Posts Tagged ‘lifestyle’

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.

Teach Children to Follow Their Dreams

This isn’t your parent’s China. China is an ultra modern society with the people curious about the world at large.

From a young age I knew exactly wanted to do. Then I changed my mind.

Such is youth. My dad had different plans for me. My childhood was spent on the family farm and it was an awesome life. My dad owned an agricultural repair business and the plan was in place for me to slide right into the company. There was only one problem: I hated the work.

My children are now adults. One is in China while the youngest just graduated high school. My fondest hope was that at least one of the two would be interested in tax and accounting work. No dice.

Forcing your children into a family business is always a bad idea. The kids might love the work and they should then be welcomed with open arms if they do. But most kids don’t want to follow in their parent’s footsteps. Their dreams are different. Most often they follow their parent’s path because they don’t know where else to turn.

Rural areas face the same issue. When few career opportunities exist young people must either leave the area or work in the coal mine. It’s the perfect recipe for unhappiness.

Heather, my oldest, is spending a month in China teaching a 5-year old girl English as a second language. The host family is treating Heather great.

Brooke, the youngest, prefers working in dirt. She works for my dad’s company landscaping. She also has a few side jobs working for people in town clean their yard and garden.

Both my girls are happy. I couldn’t ask for a better gift. I never forced either of my girls into living my life. The goal was to always help them follow their dream. The only constant from dad was the endless indoctrination of personal finance advice. As a result my girls are handling money better than 99%. I guess that means they’ll be the future 1%. Good for them.



Nothing to Lose

Steve Jobs said “you have nothing to lose” in his Stanford commencement address in 2005. Jordan Peterson has said the same thing in many of his videos. What both mean is that in the end we are all dead. Nothing we say or do will change that. Knowing someday you’ll be dead is a humbling attitude you can channel into productive projects. You have nothing to lose by following your dreams.

Failing is part of the process. As much as failure hurts, we know it will all be forgotten someday as the hands of times sweep all our actions into the depths of history. Nobody remembers the details of the numerous failures of Thomas Edison as he worked toward the light bulb. We just remember the one that worked.

Starting a business or side hustle is the ultimate leap of faith. Failure will be displayed to our embarrassment. Or will it? If I didn’t share my many business failures over the years none of you would know! I share the mishaps because that is where learning takes place. Success is a poor teacher so I show where things went wrong.



Go East, Young Girl. Far East

I tried to ingrain the “you have nothing to lose” attitude in my girls. I drilled the lessons into their heads daily without remorse. Early on I was worried they may not be getting the message. Then, as the years progressed, it became obvious they were listening after all.

Heather at a jewelry expo in Beijing. She always loves her art.

Heather worked in my office for a short while and still fills in periodically. She worked in my office at first for the same reason many kids work in the family business: it’s an easy option. It didn’t take long to learn she wasn’t interested in the tax or accounting life. Personal finance was as far as she wanted to go in the accounting world. Dad took a deep breath and allowed his sweetie to cut her own path. It was the right thing to do.

From high school on Heather was interested in East Asia. She built plans to go to college in Thailand and South Korea. Later she learned she could teach English as a second language in countries around the world. Good grades and an unrelenting drive made it a reality. Fundraising and financial tricks learned from dad gave her the chance to see China as an insider rather than a tourist for practically no money!

Her host family is awesome! Heather is seeing China from the perspective of a Chinese family. She lives with her host family, tutoring their five year old daughter, Dora. Dora is such a sweetheart. WeChat allows us to communicate without cost. Dora speaks good English and is a bundle of energy. Heather will be heartbroken when she has to return home. She will always have memories (and friends) in a land far away. The modern world makes it easy to stay in touch.

In middle school you would never have guessed Heather would take the path she did. On a family trip to South Dakota Heather was so anxious we had to stop at every turn off for a bathroom break. We even created a few new rest stops along the way. It was bad. (Heather will probably read this while still in China. She’ll be embarrassed when she does. Consider it dad’s revenge for making him stop every quarter mile.)

Heather inherited the early travel anxiety from dad. I’m crazy when I have to travel. It always sounds like a good idea until the departure date approaches. Mrs. Accountant can tell you many stories of the strangle behaviors I’ve undertake when on the road. I travel for business with rare exception. I keep myself hyper busy so I can control the anxiety. If I’m not chatty, running my mouth a million miles an hour, I withdraw into my own fantasy world. The best non-business trip I ever took was to Costa Rica. My parents invited Mrs. Accountant and me. This allowed for some normalcy with more family around. Still, I didn’t say much during the trip as I mentally withdrew.

Heather and Dora. The world is an awesome (and smaller) place.

Heather outgrew her travel anxiety. Thank god for that. Heather is there, in China, learning their culture and teaching at the same time. The world is much smaller now.

I get to see the world through her eyes and from the perspective of her host family. They seem a lot like people here. They have strong family ties and enjoy time together. They are interested in the world around them. More people speak Mandarin as a native language than any other; English in number three behind Spanish. Still, Heather traveled to China to teach English, whereas Chinese people speak English when they come to the U.S. Strange how they are such an enlightened society as not to demand everyone conform to their culture and language.

The activities Heather enjoys with Dora make me smile. They do so many fun things together. She sends pictures every day. Dora is a well-adjusted young lady. When we video chat Dora keeps hopping in and out of the camera view. We are just normal people to her. Our smaller world reminds us we are all normal people, regardless of culture.

Imagine if I would have demanded Heather work in the family business? All this would have been lost. Heather would have felt a longing for a different life while I dealt with an employee unhappy with her job.

As much as I want to point my girls in a certain direction, I can’t. There was no way I could have guessed Heather would end up where she is. She is better for it too. She called yesterday (about 9:30 p.m. in Beijing) because her car overheated in standstill traffic. I talked her through it. She eventually contacted her host family. The dad stayed behind to handle the auto repairs while mom brought Dora and Heather home. I am so proud of how Heather handled the situation. She really has grown up. She grew up because I allowed her to fly.

The Ground is the Same over Here

Brooke took a path I didn’t expect either. She never even tried to work in my office. She did stuff tax organizers into envelopes over the holidays each year. But her heart was never in the office—any office.

Brooke is interested in computers, but schooling is something she wants to put off for a bit. She has a few coins saved so she has time to decide the path she wishes to travel. In the mean time she likes working in the ground. Heather is traveling land in China while Brooke turns dirt in the backwoods of Wisconsin. It’s a living. And she enjoys it!

Brooke left the door open for college a year or so down the road when she is more certain she wants to learn more about computers. Landscaping and nurseries are acceptable ways to fill a day and gain an income in the mean time.

Again, if I would have forced the issue, requiring Brooke to take a path I thought appropriate for her, she would have been miserable. There is no way a parent can know what will appeal to their children.

There is a way we can help, but is takes a lot of fortitude.




The Guiding Hand of Parents

You can teach your children how to follow their dreams. Engage them. Require them to think about the things they want to do in life. Pay attention to their interests and encourage them to pursue their dreams.

Heather and Dora rollerblading in the middle of Beijing at night. Those two are having a great time and are the terror of China. They’re both cuties.

That doesn’t mean the kids get a blank check to do what they want. Quite the contrary. My girls had to earn whatever path they choose to walk. I didn’t pay Heather’s way to China.

College wasn’t a free ride either. Heather struggled with getting to college. I didn’t support her attempts at several higher education ideas financially. She had to earn her way before I stepped in and helped. Once she buckled down and got serious about full-time college she was able to raise the funds necessary to attend school without selling investments to get there. She got so close before she couldn’t do it anymore. I immediately stepped in and provided the rest. For the record, my contribution was very small, a few thousand dollars. Think about that. Heather will leave college with a degree, no student loans, no debt and dad will still be solvent having invested less than $5,000. And Heather got to travel to China (Netherlands next year). She also has a job tutoring people in China from home (online) while she finishes school. She has a bright future!

While Heather is starting to create a path she is likely to travel most or all of her life, Brooke is just starting out. She is 18 and experimenting with her choices. I can’t say as much about her because her story is only beginning. I see the same pattern in Brooke that I saw in Heather. The only difference will be the ultimate path taken.

Parents worry about their kids. It’s only natural. Here is what I did:

  • Provide a supporting hand.
  • Be consistent.
  • Freely offer advice and guidance without doing it for them.
  • Let them explore the available options.
  • Don’t force them into the family business.
  • Let them fail. Failure is the only way to learn.
  • Let them fly. All the way to China, if you must. Your heart will eventually begin beating again.
  • Love them regardless their choice.
  • Share your stories, your wisdom.
  • Use humor.
  • Hug them. It matters.

Most of all, always welcome them home. It’s hard letting go. It is for the best. It is so much sweeter when they return.



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.

Inequality is Welcome in the FIRE Community

Inequality isn’t all bad. I think we can agree Mrs. Accountant is smoking hot while yours truly is a bit drab. Then again, if you have a tax issue you probably want the drab guy.

Kurt Vonnegut, Jr. published Harrison Bergeron in 1961. His short story illustrated the ultimate end of inequality as only the humorist could. Today we think of inequality in term of race, gender or income. Vonnegut knew this was only background noise to the real issues of inequality.

In Harrison Bergeron the attempt to erase all inequality is taken to a whole new level. Beauty, strength and mental capacity were also dished out in unequal portions to the masses. To compensate, the beautiful wore grotesque masks; the strong wore heavy weights to hold them back; and intelligent people were hit with a mental pulse of sound every twenty seconds to dumb them down.

Inequality is all the rage today. We demand income inequality between genders and race. On the surface it all seems good and honorable. Beneath the hood something else might be at play.

In Vonnegut’s story Harrison has a keen mind and wants to use it. He breaks free from the shackles holding him to the lowest level of mediocrity. The government action is swift. Harrison is killed, along with his newly discovered girlfriend of tremendous beauty. The government snuffed out inequality before anyone could feel infringed by another’s superiority in anything.

The inequality debate isn’t completely about levels of pay or rights. In many cases it’s about more about “me”. Groups of people demand more because they think as a group they have a better chance for more as individuals.

As we saw in Harrison Bergeron, erasing inequality doesn’t always lead to desired results. Making everyone the same lowers the bar for all involved and it doesn’t have to be that way.




The Joy of Inequality

Inequality is in part a choice. A woman may choose a lower annual income to garner more free time with family or to have a child. Men are starting to join that movement, asking for more paid leave, even if it means a lower salary or fewer other benefits, to spend time with family. On the surface, again, it appears—if you only consider annual wages—that an inequality has arisen between employees with a family and those with a smaller family or fewer family issues.

The perceived inequality is actually an increase in quality of life. What one person desires is completely different from that of another. Offering family leave has less value to someone with a small or no family. Those with family, young parents for example, might find family leave the largest inducement an employer could offer.

Another benefit growing in popularity is student loan reduction. Some companies now offer young employees additional services to help them reduce their student loans. The benefit is worthless to those with no debt.

Inequality can be unfair. Some is a conscious choice. Working part-time or a side gig fits the temperament of some people better than a stress filled, high pressure environment. Some thrive on pressure. It isn’t unfair to pay people in the high pressure jobs more. Putting a mask on the beautiful, weighing down the strong and interrupting the intelligent doesn’t make things more equal!

True income and wealth equality comes at a heavy price. I discussed in the past the only ways income and wealth became more equal historically: war, famine/plague, revolution and societal collapse. Walter Scheidel does a better job of fleshing out the details in his book, The Great Leveler.




The FIRE Community and Inequality

A powerful movement in our society today is the FIRE community. Their dedication to financial independence (FI) and the ability to retire early RE), or at least at a reasonable age, is making headway into previously cherished traditions of lifelong labor in the organized workplace.

From the beginning the FIRE community understood wealth and retirement was not a product of equality for all. Most of the inequality was either by choice or slight in nature. Some members of the community powered their way through to FI as fast as possible to engage the life they wanted. Others took a slower route. The gap year or years became part of the lexicon. Net worth became an interesting discussion in closed quarters.

What surprises the most is the range the group holds as FI. Some say a couple hundred thousand should do it. Others still want to pack the crate with several million. One unique animal in the crowd bows out well before FI to take a slower pace the remainder of her life. Part-time work or side hustles fill the gaps.

A millionaire roundtable meeting at FinCon17. All were not equal while all were equally welcome.

As a community it is felt: to each their own.

The FIRE community is special! Judgment is withheld when matters of finance come to the fore. If somebody is happy never engaging in a full-time serious career, nobody thinks twice about it. A few eyebrows are raised when a member want to work like a dog until death do him part. But desire to continue working doesn’t revoke membership.

The original Star Trek series has a unique underlying philosophy connected to Mr. Spock and the Vulcans called IDIC. It stands for Infinite Diversity in Infinite Combinations. The novels covered the topic more than the television series. What was meant by IDIC is that the more diversity, the more combinations of different people, makes us stronger.

A glaring example is shown us by the recently departed Stephen Hawking. Hawking was a genius on every level. Unfortunately, life didn’t give him an equal measure. His body suffered from a degenerative disease. His mind more than made up for it. Could you imagine Hawking in Vonnegut’s story? Society would be forced down to Hawking’s physical level while Stephen’s mind would be throttled to the lowest mental member of society.

Inequality can make us stronger. What we need to eliminate, or at least reduce, is discrimination. Race and gender is not a crime. Sexual orientation isn’t either. These are the hard problems to solve. Inequality, income for example, is not always bad.

Underpaying people is a form of discrimination. The FIRE community doesn’t discriminate. The FIRE community example is to accept all people from all walks of life. Workers should be paid a fair wage and provided a safe environment. That doesn’t preclude dangerous work. Risky jobs are secure when the company treats the team as family.

The FIRE community is the most diverse of any I know. It has the Vulcan IDIC philosophy. Color of skin doesn’t matter. Religious beliefs, or lack thereof, don’t affect membership. Both genders and in-between are welcome.

You will find people deep in debt taking their first steps toward financial freedom in the community and those with millions in investments. Side hustles abound. Travel is indicative while accepting those who prefer the closed quarters of home. The homebodies experience the world through the eyes of the world travelers. Once again IDIC turns weaknesses into strengths.

Vonnegut showed us the foolishness of demanding equality in all things. Too much inequality can damage the whole. But Inequality isn’t bad in and of itself. There is nothing wrong with accepting less, an unequal portion, for the same job. In my profession there is the free VITA tax service. There is also plenty of room for professionals to earn a living too. This is not damaging inequality.

As a society we need to embrace inequality. Differences force us to think in new ways. Those on the lower end may not enjoy the process. I get that. But it is rare to find a genius in the lap of luxury. Elon Musk is from South Africa; Steve Jobs had a difficult early life. Equal didn’t make them stronger. Inequality did.



Stalking the Accountant: Groundhog Day

It was an exciting week in the Wealthy Accountant’s world. Facebook decided they didn’t want me to use the name Keith Taxguy. Now if I were a Russian meddling in the election I would’ve had no problems at all. It all ended well (so far).

New policies instituted in the office this year are paying off. For the first time since I showed up in the blogosphere people are surprised how fast I’m getting work done. After tax season I’ll spill the beans on my experience so other tax firms can experiment with the same tools. It should help other business owners and those with a side gig formulate ideas to increase their efficiency. This means less work and more profit. Isn’t the modern world awesome!

I found a gapping problem in the new tax law this week that will cause serious issues next tax season. I stumbled upon it by accident (asking clients questions). Monday I’ll have a full write-up. This issue is for more than accountants. Anyone who files a tax return is affected. I estimate 70% of taxpayers will need to adjust for the error or will have a nasty surprise when they file their return next year.

A few reminders before we head into the entertainment part of the weekend. Do-it-yourselfers should consider 1040.com through this blog. I like the program and use the commercial grade program in my office. Since this blog’s profits go to charity (increasingly supporting agencies helping abuse survivors) it’s for a good cause.

 

We have another nifty drawing to give money away again in the upcoming week. Don’t miss your chance.

 

Looking to manage your growing stash better? Personal Capital is a resource many are using to visualize all their investments in one spot. Best of all it’s free!

 

In the near future I will share my experience using PeerStreet. I think it is an excellent addition to many portfolios. Over the last year or so I’ve wound down my Prosper and Lending Club investments for a variety reasons I’ll outline in the future post. I’ve added PeerStreet to my investment mix and so far have been very happy. I also like the added protection of real estate backing the loans I’m investing in.


Real Estate Investing Platform

 

And now for some weekend entertainment.

 

What I’m Reading

Tax season limits my reading time. (Notice my sad face.) I’m working on a really good book I hope to report on next week. I also have been catching up on some neglected issues of National Geographic. The short articles fit the schedule easier this time of year for me.

 

What I’m Watching

Tax season quickly turns into a real life edition of Groundhog Day. Each day melts into the next, only to repeat again and again until we get it right. With this in mind, I’ve never seen the movie Groundhog Day. I know, I know. Everybody has seen the darn movie except me, until now.

This weekend I went to the library to checkout Groundhog Day. (I actually sent Mrs. Accountant.) Now we can officially declare every living human has seen Groundhog Day. So much for my reputation as an early adaptor.

For the record, I actually watched the movie; something I rarely do. Normally TV is background noise or a sleep inducer. Bill Murray earned his keep. I watched, yes watched, the entire movie. Of course they had me when the groundhog was driving.

 

Here is a YouTube video everyone MUST see. Elon Musk hits the nail square.

 

What I’m Listening To

I worked in silence most of the week as I was on a mission from God. The work was peeling off at a rapid clip. Here is one soundtrack I noticed in my YouTube queue from earlier in the week.

 

Be good, kind readers. One month of tax season is nearly in the books. See y’all Monday.

(Now I’m off to read a book. I am taking the whole weekend off! All of it.)

How to Write Engaging Blog Posts

Grab the reader’s attention early. A rubber snake might do the trick. Then again, maybe not.

Every writing conference I’ve ever been to has a breakout session titled: PANTSER OR PLOTTER?

Beginning writers flock to these things because they think it’s an important part of the writing process when the question is really a matter of personal work habits.

Many successful writers plant their tail in front of the keyboard and start pounding out copy while others need a detailed plan before the muse flickers to life. Plotters take the risk they’ll plan until infinity before rolling up their sleeves and working; writing from the seat of your pants can lead to rambling pros in need of heavy editing.

The longer the work the more need for at least a few details before you start. Novels need a plan (which usually changes several times before reaching the conclusion) while a short story can start as a vague concept and move to the page rather quickly.

Blogger’s Dilemma

Bloggers are desperate to get something published. Once upon a time you had to write until your fingers bled to improve your voice and acuity on the page. The only true way to master the writing craft is to write. A lot!

Traditional publishers want polished work. Polish comes from experience. Experience comes from practice. It takes heart to write endlessly perfecting your craft without much reinforcement.

The publishing world has changed tremendously over the last several decades. Self-published books were universally bad in the past. Today many of the best books on the market either are self-published or started as a self-pub.

Bloggers are like any other writer. They want to see their stuff out there as soon as possible. Rushed work looks, well, rushed.

I’ve received several requests to discuss my writing habits. Most people realize publishing a half million words a year on a personal finance blog is a lot of work. They want to know where I get my ideas, do I plot or write by the seat of my pants, when do I write and how fast do I write.

I imagine the Plutus Award for Best New Personal Finance Blog of the Year has something to do with it. Another part is my story telling. People expect boring facts when they see “Accountant” in the title. Surprising the reader with engaging storytelling mixed with useful information grabs them early and keeps them.

Some questions are hard to answer. One reader asked how I come up with such awesome post titles. I didn’t have an answer.

Writers have a difficult time explaining what makes a good piece of writing a good piece of writing. At first glance it appears I just sit down and peck out a story, hit publish and people get Ooooo lips.

Rather than give you stale, dry description on how to write an engaging blog post people will want to read and will keep coming back for more, I will show you how I do it. My way isn’t right for everyone, but it does give you an idea on how my creative process works.




How I Write

Ideas hit me all the time. Reading a book, watching a movie, talking with friends, thing jump out at me and demand recording. The working title of this post was the title of this section. Of course, if I want anyone outside my regular readers to become “engaged” in this post I had better come up with a better title.

When ideas hit I take notes. At home, at the office, on the road, I keep paper and pencil handy. Yes, even beside the bed is paper and pencil. I sleep on the couch about half the time and in bed the other half. On the couch I’m surrounded by books and papers. When my creativity is highest I wrap myself in the literature and recording utensils.

Rarely do I sit and write spontaneously. After a long day, writing a quality post requires some advance planning. If I had no previous ideas to mull you wouldn’t see a new post the next day.

There are 64 unwritten posts in my WordPress queue. You need a title to save the idea, but every title is accompanied with a few sentences outlining a theme I wish to address. Sometimes the notes are detailed and run several hundred words and links to resources. Most descriptions are short. This post has two sentences as the material for pumping my creative energy.

Most ideas die in my little notebooks. After thinking about them for a few days it becomes clear the idea doesn’t work or the project would be 20,000 words. (As an example: I had planned a post on climate change and why it doesn’t matter, plus how it affects personal finances. The material I gathered kept growing until I realized it would be a veeeeery long post. It would also cause people to throw things at me since it’s such a politicized topic. I had planned a second post on mass extinctions and why we are not in the sixth great extinction. The natural world is becoming more diverse even as people think humans are killing everything off. The work on both these posts would have ended up short books in their briefest form so I shelved the projects. I did get to read several really good books on the subject so all wasn’t lost.)

(Good blog posts also try to avoid long paragraphs.)

Three times a week I publish on a topic of interest in the personal finance community (I hope). On Saturday I give readers a glimpse inside my personal life.

Every day I am thinking about writing! When I take a break or eat I’m thinking about what I’ll write in an upcoming post. The thoughts are never more than a few inches away.

By the time I punch the first words onto the digital screen I’ve played the idea through my mind countless times. I start the story and then toss it when it goes down a dead end road. As I work around the farm or workout at the gym I’m playing with possible scenarios.




The Fun Part

Most days I have a good idea which posts I’ll be writing for at least a week out, including the “Stalking the Accountant” post on Saturday.

This gives me time to work the idea out in my head. Plotting is something I rarely do even when writing a long novel. (Eight years ago I wrote a 180,000 word science fiction novel from a three sentence note. I knew where I wanted to go and started building the story. It ended up someplace different and a better story that is now the first book of a trilogy.)

Pantser writing has a huge risk. Plotting is drudge work. I like to write. After plenty of time thinking the idea through (sometimes with and sometimes without notes) I set to work. Writing from the seat of my pants means there are times I write a post and get the dry heaves when reviewing. Yes, I have to start all over. The idea I regurgitated is dead and gone once that happens. Those are tough days when I have self-imposed deadlines.

Most of the deleting these days happens in the editing process. Maybe a dozen or so posts get completely rejected per year. Most can be salvaged with work. On good days (when the whisky is flowing freely) the necessary editing is light. Those days are rare.

What comes next is the part people seem most interested in. They want to know “how” I write.

Most posts, including this one, are written the night before they are published. The clock reads 10:05 as I type these words.

On a good night I can stamp 1,000 words of rough draft to the laptop’s memory banks per hour. On a bad night I start to wonder if I’ll get any sleep before sunrise.

Normally, rough draft takes two hour or so for posts on this blog. If more research is needed or if I want to add more links for readers to dig deeper into certain points I don’t have space to adequately cover in the post the time commitment increases.

It seems easy at this point. Some crazy guy from Nowhere, Wisconsin types for a couple hours and calls it a day. If only it were so easy.

Dozens of hours of thought entered the scene before the first word was typed. Sometimes I read entire books or pull information from several books to build a quality post. I don’t show books just to get an Amazon sale! These books really add to the learning process of the reader!

Writing rough draft appeals to beginning writers. I don’t know why. From the outside it must seem like that is all a writer does.

The hard work reignites the next morning. Editing also takes several hours as I rework the words until they communicate what I demand them to. Time constraints can be an issue.

I read every post out loud to Mrs. Accountant. Reading aloud is the most powerful editing tool I know of. If Mrs. Accountant will not sit still to listen to you read your work to her you can still read aloud to yourself. Trust me, it works.

Important note: Stephen King in his book On Writing tells a story of an editor who once sent him a note along with rejection letter stating: Final draft is rough draft minus 10%.

I don’t delete as much as I used to. As you build your writing skills you will delete less, yet still edit plenty. Sometimes you even add during the editing process. Remember the 180,000 word novel I mentioned above? In the editing process I highlighted 30 pages that needed to go and hit delete. I loved the story deleted, but it had no place in the novel. If you want engaging writing you have to do it.

Publishing a blog is more than words. I was never a picture taker. Now I’m always looking for possible images to add to posts. At least phones have cameras today and Google automatically downloads the things to “Photos” on my laptop. Don’t ask me how.

Formatting the post takes about an hour.

As soon as I finish I hit publish. Sometimes I finish a day or so early. In those instances I schedule the post. Most scheduled posts are written the day before versus the night before. This means Mrs. Accountant listens to the story at night. Before I hit the hay I format and schedule the post.




Personal Touch

The information to this point is mechanical information. It tells you what you’ll see if you follow me around and read my mind. You see me mentally taking notes and planning. You see me writing and editing. My personal writing schedule will not produce engaging posts!

Engaging writing has a piece of you in it. Stories are vital! Most posts on The Wealthy Accountant have some element of story. A good writer knows which parts of the story to leave out. The same story can be told multiple times from different perspectives!

Your life is rich and full of stories. Your childhood, work, marriage, health and family are a cornucopia of stories to share.

Our wedding candle as we approach our 30th wedding anniversary. The personal touch is the key ingredient of engaging writing. Always have a piece of you in there.

No matter the subject, stories are important. Without a personal story the information is just rote formality. For crying out loud, kind readers, I write on taxes and personal finance! Story is the only thing I have to offer unless you think plagiarizing the stock quotes page of The Wall Street Journal is engaging material.

Stories from history or the news are interesting, but often told. Your story, told right, is one only you can tell and readers will find it near impossible to put down or stay away.

Stories are unique in communicating information. Story allows a message above the communicated information. Think of the power of Christ’s parables. They stood the test of time and are so memorable for a reason regardless your faith.

When you own the story the reader gets a chance to step into your world. That’s why a started publishing the “Stalking” posts every Saturday. Engaged readers want to know more about the person they are growing fond of!

Share a piece of you and readers will be engaged. Readers feel like they know you and in a way they do. Writing allows the author to share at a deeper, more intimate level than mere verbal communication.

Practice, kind readers. If you are looking to write an engaging blog you MUST practice. Practice is the only way to get good. Write every day. Never believe you must publish every word you smear across the parchment. The words aren’t that precious until you can string them together in a way that makes your readers swallow hard. They just can’t seem to get the lump in their throat to go down.

The clock now read 10:37. This post is coming to an end. I’ll read a bit before retiring for the night.

Tomorrow morning the hard work starts. If I do it right (or is it write) you’ll be thinking about these words for a lifetime.



Stalking the Accountant 20 Jan 2018

As tax season approaches I start to fall into a familiar pattern I’ve developed over the years to help focus my attention.

Some people like listening to music while they read; I don’t. I prefer absolute quite, huddled in a dimly lit corner while I devour pages of knowledge or embark on an adventure through space and time.

Preparing taxes is different. Plugging numbers as an elegant return is formed requires background noise. I find certain long pieces (frequently an entire album) and repeat the material again and again all day long. It drives the office crazy because sometimes my choices are really out there.

Life requires balance so I try to distract my mind with something intellectually stimulating for at least a few hours per week as well.

With these thoughts in mind, here are some of the things I was doing over the last week:

 




What I’ve Been Reading

The Ends of the World: Volcanic Apocalypses, Lethal Oceans, and Our Quest to Understand Earth’s Past Mass Extinctions by Peter Brannen

Climate change and the extinction of species is a hot topic sure to fire up the political agenda. Strip away the politics and your IQ jumps better than 40 points. The Ends of the World is a longer-term look at life and extinction events on Earth. If you think man is causing the sixth great extinction you might want to think again. You should see what trees did to early life on the planet. If man wants to get serious about creating a mass extinction we will need to up our game.

Before the politically minded become smug, know climate change is real and man is a large part of the current changes. There will be consequences! As George Carlin said, “The planet will be fine. The planet isn’t going anywhere. We are!”

The Ends of the World is must-read material for people interested in how climate change in the past affected Earth along with the evidence from prior mass extinctions. Stripped of political dialog, you might find this a powerful education helpful in your daily life as you choose how to live.

 




What I’m Watching

This week I want to share two YouTube videos I found mentally stimulating.

The Unbelievable Powers of Electricity shocked me. (Sorry, I couldn’t resist.) My understanding of electricity isn’t vast, but still notable. This documentary added to my knowledge base.

 

How can a documentary about the oldest living thing on the planet be interesting? Well, I’m glad I took a chance. Oldest Tree on Earth: The Curse of the Methuselah Tree proved far more interesting than I ever imagined.  Highly recommended.

 




What I’m Listening To

I tend toward long play music to fill in the background when I’m working numbers. The sounds can get really strange as tax season rambles on. So far I’m on this side of the line of normal with Pink Floyd echoing from my office.

The Wall is the best concept album (double album, actually) ever produced, IMHO. It also qualifies for long play at nearly an hour and a half before the sound ends.

 

Updates and Reminders

Tax season is here and I want to grow the DIY tax preparation part of this blog. Please consider using the same tax software my office uses online when doing your own return. I published on preparing your own tax return recently. It might be worth another read before filing.

 

As a reminder, the forum is a great place to interact with other like-minded people. The more people who use the forum the more vibrant the platform becomes.

 

I’ve added two affiliate programs recently. SoFi is a great program to reduce your student loan interest so you can build your net worth faster. They also offer personal loans and mortgages.

This said, I encourage you to use SoFi (or any lending) in a responsible way. Debt is caustic to wealth! SoFi could reduce your interest rate allowing you faster retirement of the debt. If I find out you added to your debt burden I will find you and give you a very stern look.

 

Personal Capital is a growing platform for managing your net worth. It’s hard to manage what you don’t know and Personal Capital is a good way to visualize and manage your financial empire

 

Finally, don’t forget we have a number of cash giveaways coming up. The first is only a week and a half away from the date of this post’s publication. The drawing dates are reported on the Where Am I page. Click the notice for the rules.

Have a great weekend, kind readers. See y’all Monday.



The Cost of Yes

At one time or another everyone has experienced the desire to do more things that interest them. It might be traveling the world or trying multiple sports or musical instruments. A few people, prodigies, manage to conquer several musical instruments at once.

In business we see Elon Musk tackling business after business with endless energy. Small business owners are lulled into a false sense of ability when they try to multitask at the same level.

In our personal lives we might attempt to read several books at once or even write multiple books at one time. After all, we dug deep into a handful of textbooks simultaneously in college.

At work we crack open several projects at once. Before long we stall out as our brain freezes. Why does this happen? Elon and a minor percentage of the population considered prodigies manage it. Why not me?

Back from Holiday

One of my favorite authors, Ryan Holiday, wrote about this issue a year ago.

People demand as much as they can get from you. I get a steady stream of emails from readers stating they wish they could find a local accountant like me.

Clients demand I, and only I, touch their tax return.

People demand every step be taken personally by people they admire. But they don’t know what they are asking for.

Does anyone believe I personally prepare a thousand tax returns annually without a bit of help?

We want to think our heroes are really superheroes!

If only your favorite accountant could be an awesome husband, father, business owner and blogger without a push from another living human being.




A New Brand of Musk

Elon Musk isn’t doing the incredible at the level outsiders think either.  If you watch closely, Musk is expert at focusing on the task at hand.

With so many businesses, Musk must multitask. But he doesn’t! At least not to the level many people think.

Musk has been candid about his work schedule. He works long hours with few days off. But he separates each day into specific tasks. Some days he’s working at Tesla, the next day at SpaceX.

Each day is dedicated to the project at hand. Musk attacks several projects over the course of a week or month, but each day is dedicated to one project.

Focus is key.

Most people are thinking about the time they should be spending with their spouse and kids when at work. At home they are preoccupied with work matters.

All this is insanity! You can only be where you are. When your mind wanders to a project you are away from you end up nowhere. The wife and kids don’t get your undivided attention. Later, when exhausted from all the mental anguish, you underperform at work. You end up spiraling down.

In college you read several books at once as you worked through each course. The same happens in your personal, work and/or business life.

Why it worked in college (if it worked for you in college) is that you were in Sociology when you were in Sociology and not in Algebra! It sounds like common sense, but we tend to lose this skill set once we enter the workforce or start a business.

Business owners are the worst! I’ll vouch for that.

Demands come from every direction. As a business owner you want to solve everyone’s problem. But you can’t!

Nobody is helped when you are spread thin.

But business (or side gig) demands constant attention. When a client arrives without an appointment you own them answers to their problem, right?

No, you don’t!

You owe the client who scheduled an appointment who happens to have her stuff spread across your desk at the moment.

If you take every call, constantly check your email or allow every interruption you will end up exhausted without getting anything done you wanted to accomplish. The client is screwed and so is your family when you get home.




Back on Holiday

Ryan Holiday is a writer. Writers need plenty of free time to allow the creative process to work.

Last year when I attended Camp Mustache SE in Gainesville, Florida, the facilitators informed me they tried to get Holiday to attend. Holiday immediately sent them to his agent who said the fee is $15,000, plus expenses. The fee is high as a way of saying “no”. There were some complaints at Camp when this was revealed, but Holiday’s career would spiral out of control if he attended every offer.

Readers who pay close attention can tell when I’m rushed. It shows in my work and the scattered mental process.

I was too busy getting our picture taken to watch the eclipse. Not!

Holiday talks about keeping his calendar as open as possible without harming his career. He says “no” to almost very distraction. He admits to lapses, as any honest individual would. Still, lapses evolve into serious issues if allowed free rein.

Holiday calls it “calendar anorexia”. By keeping his scheduled appointments down to a minimum he keeps ample open time to think and create.

I wish I were as good at it as Ryan. Writing a blog is a business all its own. A tax practice is a business requiring serious time commitments.  People reading this blog know they can dig for 30 seconds and have my office phone number. The call is corralled long before it gets to my office, but it does take time from my team members.

Distractions are common in an accounting office. If I’m to get any work done distractions must be avoided.

I spend more time at the office than I should, but I enjoy the work environment. I take time to read and research, manage my business, review my budget (what budget I have) and investments. Tax returns take plenty of time during tax season. Managing a small business is a time sink, if allowed.

People will wear you out if you let it happen! They’re not bad people either. They lack discipline so they just “drop by” for a quick question. Not a good idea if you want the answer from me.

The Cost of Yes

Yes costs more than money.

Every interruption has a cost. Each distraction takes more than the “few minutes” the client/potential client/salesman promised.

It takes time to push paperwork (or any project being worked on) to the side to do something else. Your mind has to shift focus to the new task. This takes mental effort!

Once you are finished with the “few minutes” you need to refocus again on the original task. Research says it takes up to fifteen minutes (longer for some people) to get back up to speed on the original project. The “few minutes” squandered as much as a half hour of productive time. And that’s assuming the “few minutes” were really only a few minutes.

Take a couple personal calls and client interruptions and you’re productivity collapses to nothing while you end up exhausted! Worse, the boss is ticked you aren’t getting anything done.

“Yes” costs more than money; it costs peace of mind, satisfaction and tranquility. Interruptions are stressful!




Good for Business?

I get asked to attend a lot of events. Mini conferences have sprung up all over the country and around the world in this demographic. My work with Mr. Money Mustache and other popular FIRE (financial independence, retire early) bloggers coupled with a Plutus Award has made me in somewhat high demand.

My first impulse is to always say “yes”; my inclination is to please people. I want to make the readers happy. And I might get new readers!

Focus is necessary to steal food from humans. It is easy for monkeys since humans are so easily distracted.

Except, if I really thought about it, there is no way I can sit with each reader personally. If my readership consisted of only people I met personally this blog would be very, very small. And unprofitable, too.

Traveling kills me. Of all the things in this world I loathe, traveling tops the list. I don’t begrudge those who enjoy the experience; I just want to be left out.

I felt obligated to attend several events each year as part of the price for being a blogger. There is some truth to that, but it wears me down doing something I really don’t enjoy.

Late last year it was made abundantly clear I need to stop attending events to please people. A natural part of my work/business life will bring me in contact with readers and potential readers. I don’t have to travel across the country or to the other side of the planet to be successful in this genre.

My readership will grow whether I travel to endless conferences or not. Your personal life is the same. Constant distraction subtracts from your overall enjoyment of life.

Media Kit

On the left side of my desk is a media kit I’ve been working on for a while now. It’s not done, but soon.

This upcoming Saturday I have a special “Stalking the Accountant” where I will share why I write so much. You’ll enjoy it.

From this I will complete my media kit so the world can share my stuff without contacting me. I already made it clear you can steal my stuff. Now you can poke and prod without bothering me. It’s the best of all worlds; everybody wins!

Camp Accountant will be my sole public appearance. I’ve committed to FinCon18 in Orlando, but am uncertain of any additional commitments beyond that.

Elon Musk may be the new fragrance of the business world. Without the discipline and focus necessary to succeed it will all end with exhaustion, anxiety and burnout.

We can do better than that. We can consider the consequences of every “yes”.

It might only take a minute, but I don’t have the luxury of spending that minute in an unscheduled interruption.



Personal Solutions to the Healthcare Crisis

In the United States healthcare has gone from crisis to tragedy. Double digit increases in insurance premiums for many years on one hand and a tax code that forces you to pay up on the other is a painful experience for many family budgets.

The current tax code contains a health insurance mandate; have health insurance or pay a tax penalty. Congress has unsuccessfully tried to end the mandate, but the current tax bill might contain language ending required health insurance coverage.

Even if the health insurance mandate ends there is the problem of affordable insurance. If you are fortunate enough to have an employer paying most or all of your health insurance premiums you are lucky. Small employers are far and few between who can shoulder the cost of healthcare. And large corporations are scaling back the employer paid portion of healthcare benefits.

An anomaly of the current economic expansion is the lack of wage increases. For employers covering health insurance the cost of each employee is exploding due to rapidly rising health insurance premiums even when they offer modest wage increases at best. It might be a good idea to have a Plan B.

Then we come to you, dear readers. Many of you are either running your own small business/side gig or are planning on early retirement. The FIRE (financial independence/retire early) community has one vital flaw! Saving and investing a large portion of your income creates a large net worth fast. Unfortunately, healthcare is probably your single biggest expense, even more than housing if you retire early before you qualify for Medicare!




The Right Man in the Right Place

A few months ago I was in Dallas at FinCon 17. I was busy with demands from readers and other bloggers keeping me from the sessions (now available on YouTube). That doesn’t mean I didn’t learn anything. No matter where I go I always pick up several tidbits of information I can use personally or for clients.

On Day 2 I decided to walk the vendors. Before long I was interrupted by adoring fans. I asked Mrs. Accountant to run the obstacle course of vendors and clue me into the ones I might be most interested in. It was a good strategy.

Mrs. Accountant knows the dire straights my clients are in (not to mention our own escalating health insurance issues). She had a list ready for me when I had a break.

I formulated a plan with my research. I was aware of most of the companies involved. What I needed to do was connect the dots. No one company provided a comprehensive solution. Like a jigsaw puzzle, I assembled the pieces into what is a working program to cut health insurance costs in half while reducing out-of-pocket expenses at the same time.




Connecting the Dots

My strategy uses a three legged chair. Each leg provides benefits, but if you are lucky enough to be able to use all three legs you are golden.

Medi-Share was the first stop. Medi-Share is NOT insurance, but satisfies the tax mandate requiring insurance. If the mandate is lifted Medi-Share is a powerful consideration for handling your healthcare needs regardless.

There is one very serious drawback to Medi-Share. Medi-Share is faith based and therefore is only available to Christians. Many readers will have no problem with this requirement; however, people of other faiths or no faith will probably not be accepted into the program.

Medi-Share looks and feels a lot like health insurance. You pay a monthly Share amount similar to a premium. The money is deposited into YOUR separate bank account which is completely different from insurance. There is an annual amount you pay first which feels like a deductible.

But it is different. As other members have medical bills come in the medical bill are matched to other members with excess funds in their account. The bills are matched until all medical bills of members are paid. Medi-Share uses technology to handle the management of member accounts.

The best part of Medi-Share is the dedication to wellness. Insurance companies have an incentive to keep costs high! Health insurance carriers can only have a certain percentage of premiums as profit so they are incentivized to waste as much as possible to keep premiums as high as possible as 20% of two billion dollars is more than 20% of one billion dollars. The more expenses the more profit the insurance company can keep.

Medi-Share is focused on quality of life and provides support to keep medical costs down while providing maximum health and wellness. Medi-Share is non-profit so they are service based versus profit driven.




The Second Leg

Medi-Share’s program cuts medical costs be half or more for most people. The U.S. has outrageous medical costs, but when common sense is added the cost become more reasonable.

If you don’t qualify for Medi-Share due to faith issues you can still use Leg 2 of The Wealthy Accountant program.

The way Medi-Share keeps medical costs down is by utilizing technology and preventative care. You can use the same tools to reduce your medical bills.

Leg 2 is a company called amino (they don’t capitalize their name).

Have you ever tried to get a hospital or doctor’s office to give you a firm number on the cost prior to a procedure? It’s impossible. You get every excuse and runaround imaginable! They act like they have no idea what it costs and have no way of finding out until they got you by the throat! Amino fixes that.

Amino tracks virtually every medical service provider in the country for cost and quality. Doctors and hospitals are not allowed to advertise or buy their way to the top of the list. You get an unbiased view of your medical choices based on price.

With amino you can track you insurance deductible (or Medi-Share share amounts) and even set medical appointments right through their portal. Finally, they analyze your bill.

Anyone with high deductible insurance (that should be all of us), paying their own medical costs and those using Medi-Share and other similar faith based healthcare management systems can’t afford not to include amino in their health management mix.




The Final Leg

Now that you have Medi-Share to manage medical bills and amino to get the best price on medical care, you need a tax deduction!

What I’m about to share is a down and dirty outline of an incredible tax advantage. As time permits I’ll roll up the sleeves and give this one topic an entire post. From the providers of this third leg it seems even accountants have a lot of questions on this. I’ll give you the details to get started so you can maximize your tax benefits.

The third leg is a Qualified Small Employer Health Reimbursement Account (QSEHRA). This only works if you have your own business or side gig. If you have an employer you will need them to engage this leg of my program as a traditional HRA or QSEHRA.

The first thing to remember is QSEHRAs only arrives recently (December 2016) with what is known as the CURES Act. There are still some issues needing clarification. I will share generally accepted interpretations.

QSEHRAs are only for small employers WITHOUT a group medical plan and with fewer than 50 full-time equivalent (FTE) employees. A FTE is defined as an employee working 30 or more hours per week or 130 hours per month for 120 consecutive days.

Section 213(d) of the Internal Revenue Code (IRC) states a QSEHRA can cover any DOCUMENTED healthcare expense, including health insurance premiums. As I understand it, Medi-Share payments would qualify. If I discover different I will update this post so check back if you plan on using this tax strategy in the future.

The employer funds 100% of the QSEHRA! There is a limit to how much an employer can fund: $4,950 for an individual and $10,000 for a family annually.

Caution: If employees receive a subsidy from a Healthcare.gov policy the subsidy is reduced by the amount of the QSEHRA provided by the employer. Talk to your tax professional on your specific situation and the tax consequences if you receive a federal subsidy.

The most important part of this leg is DOCUMENTED. You will need someone to manage your QSEHRA. Your accountant isn’t the person to do it!

I recommend Take Command Health. I was impressed by the depth of their knowledge when I met them at FinCon and through follow-up encounters. If you are planning on a tax break you may as well make sure it sticks.




The Triune Healthcare Solution

Healthcare and medical insurance are causing more gray hair than old age. No one solution solves the problem for everyone. Many readers should find value in all three legs. Others can benefit from only one or two legs. Regardless, containing and managing medical costs is a primary concern in most households.

To recap, there are three steps to taking control of your healthcare needs and costs:

  • Use this link to review and join Medi-Share.
  • Review amino and determine if their service will save you time, money and hassle.
  • Have the government give you a juicy tax break with a QSEHRS managed by Take Command Health.

You will have lots of questions, I know. Leave your questions in the comments section below versus sending me an email. Many questions are repeats and it helps me manage time better. Some questions might take some research as the CURES Act is still being interpreted. Check back often to see if I found an answer for you.

Here is to clean living.