. He could speak before a crowd extemporaneously, but preferred formal presentations he could and did practice again and again until everything was choreographed to perfection. Errors were ironed out. He practiced so much that when he was live he could continue without missing a beat if technology failed while he was on stage. A Steve Jobs presentation was a show to behold.

Speeches that resonate come in many flavors. YouTube is filled with powerful speeches from movies and sports coaches. Speeches that cause a shiver to run down your spine include elements of life itself. “You can do it” is motivational, but when the words and emotions dig deeper we quickly realize the importance of what we are hearing.

Today I want to share a short speech (10 minutes from a longer interview) by Jordan Peterson. I’ve been reading and listening to his work for a while now. His recent rise to fame makes his plea more vital than ever.




A Typical Day at Harvard

The excerpt comes from a longer interview Peterson gave to a group at Harvard University. The video begins with Peterson asked what advice he would give students that want to make a difference in the world after they graduate. Peterson never missed a beat when he said, “Read great books!”

You can watch the video on your own and should several times to digest the entire message. What you should get on the first pass is that while Peterson was giving an interview, his responses are not completely extemporaneous. Over a long career he has developed a remarkable philosophy on how to live a good life. Does that sound familiar? It should. It’s been a while, but I’ve talked about Stoicism plenty enough in the past in this blog.

The overtones in this interview are dripping with stoic thought. Around halfway through the excerpt the interviewer even asks Peterson how to live a good life. What makes the responses so powerful is how Peterson opened the floodgate and released an articulate and passionate plea for listeners to accept how incredibly awesome our lives are today in the Western world.




A Game of Cards

Friday night is sheepshead (a card game with some (okay, few) similarities to bridge) night in the Accountant neighborhood. Since we are all a bunch of old duffers living in the backwoods of Nowhere, Wisconsin, the game starts at 7 and ends shortly after 9. (Did I mention us country folk prefer to hit the hay shortly after sundown?)

A few weeks ago one of our players, Pete, asked — as he always does — how our week was. I decided to return the favor and ask Pete how his week was. The rest of the night was shot. I don’t think we got more than three or four hands in before closing time.

My faith in the future is firmly intact. A recent sunset at the Accountant farmstead was a reminder and renewal of my faith in life, the future, the world around us and the beauty of life.

My polite interest in Pete’s prior week was all it took to open the gate and let it all out. Pete couldn’t stop talking about how awesome and great life was. Backwoods people live a frugal life due to environment. We can’t order pizza delivery. (There is no pizza delivery in our neck of the woods.) The closest shopping opportunity is 30 miles away and none of us miss the chance to be separated from our cash. (The card game is frequently brutal on the family budget. We play for dimes and a bad night could set a guy back a full dollar, dollar and a half. Like I said: brutal.)

Pete didn’t miss any of the highlights of our incredible modern world. We have internet (high speed!) here in the backwoods. Food is cheap and varied. The cost of living is cheaper than ever. We live longer and have medical technology to not only keep us alive, but to live better. A bum knee is a simple replacement today; in the past it was a permanent diminution to quality of life.

Debt is the only real problem messing up all the fun in our ultra-modern world, according to Pete and company. When things get tough (as if that is even possible today) you can reduce spending in all areas. You can cook more at home or turn down the heat/turn off the AC. You can walk or bike instead or burning gasoline. All budget items are easily reduced, expect debt payments. Those stay stubbornly locked in place regardless of events chipping away at family finances.

Pete retired fifteen or so years ago when he was about my age. He cut back even earlier, enjoying three day (or four) weekends. Now Pete is looking down the barrel of Social Security. Any day now he can pull the trigger and enjoy the influx of even more income. In Pete’s own words, he can’t spend what he already has! He has lived off an amount less than his Social Security check promises to be for years.




What Everyone Must Learn in College, But Rarely Does

Back to Jordan Peterson.

Peterson made it clear what college and a college education is all about. Most people think college is about learning a skill you can use to get a job. It’s not! College is where you must learn to think; a place where you must learn to articulate. That’s why he places such emphasis on reading good books.

Books have been a massive part of my life from an early age. I took a super early mini retirement in my young 20s to sit at home and read all day. There is no doubt the three or four years I bowed out of life to immerse myself in quality literature determined the success in all areas of my life.

My thirty year marriage has been the highlight of my life and still going strong. I learned from people who spent a lifetime together how to have that very thing. I read about raising good children, running a business, investing, personal finance, budgeting and taxes. I also took time to read novels with a powerful message.

So, if you go to college to learn how to articulate, think and speak, what are you to do with this superpower? “Stop unnecessary suffering,” according to Peterson.




Personal Mission

Money is only a tool. This is a personal finance blog firmly in the categories of tax, financial independence, early retirement and wealth building. But none of that is the underlying theme. I need to learn to articulate better, as Peterson suggests, to communicate this message. You don’t want money; you want to be useful!

The wisdom Peterson shares in a ten minute interview segment is a lifetime worth of knowledge. He shares another secret society is struggling with currently. He talks about how the 1% are not greedy bastards. He explains why you are not richer than you are. It’s because you are young! If you are a good steward of your money it will grow. Given time it will grow rather large. Your favorite accountant is a prime example. I’m currently on the top of the net worth list over at Rockstar Finance. I’m also a bit old to be telling people I’m considering early retirement. Give it another decade and I’ll be looking over the edge of late retirement (grow up, man!).  The truth is I had more time than folks in their 20s to accumulate my wealth. And as Peterson said, I’m not a greedy miser hoarding my money. I’m looking for new opportunities to reduce suffering in the world so to speak.

Life is so good today! When people whine and complain over how oppressed they are, I, like Peterson, am so disappointed. We can make a difference, but it will never happen complaining about everyone else!

The Accountant girls enjoying Frogg’s ice cream in Sherwood, Wisconsin.

My card-playing buddy, Pete, shares some traits with your favorite accountant. He doesn’t like to travel and has managed to live a life with far less traveling than yours truly has done. His wife likes to travel and does so with her friends. Pete happily drives his old truck (he recently bought a new one since the old one gave up the ghost) around the neighborhood playing with his solo rental property. He milked cows for a farmer just south of my farm for many years to pass time. If he gets bored and something pops up (it always does) he will do that for a while. Oh, and he stops at Frogg’s Ice Cream a lot in the summer.

If you get the chance to cure cancer, then do it! The suffering your will reduce in the world will be incredible! Most of us will make a smaller mark in the world. I’m here to tell you it’s okay to make a small difference. Just make a difference!  Daily incremental improvement compounds into massive results.

Pete provides shelter for a family and helps neighbors in need of fill-in help. He reduces suffering in his small way while living the life of his dreams. Maybe you prefer travel and grander endeavors. Awesome! We each need to play the role our personality allows.

I’m a lowly tax accountant. Yes, I reduce suffering by solving tax issues for businesses and individuals. I also contribute by sharing my experience and knowledge on this and other blogs.

Jordan Peterson makes it clear we need to learn to articulate because the world is in desperate need of people who can communicate a message, knowledge and information in an articulate way. I still have room to grow.

And good thing because I’m not ready to hang up my cleats yet.

 

* There are at least five versions of the Gettysburg Address, each with slight variations from the others, including word count. The Bliss copy is the most famous.



Wealth Building Resources

Personal Capital is an incredible tool to manage all your investments in one place. You can watch your net worth grow as you reach toward financial independence and beyond. Did I mention Personal Capital is free?

Medi-Share is a low cost way to manage health care costs. As health insurance premiums continue to sky rocket, there is an alternative preserving the wealth of families all over America. Here is my review of Medi-Share and additional resources to bring health care under control in your household.

PeerSteet is an alternative way to invest in the real estate market without the hassle of management. Investing in mortgages has never been easier. 7-12% historical APRs. Here is my review of PeerStreet.

QuickBooks is a daily part of life in my office. Managing a business requires accurate books without wasting time. Quickbooks is an excellent tool for managing your business, rental properties, side hustle and personal finances.

A cost segregation study can save $100,000 for income property owners. Here is my review of how cost segregations studies work and how to get one yourself.

Amazon is a good way to control costs by comparison shopping. The cost of a product includes travel to the store. When you start a shopping trip to Amazon here it also supports this blog. Thank you.

Depression and Personal Finance

If you are feeling suicidal, please seek help immediately. You can call the National Suicide Prevention Hotline at 1-800-273-8255 or text HOME to 741741. Find a trusted friend or family member to stay with you while you are suicidal.

 

Depression knows no boundaries. Anyone at any age can experience debilitating depression. No one is exempt: male or female, young and old, every ethnic background, every religious belief and every level of the economic spectrum.

Depression is hard to treat since it comes in so many flavors. Some people experience mild or seasonal depression, sometimes known as seasonal affective disorder (SAD). Depression can be brutally severe or cycle between periods of hyperactive behavior followed by an equally severe depressive episode. To complicate matter more, manic-depressives can cycle fast or slow.

Medication doesn’t help everyone and for many only provides mild relief. Frequently external factors trigger an event. Overwhelming debt can bring the walls crashing in.

But external triggers are not necessary for those with a tendency for depression. Successful and wealthy people are not exempt from external triggers causing depression. Eliminating debt can go a long way for many people in regaining mental health. But not always.




The Dear Debt Mission

Melanie is an incredible young woman who writes the Dear Debt blog. What started as a public journey to break up with debt brought an unexpected consequence. People started reading her blog and contacting her with their stories of unmanageable debt. Melanie also noticed in her analytics program that many people finding her blog were suicidal due to their debt load.

It might be forgivable to bow our head in silence and move on feeling there is nothing we can do. Not Melanie. Every September, which is Suicide Prevention Awareness Month, Melanie has a Debt Drop program where she encourages bloggers to join her in creating a web of posts focusing on suicide awareness and prevention. A heavy dose of debt reduction is encouraged. I added to the list a few times myself. Here is another entry.

It is impossible to know how many lives have been saved due to Melanie’s efforts. Certainly the number of people helped is tremendous.

But that isn’t why I’m writing today. There is another group of people in desperate need of help I want to address.

Living the Dream or Living in a Dream

Before we continue I must make a confession. The author is a rapid cycler manic-depressive. The dark days of winter can cause SAD, but I also suffer awesome bouts of efficient hyper-activity followed by crushing depression. It can happen any time of the year.

When I was a boy I was diagnosed with the disease. Later doctors tried a cocktail of medications to tone down the highs and lows. Lithium did nothing. Prozac and similar drugs were ineffective. They even tried scary drugs that really messed with my head. Eventually the medications were ended and I attended therapy to understand my triggers and methods to control an episode.

Here is the funny thing. I never had an overwhelming debt burden in my life. I grew up poor on a farm in rural Wisconsin, but we always had food, family life was good and I never felt like we were poor until I got older and the outside world reminded me what I am.

Later I married the best woman on earth and she blessed our household with two incredible daughters. Home life has always been good for me. I got lucky. With a predisposition for mania followed by depression, I found a way to create a life that minimized triggers. Like I said, lucky.




Money Doesn’t Solve Every Problem

When people are deep in debt they think money will solve all their problems. It doesn’t! Money will solve some issues in your life. Money can reduce and eliminate debt obligations. This is a major stress reducer.

Lots of money also opens doors unavailable to the poor. Money makes it easier to retire young or choose the job of your choice since you have resources to weather the time between fulfilling jobs. Money means you don’t have to settle for any job offered just to put food on the table. If you enjoy traveling money certainly helps with that too.

Money can solve financial problems. It can’t fix a broken marriage or resolve a drug problem. Money can buy quality healthcare, but can’t cure every ailment. And money can’t stop the demons of depression from crushing you down.

 

Dealing with Depression

To someone deep in debt it may sound strange to hear someone is suicidal when they have a quality home life and financial wealth. But depression doesn’t work that way!

Mental illness carries a social stigma. It shouldn’t. Depression is not a sign of weakness. Depression is a disease and must be treated as any disease.

Left unchecked it can destroy things of value in your life. Medication is an option for some. I encourage you to have a serious talk with your doctor on your situation. If medication doesn’t work for you, as it doesn’t for the author, you need a different set of tools. I will share some that have worked for me.

I was hesitant writing this post. After nearly a decade of controling excessive bouts of depression (I am less successful controlling the manias) I am in the deepest episode in nearly a decade.

Age gave me experience in handling triggers. Small bouts of depression would set in, but it was manageable. I have ready mental tools to get me back into life and motivated again. Manias are the worst because they make you feel so good as you get stuff done. I even managed to reduce the downside after a mania. Encouraging a mild mania is a valuable tool for an accountant during tax season. It is also dangerous. But when tax season spills into the remainder of the year the energy needs to come from somewhere, or so goes the crazy thinking.

Now is a good time to review the tricks I’ve learned to deal with depression since I’m struggling right now:

  • Triggers: Even if medication helps, controlling triggers is vital. Dark and short winter days can trigger depression in some people. It was an issue for me when I was younger, but it has been a non-event in later adulthood. Sunlight or sun lamps can help.

OTC medication or mild stimulants can trigger an event. For me large amounts of caffeine can trigger a mania. It’s easy when the workload increases to pound the coffee. You should constantly observe your response to foods, beverages, medications and recreational drugs (legal and illegal).

Stress is a huge trigger for many people. This is where a heavy debt burden comes in. But money isn’t the only stress. Other illness or the death of a friend or family member can do it. An unforeseen event can lift the stress level and start an uncontrollable spiral into depression.

  • Communicate: I have a very close relationship with my wife, Mrs. Accountant. We talk all the time. We can feel each other’s moods. Mrs. Accountant frequently knows I’m headed for depression before I do. She can see the outward signs I’m not paying attention to.

A trusted friend, family member or counselor is a tremendous benefit. Let people around you know when you are going down. Make sure a plan is in place to protect you if you become suicidal. It’s not a sign of weakness; it’s a sign of intelligence. You know the helplessness of depression. When the depression passes, only then do you realize what you would have thrown away if you ended your life. And the damage to your friends and family lasts decades and longer. Do the right thing. Have a support team in place.

  • Train Yourself: Many people benefit from motivational tapes if they only have mild depression or borderline personality disorder. The upbeat message of optimism from speakers like Zig Ziglar have helped millions.
  • Diet and Exercise: Finding the right diet and mix of aerobic and strength exercises has made an incredible difference in my life. It’s those times where running a business cuts into running in the park conflict when I eventually get into trouble. Then diet suffers and the sodas go down the throat during the day and Jack at night. It all ends badly. Discover what foods cause attacks. And consider a sensible exercise program developed with a professional (trainer, doctor, et cetera).
  • Sleep: Lack of sleep is a serious stressor. Depressive episodes for me are usually preceded by a bout of sleeplessness. Lack of sleep even messes with people who don’t have depression. Get your sleep. It might be the most important thing you do all day. Cut the caffeine if it disturbs your slumber.
  • Avoid alcohol: For some reason people with depression think alcohol will deaden the pain. It might a first, but alcohol doesn’t deaden the pain long and the risk of addiction is real. Alcohol is no solution for depression and is fraught with problems.
  • Avoid important decisions while suffering a depressive event: Depression is a funny thing when it comes to decision making. I can prepare a mean tax return without issue while struggling with depression. The reason is the decisions are less about a choice and more about application of facts. The decisions best avoided while depressed include financial decisions.

Important financial decisions are best avoided while suffering deep depression. Your judgment is clouded when you are suffering. Cashing in a retirement account is a bad idea when you should be focusing on healing. Major expenditures are also to be avoided at these times. Now is not the time to shop, buy a new car, home, et cetera.

When depression strikes deep I start to eliminate things. I cut back on life demands. Depression causes me (most people) to withdraw. I try to cut back on projects or even eliminate them. I’m not saying this is a good thing because this in itself is a decision with consequences long after the depression ends. Unfortunately, you don’t always have a choice. Life doesn’t go on as usual when you suffer depression. Something has to give and certain activities need to be curtailed. Things you don’t want to cut back are your relationships and job. Your family and friends are your support group in your time of need. And you may need that job later when the fog lifts.

  • Seek professional help: It isn’t easy to seek help for depression. When you are suffering the blinding tunnel vision of depression you don’t think anyone can help and don’t even know you need help many times. When not depressed you think you are okay now. You must break out of the trap and seek appropriate medical attention.
  • Don’t be alone: Depression can do strange things to good people. If you are suicidal, call the number at the top of this post. Help is available. Whenever possible, have someone with you.

Remain Strong

It’s not always possible to control triggers. A surprise stressor can come out of left field. Some people are lucky enough to grow out of some types of depression like SAD or borderline personality disorder. Regardless, the illness is always there. Like any serious disease, it is nothing to be ashamed of. Seek help. There are solutions.

And most of all, remember, you are not alone.

 

Wealth Building Resources

Personal Finance is an incredible tool to manage all your investments in one place. You can watch your net worth grow as you reach toward financial independence and beyond. Did I mention Personal Finance is free?

Medi-Share is a low cost way to manage health care costs. As health insurance premiums continue to skyrocket, there is an alternative preserving the wealth of families all over America. Here is my review of Medi-Share and additional resources to bring health care under control in your household.

PeerSteet is an alternative way to invest in the real estate market without the hassle of management. Investing in mortgages has never been easier. 7-12% historical APRs. Here is my review of PeerStreet.

QuickBooks is a daily part of life in my office. Managing a business requires accurate books without wasting time. Quickbooks is an excellent tool for managing your business, rental properties, side hustle and personal finances.

A cost segregation study can save $100,000 for income property owners. Here is my review of how cost segregations studies work and how to get one yourself.

Amazon good way to control costs and comparison shop. The cost of a product includes travel to the store. When you start a shopping trip to Amazon here it also supports this blog. Thank you.

 



The #MeToo Movement and the Loss of Intimacy

Romance should not die with the #metoo movement. It is possible to love and respect at the same time.

The event of my life happened on April 2, 1987. It was the most unlikely of events and was totally an accident. Unfortunately you can’t enjoy what I experienced. The modern world no longer tolerates that kind of thing.

The spring of 1987 was a calm part of my life. I owned my own home, I had money and I was living the dream. Only one thing was missing.

My lust to learn goes back to my childhood. With plenty of free time I could read from sunrise to sunset. I would walk to the corner café for a cup of coffee and dinner most days. I would putz around the place and yak with the local farmers as I swilled my coffee. To prevent my underwear sticking to my ass or crawling up thereof I would hop behind the counter and pour coffee. The patrons loved the conversation so the owner comped most of my meals and coffee.

As much as I was enjoying life I was lonely. (And young!) The farmers were a mild diversion and books were a mild form of cocaine, but there was still something missing.

I would take a class or two at the local college those years. Eventually I met some people I really enjoyed talking with so we started to take the same classes. A degree made no difference to me so I just took what interested me with an emphasis in having a friend or two in each class.

The spring of 1987 was different. The loneliness was becoming unbearable. I had my eye on a cute girl in Microeconomics. She was heavy on the makeup, but had the look I found intoxicating. I tried to make small talk with her. I thought we were making a connection.

One day a group of guys were sitting in a side area with plenty of windows discussing historical issues. Some of the other guys had the class; I didn’t. My love interest was listening to the conversation.

At one point another guy participating in the conversation said something I felt was effeminate. My love interest was very offended and let me know about it. The gloss was off the rose. There are things worse than loneliness.




The Truth

The next semester our small group, including my prior love interest, moved on to Macroeconomics. It was the spring 1987 semester.

Class was Tuesdays and Thursdays from 4 p.m. to 7 p.m. Tuesday was fine, but there were issues with Thursday. You see, our group was a bit on the frugal side and next to the college was The Image, a bar connected to the bowling alley. Thursday night was happy hour and if we got there before 7 we could buy a drink (I was a soda guy back then) for $1 and we could eat all the tacos we could scarf down.

Our group must have been charismatic because the professor understood our plight and agreed to cut breaks short so class could end 10-15 minutes early on Thursdays.

So far so good.

But as frugal as our group was we also needed to get out and enjoy life a bit, too. Every so often we would make plans for a Friday night at The Image. Then the fateful event happened.

The Image had a dance floor and contemporary music. We danced as a group but dating among our own was rare. I had no interest in any female members of our group. In fact, some of the female members of our group were later invited to my wedding.

On April 2, 1987, a meek girl with a sad face was dancing with her friend center of the dance floor. I had to meet her; I had to know her story.

She was the most beautiful woman I ever saw. Girls like that don’t date guys like me. But the pang of loneliness was too strong to ignore. I gathered my courage and walked onto the dance floor and asked if I could join her and her friend. She nodded.

Why I didn’t pass out on the spot is beyond me. God probably loves crazy fools. We danced a few more songs and then left the dance floor and talked. It was loud and it was hard to make a real connection. We enjoyed a slow dance. Did I mention God, heaven and a few other out-of-this-world feelings I had?

The beautiful woman turned pale when I gave her my name. She didn’t tell me her name. I was disappointed.

I begged her to return the following week. To my surprise she did.

Instead of dancing we left The Image for the sitting area of the bowling alley where it was quieter. (Now you know how loud the music was.) We talked for hours. The connection was instant. I found my soul mate. If only she feels the same.

She finally shared her name. Sue. Her name was Sue. (She doesn’t like to be called Susan because that is what her dad called her when she was in trouble.) She told me she was engaged a few years prior to a guy with my name. It explained a lot.

She still refused to give me her phone number or address, but did say she lived near only a few blocks away, pointing in the direction of her home. She mentioned the name of the avenue, but not the exact address.

At the end of the evening I walked her to her car. I was rewarded with a hug. Sue promised to return the following week. We would see each other sooner.

 

Somewhere around midweek I started missing Sue. (I missed her sooner, but I was able to control myself for a few days.) After class (it might have been Thursday, but knowing me it was certainly Tuesday) I decided to take a ride down her street after class.

I couldn’t believe my luck when I saw her car outside a home a few blocks up from the college. Emboldened by my prior luck I stopped. I contemplated the risks Sue’s dad might own a gun. Lust got the better of me.

Sue’s mother answered. Sue came to the door. She invited me in. I was the luckiest man alive.

That was 31 years ago. We were married one year and six days after we met. A few weeks ago we celebrated 30 years of marriage and I never regretted a one.




The Fantasy

When in a crowd I tell the story a bit differently now. I like to tell people the basic beginning facts where I met Sue, we danced, she wouldn’t give me her name or address or phone number and I walked her to her car.

Then I add I decided to drive up and down every street close to The Image until I found her car and made a nuisance of myself.

I think my fantasy story is more entertaining. And people like to think it’s funny. At least they used to. Up until the #metoo movement.

A Different World

If I pulled the stunt I did 30 years ago I would be drawn and quartered by the #metoo movement if not arrested. There’s even a good chance a few from the movement will criticize me for not knowing how the future would turned out and didn’t adjust my behavior accordingly back then.

Under today’s unwritten rules a lifetime of happiness for Sue and me would be sacrificed. Two beautiful daughters would never have been born. And we would never have celebrated our 30th wedding anniversary. What a waste!

Yet, the #metoo movement had to happen! Had to. With a wife and two daughters I feel deeply for the rights and safety of girls and women. Men can be cruel and even violent. Rare is the man suffering catcalls walking past a group of women. Women are not as lucky.

As important as the #metoo movement is, there are real problems with the revelations. So many women—if statistics are correct a majority of females (women and girls) suffer from harassment, assault and rape—are victimized that when they all come out with their story it is overwhelming. It begins to feel normal. And that is really bad.

So many women (and girls) have been abused that it is easy to start thinking every female is a victim and every male a scumbag. Nothing is further from the truth.

There are degrees of inappropriate behavior. (You can shoot me later for my opinion.) Rape and abuse of children is always the ultimate bad when discussing these issues. Touching is equally bad, but rape still is worse.

The real problem is communication. If men are honest they all have to admit saying or doing something inappropriate at one time or another. It could be as simple as an insensitive comment about appearance. As innocent as it was meant it still can cause harm because men have no idea how raw the nerves on women are after a lifetime of unrelenting male behavior.

Men who agree with the #metoo movement find themselves in a corner. What can they say without causing harm? What is an innocent inquiry could be construed in a harmful way.




The Hateful

As important as the #metoo movement is we must be careful. When a mere accusation becomes a conviction of guilt in the public arena we risk destroying the movement which offers so much hope for women in the future. Accusations are front page news and for good reason. People we thought highly of did some pretty shitty things!

But not every accusation should be treated equally. I saw an article in The Economist several months back where they listed all the famous people accused of inappropriate behavior. One man was listed with his photo. The inappropriate behavior? He made her feel “creepy”.

It gets uglier. Lawrence Krauss is an American cosmologist I highly admire. He talks English when explaining the complex issues surrounding theoretical physics and cosmology, two subjects I am very interested in and spend serious time studying.

In February of this year Krauss was suspended with pay from his position at Arizona State University due to a BuzzFeed article accusing him of inappropriate behavior and comments. He also resigned from positions in charitable organizations to prevent his attendance becoming a distraction.

Here is the funny thing. Nobody has accused Krauss of anything. Nobody! A news article (it’s on the internet so it must be true) was published with the intent to harm. That’s it. I’m not privy to all the facts, but what I do know concerns me. Nobody has complained over anything Krauss has said or done even when it was made public people were to come forward with anything they had.

That is really messed up and doesn’t do any good for society or the #metoo movement.

Risk/Reward

There is absolutely no doubt women and girls are abused and experience unwanted vulgar comments on a regular basis. The sheer volume is no longer an unspoken concern, but a raging crisis!

Every woman must be allowed to tell her story. We must also take appropriate action. If the accusations make it likely more women will be harmed immediate action must be taken as a precautionary. If imminent risk is not present we need to wait before passing judgment.  The incidence of false claims is low, but still present. We can’t allow a movement with so much to offer to suffer due to a few questionable claims. The risk is too great.




Lost Intimacy

Men are getting gun-shy. The newsfeeds are so filled with women victimized by men that men are feeling they are all guilty. On some level most men have said hurtful things. But an inappropriate comment shouldn’t stigmatize a man for life!

And men are not alone in saying things they shouldn’t. My office is all women so I hear what the ladies say and sometimes even I get uncomfortable. (I don’t avoid hiring men; they just don’t apply for the job.) I try to tone it down when they get boisterous with variable success.

The females in my office are a good bunch, but if men acted that way around women the boom would be lowered and the #metoo movement invoked. I might be the boss, but shouldn’t feel uncomfortable around female employees. Or should I?

When women talk about women stuff guys look nervously for the exits. Uncomfortable doesn’t mean wrong! Yes, my staff talks girl-talk because they are all female. I turn and walk the other way whenever I can. Just because it is uncomfortable for a male, me, to hear something doesn’t mean they are saying bad things. (Except when they think it would be funny to dress the boss in drag. Not funny.)

Love should be warm and soft, not cold and barren.

Men and women are not that much different. We say and do things from our perspective, our worldview. Inappropriate touch is always wrong. Words can be wrong while not crossing a line. Anything insinuating unwanted sexual contact is always taboo and deserves a strong reaction.

The #metoo movement is causing some unwanted results. As men feel more and more isolated they are pulling back from intimacy. What Sue and I enjoyed 30 years ago is less likely to happen today. Why would I, or any man, pursue a love interest the way I did? That’s inappropriate behavior! And over 30 years of wedded bliss and two wonderful girls would never have existed.

The #metoo movement needs to find a middle ground where men and women can coexist.

The world is different today. The internet makes it easy for men to satisfy their, ah, needs without a human being present. Sorry for being so blunt, but it has to be said.

Women want intimacy and complain men no longer provide it. A simple hug is a social crime so men avoid all contact.

Let me be clear on what I am and am not saying. I’m not talking about sex. You can have sex without intimacy. That is what prostitution and strip clubs provide. Sex can include intimacy, but intimacy doesn’t require sex.

Intimacy is the emotional and personal connection between two people. Co-workers can have it; so can lovers. In each case it is a different level of intimacy. Soldiers on the battlefield must have a non-sexual intimacy sometimes referred to as trust. As you can see, intimacy has many flavors.

The intimacy I’m concerned with today involves the interpersonal relationships between men and women. Most women hunger for intimacy. Honest men admit the same. If I had to give up my snuggle-time with Sue my life would be greatly diminished. And for the record, snuggling is not for the young only. After 30 years of marriage I enjoy a warm snuggle more than ever. Pinky (my cat) only wants to snuggle on her terms. Sue is open to compromise to my delight.




What Does This Have to do with Personal Finance?

A frequent refrain in the personal finance arena involves happiness. Bloggers love to talk about the “why” of early retirement and financial independence (FI). FI can bring us happiness, we are told.

I think they are all wrong! Your goal isn’t happiness; it’s joy. You just don’t understand the difference between the words and it does make a difference.

Happiness is generally triggered by an external event while joy comes from within. Winning the lottery brings a lot of happiness upfront. That is why a leading book on Stoicism is called The Joy of Stoicism and not The Happiness of Stoicism. (Yes, I know I butchered the title. I did it to fit my storyline.)

We want happiness, but crave joy. When I felt lonely I was still happy, but longing for joy. Sue brought me happiness and I allowed it to bring me joy. No matter what happens, what is in here (pointing to head and heart) is what will bring me joy and Sue will always be in here.

What value is financial independence or early retirement if you don’t have joy? If happiness is what you want pretty much anything will do. But joy. That is a whole different animal.

I am well aware how long this post got. I’m still not sure I got everything out I wanted to say.  The #metoo movement is so important and still at such risk of burning out before desperate changes are made in our society.

While changes are necessary to allow women to live without threat of assault or abuse, a common ground must be found where a man can pursue his love interest in an appropriate manner and not be branded. Chivalry should never be dead.

Most women enjoy being courted. It feels good to be wanted by someone you find appealing. Men must learn boundaries. It is easy (with a look or a word) to get permission to hug. This isn’t a hard game to learn: you don’t touch an intoxicated woman sexually; you never touch without permission even if you’re married (there are still boundaries in marriage; that is why mine is still strong after 30 years); offer intimacy before offering sex. Intimacy is more fun than sex! Sex is better with intimacy!

Or you can succumb to the alternative—prostitutes and strip clubs—a world devoid of intimacy. And a world I don’t want to live in.



Stalking the Future of The Wealthy Accountant

All good things must end. (No goodbyes, just good memories.)

Burnout sets in post-tax season. Long hours working leads to exhaustion only to be repeated the next day eventually takes its toll. Recovery is less certain than in the past. Age is part of it, but the new tax code and demands from a wider audience also play a role. Due to these factors there will be significant changes to this blog going forward.

The most notable change will be the publishing schedule. Tax season became so overwhelming something had to give. I reduced the publishing schedule from three times a week with a “Stalking” edition on Saturday to twice per week.

What surprised me was the increase in traffic when I reduced the amount of material published! I was warned about this by several bloggers. Nailing the equivalent of five or more average-length novels per year to the blog can burn out readers. It was even causing some to unsubscribe. I might be slow, but I eventually catch on.

The end of tax season may account for much to the uptick in traffic after the publishing reduction. Regardless, my desire to write in other venues is growing. Whether traffic climbs or not, the new publishing schedule will remain. Monday and Thursday are the new publishing dates, replacing the Monday-Wednesday-Friday schedule in effect for the past year or so.

The “Stalking the Accountant” posts are reduced from every Saturday to the last Saturday of the month only. (This “Stalking” post fulfills next week’s weekend post.) I’ll share some of my personal activities in “Stalking”, as always. Other matters will also be addressed where regular posts would be inappropriate.

Since our last “Stalking” publication we had a few drawings for money! On March 30th Gina V. of Florence, S.C. collected a $50 Amazon gift card for opening an email of the latest TWA post. In honor of the end of tax season a drawing on April 16th from a list all of subscribers made Charlie M. of Las Vegas, Nevada the proud owner of a $250 Amazon gift card.

Power Posts!

My previous writing schedule made it difficult to honor my commitments to other writing projects. With the extra time I will work hard to mend bridges ignored. When I publish in other venues I’ll keep you updated on social media and weekend editions here, if allowed.

A reduced writing schedule also means I can focus more on quality. Quantity is fine for certain issues, but digging deeper is required in many instances and if time is short the quality tends to be the same.

Five or so years ago I wrote a series of articles on a content farm dealing with and winning an IRS audit. The articles were short, yet valuable. Changes at the IRS and in the tax code require I update these pieces. I will re-write the entire series with a massive expansion. Because these articles will be a virtual bible for the accounting industry they will not be published in the traditional manner here. Each section will be unavailable until the entire series is complete. Each section will be available for purchase with the whole series available at a lower price than individual article purchases combined. People who want to audit-proof their return may wish to buy that specific article. Tax professionals will want the entire guide. The best part is I will update these articles in real time so once you purchase a section you will have access to future updates. The IRS Audit Manual should be available by late summer or autumn 2018.

Renewed Focus

Warren Buffett has a 20-slot punch card philosophy to investing. I will apply the same methodology to this blog.

Over the decades I’ve written more material than I can count. Writing for me is personal with a side benefit of a modest income. My interests are catholic (little c) so writing the same genre for too long starts to feel stale to me. When I decided to become proficient writing flash fiction I set a goal of 2,000 stories. When I hit 2,000 I was done. The end. Finito. Goodbye.

The Wealthy Accountant has been my most enjoyable writing to date. I write what I know and enjoy talking about. But money is more a side discussion in my personal life. I’m more of a business type of guy than a money talker. Truth is money is pretty straight forward. Control your impulses, spending less than you earn and invest the excess. Even a bad investment is better than no investment. A million words on frugality and investing starts feeling stale to me.

Business is a different story. Writing about running a successful enterprise is endless. Reading another story of how someone paid off debt and retired at any age seems rote. Business is a bit more challenging; value creation more involved.

Over the last several months I’ve included hints of the future around this blog. I published Countdown Clocks. It should have been a dead giveaway. Subtle hints didn’t seem to connect unless readers are keeping it a secret from me. Then I made it less obvious.

On the Where Am I page below the calendar are the words “All good things. . .” printed backwards. Below this is a large bold number. The number is a countdown clock. When it reaches zero this blog will have 500 published articles. The IRS Audit Manual and other private publications here do not count toward the total. When the clock reaches zero I will stop publishing here. By applying a sort of 20-slot punch card approach I will need to focus on what is most important rather than filling column inches. Everything has an expiration date and so does this blog. (Come to think of it, so do I.)

 

What I’m Reading

The Master Algorithm: How the Quest for the Ultimate Learning Machine will Remake Our World by Pedro Domingos. Not only interesting, but concerning. Computers are starting to learn from the massive reservoir of information gathered each day. The future will be radically different from even the recent past. With all good comes some bad is all I can say.

 

What I’m Watching

Brian Greene on the B-Theory of Time. I’ve been thinking a lot about time lately; the kind of time experienced in an Einsteinian world.

 

What I’m Listening To

There is a publishing opportunity to write a story on the rollercoaster ride of blogging. The Karen Carpenter story will play a central role.

 

Now I’m off to spend more time with my family. I’m sure you understand.

Attributes of a Wealthy Individual or The Smartest Guy in the Room Isn’t the Richest

Twin brothers walk into the Wealthy Accountant’s office. One brother is as smart as a whip with an IQ of 147 and a wiz with numbers. The other twin, while looking identical to his brother, is a bit short in the mental category. The less bright brother is hard working, but knows he can’t outthink his twin brother.

Which twin do you think has the greatest financial advantage? Which one is likely to become a millionaire?

Would you believe me if I told you the super-smart twin is orders of magnitude less likely to amass a financial fortune? Yet time and time again I see it in my office: smart people underperforming and average people hitting it out of the park.

Here’s the funny thing. Both brothers are probably equal in intelligence. Life experiences caused one brother to think of himself as average. Perhaps the less intelligent brother preferred working outside with his hands while the high IQ brother pursued a profession.

Doctors and attorneys are awesome at playing financial offense. Many professionals share this quality. But high levels of intelligence don’t correlate well with high levels of financial wealth.




Big Hat, No Cattle

Thomas J Stanley argues in his 2001 book, The Millionaire Mind, that many professionals with a high income don’t have a corresponding level of net worth. Decamillionaires (people with a net worth north of ten million) have a term for people with high levels of income and little to show for it: big hat, no cattle.

These high earning professionals are also extremely intelligent. So intelligent, in fact, they start to believe they can outsmart the markets by timing them. They also have another weakness. Professionals need to maintain an outward appearance of affluence to convince other they are really good at what they do. Who would ever believe an accountant driving around in a bank reposed beater or attorney living in an 800 square foot home?

Average people in average income jobs are more suited to seven and eight figures of wealth! You read that right. The salvage yard owner is far more likely to have a serious level of net worth than a doctor, attorney or (gulp) accountant. Stock brokers and other financial advisors should have an inside track, but spending levels and a high level of understanding of how markets work causes many of these professionals to trade or time the market. The only traders with a snowball’s chance in hell of winning long-term are the market makers and financial newsletter publishers.




My Side of the Desk

Swing around, if you will, to my side of the desk. From my perspective you can see things clearer.

Every day people from all walks of life wander through my office. I have law firms, doctors and even accounting firms as clients. By and large this group enjoys a higher income than average. They also have a low level of net worth compared to what they earn. Worse, I’ve seen more than a few of these professionals pulling in upwards of a half million annually with only a low six figure net worth to show for it.

Before we continue, re-read the last sentence of the last paragraph. For some reason I find it vaguely important to our discussion.

There are plenty of excuses as to why these people are worth only slightly more than their last paycheck. None of them resonate with me.

High spending coupled with high income leaves you just as poor as if you never earned a dime in your life! It’s not the level of income; it’s the level of spending!

Don’t leave my side of the desk yet. I have a few more clients to introduce you to.

Oh, here comes Sam. He worked in the mill his entire life. Not the smartest guy in the world, but a helluva family man. He goes to church every Sunday. His wife died a few years back. Worked in the paper mill his entire life before retiring with $4.7 million. By looking at him (or his car or his home or his . . . ) you would never guess he is rich. (Sam is a real client with a different name.)

Here comes another wonderful client. Jack has a landscaping company. He clips and maintains lawns for businesses and rich people, you know, the doctors, attorneys, financial advisors and accountants. Don’t say anything, but the guy maxes out his retirement accounts before adding more to his non-qualified accounts. Oh, and he is a millionaire too. Didn’t expect that considering the rust bucket he’s driving, did you?

The same pattern holds for farmers (they’re not all poor!), truckers, salvage yard dealers and guys laying concrete.




Reality Check

Don’t bite your tongue so hard. They aren’t all rich. Yes, I know guys in the military (or retired from) who are pretty darn rich. Many are pretty darn poor, too.

Not every doctor and attorney is net worth poor compared to their income. Many people in average jobs struggle. What I’m getting at is the people you expect to be rich are putting on a show. They have a big hat, but no cattle. They spend all their money putting on a façade. There’s nothing left to fund real wealth!

People with average incomes in jobs where there is little to no expectation of wealth have an easier time hiding their financial accumulations. A worn pair of jeans is more than fine to wear to work at the salvage yard or auction house. It’s expected!

When I first started investing in micro-loans on the Prosper platform I was able to see a few details on the borrower. Prosper provided a credit score and income range along with the borrower’s occupation. For some reason accountant’s needed loans in May. This blew me away for two reasons. First, an accountant should be flush with cash after tax season.

Second, some accountant’s work outside the tax field so they could need additional funds. Prosper also listed the reason for the loan request. When an accountant requests a loan to pay bills in May I’m dubious. Online lending platforms are not the cheapest way to borrow money! Any accountant worth his salt would never make such a poor financial decision. I say “his” because no woman would ever do something so foolish. (Yes, that was a joke.)

Prosper confirmed what I suspected from serving my clients. High income professionals frequently are poor handlers of money.




Smarticus

There is a lesson for the wise in this tale. You do NOT need a high income to be wealthy or financially independent! Average people in average jobs with average income can excel financially. The statistics are clear.

Sure, a high income can get you to seven figure net worth status faster if you can avoid the siren call of excessive spending to play the role. Even a below average income can grow into a tidy nest egg if handled properly. Minimum wage is a hard racket, for sure. But once your income climbs to a level even below the national average you have plenty of resources to fund an early retirement!

Excuses will show up in the comments. It goes with the territory on blog posts with this topic. They are still only excuses. Income level plays a role in your net worth. By age thirty you should have at least two years income invested. Once you reach 40 your net worth should exceed at least 10 times your annual income. If you are pulling down a $50,000 annual salary you should have a half mil tucked away in an index fund by your 40th birthday. As each decade passes the net worth report card should grow larger.

This is where the rubber touches the pavement. Really smart people want to trade stocks and bonds. They want to time the market because they did all the research. Of course the market makes a fool of the well educated.

There are only two ways to accumulate money in the market. The first is to drop the money into an index fund, or, if you are so inclined to engage an actively managed fund, a growth and income fund. Forget about aggressive funds and other crazy ideas. Your goal is to be rich!

The other way to get rich investing is to research listed companies for undiscovered value. Buy these gems and hold them for somewhere in the neighborhood of forever. Then go out and find another undervalued business to invest in.

Remember, you don’t want to be the smartest guy in the room. The smartest guy is often broke!

I want to be smart.  Just not that smart.

It’s been a while since I showed you my working papers. Below are my unedited notes for this post. It should also be noted the working title of this post was Attributes of a Wealthy Individualor The Smartest Guy in the Room isn’t the Richest was added at the last minute as a tribute to the Rocky and Bullwinkle cartoon. Hope the insight into my writing style helps you with your writing.

What characteristics are most common in the wealthy? High intelligence doesn’t guarantee wealth, it actually hurts! Smart people think they can outsmart the market and time it. Professionals have an appearance to keep. Doctors and sales people need to look the part. The massive spending required to “look good” reduces savings and all the profits those savings generate.

Average people have a much better chance. The salvage yard owner has nothing to prove so she socks away a massive percentage of her income and puts it into index funds because she know she can’t do better,.

I see it in my office all the time. A recent client picked up his return. He is retired with a serious seven figure retirement account before looking at non-qualified monies or other assets. He is an average guy from an average family retired from a mill job. And he’s rich.

Don’t be so smart to talk yourself into poverty. Intelligence can only dig you out of so deep a hole.



Stalking the Recreational Accountant

As regular readers will attest, I’m getting punchy at this point of tax season. Don’t worry. The insanity will pass (maybe).

This is the point where very difficult and unique tax returns show up on my desk. To clients: I’m making headway. Slower than the early part of tax season, but still peeling off work at a good clip. I still need to focus on quality over speed and some of these issues just take time.

I’ll be sleeping Saturday and back to the office Sunday for uninterrupted time.

Also, a reminder we have another drawing this upcoming week. Details on the Where Am I page.

 

What I’m Reading

Earlier this week I introduced you to a short story by Kurt Vonnegut. It’s worth reading, takes a few minutes and is free. If you haven’t already, take a moment to read Harrison Bergeron (& Activity). You’ll think of inequality in a whole new light.

 




What I’m Watching

I have no words for what I’m about to show you. FTL is really good and worth the time to watch.

 

What I’m Listening To

Simon & Garfunkel never fail to entertain. Enjoy Scarborough Fair.

 

Enjoy your weekend, kind readers.