I am writing this as I sit in the Seattle airport waiting to go home after a long weekend at Camp Mustache 3. (More on Camp Mustache later in the week as I write a roundup post.) The weekend was nothing short of incredible. The people I met and the stories shared have me tingly all over. One of the events of the weekend is climbing Mount Si. While climbing the hill our group talked and shared more stories about our lives. These get-togethers always entail a lot of “Where you from?” questions. While I was climbing Mount Si I was asked how I met Mrs. Accountant. I have a blog post in process on how to build a long-term, fulfilling relationship; today I want to focus on how to find the ideal mate.
Twenty nine years ago I was still taking a few college classes here and there. Our story deals with Macro-Economics class. Class was from 4 pm to 7 pm, Tuesday and Thursday. Next to the college was a bowling alley and bar called The Image. The Image had Happy Hour on Thursday until seven. Several students, the Wealthy Accountant included, talked the professor into ending class a few minutes early on Thursdays so we could catch the tail end of Happy Hour.
Thursday Happy Hour at The Image had two advantages: $1 drinks and all the tacos you can eat. As a frugal college student I bought a soda and loaded my plate with tacos. For one dollar I could enjoy dinner with friends. My tightwad nature brought me to The Image for the fantastic deal. Other people with similar attitudes attended.
One special Thursday on April 2nd, 1987, a quiet young woman also enjoyed the Happy Hour deal at The Image. The details are important, but not to this story. The result is I met Mrs. Accountant, married her one year and one week later and stayed married for the next 28 years and still run strong. I found my perfect mate at a bar. Neither Mrs. Accountant, nor I frequent bars. It was only a chance encounter over a low cost dinner option that crossed our paths. If not for our frugal ways we would never have met.
Mrs. Accountant and I share many similar values. We have different interests, of course. Our values brought us to The Image that fateful evening. It is no surprise I found a soul mate there. People with similar interests and values frequently cross paths. When you are dragged someplace you are uninterested in you are less likely to find that special someone. It is not impossible, just less likely.
A life-long relationship happens when two people with shared interests move forward together. The odds of meeting increase exponentially when you congregate where you are most happy. A religious person is most likely to find the perfect mate at church or other religious gathering; frugal minded individuals interested in early retirement have a good chance of meeting new friends and a mate at Camp Mustache; and a frugal college student bent on building enough net worth at an early age to pursue all the crazy ideas he has, has a better chance of meeting that special someone who will light his fantasies for a lifetime at a one dollar Happy Hour dinner at The Image.
There are other considerations. Mrs. Accountant and I are not connected at the hip. (I climbed Mount Si; she did not.) The strength of our relationship creates an absolute confidence in her. I never worry she will leave me or even temporarily stray. She can attend an event I am uninterested in and I encourage her to go. We share a common bond. Our values are similar when it comes to relationships, money, work, retirement, travel, children, etc. She has fewer crazy interests than me. I have an insatiable curiosity. Mrs. Accountant allows me to explore these interests without complaint or being judgmental. And trust me, I have some flaky ideas.
My perfect mate showed up when I least expected it. I swore I would never date anyone I met in a bar. Then the cute Mrs. Accountant showed up and the rest is history. In the next 29 years Mrs. Accountant and I have been in a bar less than 20 times. It was that one chance encounter that made all the difference to my life and the happiness I have.
Increase the Odds
My life experience is an example of how you can find a special someone to share your life with. Here are a few tips I recommend you consider:
- Keep your eyes open. When you least expect it your soul mate will appear.
- Attend events that move you. Don’t attend looking for a date; attend to satiate your mental lusts. It is at these moments where your mind is open and another like-minded spirit will brush into (and enter) your life.
- Don’t be afraid to explore.
- Talk with everyone at events that interest you. Appearance attracts the eyes; the mind attracts and connects the soul.
- Like-minded people attend the strangest events together. Always be mindful of the people you are with. Keep an open mind and share your stories.
I know it is tempting to rely on appearance. Looks age. The mind grows more beautiful with age; our bodies do not cooperate so much. Appearance will attract you into the first meeting/conversation. The actual conversation will cement the life-long relationship.
Closing the Deal
Mrs. Accountant and I did not consider what we were doing a business deal. Let me remind you, marriage is a contract. The day Mrs. Accountant and I met she refused to give me her name, address, or phone number. Smart girl! I begged her to return the following week. She did!
I invited Mrs. Accountant to leave the bar for a table near the bowling alley where the noise was less (you snicker here). We talked for hours. In a weak moment she gave me her name and phone number. As an accomplished stalker I discovered her address and showed up the next day. As fortune would have it her daddy did not greet me with a shotgun. We continued talking over dinner in her home this time.
The first night at the bowling alley cemented the deal. It was all over. The rest of our lives we would share. We both shared our life stories. Vast amounts of our lives interconnected. Those facts alone led us to believe we were meant for each other. Time has proven us right. After a few years of adjustment, we settled into a life where we never argue. We do not always agree, but we never argue. There is no need. We understand and respect each other.
If you are looking for a special someone to share your life with, consider my advice. Always talk. Start at day one and communicate. Build a strong connection. Share your story. Include the special someone into your future story. Dream. Dream together.
If you have found your soul mate, as I have, please share in the comments. I love a great story with a happy ending.
Cars are a leading cause of wealth destruction; they are also a necessary evil in our society. The only way to win the “car” game is to prepare for battle with a fully loaded arsenal. Today I am going to show you how I buy cars for $4,000 or more under Blue Book.
Before we begin battle you need to understand my car habits. I drive 6,000 – 8,000 miles per year, mostly for business trips. I bike to work around 100 days per year and drive another 100 days. The round trip to work is 30.2 miles. I always buy a used vehicle. Once I claim ownership of said vehicle I drive it for 15-20 years. There are two cars in the garage. This means I buy a car every 7 to 10 years on average. I keep my cheapskate skills honed by helping clients and family members engage in the same mischievous auto savings activities.
The Opening Salvo
In the past I have purchased used vehicles from owners, but my favorite victim is the local bank or credit union. In my neck of the woods the credit unions handle the bulk of the auto lending. Some of these loans go bad and the credit union takes possession of the vehicle. I am not picky about what I drive. If it starts and gets me from Point A to Point B cheaply I am a happy man.
My preferred target is approximately 1-2 years old, gets good gas mileage, has low maintenance issues, and has not been abused. An internet search can reveal issues with a make and model. Minor issues don’t bother me; major issues like the transmission are a deal breaker. The local credit unions usually give the car a safety check prior to selling. I still take the vehicle to a trusted mechanic to give it the once over to verify the car has no major issues.
You need inside knowledge I will share with you for the next step. The financial institution needs to unload that vehicle fast. The regulators do not want a wasting asset sitting on the credit union’s books for any lengthy period of time. If they don’t find a buyer fast it goes to auction where only licensed dealers (in most states) can purchase it. A vehicle at auction goes for a lot less than the credit union wants. In other words, you have a motivated seller (my favorite kind).
There are a couple of ways for the financial institution to facilitate a sale. The two most common are:
- Make an offer. They will haggle just like an auto dealership.
- Make an offer in writing and we will get back with you. With this method, the bank takes in all the offers and makes a decision in a few days.
Most banks use method two now, so we will focus on cracking that nut. First, the offer is non-binding. If the bank insists it is binding I give them 12-24 hours to make up their mind. I prefer a non-binding offer since I can bid on several vehicles they have available; on the vehicles they respond to, I can choose the best offer. Regardless, never make an offer valid for more than 2-3 days. Don’t worry, if they are still interested in selling to you they will call even after the offer expires.
Before I make an offer on a vehicle I take it for a test drive. Each car I am interested in after the test drive gets looked over by me first and a mechanic second. You can have a trusted mechanic check the auto or if you are lucky like me, you have a neighbor who has a small auto shop in his garage.
The test drive is over, the mechanic found the car in good shape, and the credit union called to say they accepted my offer. At this point I know my offer was the best, but I don’t know by how much; my offer may also be the only one. I agree to meet with the banker. With a million dollar smile I tell my friendly banker I am no longer interested in the car. The reason: my research online indicated it is worth less than the offer. In half of the cases the bank only has one offer, yours. If I back out of the deal this thing is going to auction with a massive haircut.
Large purchases are more emotional head games than true purchases. The bank wants out bad and fast; I want a sweetheart of a deal or I keep driving the Junker I already own. I am always polite working with the bank officer. I am their friend. I also know the guy trying to unload the vehicle is frequently the guy who wrote the bad loan. People are unfairly motivated by the site of cash and I use that to my advantage.
To finish the process I will share my last auto purchase from a local credit union. I own a 2001 Honda Accord (purchased from an employee in 2003) and a 2007 Toyota Camry (purchased from the credit union in 2008). This is the story of how I became the owner of the Camry.
The offer was accepted after the offer expired. (Surprise! Surprise!) The Blue Book on the vehicle was $14,850 at the time; my offer was for $10,800. I smiled and told the banker I was no longer really interested in the car unless I could steal it. He said the offer was $10,800 and that was all he was authorized to accept. I said I will pay $9,500 or it is not worth putting another vehicle in the garage. He started chocking on his tongue. He also said the credit union was taking a loss on the vehicle as it was. I replied I was not in business to guarantee the profitability of every loan the credit union makes.
Here is where psychology takes over. I softened the poor guy up, now it was time to go for the jugular. I ask the banker if it would make a difference if I took a loan so the credit union could recoup some loss by collecting some interest. Only once in over 30 years did they say yes, take the loan. (I did take the loan and paid it off in full less than two weeks later. I did save another $800 in that instance.) With the loan issue out of the way I unleash an unfair mental manipulation: Cash. I bring cash with me to an auto purchase. The sight of cash creates all sorts of effects on the seller. Even bankers fall for it.
I dig into my bank bag and pull out $9,500 in hundred dollar bills and count it out on his desk. “This is all I have,” I say. “Take it or leave it.” By now the banker is as white as a ghost. He still claims there is no way to close the deal at $9,500. “Well, how much then?” The banker came down to $10,500. I explained to the banker that if I walked the car goes to auction where my offer will look like a King’s Ransom. I also explain that if by some miracle he sells the car before auction they will lose another month or more of time value. I make up some BS lost interest number at this point. The banker stuttered a bit more and said $9,800 was the best he could do.
His shoulders slumped. I knew I had the best offer. I pulled out my wallet and added $300 more to the $9,500 already on the table. I win.
It does not always go this well. My average auto purchase is around $4,000 under Blue Book. A decade ago I had an itch for some fast cash and bought a small number of vehicles, drove them for a few months and then sold them from my office parking lot for more than I paid for them. (Someday I’ll tell you the story of the cute little Z28 I drove for one summer.) Unfortunately, in Wisconsin, if you sell more than four cars a year you are a dealer and need to be licensed. Well, it was a good idea for a year! I went back to my old ways; buy’em and hold’em forever.
Once you own a vehicle it is time to make them last. In northeast Wisconsin we can have snow and ice six months of the year with a guaranteed four months of such weather. Salt and sodium chloride on the roads wreck havoc on cars. (I once had a car where I needed to replace the gas tank; it had rusted through.) Making a car last 15 or so years is a challenge. Your climate will require modest changes, but what I do has worked for me in a harsh winter climate.
Here is how I maintain my vehicles:
- In the summer I wash the car myself by hand; in the winter I also do it myself if a warm spell shows up. Otherwise, the car does not get washed much.
- I change the oil like a religion. I read the owner’s manual and follow the recommendations. Most cars can go 5,000 to 7,500 miles between oil changes now. I follow other maintenance requirements, as well. I change my own oil, but enlist my neighbor mechanic for issues like tire changes and brake jobs.
- I drive sensibly. I refuse to pound my car.
- That is it. Nothing special. Drive intelligently, change the oil, and give the girl a bath every so often.
Buying a car is not that bad. You can get a reliable vehicle at a cheapskate price if you know how. Cars today last a long time if you change the oil. The cheapest car is the one you never buy, so maintaining your mode of transportation is vital.
Remember the two cars I own? The Honda is getting old. She runs like a charm, but the body is really getting bad. Salt will do that. Soon I will visit my friendly credit union. I know they will be prepared for me. It will make no difference. They are a motivated seller with nowhere to go and I am armed to the hilt when I come knocking for a deal.
Am I acting in an unfair manner? I guess that all depends on if you are in the market to buy a car or a bank with a repo on your parking lot.
Many years ago a young man entered my office wanting to see me. He had a fan folder filled with documents and needed his tax return prepared. In a weak moment I allowed him a meeting without an appointment. As I always do with a new client, I started to ask questions. It is my firm belief that you must know your client before you can help him.
Opening a file for a new client requires their Social Security Number. He questioned my need for this information. I explained how I cannot even open a file for him without the SSN. He grudgingly provided the number. As I continued asking questions to understand my new client I was met by a wall of resistance. Finally, the young man had had enough of my questions. He informed me I was on a need to know basis, to which I replied, “You need to know you need to leave.”
The IRS sends agents to accounting offices periodically to test accountants, practices and procedures. After digesting the meeting with the young man I came to the conclusion he was an IRS plant there to test me. Accountants under pressure to build a client base may succumb to temptation. The IRS wants to know which tax professionals are willing to step over the line when pressured by a client.
For some reason I do not feel pressured to cheat on taxes. The tax code is filled with too many opportunities to reduce your tax load without cheating. Savers also have less incentive to cheat as they are treated preferentially by the tax code. I am only interested in the correct answer, not a certain result. If you owe money, you owe money. We can work on ideas to lower your tax bill going forward, but what is past, is past.
Attorneys, doctors, and accountants all need to know their client before prescribing.
Keith’s Rule # 14: Prescription before diagnosis is malpractice.
Knowing the client takes more time in the beginning than the actual preparation work. Some of the learning takes place by undertaking a deep review of the paperwork provided. Most details about a client, however, is gathered by questions. My files are filed with copious notes on clients. Before I prepare a tax return I review notes from past years.
Why is it so important to know your client? It may seem obvious for a doctor. Can’t a tax pro just plug the numbers and go? Sure, if you are a data processor. My clients want more from me and I provide it.
There is a more important question, however. If knowing my client is important, how much more important is it for you to know yourself? The questions I ask are vital in helping me prepare an accurate tax return and provide appropriate advice. You need to have an equally intense Q&A with yourself to understand what you really want in life. Without a full examination of your personal goals and values you will never get the results you want.
The questions I have when meeting with you will be different than the ones you will need answered by yourself. You need to ask and answer certain questions only you can answer. By answering these questions you will gain a deeper understanding of what is really important to you. Here are a few sample questions:
- When do I want to retire?
- How much do I need to retire?
- What will I do in retirement?
- What really makes me happy?
- How much stuff is enough?
- Family? How can I have an awesome family life?
- What interests me most?
The above questions are only a starter. The questions you ask will lead to other, different questions. Maybe you want to reunite with your children or spend more time with a significant other. Others will be focused on early retirement or travelling. For the same reason I ask my clients different sets of questions after I get the basics down, you will also have questions unique to you. Allow your mind to go where it wants. Don’t force it. By having a productive self-talk you will gain a better insight into your personal beliefs, interests, and passions.
Real Life Example
I have always been lucky. Things always seem to turn out right for me. A seeming disaster turns into a wealth of new knowledge I can use to better my life and gain more happiness. You can experience the same luck I have.
Growing up on a farm in rural Wisconsin is not a recipe for financial wealth, especially when the farm entered receivership the year I graduated from high school. Talk about plans going down the drain. It turned out to be a massive blessing. My life took a ninety degree turn the same time I entered adulthood. Without the family farm going under it is unlikely I would have ever entered the tax field. I would have missed all the great people I met along the way, including writing this blog.
Questions were very important to the young man I once was. A few years later I met Mrs. Accountant and married her at age 23. I asked serious questions of myself back then and also of my new bride. We discovered our values when it came to work, children, spending, and retirement.
By age 30 Mrs. Accountant fully retired. Our first child entered the world. It was important for mom to raise our daughter. It was through questions that we understood our values regarding children. Both my daughters spent the majority of their time with their parents rather than a daycare provider.
My values regarding my children were different from Mrs. Accountant. I enjoyed the kids much more when they got older. Eat, shit, and repeat never appealed to me. Cute never offset the reality. Still, I bonded with my girls. I held them, talked to them, and even changed the occasional diaper. Once the girls started walking I was all-in. Now we can play games and communicate! I kiss my girls, all three of them, every day and tell them I love them. My values differed from Mrs. Accountant, but were still of the same thought when it came to loving our children.
The same conversation early in our marriage revealed another value. Whereas, Mrs. Accountant is totally content at home with the girls, reading, playing in the garden, etcetera, I am not. For twenty years now I have promised I am going to retire, a real retirement where you sit around all day. I can’t stand it! I tried. I really did. It got so bad I started countdown clocks to help me prepare for the day I lost my work family. It did not work.
I gave up on countdown clocks. Questions allowed me to understand who I really am. I am a father, husband, and business owner. I am also the happiest person I know. Every breath is a pleasure. There are probably groups out there for sick people like me. I imagine the first meeting would go something like this:
I stand: “Hello, my name is Keith and I am a workaholic.”
The group in unison: “Hello, Keith.”
I continue: “Sitting around in this room jawboning is irritating. So, if any of you have a tax issue, or a business idea, or an investment question, I will stay as long as necessary to help you solve the issue.”
I sit. The room face palms while shaking their heads.
Was it something I said?
There are only a small number of issues that are really urgent: IRS letter, inheritance/death, purchasing a home, divorce (you would be surprised how many people I know who came this close to getting divorce papers and didn’t), and either buying or selling a business or major asset. Periodically something new shows up, but 95% of urgent calls fall into the above mentioned categories. Today we have a client purchasing a business.
Accountants are called “deal busters” for good reason. Whereas, the buyer has already convinced himself how great the deal it is, the accountant points out all the things that can go wrong and several things that are wrong with the deal. The accountant’s math is slightly different from the buyers. The accountant knows he will see this account a lot in the future if the business is purchased. A failing business makes for the worst clients (extra work and difficulty collecting fees). On the other hand, business clients are high margin accounts. Good accountants will pass on a lucrative account to avoid the problem clients.
Sellers are noted for exaggerating the value of their company. Buyers tend to believe what they are told and are easily distracted from damning numbers in the financial statements and tax returns. Good accountants ground their clients in facts. I personally work hard to take the shine off the business purchase. This is not a new toy or cash cow; it is hard work and commitment. I know I have done my job when the clients says, “It can’t be done.”
Once the client sees all the warts, it is time to bring him back from the helplessness of “can’t”. Can’t is a place of powerlessness. When you say you can’t do something you are removing all possibility of success even if you try.
Keith’s Rule # 12: Whether you think you can or you can’t, you are right.
I do not believe in can’t. Can’t is a four letter word never used by polite people. Can’t destroys dreams; can’t destroys all hope of any future. People ask my advice on so many issues that boil down to one deadly word: can’t. How many of these “can’ts” do you fall for?
- I can’t fix my marriage
- I can’t spend less
- I can’t save or save more for retirement
- I can’t find a job
- I can’t start/run a business
- I can’t find a quality mate
- I can’t eat better
The list goes on ad nauseam. Once you convince yourself you can’t, what else is left to do. Can’t in a marriage equals divorce; can’t in business equals bankruptcy; can’t in retirement planning equals living paycheck to paycheck until your body gives out.
Breaking Through the Impossible
Our excited future business owner above watches me systematically explain all the problems with the business he is interested in buying. I watch as he slumps deeper and deeper into his chair as I deflate his dreams.
Keith’s Rule # 13: Be a problem solver; a solutions guy.
The process I use to point out issues in the target business need to be used daily in an ongoing enterprise. When I point out problems I don’t feel they can’t be fixed. Most problems are fixable. By pointing out issues, my client can negotiate a better deal on the purchase. It is all a mind game.
Every success starts with a game plan. A long-lasting marriage didn’t just happen. The marriage was worked every day and nurtured. Microsoft did not just happen by accident. Bill Gates had a plan. He managed his company and continually tested and modified his plans. In a few a decades Microsoft went from startup to one of the largest and most profitable companies on the planet.
Pointing out problems is not a “can’t” issue. Clients come to me with problems all day long. Rapid fire, I provide one solution after another. When not in front of clients I read voraciously in a wide variety of fields. My reservoir of knowledge grows and grows. I may not have the perfect answer or preferred solution, but I have ideas. In my mind there in nothing I can’t do. (Pun intended.)
So many people have tax problems. There are answers to every tax issue. You may not like the answer, but it is a solution. When you do not like my answer it is because you say you “can’t” do what I suggest. Give me enough time and I will lower anyone’s taxes. Digging a hole with the IRS takes time to work out of, but it can be done.
The Death of Can’t
Doctors, attorneys, and accountants see a lot of things we sometimes wish we did not. As an accountant with over 30 years of experience, I have seen people with more different problems than I care to recall. In the first minute of our first meeting I already know if you will succeed or not with only a rare miss. When Goodwill Industries (FISC) sends me a client with significant tax problems it is easy to tell if the problems will be resolved. Here is how I can tell: if the clients want me to enable their behavior rather than change, they will fail. Major tax problems require drastic actions; not all of them will be fun.
Your entire life is the same. A failing marriage needs a dose of something different than what it has been getting. A failing business or rental property owner needs to consider alternatives, not double down on the same failed policies. No matter how good you are you need to reevaluate frequently. Things change, so do people. Mrs. Accountant and I are different people than we were the day we married. We evolved together. It was a conscious effort. Running a successful tax practice for 30+ years means the company evolved and was transformed many times over the decades. What I did 30 years ago to start my practice will not work today; it takes a different approach now. It can be done.
Change Your Words, Change Your Life
Words are powerful. The words we use when we talk to ourselves are even more powerful. Listen to your self-talk. If you find negative tones cropping up, it is time to quash them. The word can’t is a dead giveaway your thinking needs reworking. If the Egyptians could build the pyramids 5,000 years ago, if we can announce and then land a man on the moon in less than a decade, if we can travel to any corner of the planet in less than a day, you can solve any problem you have. Man has cured disease, lives longer, produces more food, lives better, and has more luxuries than ever before. You are blessed (and lucky) to live in such an awesome period in time.
Optimism is my default. Sure, I take it on the chin now and again. That is life; suck it up. Words can build my confidence or destroy all I hold dear. You must, as I do, remain vigilant in monitoring the words you use. People judge you by what you say and what you do. The right words can land your dream job or destroy any chance of getting hired. The relationship you share with your ideal mate is predicated upon the words you use with and to each other. Heck, the right words got you the relationship. If you are not with your ideal mate it might be time to examine the words you use with people who are most attractive and mentally, emotionally, and spiritually fulfilling to you.
In the Bible (for the religious readers) God created everything with words. In the Gospel of John we are told before the universe began there was the Word. In ancient times people believed your name had powerful influence over the people who held it. We don’t believe names have as powerful an influence today, but we all know examples where a name made a difference.
Always use powerful uplifting words when you talk to yourself. It makes a difference. People tell me they love to hear me speak. I have no special claim to fame. I do choose my words carefully. I tend toward powerful, positive words. People do not want to hear about how it can’t be done. Most people are drawn to passionate people. Enthusiasm in a speaker makes the whole crowd feel awesome so I give all I have so the people I speak to can have that feeling every time they hear me.
You can do it! Problems are solvable. You can have the man/woman of your dreams. You can retire early or work at a job/business you love. Be a great friend and you will have great friends. As for me: what you see is what you get. People wonder if I am the way I write or like I am in front of a crowd. Yes! All the time. Granted, I am not always turned on. As the great motivational speaker, Zig Ziglar, said, “Someone who is on all the time is one something and it is going to kill him.” But I am always optimistic. I have enjoyed an awesome life. You can’t (another intended pun) imagine how great my life has been and is. My wife and children (beyond awesome); my business (living the dream); my home (living in a way very few can); my body (my health is excellent and I am fit); my mind (I have dreamed dreams you would not believe, read books, expanded my mind, experienced a thousand universes).
And you can, too.
Balancing family life, personal, and business present challenges when your interests are catholic (little c, not big C). Family is always a priority while business always demands more of your time; personal time is needed for mental well-being and health. Business owners are in the toughest situation. Bill Gates, Steve Jobs, and Elon Musk changed the world with their work. The best learn quickly to avoid keeping busy. Even small business owners suffer the same demands on their time as captains of industry.
Some leaders are better at managing their time and personal lives than others. Steve Jobs was noted for his intensity. Elon Musk gave us PayPal, Tesla, Solar City, and SpaceX. Their skills in creating value are legendary, but Jobs managed to find time to meditate and stay married, while Musk has had three wives in the last decade. A burning intensity to perform does not preclude a healthy home life. Bill Gates got married and stayed married. (Bill and Melinda make a cute couple.)
If Elon Musk can run several multi-billion dollar corporations, it is possible for you to do great things while retaining balance in your life. Few of us will ever experience the demands of a Steve Jobs, Elon Musk, or Warren Buffett. It boils down to managing workflow. By creating systems to manage all the demands on your time you can create a happier, healthier, and more productive life.
No matter where you work, there will be demands on time. I will approach this from a business owner’s viewpoint because that is my worldview and experience.
Recent events challenged the system I used for many years in my office. Additional new clients with greater needs than most of my current clients coupled with Murphy’s Law (what can go wrong, will, and at the worst possible moment) tested my skills. I am still digging out.
Here are some considerations for managing workflow at work:
- Outline expectations with clients, co-workers, and the boss. Since everyone has different needs and expectations it can be like dancing on the edge of a razor. People will constantly try to push you off balance, not out of malice, but to gain advantage to satisfy their own needs.
- Build a system that works and is flexible. In my tax office we have to be prepared for everything. Our best laid plans can crumble if we create a rigid workflow. A critical issue can take precedence over regular work.
- Allow your team to shine. I refuse to dictate most workflow matters. My team is in a better position to determine the best course of action to maximize their productivity. I provide guidance when necessary. When issues arise I provide input and allow each employee to then determine the best way to manage work at their station.
- Consider categories. We are in the process of switching our tax workflow procedures. We will list each tax return that comes in A, B, or C. Tax returns in the A category anyone can prepare with only minor review. These are the easiest returns. The B tax returns can be data entered by anyone, but will require a review. All C tax returns must be prepared by me or reviewed by me. The C returns are the most difficult or contain issues where my experience will result in significantly lower taxes.
- Each work environment is different. Using my office as an example again, I set priorities on workload. Certain phone calls must be made today. Due dates frequently dictate work order in a tax office.
- Record every step. We use multiple organization tools to manage workflow in my office. Every piece of work is entered on a worksheet at the front desk. We have a redundant system to reduce errors. Tax returns are reviewed. Even my work is checked. For example: When a tax return is finished and signed by the client it goes in a slot. I take these e-files and process them. When the IRS accepts the return I mark it ACK and return it to another slot. Natasha, at my front desk, checks each e-file to make sure it was really e-filed. We don’t want a return unfiled because a page stuck together.
- Use time management tools. Each member of my team uses different methods to process their workload. I tend to be a paper and pencil guy. I have handwritten notes everywhere (and only I can read them due to my awesome handwriting skills, though I have it on good authority Natasha is able to grasp every seventh word). Many employees use Post-It notes, the digital kind, and keep them on their screen. Outlook is a great management tool. The tax software I use has several time/workload manage tools built into the program.
- Always keep an open mind. Test ideas to improve your workflow. Team members are a great source of ideas to better manage time and workload.
There are many more ways to manage workflow in your professional life. Each situation is unique, as are you. What works for me may not work for you. I prefer to manage by fiat. My employees tell me they love how I grant them the latitude to determine their own work space. I refuse to spend my day hunched over the backs of my team. I hire good people and give them the authority to do the job in the most efficient way for them.
Family is more important than work. Work life frequently requires us to spend more time with people other than family so it is imperative we prioritize family life. Since I have been married for 28 years (to the same woman, you smart ass) and have two daughters who managed to stay off drugs and not get pregnant, I assume I did something right. I make no claim to being the perfect father or husband. All I can do is share what I do that led to the current results.
- Tell them you love them every day. This is the most important part of any relationship. Tell them you care. First thing every morning, I give all my girls a kiss, a hug, and tell them I love them. It is also the last thing I do before retiring each evening. Regardless the situation, I tell my wife and daughters I love them. If I am upset about something they still get a hug and kiss. I make it clear I am upset about the action, or lack thereof, and not with them.
- Never go to bed angry. This is Mrs. Accountant’s rule. A good one, too. There will be times when you are not happy with a situation. No matter, we still make peace before we sleep. The next day we usually deal with the situation better anyway.
- Praise often. It is too easy to admonish when a family member does something against your liking. Be sure to praise even faster. A child with poor grades needs a pat on the back when they ace a test. If you are married for 28 years there will be things that irritated you over the years. You can whine and complain or ask gently for some changes. When your significant other does something you like, let them know. Maybe someone needs to lose weight. Instead of harping on their eating habits and flab, comment on their choice of quality food or skipping desert. Reinforce the positive rather than focus on the negative. Once you conquer this skill there will be few disagreements in your household. Mrs. Accountant and I have not had an argument/fight in 25 years. The first three years were a different story. I had to learn some skills and I was determined to have a good marriage.
- Give each other space. To the best of my ability I do not crowd my family. Everybody needs down time alone. I am comfortable allowing my daughters and Mrs. Accountant their free time without me. Girl time is important. So is guy time. Sometimes life events require alone time to process an event. When ready, they will seek your comfort.
- Love unconditionally. My wife and daughters are individuals. I have no desire to mold them into what I want. I prefer family members who are their own person. When you love unconditionally your family is unlikely to leave you. Where could they possibly go where it is better? The best they could hope for is a draw.
- Fix yourself. It is impossible to fix someone else. It is a fool’s errand. I worry about my behavior and encourage my family in theirs. I take care of my health and encourage my girls to do the same. Then it is up to them. No harping. I am not perfect and do not expect anyone else to be either.
- Make your family special. I spend very little money on myself or family. Mrs. Accountant and I have not exchanged Christmas, birthday, or anniversary gifts in decades. Our relationship is not predicated upon stuff. Instead, we spend quality time together sharing stories, ideas, loves, concerns, and feelings. Our gift is ourselves.
- Learn to push buttons. People together a long time know each other’s buttons. Always avoid pushing buttons to control or harm. Instead, learn which buttons make your family members happier. Too many people push the wrong buttons on their significant other for a variety of crazy reasons. Stop! You have no idea how fun and fulfilling your relationship can be until you start pushing the buttons that turn him/her on.
It takes commitment and work to have a solid marriage or relationship. Do not get lost in work, school, kids, life obligations, or anything else for that matter. Make your significant other number one in your life. Encourage your children toward excellence. Love them unconditionally. Remain faithful. (It is easy remaining faithful when your relationship is anchored on the deepest of bedrock.)
People get so caught up in work and family that they forget to take care of themselves. Family is more important than work; you are more important than family. Think of it this way: why do airlines tell you, in the event of an emergency, to put on your oxygen mask first, then the kids? Because you can’t help the kids if you are unconscious or injured. You must put “you” first. This is not self-centered arrogance. To provide for your family you need to mange yourself; before you outperform at work you need a healthy home life. It all makes sense.
Here are some tips to maintain a healthy personal life, including mind, body, and soul:
- Quiet time. To maintain good mental health you need time alone to separate your thoughts.
- Mental health is increased by running alternative lives. You soon realize how lucky you are when you visualize alternatives. It is natural to think of other people in ways you would not in real life. It creates balance, showing your mind the high quality life you actually have.
- Clear the mind for a few moments minimum every day. Pray if you are religious.
- Who cares who is watching? Read what trips your trigger.
- If you are walked in on, don’t stop singing. Instead, start dancing with the new arrival. Who cares if the police serving a search warrant think you are nuts? It’s a happy nuts.
- Quiet the mind and then listen to all the sounds around you. There is a whole new world you have been missing and it is an awesome world, indeed!
- Eat right. Garbage in, garbage out. Feed your body good fuel and it will serve you well for a century.
- Lift things, walk, run, jump. Life is too short to sit on your ass all day.
- Make friends of everyone. We all have a few close friends. Having many acquaintances can provide a fulfilling addition to life. Be a friend to all you meet and share ideas and stories. It makes life all worthwhile.
- Give thanks. Express gratitude to yourself and others. It is okay to feel smug after completing a good job.
I am sure you can add to my lists. Please do so in the comments below. Remember, it is an awesome day to be alive.
People suffer financial hardship largely due to limited math skills. Myths, frequently perpetuated by the financial services industry, are created, repeated, and reinforced to keep people poor and enslaved. Financial services companies are there to provide financial services and collect a fee for that service, not make you wealthy.
Today we are going to dispel a few of those myths and start you thinking differently about money, investing, and wealth. Armed with the real math you can avoid stupid money mistakes. Early retirement (any retirement for that matter) and financial independence requires you to manage your money wisely. This means you will need to put aside the lies you have been told from young on.
The Mortgage Lie
A thought experiment: You have a 10% interest rate mortgage, itemize so you can deduct the interest, and are in the 25% tax bracket. What is your interest rate after taxes?
Another similar experiment: Your credit card charges you 10% interest. You carry a balance. The credit card is used for personal only so the interest is not deductible. You are in the 25% tax bracket. What is the interest rate on the credit card after taxes?
Your bank wants you to think tax deductible interest somehow lowers your interest rate after taxes. To avoid lawsuits they say stupid stuff like: May be tax deductible. Speak to your tax professional. Most tax professionals perpetuate the bad math. Your cost for the above mortgage example is 10% even if you can deduct every dollar of interest. The interest rate never changes due to deductibility, but the cost does. A better question is how much does it cost after taxes? I hear it all the time. People tell me they are only really paying 7 ½% interest (using the above example) after taxes. No, you are not. You are paying 10%.
The illustration becomes clearer when you take an example of a non-deductible expense. In the above credit card example with essentially the same numbers as the mortgage, we review the facts without a tax deduction. How much does it cost? I argue your interest rate (or cost) on the credit card is closer to 15%. You need to earn $150 to pay the tax and have $100 left over to pay the credit card interest.
If it does not jump out at you, re-read this section again. Some facts: A tax deduction does not lower the effective tax rate or cost! But, a non-deductible expense costs more than the stated price because you need to earn more, and pay the tax, to have enough left over to cover the cost. Get it?
The bank is not your friend. They only provide safekeeping of your temporary money for a fee. You can write checks, borrow, and earn modest interest on savings with a banking institution. They are there to collect a fee for said services. They do not care if you get rich, reach financial independence, or ever retire for that matter. Banks are in business to earn fees. Period. Before you run to your tax professional, question him. Make sure he understands the math. Too many so-called professionals are also mathematically challenged. Tax deductibility is a gimmick to pry more cash out of your wallet.
By the way, if you want a $10,000 deduction I have a better idea. Instead of giving it to the bank in the form of interest, contribute the money to a non-profit organization. It’s tax deductible! The non-profit will put the money to better use than the bank and you get the exact same deduction. Isn’t that nice?
My Giant Escape
I own a bike and hope you do to. For decades I rode a Huffy around town. Last year I upgraded to a new Giant Escape. It was time. The Huffy had seen better days. The Giant Escape set me back a hair over $600, including lights and the carrying rack. I bike to work about 100 times per year. In NE Wisconsin it is unsafe to bike during parts of the winter. My office is 15.1 miles, driveway to driveway. It takes an hour for the trip, a bit longer if the wind is against me.
Biking is great exercise and a great boost to my wallet. The $600 investment paid for itself in less than a summer. Of course, extraordinary claims require extraordinary proof.
The IRS says I can deduct over $.50 per business mile. I don’t use the IRS numbers in calculating what I save. My vehicles are bank repos and I run them for 15-20 years before repeating the process. I estimate my cost to run my car is closer to $.30 per mile. Gas, wear and tear on tires, oil changes, eventual brake pad replacement, and depreciation set me back about 30 cents a mile. I exclude insurance in my savings because I pay insurance whether I drive or not. The same applies to depreciation. A vehicle will wear more when driven, but will still depreciate some if left in the garage.
On first blush you might think I save $9 every time I bike to work. You should stop blushing; it is the wrong answer.
30 miles round trip x .30 = $9
The formula is simple so why does it cost more to drive my car? The answer is simple:
Earn $15 – $5 tax – $1 cost of work = $9
As you can see, I need to earn $15 to pay for the car I drive to work. The $1 cost of work is an estimate of the excess cost of working versus staying at home. Work clothes are not free. By biking to work I can work fewer days per year and retire early due to lower living expenses.
Since I save $15 per bike trip to the office and do so ~100 times per year, the savings quickly covered the purchase price of the bike. When I drive to work, the first $15 goes to cover transportation costs. The depreciation and maintenance on the bike maybe approaches 1 cent per mile. Therefore, the first $.50 goes to cover transportation to work, after taxes.
See how fun math is?
In the near future I will expand on how a bike is one awesome, mega-powerful way to super charge your financial life.
We finish our lesson today with the biggest math problem of all, the lottery. It seems like a couple time per year the lottery in these parts gets really big. People yammer about it ad nauseam. Somehow, people have convinced themselves the lottery is an acceptable expense if the prize exceeds the odds. The logic goes like this:
Odds are 100 to 1 to win
Tickets cost $1 each
The jackpot rises to over $100
Ergo, it is a good idea to buy a ticket
No, it is not! The odds are still massive against you. The lottery is even worse. Like 450 million to one to win. Given enough time and lottery ticket purchases in similar situations have an expected return higher than the ticket costs. True. If you live a couple million years! The lottery is a waste of money. Sure, somebody will win. Sure, it could be you. No, it will not be me. I already won because I did not play.
If you play the lottery, consider an alternative. Instead, put the money into a retirement account. A lifetime of lottery ticket purchases should provide a comfortable retirement without any additional funding. You see, small changes create outsized results as time grows your investments many times over.
Hope you enjoyed today’s math lesson. I bet it was more fun than math in high school. When math affects you directly it is always more interesting. Always keep in mind what is really happening with your money. Don’t let anyone snooker you into a stupid investment or bank product with the BS tax deduction story.
There are certain characteristics common among people who achieve early retirement. Saving and investing are a serious part of the lifestyle of an early retired individual. Another common strait is a nervous energy to get things done. People who retire early, or at least can, tend to work hard and save.
I am an unusual type of retired person. Travel does not interest me, nor does sitting around. Like many people headed for an early retirement, or already there, I am full of pent up energy and filled with ideas and full of curiosity. So the question begs asking: What do you do once you are retired?
Unless you are playing a Chump’s Game, you were working for more than just money. You probably enjoyed the work you were doing and that is why you did enough of it to reach financial independence at a young age. I propose doing what you have always done. Many wealthy people continue working well past the time they need to. Warren Buffett is long past needing to run a Fortune 500 company or digging for quality investments. He could easily drop the whole thing into an index fund and do something else with the rest of his life. Bill Gates took a different track. He changed his profession, but still keeps busy making a difference around the world.
Recent events turned my office chaotic. Too many new clients (new clients always take more time the first year to learn their situation and add all the detailed information into their file) and a series of poorly timed illnesses put me on the defense. I thrive in a challenging environment. Pushing myself to a higher level thrills me and fires my dreams.
Learning a new language, expanding a business, even planning a vacation, all comes with its own unique set of challenges. Unless you plan on doing nothing from the moment you retire until the day you die, projects will fill your days. Some will complain this is not a true retirement. But when pressed, these very same people have no answer to what retirement is unless you consider sitting around all day the only “real” retirement.
I was asked if I was succumbing to being a Chump when I took on the extra clients. I hope not. I did not do it for the money. If it was only money I did a piss-poor job of it. If it was only money I would have outsourced most of the work and accepted all prospective clients, about 12,000 in all. If it was “money-only” I could have pulled a seven figure increase in income this year.
New clients pushed my firm from 700 returns to near 900. I avoided ex-pat returns (I had 700 requests) because it was something I did not want to do. Maybe someday I will change my mind, but for now I have to cut the line somewhere. Most of the returns I accepted included either a small business or rental properties; something I enjoy working on. The workload easily increased 50%.
As hard as it has been, it was all worth it. Slowly, I am digging out and getting caught up. Valuable information was learned, meaning I am better now than I was six months ago, a good thing to feel when you already have 30 years under your belt. Sure, I spent more time in the office than I planned. I also made a difference which gives me a reason to drag my ass out of bed each morning.
Given the chance to do it again, I would. I would make some changes, but that is to be expected after learning something new. If happiness is the true count of retirement then I took the right path. Staying at home all tax season would have provided less pleasure to me than the chaotic tax season office.
An Example of Doing It Right
Of course, not everyone is wound as tight as I am. I’ve been threatening to sell the business and retire for over a decade now. When I really start to think of it I quickly change my mind. Now my good friend, Pete, is a different story. Pete is a neighbor who graces our card table Friday night. My youngest daughter sits behind Pete and watches him play cards. (Dad is not good enough, I guess.)
Pete worked for Kimberly Clark in the IT department for years, saved like a wildman, bought a rental property, and retired early. His thought process was he would spend his days working projects on his few acres of land and the rental. He planted trees everywhere. He worked on his rental. Before long the projects were done. He needed something to do.
Soon he was working for a neighbor milking cows part-time. He also picked up odd jobs here and there to fill in the time. Nothing too hard now; he was retired. In the summer he operated the bridge in town so boats could get through. He might have to hit the button ten, maybe twenty times in a day. And read a book. The library was on the way to work.
Time keeps counting and after decades of retirement Pete has re-retired from milking cows. I haven’t heard yet on the other odd jobs, but it sounds like this is a retirement commitment. He kept the rental. The time was right for Pete as he reached age 65. However, he likes sitting at the town hall on Election Day as a poll worker so he will be happy to hear we have an election coming up on August 9th. Our local district attorney irritated every law enforcement agency in the county so they endorsed a new guy. So we get to vote August 9th. Good for Pete.
Now that Pete has more time with his “real” retirement he informed our card table he is interested in learning a new card game: bridge. If you know of any bridge games in NE Wisconsin, send them my way. Pete has time to learn new trades now.
Do not let someone else determine how you will spend your retirement. It is your life. You can go crazy like your favorite accountant or you can chose the route Pete did. If you want to travel, fish, or golf all day, go for it. You earned it! One thing I am certain of. Many people earn more money in retirement doing the stuff they love doing. It does not happen all at once, but it happens. The younger you retire the large the income tends to grow. Don’t worry. You will get used to it.
FIRE: Financial Independence, Retire Early
There are only a few good reasons to work. They are good reasons, of course, but can quickly overrun your personal life, destroying the original goal of working in the first place. The two good reasons I can think of to works are:
- Saving for retirement, and
- Love of the work.
In the beginning it is hard to tell if you love your work because you have to work. That is why we preach early retirement here; not to bow out of life as soon as possible, but to live the life you want. Once you have amassed a large enough nest egg you are retired even if you chose to continue working your job. FIRE allows you that freedom.
Once you have moved beyond the need to work a job many people continue to do so. Self-employed people are the worst. I know, I’m living it! Just because you can quit doing what you do to earn income does not mean you should. If you enjoy the work environment, co-workers, clients, and the work itself, why would you quit? There is no shame in doing what you love as you work toward financial independence and even afterwards.
No matter how much you love the work, however, there are always days. My office is living a series of “one of those days”. I want to share how I plan on working through the situation. First, some background on why we are feeling the pressure.
The Building of a Disaster
Every catastrophe starts with a great idea. In this case I had a plan to partner with Mr. Money Mustache on an idea. It went better than planned. The guy is awesome and instead of giving me a minor plug, he gave me a full article. When millions of people see the work I do they want to join the fun. Unfortunately, I have a small accounting office.
It was a challenge at first, but I was on a mission. We accepted about 1 in 120 requests from people/businesses to be a client. This low acceptance rate still increased our client base and workload over 50%. As a good business owner I hired additional staff to handle added tax work. Then the best laid plan started to burn.
We still had to field thousands of emails (sometimes 200 or more a day) just to tell people “no”. My time was stretched, but people understood. The perfect storm was brewing. Then the phone calls came. The people we accepted as clients wanted more personal time than I had to offer. My workload was getting further and further behind. I was no longer keeping promises, never acceptable business practice.
A CPA I hired with 9 years experience proved incompetent. I refused to allow work to go out wrong. Worse, he could barely manage a tax return a day. I let him go. My number one tax preparer contracted a respiratory infection that affected her all tax season; she missed over three weeks during the heart of tax season. Another preparer is attending college and only worked three days a week. The great news is I never get sick. But the work kept piling up as people demanded my attention instead of allowing me to complete work.
Darkest Before the Dawn
By the tax due date I was further behind than at any time in my career. It was overwhelming and clients did not care. The non-stop calls and emails only made it worse. We actually prepared fewer tax returns by the due date than the previous year even with additional staff. Most new clients and many regular clients were suffering my misfortune.
Let me introduce you the two most awesome women I have had the honor to work with: Karen and Natasha. Karen is my office manager and prides herself on quality work. She takes her work personally. Natasha is my front desk and administrative assistant. As the tax season wore on, Natasha never complained, but I could see her efficiency decline. She was worn out by the phone calls and complaints of slow work. The workload was too much, as well. Natasha is like Karen in that she prides herself in doing high quality work. This only made Natasha feel worse.
Karen is another story. By sitting in a chair so many hours she acquired back pain. She started wearing a brace so she could handle the extended work hours sitting.
Keith’s Rule # 11: Never work yourself to injury.
The brace was only a short-term solution, if you can even call it that. My entire team collapsed under the weight of excessive demands. Pain drained Karen even faster. Yesterday it ended in an argument over workflow. Last night she came into my office and nearly broke into tears. Listen to what she said, “I can’t take anymore. We are not serving our clients the way they should. I have never done such poor work. Our clients deserve better.” She didn’t say those words exactly, but it is what the conversation was about.
How do you handle an overwhelming situation? What can a business owner do when he finds himself with more work than it is possible to get done?
I love the work I do, but in the accounting/tax industry there is always a due date looming. This means stress can interfere with a balanced lifestyle. Clients are sometime miffed when I take an afternoon walk or jog in the park during tax season or in cases like now when we are so far behind. I still do it.
Keith’s Rule # 12: Health is more important than work.
For Karen and Natasha, they have lost balance in their lives. My job, as business owner, is to bring the balance back so they can serve the clients right. After tax season ended I gave my team a paid day off in addition to their normal vacation days. I required the extra day off. It was a grueling tax season. But one day is not enough.
Karen and Natasha suffered the most because they fielded all the phone calls, complaints, and emails. Each phone call pushed them a little lower and less efficient. It was beginning to feed on itself.
This morning I woke up around five (normal for me) and rolled over to snuggle Mrs. Accountant. We talked a while about the challenges in the office, both worn out employees and clients who need work completed. It was then that I hatched my plan to get my office back.
I am forcing Karen and Natasha to have a one-hour massage on company time and company expense today. I know they will complain they do not have time; I have a solution for that, too. Karen and Natasha both will receive four hours of uninterrupted time each day: no emails, no phone calls (I will take their phone away). Karen will have a DO NOT DISTURB sign on her door during her four hours. If she needs a coffee, it will be brought to her; she can have her cigarette break (yeah, I have an office of smokers, except me) outside a door from her office. I do not want her to accidentally run into a client that starts the whole process of interruption all over again. In four hours she will get more done than she has been in a week. Once she gets momentum and her sanity back she will start feeling better about herself and how she is treating clients.
Natasha is a bit different. It is hard to get away at the front desk. No problem. I am bringing in a temp to answer calls for her 4 hours a day. She can see clients, but can also focus on getting her work done. By getting a break from the non-stop phone calls she will be able to help the clients by getting work recorded and to the clients faster. By reducing the stress level she should feel better as she accomplishes her goals each day.
Well, if clients don’t get the hand-holding, will they be pissed? Sure, a few will. A small number of clients are the ones applying all the pressure and stalling all work efforts. They will be mad until the work gets done. If they persist I will have one less client. There are 12,000 itching to fill the slot.
My team is more important than just beating work out of them. It sure feels that way this tax season. I hate it and it will stop now. Karen fought me yesterday on some of these ideas, but this is coming from exhaustion. I will regain my office after a fantastic surge in new business. By taking actions that treat my employees fair and with respect, we will serve clients better. New clients always take more work as we learn to understand their situation. It was my fault I accepted too many. I will honor my commitment to my clients (even if on the slow side at first) and treat my team with respect. I learned a lot this year. I will use the added knowledge to improve the work we produce in the future.
I know my attitude will make my team healthier and happier than ever while showing respect for their personal life and well being.
* I am not the only one experiencing these types of challenges. Feel free to share your situation and solution in the comments.