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Early Retirement, Lifestyle, Taxes and Investing

Financial Independence for Normal People

51efot8iakl-_sx324_bo1204203200_Discussions around here have focused on early retirement and financial independence with a few assumptions: either you own income properties, own a business, or have a side hustle. But what about the other 95% of the people working their tail off, day in and day out, looking for a retirement plan? For those fine folks I have a treat today. We will focus on normal people and wealth accumulation. We will avoid tax talk because income level and type of income create too many variables muddying the conversation.

You would think it should be simple if you are a wage earner only, but it’s not. There are several choices you need to make to maximize your wealthy building. Accelerating to the early retirement line is straight forward if you know where to start. Without passive income like rental properties you only have your earned income (wages) to rely on. Your passive income will be limited to dividends, interest and capital gains.

Building an Empire

There are two parts to living the Financial Independence (FI) lifestyle: the building phase and the maintaining phase. During the building phase you save like crazy. My recommendation is to save half of what you earn. It is more important than ever to have a high savings rate if you don’t own rental properties or have a side hustle. It will take 16-17 years to reach FI at a 50% savings rate assuming a 5% growth rate and a 4% withdrawal rate once retired.


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Get Paid to Take a Vacation

frog-897418_960_720Mrs. Accountant and I recently went on a business trip. Like most business trips we invested time, but no money. The trip was better than free; we came home with more money than we started with and did nothing crazy like house-sitting or couch surfing. We enjoyed meals at excellent restaurants and slept in 3 and 4 star hotels every night. We drove in this instance because we like seeing the sites as we go. In all it took three weeks to complete the business trip. It was a great time for Mrs. Accountant and me to spend quality time together without interruption.

There are a million ways to travel for free. Many people in early retirement dream of doing so. But what about the rest of us? You might not be retired. And then there is the unique breed of animal called the business owner. I fall into the last group.

Traveling is something I avoid. Life on the road is not something I look forward to. As I get older I find myself on the road more and more for longer periods of time for business. Now you know why Mrs. Accountant works for my company.

The reason for the trip is not important. What is important is how I accomplished the feat of three weeks of travel and got paid to do so. Actually, three entities paid for our trip: the organization I was asked to speak for, the bank, and the government. The government paid the largest portion of the bill and it was all legal.

Speaking engagements are the biggest reason for time away from home now. Training conferences are second. Many conferences extend over a long weekend, four days in this instance. The four days at the conference were covered: meals and lodging. Personal entertainment and travel were my own.


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I’ll Tell You Why You’re a Failure




8226451812_88007f08df_bBuying a car is like marriage to me; it is until death do us part. So far she has been the one dying and I remain to keep the memories alive. In 2009 I bought a 2007 Toyota Camry from the local credit union to help them clean up a bad loan. I have never had serious problems, but periodically I have to invest a bit into the vehicle so the ‘ol girl makes it to 20. The Camry had one of those days.

The exhaust pipe broke near the head next to the catalytic. The metal was too thin to weld so replacement was the only option. My neighbor across the road (how convenient living out in the country), Roger, has a lift in his garage and handles most minor repairs for me. I still change the oil so I can brag this accountant gets his hands dirty now and again.

The replacement part had the cat in it so it wasn’t going to be cheap. I went over the O’Reilly Auto Parts for the replacement. It set me back $184. Roger charged me $25 to change it. I knew it was going to be a bit more than a simple muffler repair. When I picked up the section of exhaust pipe the kindly clerk asked me if I was a member of their rewards club. I said I was now. It works like this: for every $150 you spend they send you a $5 coupon for a future purchase.Continue reading

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Credit Card Secrets






We think of credit cards as those things which allow us to manage our financial lives without carrying money around. Bills are easy to automate with credit cards and paying the card at the end of the month is a simple, one-time, setup online and it is paid in full on the due date without any further action on your part. Even if you don’t record your spending, a credit card has a nice list of all your spending in one neat, compact location for future review.

Those crisp pieces of plastic come with a dark side also. Without constraint, you can dig a financial hole difficult to crawl out of. Make no mistake; credit cards are debt, even if you pay them in full monthly. Debit cards serve the same purpose and are not debt because it comes out of your bank account; when the money runs out, the purchases are declined.*

Previous posts discussed bonuses, cash-back credit cards, and interest free/fee free loans. I consider those the easy benefit of credit cards. Debit cards offer limited bonuses and cash back, but credit cards take it to a whole new level.

There are a lot more benefits to credit cards most people either don’t know about or never take advantage of. I seek to end that problem now. These benefits are worth anywhere from a few hundred dollars a year to thousands, depending on your level of spending and the items/services purchased with the card.Continue reading

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Permanent Interest Free Loans

debt-1Credit cards were always a powerful cash management tool for business owners. Individuals can harness the same power, but frequently use credit cards wrong, piling on high interest debt, and suffering financially. In times past, credit cards allowed for easy payment and tracking of expenses. As banks grew more competitive, the opportunities also grew. Most people are familiar with cash-back and bonus offers when opening a new credit card, but there is so much more.

There is a whole additional universe of value available from credit cards missed because it is buried in fine print. In this post we will focus on one of those benefits: interest free loans. Tomorrow I will focus on the litany of advantages you can use to make your life simpler.

Interest free loans from credit cards are not for everyone. I will focus on three groups who should find value in the strategy I will soon outline. The three groups are: people digging out of debt, people interested in accelerating their investments in index funds, and individuals and business with seasonal revenue.


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Hidden Value in Homeowners Insurance

img_20161031_201350Insurance is for the mathematically challenged. Insurance companies have the largest buildings in town for a reason. What other company do you write a check to for a thousand dollars and get nothing more than a promise to cover some bills in the event of certain losses? Commissions to the salesperson can reach or exceed 100% of premiums in the early years of some life insurance policies. Many credit card companies offer free extended warranty insurance at no additional cost when you buy with their card. You can guess the real value of the extended warrantee offered at Wal-Mart on $88 headphones.

Warren Buffett built an empire funded by insurance premiums at Geico. Some insurance is required by law. In the U.S., auto insurance is required for liability. Health insurance is also required since the Affordable Care Act passed.

Insurance is about risk management. Insurance companies are masters at it. The goal for the insurance company is to bring in as much as possible in premiums and pay out as little as possible in claims. Insurance always has a built-in profit for the insurance company. This is the house advantage.

Most insurance claims are for stupid small stuff. The cost of insurance to cover claims under $10,000 is massive. The processing of a claim is expensive. That is why higher deductible can save so much. But even better is not buying insurance at all and pocketing the cash.


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Screw the Rich

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

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

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

I Can’t Take Anymore

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

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The Friends You Keep




20131109_095843My relationship with the gym is an on-again/off-again affair. Three times a week I lift weights and during the frigid NE Wisconsin winter I also run on the treadmill a time or two each week. It isn’t cheap. I consider my gym membership, which covers Mrs. Accountant and me, a luxury and a spending splurge which sets me back about $800 per year.

Over the years I belonged to three gyms. The first gym went out of business and for several years I avoided costly gym memberships. Then an injury required either expensive physical therapy or a more formalized and regular workout schedule. It was a painful injury. I ruptured several tendons in my right bicep when I was butchering chickens. (Now you have another nugget of trivia on me.)

At first I thought I blew out the rotator cuff because I could not lift 5 pounds with my right arm. A visit to the doctor put that notion to rest. The bicep was another issue. That sucker hurt. A few sessions with the physical therapist quickly drew me to the conclusion I would need to take matters into my own hands if I were to heal in this lifetime.Continue reading

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