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

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

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

I Can’t Take Anymore

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

The pressure to spend is endless. Mass media had gone out of its way to program people into spending zombies. The zombies are also trained to ferret out those few who avoid most of mainstream media and pressure these poor souls into service of the zombie army.

And don’t think you are exempt. They are watching you. You know what I am talking about. You can feel their shifty eyes looking out at you, accusing, condescending. They loath you because you had the audacity to save. To invest. To build a nest egg and a positive net worth. Like me, you need to disguise yourself when you venture out to make the rare purchase. It takes great care because the zombies can smell you. It is the smell of growing money and they want it so they can spend it.

Ah, I Am a Farmer

Mrs. Accountant and I needed a freezer to store our ample garden produce and for beef from a recently butchered steer. We dress up in our Sunday go to meetin’ clothes for our adventure to the appliance store. This is an event that only happens once in a blue moon!

Since this purchase was years ago when the internet was not what it is today, we needed to do some research by hand. Our goal was to check a few stores and then decide on the best freezer at the best price. We wanted value. When we walked into the second appliance store the salesman happened to be a tax client. It was a bad omen. Since he was my client his attitude was I would buy the most expensive freezer at full price, no questions asked. I owed him!

Needless to say, I did not buy a freezer from that store. The client never returned, not that I cared. When I am in the market to buy a larger ticket item I must take precautions. I buy my cars used from the bank. At retail outlets I wear those glasses with the big nose and mustache attached. Not conspicuous at all. When asked what I do for a living I say I am a farmer. A poor, broke farmer with no money to spend so please give me your best offer. Then I will go home and check the couch and see if enough change has accumulated there to cover the purchase.

It’s not a lie! I am a farmer! Sure, farming isn’t my first line occupation, accounting is. But if I tell someone what I really do I may as well start reaching for my ankles as I say it because they will service the account from behind. Business owners are all overpaid rich people who deserve to be soaked, or so the theory goes. Many products where the price can be negotiated down requires the salesperson to believe you are a poor schmuck or they are resistant to offer their best deal.


How much for this beauty?

Oh, You’re a Doctor

Now we turn to a client I have had the great pleasure to serve for nearly two decades. He is a doctor with heart. He loves helping people and he can’t find a way to stop doing what he loves. He now works out of his home helping pharmaceutical companies develop promising therapies. He is one of the good ones.

Our doctor friend has a very high income, as you might expect. The high income does not mean he wants to waste his money. He handles money with respect. He expects to leave a legacy and provide for charities.

He also has a major problem. His work requires him to speak frequently and he is on the road a lot. He needs a reliable auto and that is where the problems begin. When our friend, the good doctor, walks into an auto dealership the sales team is already counting their commission. It is the same wherever he goes. As soon as it is discovered he is a doctor the offer changes. If you are a doctor, you pay full price; no negotiating. There have been instances where the doctor called me after breaking down and making a purchase where I had to go in and raise hell to get his money back. The good doctor is a nice man; on the other hand, I am not. I am a class A asshole when I have to be. Boning my client because he was so stupid as to have a positive net worth boils my blood.

I could go on with story after story. The end game is always the same. People with money, the so-called rich, get screwed when they decide to part with their hard-earned money. It’s as if they have no right to act responsibly with money.

A Dying Breed

You are a dying breed, my friends. So many people spend more than they earn on wasting assets and other assorted junk. They then complain how bad the economy is when the reality is things have never been better. Half the stuff we use is free on the internet, food is cheap, the library provides all our entertainment for free, and energy prices are low. About the only things we need to spend money on is housing and utilities. It does not take much to live anymore; technology has made life so easy we have time to sit around all day and whine about it.

The worst part about a living  species on the verge of extinction is that so many want to bag one of the remaining beasts as a trophy. You are the beast, the trophy. If only they can find a way to pry the money from your fist of investments.

The biggest mistake in life is to let people know you have two nickels to rub together. Oh, you are in for it then. The price of that car or freezer just went up. A lot! Somebody deserves a commission and it is your duty to provide it. I lost a client because I refused to be screwed when buying a freezer. The truth is it was cheaper to lose the client than to overpay for the freezer.

Playing Dirty

There is a way to deal with these morons, however. It took me a long time to figure it out. As far as I know it is the only way to get the job done. It requires psychology. You can easily mess with the minds of people who need a constant money fix because they are broke. I am not suggesting hurting anyone in any way. What I propose is getting the best value for your money without getting abused because you have a job people perceive as too high paying or because they think you can afford to overpay.

It is best to explain by example. A successful business owner asked me to help him buy a service truck for his business. Only a few dealerships in town had what he needed for his business and they were firm on the list price. The truck listed at around $52,000 and the dealership was willing to drop the price to $48,000, no lower. We knew this was not the best price as I saw invoices from other clients paying in the low 40s.

I was ticked so I rolled up my sleeves. Treating a potential client with disdain is a no-no in my book. I asked the business owner to bring $40,000 cash with him when we visited the dealership. Well, the dealership was going to show this wealthy accountant a thing or two. The price is $48,000, firm. Bullshit!

I explained to the salesman he would need to do better. He said the dealership would lose money if they went lower. I explained they must be going out of business because I saw several similar trucks on tax returns selling for less. The guy swallowed hard as he was caught in a lie. Time for the manger.

I shook his hand with my best smile. I swear no teeth were showing. I got a similar song and dance along with faux issues that required a higher price for this particular truck. Then I played my trump card.

I took the briefcase with $40,000 from my client, placed it on the table, and opened it in front of the manager. “This is my final offer,” I said. A lot of people are defenseless when they see cold, hard cash in front of them. The manager hee-hawed around a bit. I said, “If we do not close this deal right now today we are going to a different city far away and buying the truck there. The cost of a small amount of driving will easily be covered by the $8,000 in savings.

The manger went through the typical theatrics in the back room and finally agreed to the terms. Then he was nervous about taxes and title. We put that on the credit card after a thirty second cry session.

Dirty pool? Probably. But they were selling the exact same vehicle for $40,000 to $42,000. I know. I depreciate those things for clients. The dealer made money or they would not have sold.

You work hard for your money. You save and you invest. People will try to rob you of your frugal stash. The best I can offer is these parting words: Hi, my name is Keith Schroeder. Do you have a freezer a poor farmer can afford?


When I was a young boy growing up on the family farm we had three sections to the farm: the homestead, Newhouse place, and “up by the other place”. Yeah, we really called it “up by the other place”. We were sophisticated hillbillies, I tell ya.

Up by the other place there was a well with an old style pump you worked by hand. Toward the end of our farming days the pump was fitted with an electric motor, but that doesn’t help with our story.

The old well pump up by the other place was a job I hated. Feeding the animals was okay, but getting the tank filled with water was a chore. And a lesson. That old well taught me more about life and success than any seminar or college class I ever attended. The lesson was so simple. It amazes me to this day more people do not understand the lesson of the pump.

The Investment

That old well was deep. Getting water out of that darn thing prit’ near (yes, I am writing this way intentionally) killed me every day I went over there. The only saving grace is water from wells so deep is ice cold and sweet. There is no water in the world that tastes as good or refreshed as well. Getting the water is the issue.

The job was simple. You started pumping the long handle vigorously, up and down, up and down, up and down. You put your whole body into it. In the summer sweat would pour down my face as I gave it all I had. After several minutes I wanted to quit or at least take a break. But that is a mistake. It takes a long time to get the water flowing. With each pump of the handle the water works a bit higher, but if you stop it goes all the way back down and you have to start all over again.

Lesson One

Everything worthwhile in life works exactly the same way. You put a lot of hard work in with little or no reward in the beginning. My tax practice was no different. This blog is still in its infancy. The Wealthy Accountant got a nice lift-off from a Mr. Money Mustache mention, achieving 8,000 unique users in the first few days. Then the numbers declined and kept declining to 1,600 unique users over the prior 30 days. My publishing schedule was sporadic at first; blame it on tax season and the heavy work load from the Mr. Money Mustache mention.

In early July I started publishing daily with few days missed. My readership grew steadily to just under 3,000 unique users in the prior 30 days according to Google Analytics. Then I needed a break so I could put more research into a few posts. My readers jumped ship fast. They want content! Thirty day trailing page views dropped from 19,849 to 17,743 while unique users went from 2,991 to 2,930. Not a big drop, but totally understandable if you ever worked a hand pump.

Like the pump up by the other place I have to keep pumping if I am ever to get to the reward. The water is part way up the pipe. If I stop the water goes all the way back to the bottom and I have to start over. Only continued effort without much in the way of reward will bring me to my goal.

The Reward

As I pumped in the humid summer sun I knew if I kept at it long enough the water would start pouring out the spout. Finally the water started to flow. The animals would come running to the fresh cold water. (That is the other lesson of the pump. Stand around like the steers and watch the dumbass human pump his tail off and then come running when the reward shows up. Of course, the downside to this theory is you eventually become what’s for dinner.)

Once the water started flowing I could slow my pumping. All it took was a little steady pressure to keep the water flowing strong. I could reach around with one hand as I pumped with the other to enjoy the crisp, cold water. The rewards kept coming as long as I kept the pressure steady. The workload was reduced when the reward was pouring fastest.

Lesson Two

That is how it works in business or any other endeavor. When you work the hardest the rewards are few, but once the rewards start it only takes a small amount of pressure to keep the rewards flowing. Successful blogs can enjoy a less demanding publishing schedule while maintaining readers and revenue. Actually, when the traffic finally starts to explode higher, the revenue rises even faster. The revenue per page view is higher on blogs with 1,000,000 views per month than a blog with only 20,000. There is no reason to complain; it is just the way life works.

Like the pump, a steady pressure is required or eventually the water goes back down. Business is not as hard as many people pretend. I have owned several businesses over the years. Some did well, a few crashed and burned. If you were asking for ‘fair’ you came to the wrong universe. Every success story starts the same way: I worked hard to get the thing going and I was too stubborn to quit. After a while it took off better than I ever imagined. Now the thing is on autopilot; a small amount of effort keeps the whole thing purring. Periodic disasters require an extra level of input for a while until the whole thing starts purring again. Happens the same way every time.

What you don’t hear is: Gee, ya know, I was out walkin’ around and before you know I was CEO of IBM, my investments grew to millions (and I never made any investments!), and I am as popular as I am good-lookin. Okay, you hear people say stuff like that but they have mental illness issues. Even most lottery winners have played a long time before they win the big one (not that I am encouraging such behavior).


There are no formulas to illustrate wealth creation I know of outside business models, so let me introduce the world’s first mathematical formula of personal wealth accumulation:


Remember, you saw it here first. The formula is elegant and beautiful, as the physicists would say. The formula is so simple: Wealth is directly proportional to the effort applied multiplied by the time invested plus intelligent thought and planning. Sitting on your ass all day will not bring you closer to your goals. (Johnny, sit down! I know I sit on my ass all day as an accountant and do very well. You’re messing with my theory.)


The old barn burned down decades ago, destroying the old hand pump, but not the lessons learned. The pump once lived in this exact spot “up by the other place”.

Pump It Up

What are your goals? Do you want to own investment properties that throw off enough cash flow to live on? Are your plans to build a retirement account so you can retire early? Travel plans? Maybe you are crazy insane like yours truly and love building businesses. Whatever gives you bliss, they are all possible.

Even relationships work on the same principle. When I met Mrs. Accountant I had to work hard to win her over; I wasn’t the prize catch she expected. To make matters worse, Mrs. Accountant was engaged to be married two years before meeting me and it was not a pleasant experience when it ended. Just because the world is always fair, the guy that made Mrs. Accountant’s life miserable had the same name as me! You read that right. Mrs. Accountant hesitated because I had the same name her ex-fiancé had. How messed up is that. She couldn’t say my name above a mumble for years after we were married. I understood.

Early in a relationship you need to build rapport. Not much into spending, Mrs. Accountant and I talked at home a lot. We spent considerable time together building our relationship. Once things were awesome we could detach at the hip. Constant and steady efforts keep the relationship awesome without smothering each other.

Starting projects is hard. Really hard. I’ve undertaken many over the years. The story of the pump comes to mind every time. The first time I heard the story of the pump was from Zig Ziglar. It stuck with me and bears repeating, as I have done here.

If you want easy you can leave the room now; I don’t offer easy. What I offer is an honest assessment of reaching your dreams. I get emails daily from accountants who want to know how I did it. They want a magical elixir to eliminate all problems when starting a business. Sorry. That elixir is only found in fairy tales. It takes a special breed to start and run a business. Steve Jobs said running a business is constant worry and that you really need to love what you do because there are times it hurts so much normal people quit. You have to be insane to keep working under such stress and pain with no current income/reward, Jobs continues. Only the insane survive.

It takes that insane effort to build something people later marvel at. If this blog is to grow into something massive numbers of people read and use in their life I need to continue pumping like crazy. After a while, when people see only a steady effort as traffic and revenue keeps pouring in, they will assume it was all so easy. They missed the hard part. When you get really good at something it looks effortless to outsiders. Michael Jordan made it look easy because he practiced and practiced even when he wasn’t getting paid. Then it turned into a steady flow of performance and endorsement deals.

When it is fun during the hard, pumping like mad phase, you have everything you will need to survive and thrive. And then there are the times when no amount of pumping will work. You just move to another well and start again. That is the way life works. That is the lesson of the pump. There will be failures along the way and painful moments no matter how fun or enjoyable the process is for you. Grinding through the difficult times builds the character and endurance necessary to keep the dream alive when things are going great.

Keep pumping. I hear the water from this well is cold and sweet. Enjoy.

downloadThe tax advantages of organizing as an S corporation or an LLC electing to be treated as an S corporation are significant. Self-employment taxes disappear with the corporate structure and with an S corporation there is no income tax either as all profit flows to the owners. As with all good things, there are pitfalls. The S corporation is no different.

Most small businesses in my office use the S corporation structure. There are a few rules that need to be followed, like the owners paying themselves a reasonable wage. The wage issue is easy to handle; I require S corporation clients to do their payroll in my office. Problem solved.

The other major issue with S corporations is basis. Before your eyes roll back in your head, hear me out. Basis is one of those animals many accountants screw up on or fail to track accurately. You need to have a fundamental understanding of basis if you are business owner. If your accountant messes it up the IRS still sends you the bill, not the accountant.

What is Basis?

Before we manage basis we need to know what it is. In this instance we are not talking about basis in a single asset. Our discussion focuses on your basis in your business. Basis in this instance is:

Initial investment

+Additional investments

+ Profits

– Distributions

– Losses.

It gets a bit more complicated, but we are a family blog so we will not talk dirty. There are two types of basis you need to understand in an S corporation: stock basis and debt basis.

Stock basis in its most basic form is the formula above. Debt basis comes from money you personally lend to the S corporation; loans by the S corporation guaranteed by an owner does not increase debt basis. Partnerships gain debt basis when the business takes out a loan and the owner is liable for the debt. It is common for businesses to get a bank loan where the bank demands a personal guarantee. With partnerships and sole proprietorships there are no issues doing this.

Example: Let’s say you are one of two partners in a partnership. Each partner owns 50% of the business with a stock basis of $10,000 for each partner. The partnership has an opportunity to promote the company with lots of potential, but it is expensive. By growing your firm the partnership will incur a loss of $25,000 in year one. To cover the loss the partnership gets a bank loan for $5,000 and each partner guarantees the loan.

Each partner will have a $12,500 loss to report on their personal return. Because each partner is liable for their portion of the debt, they can use the complete loss against other income on their personal return. If they don’t have other income to reduce they may have a net operating loss (NOL) which can be carried back two years and forward twenty years to offset other income.

Problems with S Corporations

S corporations suffer from the way debt basis is handled. The above example is simplified. Sole proprietors are indistinguishable from the owner and therefore there is technically no debt basis; debt acquired by the business is a debt of the owner. That is not always the case with S corporations or partnerships.

Non-dividend distributions from an S corporation are made from equity basis without regard to debt basis. At first glance it might be hard to see the problem. Time for an example:

The two partners above instead decide to organize as an S corporation (or are an LLC electing to be treated as an S corporation). The first year is the same as the above example for the S corporation with the exception of the debt being lent personally from the owners equally. The next year the company breaks even. (I’m keeping this simple for illustration.) Since the owners have personal bills they decide they will have the company borrow an extra $50,000 and distribute $25,000 to each owner. The owners guarantee the loan.

Each owner has no debt basis or stock basis! Distributions are made from equity basis only in an S corporation. After the company suffered a loss the prior year sending each owner’s equity basis to zero, all distributions are now taxed as a long-term capital gain (assuming they owned the company longer than one year)! In effect, you are taxed on borrowed money!

There are other issues (suspended losses, et cetera) we will not discuss today. My point is small business owners can save a lot of taxes with an S corporation, but handled incorrectly can create some nasty tax problems. Let me say it this way: Never, ever, ever have your S corporation borrow money from anyone other than you. It solves all the problems.

img_20160928_075441The Right Way to Fund an S Corporation

Okay, not all problems. Businesses need working capital or loans for capital equipment or improvements. Few companies, especially in the early year, are self funding. So how does an S corporation beat the problems of distributions and equity basis?

Simple. Well, simple in theory, difficult in practice. The easiest way around the basis issue in an S corporation is to borrow the money from the bank yourself and then turn around and borrow the S corporation the money. Now you have debt basis. After profits/gains are added to stock basis, distributions are subtracted, then losses. Since distributions are applied to stock basis before certain losses we don’t have long-term capital gain taxes to pay in most cases or other nasty tax surprises.

Then tax time comes around and you bring in your books with new bank debt. I explain the situation and with a million dollar smile you tell me it is okay, you guaranteed the loan. It’s not okay!

The lesson to learn up to this point is: Your S corporation should only borrow money from you, the owner. Each owner wanting to increase debt basis needs to borrow to the firm directly, not a loan guarantee. Bank loans to an S corporation guaranteed by owners does not increase debt basis so losses are suspended once stock basis is used up and further distributions are taxed as a capital gain.

Credit Cards

The problem described above seems to crop up every year. It has gotten to a point I need to find solutions clients will understand. Basis workshops for accountants usually extend for two or three days; the topic is that intense. I have to boil this complexity down into something digestible for my clients.

For my smallest S corporations I have stumbled onto a solution that helps a few clients stay on the straight and narrow. When the owner goes to the bank the bank wants to lend to the business with the owner’s guarantee by default. Credit cards are usually different. Most credit cards are in the name of the owner only. Since many credit cards now offer interest free loans with only a 2% fee, the cost of short-term borrowing is low. By using the credit card for working capital or as a line of credit, the owner gets funding for her S corporation by borrowing to her S corporation directly via the credit card, thereby increasing her debt basis and avoiding negative tax consequences.

Of course, the same goal is reached if the business owner takes out the loan and the S corporation guarantees the loan. This is a foreign concept to many bankers. It shouldn’t be. It protects their interests, too. (Reread the first sentence. Instead of the S corporation taking the bank loan guaranteed by the owner, turn it around. Have the owner take the loan and if the bank wants a guarantee from the business it is okay.)

Many business owners use credit cards for day-to-day expenses and bills. I am always relieved when the credit card is in the individual’s name and not the S corporation’s. It gives me an out when preparing their taxes. Bills paid on a personal credit card are really a de facto loan to the S corporation. I like that. Now we need to have some paperwork to account for the loan to the S corporation which we can prepare in-house.

Parting Shot

Basis calculations are extensive. I run basis worksheets on every business in my office. In some cases, money borrowed by the S corporation causes no problems. Sometimes it only causes suspended losses to be used later unless the stock is sold; then the losses are lost, never deductible. (There are ways to avoid that too.) If I were an IRS auditor I would pull every S corporation with a loss. It is low-hanging fruit for the IRS. Too many accountants and virtually no taxpayers understand the S corporation consequences of equity and debt basis.

There is one take-away from this post: Never let your S corporation borrow money from anyone other than owners. The owners borrow from the bank and in turn lend to the S corporation. It makes your accountant’s job much easier. And your life less taxing.


Note: If you are prone to insanity you can dig deeper into S corporation basis issues here. I focused on one issue today; basis is far more involved than one simple issue. Even the IRS link provided is a simplification. I have a book on my shelf at the office on S corporation basis; it is over two inches thick.


Practicing dead. Eventually I’ll get it right.

We are going to do an exercise today. Nothing that will work up a sweat or anything, but might bring a few tears to your eyes or even abject fear of how bad you have been screwing up.

I want you to close your eyes. (Not now! Finish reading this first, then do the exercise. Did I have to mention that? Okay, back to our story.) Find a comfortable place where you can lay back and close your eyes. We need to do some time travel today and until scientists invent a time machine we will use our mind to get the same results.

Now that you are comfortable and relaxed, your eyes get heavy and slowly close. Your mind races you to a time in the future, maybe the near future, maybe decades down the road. In this future you are lying on your deathbed. You are old and tired. It is only a matter of time before the Grim Reaper claims his prize.

With these last moments of life you have the opportunity to review the life you have lived. What do you see? Are you smiling? Crying? Are you happy with the life you lived?

I Wish I Would Have. . . 

How depressing it would be to lie on your deathbed reviewing your life and muttering, “I wish I would’a. . .” Imagine the tears streaming down your cheeks as friends and family look on wondering why you are in such pain. They pity you as the last spark of life leaves your body. Death is a welcome gift.

What did you do to mess your life up so badly? Did you work too much? Or did you never find your calling? Did you sacrifice friendship and love for just a little bit more? Did you waste your life on stuff instead of something worthwhile like relationships?

Dig deeper. You are on your deathbed and you have an accounting to provide your maker once you cross that line from this world to the next. Did you invest the talents granted you or did you bury them in the sand, fearful the harsh master would judge you should you lose charge of the gifts granted? (For those of you who don’t know, this is a parable of Jesus. Religious or not, you can learn a lot from holy books.) Now you must balance the books. You see, we are all accountants deep down inside.

Are there any regrets you would like to share with the class as you glimpse the future just moments before death? Oh, it hurts too much to share. Well then, maybe reflect quietly to yourself. Be honest. I know you will. You can bullshit everyone you meet all through life, but on your deathbed you can’t bullshit yourself. You know.


It is unfair for me to put you through such a trial at the moment before you die. Let me take a seat beside you and close my eyes and travel to that distant land where I lay on my deathbed and reflect on life. Do you notice the shit-eating grin on my face? Never mind.

My first impression is, “Did I do all that?” I was a busy bee!” Then I start to snicker as I recall all the trouble I got into. Lord help us all! My daughters and the rest of the family and friends notice my lips moving as if I have some parting wisdom to share. They lean closer to hear my faint whisper, “It’s going to take a few generations to clean up that mess.” Then I give one last shit-eating smirk and take my last breath.

The Grim Reaper hesitates. He looks back to whatever god there is and says, “Do I have to?” God frowns while he nods. It is the way things have always been; there are no exceptions for wealthy accountants. “Just put him way over there so I don’t have to put up with his BS.”

Reality Check

If you are honest like me *cough-cough-cough* I said like me *cough-ahhhemmm*. Something in your throat, Don? (Reference George Carlin.) Then shut up. I am honest. . . with myself, if I have to. On my deathbed the fog of bullshit will clear out as there is no one left to BS. The same applies to everyone.

You know the truth at that last moment. We know the truth right now. An honest assessment blends the two extremes from above. I suspect the vast majority will lean heavily toward the camp of “I wish I would’a.” The exercise above only brings the truth into focus.

I certainly have led a life of Bedlam. People usually don’t forget me if I make an appearance, especially if I am on a mission, aka, I’m up to something. Heheheeeee! There are other times I sit back and let life pass me by. Readers of this blog know how I struggle with this retirement thing people speak of. The trouble for me is I can’t be retired and do all the stuff I love doing. Technically I am not retired if I run a business or businesses. Then I get two spare minutes and start writing yet another blog. Writing is hard work, folks.

There is a way to bifurcate a lifetime of experience. First, I change the meaning of words to suit my purpose. It isn’t cheating. It’s my game; my rules. If you don’t like it, I’ll take my ball and go home. I can change the meaning of words to improve my life; so can you. Different languages handle words and how they are understood in multiple fashions. I am only changing the meaning and understanding to improve my life experiences. Retirement is one of those words.

Retirement is my best example. Look it up in the dictionary. Retirement looks like the first example above filled with regrets. My definition says I am retired when I live life on my terms. As soon as I stop trying to impress the neighbors I am free. Even in a prison cell I would be just as free! Imagine, a prisoner more free than you. It happens all the time.

The mind is the only thing you have absolute control over. Once you stop trying to control things you can’t, stress declines, then evaporates. Now you are free; now you are retired.

Under my definition I can run a business, write a blog, take a big juicy bite out of life. I even give myself plenty of “fuck’in around time.” You need that to, you know. But just pulling up stakes and cashing it in? Never! The Grim Reaper will pause (a tell) when he is ordered to harvest his greatest (okay, craziest) prize of all.


Dead is a long time.

The Best News

Honesty is important if you want to benefit from the exercise at the opening of this post. No matter how well you have lived, there are things you will want to change. You can open your eyes now and wipe the tears from your face. You are alive; you are not on your deathbed. There is time to choreograph the life that fills you with joy.

Some things are impossible to have. Learn the Stoic discipline of accepting reality. I will never be retired and not retired at the same time. If I choose to dedicate my life to a monastery I can’t live a life similar to Hugh Hefner’s at the same time. It’s one or the other.

What I can do is search inside my soul to find which life will be most meaningful to me. That is why you have to do the exercise. It is not an accusation; it is a discovery, a revealing of inner truth.

There is no wrong answer. I love reading books and doubt I will regret having spent so much time with my beak in one. I also tackled more projects than I can remember. I better die slow if I intend to cover my whole life prior to passing. I want to leave this world knowing I lived the life listed under Bedlam.

There are always a few things I decide to change every time I undertake the exercise. I evolve. So do you. Life is always exciting if you allow your old self to die to make room for the new you. By growing every day you experience all the best parts of life. It is your life. Trying to please others or living someone else’s life is madness. I may be crazy, but I ain’t dumb. Neither are you.

Promise me you will bookmark this page and come back on a regular basis to remind yourself of who you are and what brings you bliss. The exercise should be performed a few times per year to account for the changes in you over the months and years. Follow your dreams. Live a life you are proud of.

Live a life you will smile at when you make that final review. Remember, on that last day, it is an audience of one. The only one that matters.

20131025_173740Fear destroys dreams and happiness faster than any other thing can. Fear of failure prevents us from starting a business; fear of rejection causes us to pass on a dream date; and fear of the unknown forces us to keep working a job well beyond the point we could retire. This simple four-letter word pushes us back against the wall, draining all the vitality of life from us.

Fear paralyses. The opportunity to speak to a group is unrealized because our stomach turns and our heart stops due to fear, as if the audience will rush the stage and beat you. (Well, there was this one time I was speaking. . .) All the happiness you deserve in life is passed each time you allow fear to rule your decisions. There will be failures and rejections. Once you understand this is part of life you can focus on the important stuff and say “yes” to the opportunity for a date with the girl of your dreams or start that business.

Fear is nothing new. Mankind has felt the fight of flight response from the beginning of time. The ancient Stoics knew uncontrolled emotions destroy faster than anything known to man. And it is all self-inflicted!

FEAR: False Evidence Appearing Real.

It is all in your head. Failing at business is a possibility. When you see as many business owners over the years as I have you start to see a pattern. It becomes obvious who will fail. Most businesses fail because they neglect to take appropriate steps, which all lead back to some sort of fear. If we do that we could lose clients. If we invest in the company we might not earn the investment back. And, of course, once you allow fear to rule it becomes a self-fulfilling prophecy.

But sometimes it does not work out! You build a relationship with a beautiful woman and discover you are incompatible or she is not into you; there is no chemistry. The business you busted tail on for years is not working. That is life. There is no guarantee.

Marcus Aurelius, the philosopher emperor of the Roman Empire, knew life would throw pain, suffering, injury, loss, and death at him. These things were not to be feared. It boiled down to character. Marcus said, “If anyone despises me, that is their problem. My only concern is not doing something worthy of contempt.”

Before turning down that speaking engagement that could build your career, consider Marcus’ words, “It amazes me that everyone values themselves more highly than anyone else, yet values other’s opinions of them above your own.” What is the worst that could happen if you got up in front of a group? Zig Ziglar said he only knew of one person who died while publically speaking. He took that to mean public speaking is a very safe activity.

What could happen rarely does. And even if it does, so what! Fear, that false evidence, wants to take control of the situation. Bullshit! Yes, you could bomb with the crowd. Once again, so what? If you have it in your mind you are going to have a good time and share ideas only you will determine the outcome of the presentation as it relates to you.

Know What You Control

You have no control over how the audience receives your message. You have no control over how the client will use the information you provide. You have no control how the person of your dreams will react to your proposal. It can go wrong! It will go wrong many times throughout life.

Trying to control things you have no control over will drive you insane. Unforeseen circumstances always crop up. Sometimes they destroy your happiness temporarily. Even finding the woman or man of your dreams does not guarantee you will always agree. It does not guarantee he/she will live to a ripe old age. Life has a cruel way of testing our resolve.

You can do everything right and still fail. That is not a character flaw; that is life, so said Captain Picard to Data when Data lost confidence because he lost a game he should not have. You have zero control over the weather or what people think of you. What you have absolute control over is how you interpret the world around you and how you respond. Marcus Aurelius said you cannot be harmed until you first feel harmed. Only you allow yourself to feel harmed.

What Would You Do If You Had No Fear?

It’s a valid question. What would you do? Take some time to think about it. If you knew you could not fail would you save and invest more knowing you are guaranteed an early retirement? Would you start a business if you knew it would be a wild success? Would you walk across the dance floor and ask the awesome woman for a dance if you knew she would say “yes”?

Well, I have news for you. You will never know if you do not try. You have to ask the woman; you need to open the business; you need to give the speech; you need to make the investments. Some will go wrong; some will blow your mind.

Some failures are a blessing. Suppose you see a woman you know across the room at a party. You are sweet on her and she knows it. She has made some indications of interest. You comb back your hair and make a move. She is everything you want in a mate. You build the courage to ask her for a dance only to be turned down. Your heart sinks. Then she puts her hand on your forearm and says, “I’m married, silly. But my sister, here she comes,” she waves to her sister to join you, “likes you. You remember Sally, don’t you?” After a wonderful night you find you have even more in common with Sally than the woman you wanted to date. Best of all, Sally is a frugal gal with some serious investments. She was looking for the right man to enjoy an early retirement with. Damn, I hate it when I get rejected like that.

Some failures are complete failures. Most are a stepping stone to the next level. You don’t want everything to go your way. Sometimes a loss or rejection is the best thing that can happen to you. Once you understand you have no control over the outcome you can open yourself to a world of possibilities. A bloody lip now and again is not bad. It is a lesson to learn.

Can you imagine Steve Jobs saying, “I don’t know if we can do that. Might not work.” What about Elon Musk? Bill Gates? Any successful business leader? You know as well as I that people that do the seemingly impossible are the ones who conquer their fears. Steve Jobs wasn’t born a master presenter. But he grew to be one. Check any YouTube video of Jobs at an Apple product launch. He was a master on stage. He got there by doing it.


You cannot conquer a mountain until first conquer your fear.

The Old Adam

When I was a little tyke I was required to attend confirmation classes at the Lutheran church. Without getting into religion, there was a lesson we can apply to fear. The minister talked about baptism pushing down the old Adam and bringing forth the new Adam, without sin. That is how it works in life. We must continually push down our fears so the new you can rise and do awesome things.

Zig Ziglar said, “You are born to win, but to be a winner you must plan to win, prepare to win, and expect to win.” Zig was a Stoic and never knew it. What you think about all day long is your reality. If you allow fear to rule then you will suffer the consequences. Only you decide. Only you control your thoughts. Only you allow fear to rule or evaporate.

Fear is an illusion with teeth a meter long or a toothless old woman, you decide. You will never know the love, pleasure, happiness, and friends you would have had if you did not allow fear to rule.

Fear destroys. Mankind has known this from the beginning. The question is: Will fear rule you?


Bipolar is not a life of extremes as this drawing illustrates. Bipolar is learning to live along the edges, struggling to control the overwhelming flood of emotions.

September is Suicide Prevention Awareness Month. Suicide is the 10th leading cause of death and 3rd among young adults. The issue is too serious to let slip by without an honest discussion. According to Centers for Disease Control and Prevention (CDC), 41,149 people committed suicide in the United States in 2013, 12.6 per 100,000. The suicide epidemic crosses all age groups and racial barriers, however, young adults (2.5%) made a suicide plan at a higher rate than older adults (1.35% for middle aged adults and .6% for older adults). People of mixed race have the highest rate of suicide while blacks have the lowest. All this is according to the CDC.

Statistics are cold and not what I want to talk about today. The story I want to share is about depression and more to the point, Seasonal Affective Disorder. It might seem like a strange topic for a personal finance blog until you consider socio-economic status does not insulate you from depression, suicidal thoughts, or actually killing yourself. Wealth is not a prescription for awesome mental health. Wealthy people may seek help because they have the money to pay for treatment or might have a stronger support group, but financial independence is not an elixir that cures depression or prevents suicide.


This is a hard article for me to write. Most people have a hard time understanding what I am about to say, especially if they know me or have seen me in a business setting. I suffer from manic-depression and came this close to being one of the statistics listed above. For a long time I could not understand why I felt the way I did when my life was so good. My marriage is great, I have two wonderful (and moral) daughters, a successful business, and financial independence. Drugs are not a part of my family. So why the deep bouts of depression?

It started when I was in high school, but really turned dark in my 20s when Seasonal Affective Disorder (SAD) doubled-down on the depression as the days shortened in the autumn. November and December were almost impossible times for me to stay alive. Only Mrs. Accountant kept me alive. I had the gun in my hand; I had the rope waiting for me in the barn. The pain was that deep.

When I informed my family I was thinking of writing this post they were supportive; when I said I wanted to provide solutions because I have beaten depression there was a resounding rebuttal. That is one of the truths about depression: those who have it sometimes do not think they are sick. Another truth is more sinister. There is a part of depression that draws you in. There is something comforting in the painful fog of depression, like an old friend. It is why it is so hard to avoid.

According to Psychology Today, about 10 million Americans are estimated to suffer from SAD and research shows as many as 4% of people suffer from bipolar. People with SAD suffer during different seasons, though the shorter days of autumn in the northern hemisphere tends to affect more people with SAD as winter approaches.

Manic-depression is a strange animal. I love, I really love, the manic phase. I get so much done and I feel on top of the world. Unfortunately, after the mania comes the depression. The swings are powerful. I am considered a fast cycler. That means I can swing from top to bottom more frequently than the average bipolar person. Sometimes the depression barges in when I am at my weakest. After working long hours for a long period of time, the exhaustion lowers my guard and the emotions rush in. It is so swift, so powerful, it takes my breath away. Before long I am with an old friend. It is a good thing I don’t keep a gun beside my bed.


Enough of the statistics and my problems. I am a solutions type of guy. I have found ways to reduce and alleviate the effects of manic-depression. If you are like me, medications do not work and have side effects which include suicidal thoughts. The best news I can offer is that SAD generally lessens with age; manic-depression does not.

The solutions I offer work for me. You are different! What works for me might work for you. Might. You need professional help to find solutions that work for you. Medication only works for some people. When medication is only a partial or a non-solution, you need to find anchors to help you through difficult times.

If you are having suicidal thoughts I want you to stop reading now and call your local suicide hotline or the National Suicide Hotline at:


People with bipolar struggle to know who they are.

1-800-273-TALK (8255)

When things get dark you need help. No matter how strong you are you must seek and accept help. I know it is hard. But your life depends on it. It doesn’t seem that way right now, but it will later.

Honing the depression side of bipolar is only half the battle. Taking the edge off the mania can reduce the depression side when it hits. The tug of SAD already is present as the days are noticeably shorter. You should be aware bright light helps, especially as the days bottom out in November and December. In NE Wisconsin November is the cloudiest month of the year. Coupled with the already short days it makes it very hard to push depression back.

Diet and exercise played a major role in reducing the wild swings of bipolar for me. Getting enough sleep also helps. This is really hard when your thoughts are racing, I know. I have a habit of living on very little sleep for long periods of time before I crash. The crash is not pretty. Usually I can keep the mania going for a bit longer in some cases to make it through a busy tax season or to push further into autumn so the SAD inspired depression is lessened.

The Christmas holiday with the pretty lights seems to also help. Once I make it that far I can focus on the upcoming tax season which seems to chip away at the depression until it is gone.

Summer is usually a good time for me. The longer days mean depression is subdued though not totally eliminated.

Regular exercise had played the largest role in reducing depression. The episodes are significantly reduced as long as I keep running and lifting. I take one day off per week and run three days and lift three days. It works for me. Exercise releases chemicals in the brain similar to prescription medications. The self-produced chemicals also seem to work better.

Stoic teachings also helped me immensely. By reading Seneca and Marcus Aurelius I have learned to let things go and only focus on the things I can control. For me, depression has been, in part, related to self-inflicted stress. When things go wrong the manic cycle starts spinning non-stop. Marcus Aurelius reminds me: Choose not to be harmed—and you won’t feel harmed. Don’t feel harmed—and you haven’t been. Easier said than done. As with any philosophy, it is a work in progress. Small steps every day.


The days are getting shorter as I write this in late September. I can feel the tug of SAD around the edges of my mind. Luckily I am not in a mania phase waiting for the collapse.

This is deeply personal. How do you tell someone, or expose yourself to the world in a blog, you once held a gun in your hand and struggled to not put a bullet in your head. The perfect fantasy world people sometimes see from the outside of my life becomes totally real once you step inside for a moment. I am just like you. My life is a daily struggle to understand the world around me. The depression has certainly eased over the years, but as my family made clear, it is by no means conquered.

I am lucky in one way. I have a loving family as my support group. They do not judge me. They gently help me through the fog and night of depression until I emerge out the other side. The depression episodes tend to be much shorter in duration as a result.

Readers of this blog tend to have a higher net worth and income. Let me remind you that you and your family are not exempt from depression or any other mental illness. It is nothing to be ashamed of. We are all people with all the accompanying frailties. What defines who we are is how we work together to build a better us.

accountantSean is a CPA who sent me an email asking a list of questions about how I started my business, how I operate successfully, handle problems, and balance work and personal life. It is a common request from members of the accounting industry. They want to know how I pulled this stunt off. In the past I touched on the subject; today I will dig deep using Sean’s email to drive the narrative.

Even though this story is about my experiences in my business, most of what I do works for other business models with slight modifications. The hardest part for a professional earning good money is to jump into the unknown of private practice and the certain decrease in income as a business is started; the money comes later. There is also fear of the unknown. I will share how I managed these issues. This will sound different from what you hear from other people or the media. The only reason I can give for the dichotomy is 1 in 10 businesses survive the first five years. Since I am one of the survivors, my story will differ from the majority, 9 out of 10 crowd.

I will use Sean’s email as the guide. I will respond to each section and question separately. Before we start I want to emphasize that what I did twenty or thirty years ago will not work today! My company has evolved and continues to evolve. If you want to start your own business you must be willing to constantly change as our society and economy changes. The challenges never stop and it never gets easier. If you want a business because you think it is easier or for the money, stop right now, leave this page, and go enjoy an early start to your weekend. You start a business because you love the challenge! The money does come after a while, but there will also be days you work for love only because there is no money coming in.

Let’s get started:

Hi Keith,
I was turned on to your blog (like many others) by the mention in a MMM article. I was thrilled to learn of someone who was working in the accounting industry, was an entrepreneur, and had figured out a way to strike a balance with work and personal life. I have been reading your blog ever since.

Thank you, Sean. I am humbled.

I am a CPA that currently works for a small firm in western New York. I have often kicked around the idea of forming a practice of my own but I just don’t feel I have the experience to make the jump. You obviously had the courage to take that jump early on in your career. I know you have addressed many questions you receive via blog post and was wondering if you could share your experience regarding some of my thoughts/questions below:

There are a few issues to address in the email intro. I have worked in the accounting industry most of my adult life. I turned 18 in 1982. I had no idea what I wanted to do with my life. I graduated in June and the family farm when through bankruptcy in November the same year. Everything I knew was gone. 1982 is also the year the economy was really bad. The 2008 recession was nothing compared to 1982 in NE Wisconsin. In the county where I lived there were no employers even willing to give you an application. Why waste the paper; the answer is no.

I worked in my dad’s agricultural repair business (which I hated), but it was the only thing available and sitting on my ass all day was not an option. My dad hated paperwork so I got the job, which I liked. Other employees asked me to prepare their tax returns. Dad was new in his business so I worked for far less than minimum wage so the tax prep work was welcome income. “But son, you live here for free and get to eat my food. And think, some day this will all be yours!” “Great, dad. Just fucking great.”

My dad and I got along well, but my heart was not into the business. My brother is a different story. He runs the company today and I am happy for him. I, on the other hand, stepped into a silo with silo gas and was injured. It was my ticket out. The great news was I saved every penny I earned and dropped it into the MFS MIT fund; I later moved to American Funds where I invested in growth & income mutual funds. August 1982 the stock market started its historic rise. My minor nest egg grew into a possible early retirement. In other words, I got lucky. Sure, I saved like crazy so I created my luck, but the world at large was in love with Keith. Aaaaawe!

My courage in starting my tax practice had nothing to do with courage and more to do with rampant stupidity and stubbornness. From 1982 (this means I started tax work in the spring of 1983) to 1989 I worked very part-time as a tax guy. I had 50 or fewer clients on the side and they were all easy tax returns I could pound out in a few minutes. I also did them by hand back then. For the 1989 tax season (in the spring of 1990) I decided to go full-time. This is what I wanted to do, the career I wanted. I unzipped my fly and bought a computer for the business ($4,000 back then), a high speed printer (2-4 pages a minute back then and another $4,000), and opened my wallet to advertise.

Everybody needs a tax guy, I assumed. Dumbass! They might need a tax guy, but they don’t need me as their tax guy. On April 15th, 1990 I looked out my bay window and realized I had 48 clients, $3,000 in revenue, and $34,000 in expenses. I needed to get smart fast or this little fantasy world I live in was coming to an end. Good thing I already owned my home. Promoting my business is another post in the queue.

Next question:

When you started your own practice did you have a mentor to help guide you through the initial few years?

No, Sean, I did not. I was a stubborn ‘ol kraut too stupid to know what he was getting into. I had business in my blood so I knew working for someone else was out of the question. In high school I belonged to the Future Farmers of America (FFA). Back then we raised money by selling light bulbs. Yes, I was the number one sales guy the first two years. They pissed me off my junior year by insinuating I owed the school more sales because I was so good at it. I said “Fuck off” in the awesome polite way I have and refused to sell another light bulb.

Instead of light bulbs, I decided to start my first business. There was a company back then called Specialty Merchandise Corporation (SMC). They imported stuff which I could buy wholesale. I took my sales efforts on the road and sold all kinds of other stuff, but no light bulbs. The school was so pissed they called my dad in. It made no difference. I was a SMC salesman now; they knew where they could stick their light bulbs. Moral of the story: Don’t kick your star salesman in the nuts. He doesn’t need you; you need him.

I had no mentors, but I did have motivation. I knew my competition. My goal was to take my game to them. And I was dumb enough at the time to think I could pull that stunt off. I matured a bit since then. A bit.

When you were establishing yourself/your practice how did you educate yourself on different tax subjects?

Funny you should ask. I have alluded to my limited college education in the past. Just because I did not finish college did not mean I did not get an education. I studied non-stop. Back in those days the IRS had something called Package X. It contained just about every form known to man. Package X came in three huge plastic wrapped boxes. Coupled with Publication 17 and 334 (I hope I got that right) I had limited research materials available. I also paid for CCH. (Over a thousand bucks per year. Ouch!) CCH is a massive tax research publication. I had twenty feet of shelf space filled with tax books.

When I went full-time in 1990 I took an H&R Block training class. They wanted me to work for them. Fat chance. It was a good starter course, however.

I had no professional licenses at first, but I still attended 50-60 hours of continuing education (CE) classes per year. I wanted to get good and I went right to the source. I was determined to be the best so I invested in the one thing that would make a difference: education. Two years later I was an enrolled agent (EA), a licensed tax professional who is allowed to practice before the IRS. I could now represent clients in audits, et cetera. Only 30% of people pass the EA exam in any one year. I passed the first try. I used a self-study course from Thomas Tax Seminars (TTS). TTS is long gone; I am still here.

If you did not have a mentor (or even if you did) I am sure you experienced situations when you first began your practice where you felt you were in over your head. Perhaps a more convoluted tax situation or a client coming to you with what they believe to be a simple problem but is (from a tax perspective) a complete nightmare of issues. Or even a situation where you committed to doing tax work and realize you flat out have not experienced this situation with any of your other clients and simply do not know what to do. How have you learned to handle those situations?

Now we come to the crux of the situation, Sean. You are scared shitless to strike out on your own. Wanna know a secret. So was I. I still am. Fear is a damn good motivator. As the business owner you are the go-to guy. You make the call in tough tax situations.

If you think I was over my head when I started my business, you should see me now. Go back and re-read some of my posts on how the Mr. Money Mustache mention messed with my business good. Let me add some honesty here; I have put on a brave face for my audience. It was a hell of a learning experience. See, the lessons never stop coming rapid fire. And people suggest I should retire. Really? Where the hell am I going to get such excitement anywhere outside of business? Retire! Pftt!

As a tax professional, people will bring you the tough stuff; they can do the easy stuff themselves. Remember those CCH books lining my office walls. Well, when the going got tough I used them. Today you research online; the books are gone. There is no issue you can’t figure out. Find your niche and educate yourself. After thirty years I still run myself tight now and again. If you think you are a smart tax guy, wait a while; they will change the rules on you. Taxes always change! You are the professional! You need to do your research and come to a solution that is reasonable.

You are going to get some wrong. Clients will get pissed, the IRS will change rules after the fact, and you get the blowback. Welcome to my world, Sean. It’s a fucking party all day long. And people ask why I drink. Geesh!

Truth is, you must always keep learning. CPAs need 40 hours of CE per year minimum. I am not a minimum kind of guy. I take far more training than is required. That is why I am good (if I can act conceited for just one moment). I got good because I took the impossible cases and fixed them. I got good because I had my head handed to me a time or three, as well. You will learn more from your failures than your successes. There is no shortcut. Sorry, Sean.

Are there other influences or accounting professionals in the industry that you follow?

Yes. I have no pride to stroke. I talk with my peers and have worked with them. My client comes first! My pride does not even get a showing. I talk and I ask. There are some local accountants I admire because they do great work. For some reason I don’t get many of their clients. Go figure. I also like certain training programs better than others. Tax Insight is one I attend every year. Phil Harris is a dry speaker, but also one of the smartest tax guys I have ever met. I bring plenty of water and listen close.

Some of your greatest mentors will come from crazy places. Brandon over at the Mad Fientist has written several tax posts. He is not a tax professional, but is a fucking genius when he writes on tax issues. He researches the shit out of the subject, just like tax professionals should, and explains it perfectly to his audience. I’ll let you in on a secret. I am still working through one of his tax posts and trying to figure out how to apply it in the real world. He already does it so this dumb tax guy will one day catch up with Brandon, a non tax professional, and will surreptitiously bring up the subject, picking Bandon’s mind. I gotta learn how to do this. It is too juicy for my clients!

Read a lot, Sean. Every part of every day is part of your education. Stretch yourself with tough cases. It is the only way to learn.

Have you developed any techniques for handling disgruntled clients when a mistake is made or there is an oversight?

There are clients from hell, no doubt. If we made the mistake, we make it right. Sometimes that means covering an IRS penalty. It is rare, as it should be, but it happens.

The big issue is when a client swears they told us something, but didn’t. We have had clients modify documents to try to place blame on us. Some people are dicks. Today we scan and keep everything. It ended most problems.

Some clients are unhappy no matter what you do. We ask them to leave. I always try to be polite. I even suggest, if they are interested, an accounting firm I feel would be a better fit for them. I try hard, ahem, not to be a dick, though sometimes I can be a real cock.

There are also clients who are too needy. They will be on the phone daily. Do yourself a favor; move’em along. No one client is worth it. No amount of money is worth the grief. I have no problem with questions, but when it becomes virtual harassment I lose interest instantly. My life is too important for that kind of crap.

I would really enjoy hearing your thoughts on the aforementioned questions. I know I have asked a lot, but I think there are many readers out there who would benefit from learning about your experience.

picardwiningWell, Sean, I hope you enjoyed what I shared today. I could go on for hours. There are so many things I could share and I do in this blog. It will never fit in one neat package; business is not that neat and clean. You will have days, if you strike out on your own. My number one piece of advice: keep learning. Even if a class does not provide CE, still take it if it interests you. Learn. It is what makes you really good and separates you from the competition.

And remember what Captain Picard said, “There is nothing like sitting in the captain’s chair.”


This is your new best friend, the librarian at the reference desk.

How would you like a cool $850 every month in your pocket tax-free? Invested in the Vanguard S&P 500 index fund you should be booking around a million dollars in 30 years, assuming historical averages of 7% returns compounded per year after inflation. Okay, I lied. $850 invested every month for 30 years at 7% comes to $1,049,923.39.

But 30 years is a long time to wait for your million dollars. Well, I didn’t say you couldn’t take a bit out of your paycheck and drop it into your retirement account to supercharge your wealth building (and tax savings). Regardless, a free $850 every month in the First National Bank of Wallet is nothing to sneeze at. And anybody can get the free stuff and the money. In fact, the folks handing out the goodies want you to have the money. Who are these crazy people?

Librarians! Yeah, those people you haven’t visited since your junior year of high school have made some changes to the place while you were gone and you might want to check it out.

You know how some businesses can be rude to paying customers. Well, at the library I have never had that experience. These people are happy to see me and allow me to walk out of the place with stuff you would not believe. Sometimes they actually let me keep it forever! And they still have the regular goods you would expect at a library, like books; you know, those thing made of paper, held together with glue, and have pages. The library likes those back after three or four weeks, however.

Setting the Stage

By far, this is my favorite blog post to-date on The Wealthy Accountant. The research was not only fun, but took me places I didn’t expect. As a long time library lover (since I was about this tall) I learned more about my library in the past week than ever before.

It started when one of my junior accountants in the family noticed a free Wi-Fi hotspot at the Elisha D. Smith Public Library in Menasha Wisconsin and checked it out. The thing is the size of a business card and not much thicker and only requires plugging into the wall. It automatically set up the hotspot in our home. We live in the boondocks and have an antenna on the roof to get wireless internet. It is slow and clunky, especially when the four of us are streaming something. The backup Wi-Fi made everyone happy until we returned it.

I started thinking about all the other things libraries have. A cursory look piqued my interest and started this article on the path to publication. As I started gathering information it was obvious I could cut my personal spending hundreds of dollars per month. This money, funneled into an investment, could catapult me to financial independence faster than ever without sacrificing anything.

I will now share with you some of the awesome finds I made checking out massive libraries like the ones in Los Angeles and the surprising values available at libraries in towns as small as 725 people. As I started to add the savings up I could not resist calculating the value of this money invested over a working career. I know most readers here work 10-15 years and then retire. But think of it. If you could lop off up to $1,000 each month from your spending, how fast could you retire then? Once the house is mortgage free, the library pretty much ends any real spending needs. The cost to live is microscopic then! If you want to scale back to part-time work or engage a hobby or small business idea you are now able to do so with only a modest nest egg.

Picking a Library

I anticipated the complaint that this might only work in large cities with massive libraries. Wrong! My research tossed that idea out the window in about twelve seconds. Another thing to consider is that libraries usually take anyone as member. I live in a rural area where our local library is small. Inter-library loans are common, expanding the services and items available without a long drive. I also belong to three library systems. None of them turned me down. I use the Menasha library most often because it is close to my office and the fireplace is to die for. I also belong to the Chilton library (my local library) and Appleton’s public library.

If one of my three libraries and their network don’t have what I am looking for I can always break down and buy it, but it ain’t too often.


It is difficult adjusting to the reading area at the Menasha Public Library on a blustery day in January. Sometimes it takes me 3, maybe 4 full seconds before I acclimate.


Before we start counting our money, let’s take a look at what we can find at the library. I will not mention the books, movies, music CDs, magazines, and newspapers. But since I did anyway, let me just add that the movies of the latest hits are free and available before Netflix or HBO have them and you can keep the 20 bucks Wally World or Amazon want for the movie. Same with music CDs. (Stick around. There is a lot more free music at the library than you ever imagined.) I like to own books, but most are read once and never looked at again. Some books are used as reference for my writing. Then, after I kick the tires by borrowing the book from the library to see if it fits my needs, I ring up Amazon and have the book delivered to my doorstep.

A while back I talked about cutting your electric bill. I encouraged the use of a Kill-a Watt meter to help determine the energy hogs around the house. Since you only need the meter for a short period of time the library is the perfect place to get one without a penny of cost.

But now it gets really weird. The Neenah Public Library and the Patterson Memorial Library in Wild Rose, Wisconsin (Population: 725. (Salute! as they used to say on Hee Haw. Kids, Google it or check it out on YouTube.)) have ukuleles. Ukuleles! Neenah has 8 and they are all lent out with a waiting list of 20 people. This is where I usually let a cuss word slip, but I’m speechless.

Neenah and Wild Rose have cake tins; Green Lake Public Library in Wisconsin lends fishing equipment, a telescope, and backpacks; the small Wild Rose library has early literacy kits, a seed library, rubber stamps, card making kits, a movie screen, and slide projectors; Neenah has knitting needles; and Menasha has free legal services (excluding criminal), Gale Courses for free, Roku, Kindle readers with an ungodly amount of books loaded on it (great for vacations/plane trips), and Amazon Prime movies. And this is just a sampling!

This is where we all sit back and take a deep breath. From now on you have to promise me before you spend a penny you will give your library a call and see if they will lend it to you. You see, the library is like this really friendly neighbor who is always happy to lend you any of his stuff without question, cost, or requiring a return favor. In fact, the library is such a friendly neighbor they want you to borrow their stuff. You hurt their feelings when you buy stuff you could have borrowed from them. Now I know you. You are good people. You are not the kind of person to hurt the feelings of a kind, gentle soul of a librarian.

Okay. Now we can start counting our money. We will start with the LA libraries and then move to smaller libraries.

Money, Money, Money

Los Angeles has two library systems: County of Los Angles Library and Los Angeles Public Library. (I don’t visit California often so locals should feel free to correct me.) There are so many perks in these large libraries it would be impossible to include them all here. Here are a few free subscription services available from these two library systems:

Zinio: The library portal has over 360 magazine titles without any limits or return dates. In case you are worried they only offer Turnip Greens Quarterly, think again. Think: National Geographic, Vogue, and Rolling Stone. Value: $50/month and up.

Hoopla: More books and comic books than you can ever read. Value: $50/month or more depending on how many books you read. Live one-on-one help for academic courses and resume preparation/review. If you or your children need help studying or getting your resume right for the perfect job, this benefit is worth: $4,080 per year.

Freegal: Like music? Library patrons can download three free songs per week at no cost. They have a pretty good selection too. At a buck and a quarter per song that adds up to a value of: $195 a year. has a massive library of instructional videos on every topic known to man. When you need to understand a project yourself, this is the place to go. Value: $420/year

These few benefits to patrons of LA’s two libraries add up to serious savings. There are many more opportunities in such large library systems you can easily cut your personal spending by a thousand or more per month. The short list above adds to $5,895 in annual value if fully used. Add a few more services and you have $10,000 in annual benefits. Even modest readers will find greater value than I list with Zinio or Hoopla. Add the books, audio books, movies, and magazines you are up to $10,000 real fast.

Smaller Libraries

If you are lucky enough to live in a large city your library can provide you with a life of luxury. Smaller communities are not out of luck, however. Some of the benefits are hard to value so I will approximate. Remember, the things I list here is only a short list of things available at your local library.

Neenah/Menasha: These two city libraries are part of the same network. If you can’t inter-library loan the items I list you can drive five minutes and pick it up yourself.

Legal Services: Have a legal question? Ask an attorney without cost at the Menasha library on select days. You might also qualify for free legal representation. Menasha also plays a movie on the big screen periodically with free popcorn. (So does Appleton.) Jobseeker Advice is provided from time to time with one-on-one assistance in your job search and review of your resume. Values: Legal Shield is comparable to the legal help at the library and costs $60-$80 per month; the movie for a family of four, including popcorn: $50, at least; Jobseeker Advice is worth, let’s say: $100.

Knitting Needles: What is the value of this? I don’t know, but it sure is a unique item to find at the library and Neenah has it.

Gale Courses: There are hundreds of free six week courses available from Gale Courses. They are not crappy courses either. They are taught by professionals. Choices include Starting Your Own Business, Healthcare, Accounting (hint, hint), and hundreds more. Value: At least $100 per month. Other online courses frequently go for several hundred dollars per course so the value is really worth a lot more.


The Menasha Public Library does something only a few libraries do: lend out toys. You have to ask. I was completely finished with this article and only grabbing a few last photos when a kind librarian showed me all the stuff they had available in the kid’s section. That would take a whole new post to cover all those goodies.

Projectors: Have a business meeting, school presentation, or a family gathering where a projector is needed? Menasha has a projector with your name on it; a screen, too. Value: $300 to purchase.

Kindle: Heading out on vacation or a business trip? No need to lug heavy books through the airport and have the airline nickel and dollar you to death. Drop all the reading you will ever need on a Kindle from the Menasha library and you are good to go. Value: Oh, let’s say: $50 per use. Tell me what you think of my assessed value in the comments section. Just leave my parents out of it.

Now we will finish up with two small libraries: Green Lake Library and Patterson Memorial Library in Wild Rose.

Green Lake Library: This small library lends fishing equipment, backpacks, and a telescope. What do you expect from a rural library? It’s what we do out here in the backwoods of Wisconsin. Don’t knock it until you try it. Value: Fishing equipment can get pricey so I will say $50 per use; backpacks are reasonably cheap so we will go with $15 per use; and that telescope has me salivating. How about $25 a use for the telescope. No peeking in the neighbor’s window. We have police around these parts.

Wild Rose: Joseph Bongers, the Adult Services Supervisor at the Menasha Public Library, connected me with the director of the Wild Rose library, Kent Barnard. I am indebted to Mister Bongers for the referral and his advice in writing this article. What Barnard did for the public library in Wild Rose is beyond words. Here is a town of 725 people with a public library that has two ukuleles (like Neenah), slide projectors, computer projectors, a seed library, and cake pans galore! Even in this very rural area, the people of Wild Rose could easily keep several hundred dollars a month in their pocket by visiting their library rather than Wal-Mart. I stand in awe at what Kent Barnard has done. Never before has one person done so much with so little, if I can twist Churchill’s words.

A Tight Knit Group

Libraries and their directors and supervisors are a small and tight knit group. They meet at conferences and talk, sharing ideas. They are a great bunch to know. They have their finger on the pulse of knowledge. If you have a librarian for a friend you don’t need any more. Your library must be your first stop whenever you consider a purchase. If they don’t have what you are looking for they might get it. They get book ideas from you, too.

What I want you to do now is close your computer and visit your local library. Walk to the reference desk and ask them about all the stuff they have available for lending. Many libraries have a newsletter or a catalog of all the services, classes, book discussion groups, and other services they have. Don’t be a stranger. Visit your library often. Join two or three if you can and if it makes sense.

There are good people at the library. They tend to be a quiet group with a warm, friendly smile at the ready. Don’t leave them waiting.

Update 1: Linda DeNell, director of the Caestecker Public Library in Green Lake Wisconsin, contacted me with additional information. In her own words:

Thank you for being interested in the “unusual” items we check out to patrons. Like Kent in Wild Rose, we also have a seed library every spring. The backpacks he mentioned are for kids – we call them outdoor adventure backpacks, because they contain binoculars, compass, bug catcher, magnifying glass, and guide books to critters, tracks, wildflowers, and other things children can discover when they get outside.

We also have two disc golf sets, trekking poles, a spotting scope for bird watching, binoculars, and the portable telescope. And six sets of fishing gear.

Remember, Green Lake has a population under 1,000. Small libraries are just as powerful wealth generators for the community as large libraries.

Update 2: After I published this article I asked the Menasha Library who they take as patrons. They told me it did not matter where you lived, all were welcome. Wow! Do you understand the ramifications of this? That means you can use all those goodies mentioned above about the LA library and benefit from them. Join the LA library and get free and 3 free songs per week.

When you travel you should visit the local library. Rather than pack the whole house, plan ahead by contacting the library and see how much you can just borrow from them when you get there. The ideas are endless. This stuff really has me excited.