There are a lot of blogs out there telling you how to retire early. It seems 35 is the new 65 or whatever age we were supposed to retire. I think it is all crazy talk. Why would anyone ever want to start working in the first place? According to my own father I never worked a day in my life and I turned out just fine. Okay, bad example.
There was a momentary lapse of sanity in my grand design back when I met Mrs. Accountant. As we prepared for marriage the minister of the church knew I was not working and offered me a job as janitor. What was I going to say? I accepted the job. A year later I quit because I did not want to swill toilets for a living. Don’t get me wrong. The people were awesome! I loved the people over at Trinity Lutheran Church, but I did not want to be janitor.
Previous posts outlined how I live my life without a job. I grew up on a farm. Sure, farming is hard work, but a lot of fun too. Working with animals is something many people do for free all you cat and dog lovers. Well, I grew up in wide open spaces with animals galore. Later I worked for my dad’s agricultural repair business and you can call my dad and ask him how hard I worked. The great news was I found my calling when my dad hated paperwork and taxes and left the job to me. My on-the-side money from preparing taxes for employees hooked me on accounting. I loved the idea of working less and making good money while sitting in a chair or talking to people. Sure beat milking cows or fixing a silo unloader.
Now I work a part-time seasonal job and enjoy a wonderful lifestyle with friends and family. (Ya gotta do something to fill the time.) I am back to living on a farm. People think it is a lot of work when I say I have twenty steers or fifty chickens. Geesh! Do you know how hard it really is? Calf prices are out of line with beef and feed prices so I don’t have steers for the first time in fifteen years. I still have fifty chickens and 19 gardens. I try hard not to roll my eyes when people are amazed at the work I do with all those chickens. Let me explain how hard it really is. Okay, brace yourself. I go out to the barn each morning and pick up 20 eggs and pour a bucket of mash into the feeder (how do I do it?). Then I go back to the house. It gets worse. At night Mrs. Accountant, the girls or I walk back to that very same barn and pick up another 20 eggs. Every couple days I need to reload the water feeders. Once a week I clean the chickens. Cleaning the chickens takes less than a half hour. Let me be clear, I spend more time eating the eggs than I do working to get the eggs. Am I still considered retired yet?
Now Let Me Tell You about Real Work
I read all those other blogs about checking out early. It seems you can’t really be retired unless you live frugally (I am), save half your income (I do) and travel. I hate travelling! Preparing a tax return is fun; so is small-scale farming. But travelling! I like travelling like I enjoy a root canal. (For some reason I have experienced both more than I care to mention.) My teeth to the side, I have visited Costa Rica, Jamaica, Canada several times and three-quarters of the states. Reluctantly I admit I enjoyed the experience of having been on vacation; I still hated going and could not wait to get back home when I left.
Last year I travelled to Seattle to attend a workshop with Mr. Money Mustache as the focus of the event. I only went because I had ulterior motives; I had a business idea for Pete, the real Mr. Money Mustache. I ended up speaking at the event for free (they later gave me a small stipend). Pete became a client and he loved my business idea. To top it off, Pete is the nicest guy you will ever meet. Let me share how nice Pete is. A month ago he emailed to tell me he thought I was “insane” for working as hard as I do. So far, so good. Then he finished the sentence with, “at your age.” I’m headed back to Seattle this year to the same event with Pete as the guest of honor. I think I will ask Pete to explain what he meant by, “at my age.”
At the Seattle workshop I gave a one-hour presentation on a tax issues (early retirement, of course; this year is on knowing when to do your own taxes and when to call in the pros). I did not know I would get a stipend; I did it for free because I wanted to do it. It was not work; it was fun! I was still retired or at least continued in my unemployed status that began when I was born. I enjoy speaking if front of groups so much I accept 5-10 speaking engagements per year, most unpaid. Sharing ideas excites me.
My message is for you to discover what “fun” is for you and what “work” is. Some people golf for a living (a job), others take every opportunity to hit the greens; they even pay for the privilege. I am not insane, as Pete indicated, for running a business and preparing a boatload of tax returns. Truth is I am happier than a pig in manure.
We all do things we do not like doing at times; doing so does not make it a job. The root canal I spoke of above is not a job description; neither is travelling, though it feels that way to me. What makes travelling palatable is the people. I love working with people. I went to Costa Rice with my parents for two weeks because I knew I would have a great memory. Loved coming home, too. Jamaica was my honeymoon. Most of the states I’ve seen and Canada are the result of conferences I attended. I travel to learn and meet new people, giving my travels a purpose.
The best part about never having started a life of work or entering the rat race is long-term commitments. There are only two things I have done consistently for any period of time: husband duties and daddy duties. The only reason why I have stayed committed for so long to these two commitments is because I have a deep seated fear of Mrs. Accountant. If I absconded either of these duties I would be a eunuch within moments. (Note: I read these posts aloud to Mrs. Accountant before publishing them so if you are reading this it passed the Mrs. Accountant test. She does have a good sense humor. She has to; she is married to me.)
My tax practice has been around for decades. Sometimes clients accuse me of thinking about retirement because I am gone so much, especially during the summer. (If you plan on faking an illness, be sure to do so on a nice, sunny day.)I come in late, leave early, take long walks from the office and hit the gym during the work day. How do I tell clients I can’t retire because I never started? Oh, well. Such is the life of a vagabond (minus the travelling part).
Years ago I went through a phase where I attended a large number of science fiction conventions. Then the itch went away. Met a lot of nice people and authors though. Then I dragged Mrs. Accountant to film festivals for several years. Been a while since I did that too. As you can see I go through phases of things I like to do. The best part about never entering the rat race is you can engage so many different lusts. Most tend to be short-term. The ones that count, the wife and kids, are the only things I make a full and lifetime commitment to. In my life family is not everything; it is the only thing (a special thank you to Vince Lombardi).
Back to Travelling
Back to our story in Seattle where we left Pete as he tries to explain what he meant by “at my age.” For the second year in a row I am attending Camp Mustache and will speak to the wonderful people in attendance. Pete, great guy that he is, gave my tax business a heck of a plug with a blog post on his site. A significant number of people have asked me if I have met Pete in person. Yes, I have. Even sat in his house. They ask about Camp Mustache and if I will attend this year. Yes, I will. Already signed up, but have not purchased the airline tickets yet. It feels so final like I gotta go once the tickets are paid for. Until then there is always a glimmer of hope I can find a way to weasel out.
Several people have asked if I went to Ecuador with Pete, an annual event he seems to enjoy. No, I have not. The same several people ask if I plan on going. No, I am not. Why not? they ask. Every reason I give only brings more questions of, Why? Eventually I say, “Because I refuse to leave the northern hemisphere.” It stops the questions. People have a hard time believing how much I hate travelling.
This all ends badly, you know. At some point in the near future I will be sitting grumpily in a plane looking out the window and watching the earth turn slowly below, pointing, “Hey, wha’da’ya know? The equator.”
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Back in the early 1980s a CPA named Herb Vest had this crazy idea to merge the investment and tax preparation fields. By the 1990s both HD Vest Financial Services and your favorite wealthy accountant’s tax firm were hitting full stride.
My first career choice was not tax preparation or accounting, it was financial services. I fell in love with the stock market crash of 1929 my sophomore year of high school and from that point on wanted to be a stock broker. Tax preparation was a seasonal job I preferred over working all year long, putting the stock broker idea on hold. Besides, I invested most of my income and the library was filled with great books on the stock market and its history.
I sometimes play a little game with people to prove most tax returns are prepared wrong. Before any tax professionals reading this start writing nasty comments I confess I also make errors on tax returns. I get it. Tax season is more triage than solid tax planning. However, once tax season slows down it is time to put your tax preparer to work saving you money, building your net worth, helping you with early retirement and making your life easier from a financial and investing point of view.
Certain errors on a tax return are understandable. Maybe you did not know the tax law or you forgot to tell your accountant about a certain income or expense. Other errors are unacceptable. These include transposed numbers or forgotten elections. This is sloppy tax work and it drives me insane. Anyone plugging numbers on a tax return must review their own work and reduce the number of issues on the return to zero before sending it to the final reviewer.
The game I mentioned at the beginning of today’s lesson involves people bringing me their tax return without any receipts or other tax documents and by glancing at the return tell them if their tax return is correct or wrong. Over half are wrong. Then I ask a few short questions. The answers confirm my suspicions and provide a solution. With the new information in hand I send the client back to their regular tax preparer to amend the tax return.
When I was a little boy I loved watching the stars and dreaming. Then I grew up and, for a short period of time, lost the awesome wonder of the universe. Truth is I lost sight of the big picture for a better view of the small picture.
In the early years of my marriage we forwent cable television. The local free channels were enough entertainment for us. Even after children entered the scene the TV remained free. Massive wealth later caused me a moment of insanity where cable TV entered my home; a decade later it was gone.
An addiction to football* grew in me as I got older. In my defense the football game was nothing more than background noise as I worked around the house, garage or barn. But addictions have a habit of taking over a person’s life. Soon I was watching several games on Sunday and college ball on Saturday. And don’t forget the Monday and Thursday night games. If they had a Tuesday at two in the morning game I am sure I would have tuned in.
Last year I inherited a client with 23 years of unfiled tax returns. Normally I enjoy multiple years of unfiled returns. The extraordinary number of years in this instance put me at risk of potentially preparing a tax return by hand for the early years and the tax return contained rental real estate, a trucking business and a farm. I have an allergic reaction to preparing tax returns by hand; it brings up memories of my early days in the business.
The exact year eludes me when we converted the office to 64 bit computers. Old tax programs only run on 32 bit systems so I keep an old computer at the home office for just such an occasion. I had to check the old computer to see if I still had a tax program available all the way back to 1992. I breathed a sigh of relief when I found I did.
The box of paperwork for all 23 years was huge. I lugged it upstairs and fired up the antique computer. The hamsters took a while to get up to speed, but it felt good to visit an old friend. The tax returns peeled away, one after the other, until it was break time. Rather than take a walk I decided to see what goodies I had hidden on the old desktop tower.
A familiar icon was tucked in the lower left corner of the screen; a blackjack game created to mimic real life casino play. The program was built to train card counters and I acquired the program due to a fluke accident.
Charlie Munger, the right hand man of Warren Buffet at Berkshire Hathaway, is quoted as saying he never met any wise person who did not read a lot. Reading is how we learn about the world around us. We live better when we educate ourselves. Every year I read 20 – 30 books of substance and a handful of entertaining novels I think have a value lesson to teach. Reading is as important as breathing. Many of the greatest books I’ve read were introduced to me the same way you are being introduced to books here, from a blog.
This list is by no means comprehensive. Periodically I will add more posts with a list of books I feel are significant. Most of you have already read several books on this list. No surprise there; people interested in bettering themselves will discover these gems on a regular basis all on their own. There will be a few you have not heard of and now is your opportunity to add to your wealth of knowledge.
There is an interesting stream of questions hitting my mailbox. My recent suggestion to cut back and retire early has led to one interesting question. I recommended cutting back to a part-time seasonal job and enjoying all the free time. I used tax preparation as a business idea perfect to live the relaxed lifestyle. CPA’s and other tax professionals came out of the woodwork with the same question: How do you get clients?
Getting clients has always been the easy part for me; finding qualified people to help me with the abundance of clients is a different story. What I am sharing today is something I charge a minimum of $3,000 for a personalized plan to increase your clientele. For free I’ll share my business growth story and few example businesses to help you create your own growth plan.
In the Beginning
Starting a business is always the riskiest time. All the start-up costs strain working capital while you have the least community recognition and the fewest clients or customers. Advertising can be a budget killer which leads us to:
Keith’s Rule # 7: If somebody is selling you on a great advertising idea it rarely works and costs plenty, while your own cheap promotional ideas frequently work.
Last year I attended a conference forty miles east of Seattle. The venue was nestled in a wooded area with hiking trails and mountain climbing. Meals were provided and some of the best home cooking I’ve ever eaten. I was honored with an opportunity to speak at the conference and made several new friends and gained a few new clients. I’m headed back again this year with a new presentation ready to go.
I was one of the first speakers at the conference and word soon traveled that I had a pretty good offering. The only thing I can think of is I made taxes into an interesting subject. (Taxes are boring until you hear how much you can save on yours. Then taxes are the most interesting subject in the world. Go Figure.) More people wanted to be my client than I could handle. The rest of the day I was grilled non-stop with tax questions. There is a real hunger for good tax advice out there and only one me. Exhaustion set in by the end of the day.