Archive for October 2016

Supercharge Your Net Worth

img_20161009_152000Business ownership is the fastest way to significant net worth and financial independence (FI). It is possible to grow your net worth $2 or more for every dollar you increase your revenue. This is before investment gains! By understanding the accounting behind business valuation, anyone can accumulate a seven figure net worth in as few as five years which can be turned liquid and invested in income producing assets allowing for early retirement.

Building a massive net worth is more difficult, if not impossible, with earned income only. Mega-wealthy people like Warren Buffett and Bill Gates know wealth is created from multiplier effects. Buffett grew Berkshire Hathaway by investing in other successful companies and insurance. Bill Gates grew Microsoft into a world leading software company. In each case the majority of the wealth created, around twenty times the profit level, came from multipliers. Only about 5% of their wealth came from actual profits!

Average people can use the same methods as the uber-wealthy to supercharge their net worth. Business owners have the advantage. Wage earners have no multipliers to help them accelerate their net worth growth, whereas a business owner can increase her net worth by $2 or more for every dollar of increased revenue the business has even if she saves and invests none of the profits.

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Workflow in a Tax Office


Workflow system.

The more traffic grows on The Wealthy Account the more questions I get from accountants wanting to know how to run their office more efficiently. The tips below can be tweaked to work in many business settings and can be applied to personal management of time with family and friends while allowing ample “me” time for reading, thinking, and relaxing.

The workflow process in my office evolved over time as the tax industry changed and my practice transformed from a tax office to an accounting/payroll/bookkeeping office to its current incarnation as a quasi-communications company focusing on tax issues. So you understand my thought process I will walk through how I handled workflow in the past and why I changed procedures when I did. By seeing each stage of my workflow history you can pull the pieces that fit your situation best and modify them for your needs.

In the Beginning. . .

Organization in a tax office is not optional. From day one workflow had to be recorded and tracked. In business and even in our personal lives it is important to write things down. We start each client with a line item on a legal sized piece of paper. Since there are so many steps we take with our clients we break down each task into its components. Accountants track their own work and the computer monitors progress. My front desk is used as a redundant system, preventing mistakes. An empty checkbox on the legal paper requires investigation.

Before workflow even enters the office, client flow must be managed. In your personal life you can’t visit 38 different friends in different locations at the same time. The same applies in business; you see one client at a time. The early years of my business grew fast. People would frequently drop in without an appointment. Then one year in early February there was a line out of my building and half way down the parking lot. Something had to be done.

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Learning to Think: The Art of Critical Thinking

thinking-767040_960_720Critical thinking is in short supply in our society. Before we blame modern technology, the weather, or those darn kids these days, we need to look in a mirror. Critical thinking has always been a dear commodity from the beginning of time. You can’t force critical thinking on another man, but you can take steps to incorporate critical thinking into your approach to any problem and life in general.

School rarely teaches you to think. Schools are built to ingrain conformity. Most people are broke because they were indoctrinated into the poverty mindset. Hell, economists define economics are the allocation of scarce resources. The message: there is not enough to go around so we will have to find a way to distribute the limited [fill in the blank] resource.

There are no shortages! We complain we have limited water resources when 71% of the planet is covered by water. What really happens is we piss in our own cup and complain our water is polluted. The problem is not a shortage of water; our problem is dangling our junk over our drinking cup.

I could go on with a plethora of additional examples, but you understand my point. Huge, world changing issues, require leaders willing and capable of critical thinking! Unless you are one of these world leaders you have limited influence.

Critical thinking is vital in your personal life as well. Decisions made with faulty, or worse, no thinking, are the root cause of most problems in our lives.

Everyone needs a bit of accountant in them. Everything (or so scientists have discovered) can be boiled down into a mathematical formula. We don’t need a master’s degree to make sound decisions based on critical thinking. A few simple ideas can give us all the tools we need to live a happy, prosperous life.

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Lessons Learned: Raising Children with Disabilities

In the winter of 1995 Mrs. Accountant and I were a young married couple anxiously awaiting our first child due in late February. Winter in NE Wisconsin has a tendency to get bitter. The winter in question was no different. The holidays were still fresh in our mind on January 7th. My business was a remodeled basement; the following year would be my first with a store front.

The air felt colder than normal and Mrs. Accountant was feeling the effects. The stress of pregnancy coupled with the weather had her bed-ridden. Early on the 7th she got up and wandered to the couch. Then the world turned upside down. Her water broke seven weeks early. Dumb as I was I still knew this was really bad.

I rushed Mrs. Accountant to the hospital. The doctor decided the longer the baby stayed in mom the better. For two days my wife suffered. The doctor finally relented and had Mrs. Accountant transferred to a hospital with facilities for such a premature baby.

It was an intense delivery. I was not allowed in the delivery room. Our first baby entered the world seven weeks early and spent 19 days in intensive care. If I had not worked out of my home at the time I would have never stayed in business. Working from home allowed me all day with my wife and newborn daughter.

The medical problems were only beginning.

Chapter 2

Five years later Mrs. Accountant and I decided we wanted one more child. Two seemed like a good number and we had it in our heads if we only had one child she would be spoiled. (We spoiled her anyway, with love.)

The doctors were taking no chances this round. The ultra sounds were all normal; all tests were normal. It did not matter to Mrs. Accountant and me the gender of our child so we waited for our baby to enter the world to know.

Shortly before the due date the doctor decided a C-section was the safest course. This time I was allowed in the delivery room. The operation went smooth. As the baby slid from mom’s belly one doctor said, “Congratulations, sir. You have a son.” Another doctor said, “Look again doctor. You have a girl, sir.” All I remember was muttering, “It’s both.” The room was silent the remainder of the procedure.

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My Daughter Retired at 22 — Here is How She Did It

img_20161018_075051For five years I played treasurer at the Wisconsin Writers Association (WWA). The annual conference is their big event. Every year great minds gathered to share ideas writers could use to write better and promote their work. I always tried to snag a spot for a presentation on promotion for writers.

WWA is a small writers association. Only a small portion of the members are actually published, not including self-published books. I had tons of ideas for those few who did have a book in print and in bookstores. When it comes to promoting a small business — and writing is a small business (which can get really big for some) — I have a massive arsenal.

Three years ago I presented at the WWA annual conference in Wisconsin Rapids. My idea for writers was simple. Stop doing book signings at bookstores and focus on libraries. A gasp rose from the crowd. Sacrilege! I had to explain when you are at a bookstore you have thousands of competitors an arm’s length away. It is common for an author at a bookstore signing to have fewer than five people buy their book; many times they sell none!

Libraries are different. Your competitors are available for checkout, but a signed copy is available only with purchase. Libraries are hungry for authors willing to speak to their patrons. Not only will you sell books, you will also get paid for the speaking engagement in most cases. Libraries are the unsung heroes for people looking to supercharge their writing career.

I went into more detail at the conference than I will here. I will chase to the end. During the 50 minute presentation I outlined how an author can earn six figures annually working ten or fewer hours per week. I was soundly admonished. Authors disagreed vehemently that this would work. I stood my ground. As the presentation came to an end a man in the back of the room raised his hand and said, “I am with the Door County Library system and what Keith has said is 100% true. We can’t get authors to show up even when we pay them. And when authors work with us they sell books and get paid for that too. We also sell the author’s book at wholesale price to patrons so the author sells even more books and gets more royalties.” I rest my case.

My oldest daughter, Heather, was in the audience that day. She is also the only one who took notes and followed through.

Play all Day

Heather is not a normal kid; she is a lot like her dad. She does not want to run a business like I do, but she isn’t excited about working for the man. She struggled with her true dream: art. The kid is talented, for sure, but so are another couple million people, too. Heather wanted to attend art schools around the planet and I refused to pay her way. I told her she doesn’t want to produce the same art everyone else is producing. Be different if you want to survive with art.

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A Walk Around the Farm

Each of us have a worldview built on our personal experiences. There is no right or wrong in anyone’s worldview. The differences are what make life worth living. It is why we communicate. Life is interesting because we have endless opportunities to grow as we travel through each day.

Some of my favorite comments are: You write different. You run a tax office different than any other I’ve seen. Working for you is different from previous jobs. Your ideas on growing a business are so different. The key word is different. When people say I am different it means I am doing something outside the mainstream. Perhaps I am blazing new roads. Doubtfully. What I am really doing is practicing a task in a manner that makes sense to me based on my worldview.

Anyone haunting these posts knows my disdain for formal traveling. That makes me different again. I am getting better. By writing out my thoughts and communicating with people I respect I am discovering ways I might enjoy time away from home. And good thing. Mrs. Accountant would enjoy traveling more. What she sacrifices to be with me is beyond comprehension. The plan for a long road trip is still on. Mrs. Accountant wants to see Hawaii so bad it hurts. I think next summer or autumn will be the time we take the leap.

Before I start that part of my life I want to invite you into my home. It is autumn here in NE Wisconsin. It is the prettiest time of year. Instead of showing you the building where I eat and sleep, I will give you a tour of my farm. It should help you understand why I like home so much. There are lots of pictures. Enjoy.

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The Book of Gratitude

img_20161018_081240Marcus Aurelius hoped for a period of peace when he returned to Rome in 175 after spending much of his reign fighting wars and natural disasters. He secured the borders along the Rhine-Danube after spending most of three years in Carnuntum. A year later Marcus and his son returned to the Danube as hostilities flared once again. It was here, between the battles, where Marcus started writing reflections on life and how to live he titled To Himself. These writings later became Meditations.

Of all the Stoic writings from antiquity, Marcus speaks to me clearest. Whereas Seneca wrote letters which feel polished for publication and Epictetus gets preachy at times, Meditations has the comforting feel of a man reminding himself how to live an honest and good life. There was no need to impress the reader; the only reader would be Marcus himself. The honesty Marcus shared with the world is his greatest gift to humanity.

Start with Honor

Meditations is divided into 12 short books. The combined text reaches 99 pages in the copy I carry with me religiously. I find myself reading bits and pieces daily while reading the entire text from beginning to end slowly in an endless cycle. Because Marcus was writing to himself it feels like he is speaking to me, right to my face. With each passage I can’t help but think he was the greatest political leader to ever have lived.

In a time where emperors demanded the heads of any who would commit the smallest slight, Marcus was quick to forgive. His gentle soul made him loved by the people. History has called him the last of the Five Good Emperors. Rome was at her greatest when Marcus ruled.

The problems faced by Marcus daily are beyond anything I will ever experience in my life. In under 100 pages I can find guidance, warmth, and compassion for anything I am struggling with. Marcus had the power to crush his enemies and people who annoyed him. No one could hold him accountable if he did. Yet he chose to do the right thing, to live with honor and integrity. He is the kind of man most of us would follow into war.

As Marcus began writing to himself he started with a book of gratitude. The 12 books that comprise Meditations are untitled. In my mind the first book is called On Gratitude. He lists family, friends, and acquaintances that molded him into the person he became and thanked them all. In our time when politicians can’t wait to pat themselves on the back, Marcus began his self-reflection with a list of all the things he learned from others. He gave them credit. Read More

Early Retirement versus Laziness


Look at all those crazy retired people. They are so lazy as they sit there on top of a mountain they climbed.

Pete over at Mr. Money Mustache does not publish as often as he once did. I still check in now and again to see what Pete is up to. Even when there are no new posts people still comment on previous posts. A few days ago a comment grabbed my attention. In short, the commenter stated she thought Pete was anything but lazy. This got me thinking.

The post in question was actually written by Mrs. Money Mustache. (I’ve been in the mustache house. She really does have a mustache. Damndest thing I ever saw.) She said she felt like a “Lazy Log” compared to Pete who is “extremely self-motivated”. As their accountant I can attest neither are lazy. On a fairly consistent basis Pete contacts me on a tax related topic he is working on.

As most of you are aware, MMM retired at 30 and is living the good life. The argument over the years has revolved around ‘Is Pete really retired?’ The answer, of course, is yes. Mr. and Mrs. MM are retired and living the life they want. The next question then is “Are all these early retire people lazy asses?’ That is the topic of today’s discussion.

Busier Retired than when Working

I have noticed in my office that when many people retire they end up busier than when they were punching a clock. For some reason a job screws up your personal life so there is no time for major projects that sooth the soul. Once you put ‘organized labor’ behind you (don’t confuse with union labor) you are now free to pursue the things you want. Most people are like me, brimming with thoughts and ideas racing through their mind. Once the floodgate is opened it is unstoppable. Read More