Archive for April 2016

Living Without Money, the Spending Fast and Buy Nothing Day

51bWz-LER7L._SX322_BO1,204,203,200_The Western word is being destroyed by a select group of people determined to live within their means. From artist Ted Dave and his Buy Nothing Day movement to Daniel Suelo who decided to live without money to Jeff Yeager and his spending fast to Mr. Money Mustache and his grand scheme to keep spending low, even when income rises, we face the greatest economic crisis of our generation. Or are we?

All too often we act as if the economy were an actual living being. It is not. The economy is only a construct of the human imagination. Can you image any animal living in crisis because their local economy collapsed? Even humans, thousands of years ago, did not worry about this crazy thing we call the economy. Somewhere between there and here we convinced the vast majority of people they are duty bound to feed this imaginary beast.

Spending lubricates the beast. It does not matter if the spending is on stupid stuff. Buy a Hummer and save the economy, they say. That was the mantra a decade ago. Remember the government’s response the 9/11 attacks? We were encouraged to keep spending to show the terrorists we would not be affected by their actions. But the terrorists did win! They got us, as a group, to engage in insane spending habits sure to destroy the one thing we worship above all others: the economy.

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Valuation: Warren Buffett Style Investing

Book only.

Book only.

In the course of my work I am frequently asked to place a value on a business a client wants to sell or acquire. There are several ways to determine value in such situations. Today we are going to focus on the value of listed companies (stocks). Warren Buffett has stated most people should drop their money into an index fund and let it ride. If you are like me you follow Warren’s advice, but invest a portion of your money in individual stocks anyway.

There are numerous books on Warren Buffett and his style of investing. These books glance over the process Warren uses, focusing on tidbits of advice Warren has given over the years. Reading Graham and Dodd’s Security Analysis exposes how difficult it can be to value a company. Since Graham and Dodd, our understanding of value creation has grown and Warren Buffett uses the new analysis tools in his investing style.

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Work is a Four-Letter Word; Fun is Much Better

fishingAnother tax season is in the books as I write this. After thirty years in the business I am always surprised by how much my business grows and the industry changes. This year I received a major push from Mr. Money Mustache. His blog introduced a larger world to the crazy and wacky accountant from Wisconsin resulting in over 12,000 requests for help. Sure, I know the industry is understaffed and the level of super tax professionals is low and declining. But this was insane!

Another crazy tax season required your favorite wealthy accountant to work more hours than he cares to admit. It also requires a serious question: Why? Isn’t “work” a four-letter word to be avoided at all cost? It all depends. Do you like to golf? Golfing is work for me; for you, golf might be loads of fun. Tiger Woods plays golf for a living. Fishing also falls in this category. Fishing can be a lot of fun or work.

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File Your Taxes With a Missing or Incorrect W-2 or K-1

W-2As the tax deadline approaches we will discuss two problems preventing you from filing your taxes: missing or inaccurate tax documents. Some small employers forget to send W-2s preventing you from filing your taxes; other businesses may send incorrect forms. K-1s are even worse. With a K-1 you may not even know what the numbers should be and they always come late in the tax season.

There is a process in finalizing your tax return when information reported to you (and hence the IRS) is wrong. The IRS knows some tax reporting documents have errors. Unfortunately, the IRS computer only believes what it sees. Once information is reported to the IRS you need to make sure you tell the IRS computer what it wants to hear or you will end up in IRS hell getting letter after letter while the IRS employee working your case is never available. The best course of action is to avoid the IRS letter or audit in the first place. There is a process to fix wrong information at the IRS.
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File an Extension to File and an Extension to Pay Your Taxes

20160414_091410Today’s post is for my U.S. readers only. Sorry.

Extension to File

The tax due date is fast approaching. This year your tax return or extension is due by Monday, April 18th. If all your paperwork has not arrived or you are unable to file your return by April 18th, file an automatic extension with Form 4868. Here are some tips about an extension to file: Read More

Know When Not To Do It Yourself

I did not have the equipment of expertise to handle a mound system on my own so I called in the troops.

I did not have the equipment or expertise to handle a mound system on my own so I called in the troops.

The DIY movement is alive and well. Taking the bull by the horns and getting a job done can save massive amounts of money. Early retirees get to their exalted status because they kept costs low. Frugal people are drawn to DIY projects like flies to honey. With so many people undertaking projects on their own it is time to ask an obvious question: Should you be doing that project on your own.

I have seen some really bad DIY jobs over the years. Buying a large number of rental properties over the years revealed some doozies. Still, I handle a large percentage of jobs around the office, home and farm on my own. There are times I do need to take a knee and bring in somebody with experience.

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12 High Income Part-time Seasonal Jobs

20160407_071533Early retirement comes faster when you have a plan. A frugal lifestyle is the first step; the second step is a high paying part-time seasonal job allowing you a retirement lifestyle with a modest amount of work to cover living expenses. Regardless your net worth, you can semi-retire at any time with the game plan outlined here. Below I highlight twelve high paying jobs you can use to start your retirement today. I have clients in each job earning $30,000 or more per year working part-time. Since $30,000 is more than enough to live a phenomenal lifestyle, the jobs below are a great way to live the good life starting now.

The great news is that you can earn even more than $30,000 per year with the jobs below. No matter where you are on your road to financial independence you can step off the treadmill of traditional work and start spending more time with family and friends. Modern technology has made it not only possible, but easy, to live off a small number of work hours. The basics are covered by a few hundred hours of work per year. Everything else is extra wants. The same technology handles so many of our daily tasks freeing more time for personal development.

The risk you have with these part-time seasonal jobs is how fun they are. If you do not watch yourself you will soon be working more than part-time and more than seasonally. (We will not mention any names, Keith.) In those cases you should break six figures. If you go more than part-time you can use the excess cash to wipe out debt and fully fund your retirement accounts. I do not recommend such a hectic lifestyle. If you choose that course you will be in a position to stop working forever in five to ten years.




Tax Preparer: For some reason this is my favorite idea for a seasonal job. The main problem a tax preparation business has is how many people will want your services. It can easily take over your life and create massive amounts of cash every year. A bedroom or remodeled basement in your home is all you need to open a tax practice. In most states you don’t need any special licenses or schooling, but I recommend educating yourself so you provide your clients with the highest level of service. A tax preparer with 100 clients can make a solid income. Individual tax returns are around $250 in most parts of the U.S. while business tax returns go from $500 and up. Some of the business clients will need bookkeeping and payroll services too; these clients are worth thousands per year. You can farm out the extra work or hire a CPA or enrolled agent. A good mix of tax returns should average $400 per return (more for corporations and partnerships and less for most individuals). Your tax preparation revenue of $40,000 with another $10,000 per year for sideline accounting work will require a few hours of work per week for nine months of the year and maybe 4 or 5 hours of work a day for the 10 weeks of tax season.

Retirement is earlier than ever with these 12 part-time seasonal jobs with high pay. The perfect side hustle mixes vacation travel with income producing hobbies.  #wealthyaccountant #hobby #sidehustle #earlyretirement #retirement #travel #vacationHealth Insurance Sales: Clients always amaze me. A twenty year old client of mine started selling health insurance years ago, working only two month per year. He loves hunting and fishing and spends his entire day outdoors in such activities as long as hunting or fishing season is open. In Wisconsin there is about a two month gap where neither hunting, nor fishing is allowed (or so I have been told). During this two month window my young client sells health insurance like a wild man. He works long days talking with small businesses helping them set up health insurance. In two months per year he earns over $60,000. Not bad for a single young guy. (Ladies, I cannot disclose client names.)Then he focuses on the important stuff for the next 10 months.

Consultant: I see more and more consulting businesses every year. The IT industry is filled with consultants and consultant-like businesses. The number of clients in my office consulting in retirement is growing double digits every year. The income is excellent too. I see part-time consultants earning six figure incomes. Consulting covers every possible facet of business management and sales. I can’t tell you what to consult on; each person has their own sets of unique skills. What I do know is you have something of value to share with businesses or individuals. By reading this and similar blogs you are setting yourself up as a life coach, a perfect consulting job. People in sales can consult with a number of businesses helping them grow their client list. The list of consulting ideas is endless.

All the stuff you do for fun can now provide income. You already know what you love . Why not turn it into a side gig or hustle. 12 ways to earn extra money. #wealthyaccountant #hustles #sidegig #extramoney #money #fun #play #vacationDrop Shipping: This is a unique kind of part-time business I probably have the name wrong on. I can give an example of a client I have. He works out of his home and connects businesses with the supplies they need. For example: a company needs a large quantity of a certain chemical and he finds another company with that chemical for sale. He brings the buyer and seller together and makes a profit from the transaction. You can expand on this idea for almost any product. Another example: you could find a quantity of paper and offer it to accounting firms anywhere in the country. The company with the paper handles the shipping. My tax office has not paid for paper in over ten years due to a clients doing what I just said. Because of his huge volume he kills the competition on price.

Crafts: For people who love to create beautiful things with their hands a craft business is the perfect idea. One of my clients provides fabric to people for crafts and earns over $300,000 per year. The abundance of craft fairs, Etsy, eBay and Amazon are only a few of the outlets for selling your handiwork. This idea extends to caricatures and specialty gigs. Putting extra cash in your pocket on a pleasant summer day as people pay you to sketch a caricature of them is a great way to pass the time and meet wonderful people. It is only a matter of time before a wealthy family or business wants you to paint the family portrait or a mural for a massive fee.

Painter: Anyone can paint their own home, but most prefer someone else to do it. The demand for interior painters is huge. You can hook up with contractors to get a steady stream of work. Drywallers are a perfect source of referrals; when they finish their work the painters come in next. A quick introduction to the local apartment association will provide you with more work than you want. To lighten your workload and supercharge your income, you can hire a team to get the work done while you are out bidding on more jobs. Even if you want to work alone you can make up to $40 and more per hour. Not bad for a quiet day brightening room after room with beautiful colors.




Small Farm Growing Specialty Items: Your favorite accountant is victim to more than one of these part-time jobs. (What else am I going to do with all my free time?) I grew up on a dairy farm and it is hard getting it out of my blood. For the first time in over 15 years I don’t have steers due to cattle pricing issues. I still have chickens and several gardens. Specialty items make more money. Flowers seem to do well. My parents make a nice side income selling flowers they grow on their 15 acres of the world. Mushroom farming can take place in a barn or even a basement. Farming is seasonal work, especially if you get away from milking cows. Crops are a spring through autumn job.

61Twbn88OcL._SX401_BO1,204,203,200_Truffles or Ginseng: We are lucky here in Wisconsin since ginseng grows wild in these parts. There are regulations in the state as to how much wild ginseng can be harvested. The growing conditions are ideal in many part of the U.S. for cultivated ginseng. The work is light except during harvesting. With ginseng selling for $600 – $1,000 per pound it does not take long to generate a modest seasonal income. Understand, ginseng is small and it takes a lot to make a pound.

A few lucky areas have truffles. Digging truffles is great exercise and the right truffle can sell for significant sums. I am unfamiliar with the truffle trade, but I believe truffles can be a lucrative seasonal job, same as ginseng.

Forensic work: There is high demand for several kinds of forensic work. Here I am specifically speaking of forensic accounting. Attorneys and estates are always looking for unclaimed accounts. Landlords would love to collect on judgments. For seven years I ran two hedge funds designed to collect what banks could not. This is one of those seasonal jobs that can easily take over your life. Once you have a reputation for results you will have more work than you want. Revenue from forensic work can reach to 50% of collections. You can start by speaking with your local apartment association, attorneys, and small businesses. Most have accounts they would love to have help collecting on. Helping individuals find lost accounts is also satisfying.

Do you things you want and get paid for them. These 12 high paying part-time seasonal jobs give you the freedom to live the life you choose. #wealthyaccountant #freedom #lifestyle #parttimejob #seasonaljob #sidehustle #sidegig #hustles Hunting/Fishing Guide: Here is a seasonal job that turns play into income. If you love the outdoors, guide services are for you. You don’t have to stop with fishing and hunting. Guides are needed for all kinds of outdoor adventures. A junior accountant in my home is spending the summer leading a group for Girl Scouts. Room, board and meals are all provided, plus a paycheck. Looks like someone in my household will be packing it away in the First National Bank of Wallet this summer.

Speaker: Good speakers can make massive amounts of money. Speaking is easy, fun, and you meet lots of awesome people. I generally speak 5 – 10 times per year around the U.S. I speak at Goodwill Industries one or two times every year locally. Fear of speaking keeps many people on the sidelines when they could be sharing their knowledge and experience with the next generation of people in their line of expertise. I speak on early retirement, personal finance, time management, writing, and, of course, taxes. If you can turn a difficult subject (think taxes) into something entertaining and educational you will be a hit. Since I hate travelling this gives me a reason to get out there, see places, and have something to do while there. Unstructured vacations drive me insane. Now I get to travel and remain sane. Lucky me.

Blogger: I have been blogging for about 10 years now. In the beginning I used content farms like HubPages and free services like Google’s BlogSpot. You can make money on virtually any subject. A few years ago I ran across a subgenre of flash fiction while researching a medical condition my daughter has. I discovered this small group of blogs had massive traffic and nobody was monetizing their sites. I could not leave well enough alone. My flash fiction* blogs generate over 2.5 million page views per year now and enough income to get me through the worst of times if everything else went south. The Wealthy Accountant is a little different. I hired a web designer to set the whole thing up. In less than two months this blog has about 500 page views per day and brings in a few dollars daily, too. Here are my rules for creating a profitable blog:

  • Build content. Traffic does no good if there is only one post to read. Spend six months to a year building content before pushing for massive traffic.
  • Build traffic: Once you have content it is now time to get serious about traffic. The blog traffic discussion is left for another day.
  • Monetize: Once you have content and traffic it is time to monetize in a serious way. Even modest traffic can generate $50,000 in revenue or more. Like traffic, monetization is left to a future blog post.

There are endless ideas when it comes to high income part-time seasonal jobs. We don’t have to work long hours to make ends meet. It takes very little to pay for the basics. More time with family and friends is important. Yes, I know I spend a lot of time preparing taxes. It makes me happy so I continue, tax season stress and all. It could be worse; I could have nothing to do and spend my days with a beer in one hand and the remote in the other.

 

* Flash fiction stories are generally under 500 words and sometimes even under 100 words.

 

More 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?

Side Hustle Selling tradelines yields a high return compared to time invested, as much as $1,000 per hour. The tradeline company I use is Tradeline Supply Company. Let them know you are from The Wealthy Accountant. Call 888-844-8910, email Darren@TradelineSupply.com or read my review.

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 very much!

 




The Best Kept Secret of Early Retirees, the Wealthy, and Happy People

The best kept secrets of happy and successful people. #earlyretirees #happiness #happy #Success The day is April 2nd, a Thursday. A small bar attached to a bowling alley next to the college has Happy Hour until 7 p.m. A young man who would someday be known as the Wealthy Accountant attended Macro-Economics at the college across the way. Class was held on Tuesday and Thursday from 5 p.m. to 7 p.m. A group of students, led by the junior wealthy accountant, ambushed the professor, convincing him to cut breaks short and end class at 6:50 so the group could race to the bar called The Image before Happy Hour ended. It was important to the students to make Happy Hour. The Image had free tacos if you bought a drink and a full meal for the price of one soda was one heck of a deal.

Our junior wealthy accountant had his own home at this time and spent his days reading library books. Years before he was engaged to be married and found his fiancé in bed with another man. He withdrew from life knowing how important it was to find the right woman to share his life with. He wanted someone in his life, but had given up hope there was “the right” woman out there for him. So he kept reading all day, attended a few college classes and enjoying life as it was.

*  *  *

A demure young woman ran a daycare out her parent’s home. Her fiancé attended college at a campus on the other side of the state. He informed our demure young woman he found someone else; the wedding was off. She withdrew from life, spending her days taking care of children. By now she was working for a larger daycare center so her parents could have their home back.

Our demure young woman had a sister-in-law that felt it was unhealthy for our heroine to spend so much time at home alone. After adequate harassing she agreed to go out for a drink at The Image. The day was April 2nd. It was 29 years ago.

*  *  *

Our junior wealthy accountant was not demure. After washing down a plate of free tacos with a glass of Sprite he noticed a quiet young woman sitting with a friend next to the dance floor. It was a Thursday night so the crowd was thin. He approached the young woman and asked for a dance. She accepted. After the dance he asked the young woman her name; she refused to answer. The accountant was unable to secure the young woman’s name, address or phone number. There was only one chance. “Can I see you here next Friday?” All she did was nod.

The next Friday our hero waited anxiously at The Image praying the young woman would return. When she walked in his heart stopped. They danced and then left the bar for a table in the bowling alley where you could hear a person talk. It did not take long for our couple to discover they had a lot in common. One year and six days after their first meeting they were married. They are celebrating 28 years of marriage this week; they have been married to each other longer than they have not been.

*  *  *

What makes a person happy? What traits do wealthy people have in common? Is there commonality between happy people, wealthy people and early retirees? The answers are so simple most people miss them.

Bill Gates recently revealed in an interview, marrying his wife, Melinda, is the single greatest decision he made in his life. I understand what he means one-hundred percent. Marrying Sue has been the single greatest thing I ever did. No amount of money could ever replace what my relationship to that demure young woman has brought me.




The Secret

Happy people, early retirees and wealthy people do have a common thread running through them. Millionaires, according to The Millionaire Mind, by Thomas J. Stanley , tend to be married for a long period of time, tend to live in the same house forever (see Warren Buffet) and are frugal even after they achieve massive amounts of financial wealth. It seems wealthy people are happy for reasons other than money.

Early retirement is possible with a plan. Planning is the one thing you control. #success #earlyretirement #FIRE #marriage #wealth #happinessKeith’s Rule # 9: Money cannot make you happy, but it can make you miserable.

I love the story of the wealthy businessman who loved his wife so much he transferred a significant amount of his wealth into his wife’s name. He had his attorneys write up all the paperwork. He wanted the love of his life taken care of no matter what happened to him. Once the transfer was complete he told his wife what he had done. His wife smiles and says, “That is nice, dear,” as she continues clipping coupons at the kitchen table. The money meant little to her; she had her wealth sitting across the table from her.

Okay, Bill Gates tells us his best decision in life was marrying his wife; Warren Buffet has lived in the same home for decades. So is that the secret? Marry the right person and live in one home forever? These things can make you happy, but it does not satisfy the wealthy part or early retiring part. Happiness is the most important of the three so I think we have a trait or two happy people seem to possess in higher levels than the population at large. Now we need to dig further to find the best kept secret of all three types of people: the happy, the wealthy and the early retiree.




Keith’s Rule # 10: Be happy with what you have; it could be a whole lot less.

Desire, lust, coveting and ego are acid to happiness and wealth. Wanting something is one thing, but to always want more, to never be satiated, is the perfect prescription for unhappiness and poverty. Well-adjusted happy people tend to put up a hand and say, “Enough for me.” Happiness comes from inside not from out there. No amount of stuff will ever fill the void. I know a demure young woman that filled a void I had. I was never foolish enough to think money or stuff would do it for me. Good thing. If I did I would not be celebrating 28 years this week.

Wealth should be no secret. You can achieve your dreams. Learn from those who have done it. Simple personal finance strategies can make financial independence come true.#dreams #wealth #money #personalfinance #financialindependence #secrets #marriage #spouseThe secret is frugality. Think of it. People get divorced because they fall out of love or some other crazy reason. There are valid reasons to divorce, but those reasons apply to a very small percent of marriages. Frugal people are happy with what they have, including their significant other. If you are never satisfied with what you have you will eventually want a new person in your bed, too.

Several years back I had a personal trainer help me rehabilitate a bicep I blew out while butchering chickens. After a while she started saying rude things about Mrs. Accountant and suggestive things to me. It did not take long to find a different personal trainer. It ended badly for her. Her fiancé (ring and wedding dress already purchased) found out she was playing the field (she was sleeping with the assistant manager of the gym) and promptly ended the engagement. Do you think she found happiness? Now she is marrying the boss, but deep down inside all parties know she is willing to exchange men in her life at the drop of a hat. Until she is happy with what she has she will always be miserable and in fear of being found out.

Happy people do not need more stuff; wealthy people are wealthy because they realize they already have enough; and early retirees achieved their goals by saving first and spending only a fraction of their income. I encourage my clients to save 50% of their gross income. They usually give me a look. I am more the Crazy Accountant to them than the Wealthy Accountant. It is a truism that frugality will get you through almost any challenge you face in life. Desire for stuff leads to debt and debt is a terrible taskmaster to have.

Here are a few guidelines for a life of happiness, wealth and even early retirement if that is your goal:

  • Marry the right woman (or man). I understand some people do not want to be married or in a relationship. It is okay to live single. Instead, have good friends. Most of us want a significant other in our life. Choose well and make it last a lifetime.
  • Keep the spark in your marriage. After 28 years I still chase Mrs. Accountant around the house. (Was that TMI? Sorry. I still find my wife the most desirable woman on the planet. I refuse to change or even entertain the idea. I have what I want.)
  • Save first, spend later.
  • Be happy with what you have.
  • Don’t house hop. It is okay to move as long as there is a valid reason. Transaction costs on the transfer of any asset digs into your net worth so move only when it makes sense to do so.
  • Always know you have “enough”.
  • Meditate every day on how lucky you are. You are lucky!
  • Read good books!
  • Love the significant others in your life. Kiss and hug your wife (or husband) every day no matter what. Do the same with your kids; I kiss my girls on the cheek or forehead every day and tell them I love them; Mrs. Accountant gets a big sloppy smooch. Tells your parents how much you love them while you still can. Tell your friends how much you care while you have the chance.
  • Take your loved ones on a walk and hold hands.
  • Gaze into each other’s eyes.
  • Accept the gift of life you already possess. You have already won.

 

More 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?

Side Hustle Selling tradelines yields a high return compared to time invested, as much as $1,000 per hour. The tradeline company I use is Tradeline Supply Company. Let Darren know you are from The Wealthy Accountant. Call 888-844-8910, email Darren@TradelineSupply.com or read my review.

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 very much!