al_capone_in_floridaWhen someone in the local area makes the news for embezzlement it is not a matter of if they will show up at my office, it is a matter of when they show up. The same scenario plays out every time. Someone gets caught with her fingers in the cookie jar (usually for gambling) and charges are filed. The district attorney prosecutes the case. (Embezzlement cases make the news and the district attorney is a politician who can’t help getting on her knees to earn some votes.)

Most embezzlement cases end with a conviction, or more often, a plea agreement. The accused is eager to make a deal that keeps her out of prison. The DA and judge soil themselves with the familiar sentencing template. The defense attorney has no choice but to recommend her client goes along with the deal to stay out of jail.

I see the same agreements again and again. The prosecutor demands a brutal repayment plan to the victim, the judge rubber stamps the deals and the accused jumps up screaming, “I’ll take it!”

Then the IRS letter arrives three weeks later and the house of cards is ready to fall. Ill gotten gains, you see, are still required to be reported as income and the IRS watches these financial crimes cases very closely. When the defendant loses or takes a knee the IRS swoops in for their share of the pickings. All that unreported income is now taxed with penalty and interest added. And no money to pay for it.

The court ordered payments are mandatory for the accused to stay out of jail. The IRS doesn’t care. They have a spotless record of killing the goose that lays the golden egg. First the IRS demands payment, a payment which can’t be made because all income is diverted to the court to reimburse the victim. But don’t count the IRS out so fast. They have more power than any rinky-dink state court. The IRS is part of the Treasury Department which is part of the federal bureaucracy. Now they have power.

The defendant has no power! She has to pay the court ordered payments or go straight to jail, do not pass go, do not collect $200 (and if you have $200, please send it to . . .) Then the IRS gets sick of waiting for their money so they levy bank accounts (which are empty) and garnish the paycheck. Now the defendant has no money to pay the court ordered restitution.

This is where I pick up a new client because no other firm in town wants them. Oh, and they have so much money to pay my fee.

They Took Down Al Capone

But this isn’t a story about embezzlement and the consequences; it is about getting caught. Al Capone had a criminal organization to die for. Many did. Al knew how to get the job done. He embezzled, of course, and murdered, bootlegged, racketeered (I love that word. It would be awesome to go through life telling people I was convicted of racketeering. Nobody knows what it really is, but it sure as hell sounds cool), and bought off the police (not a hard thing to do).

The law couldn’t get a charge to stick until they called in Elliot Ness. Now Ness was with the Treasury Department, you know, the feds. Now those boys know how to get shit done. The reason is simple. The government doesn’t really care if you get murdered or beat up. That’s your problem. They only care if it feathers their cap or gives them political capital. But if you take a penny from the government you better bring the jar of Vaseline with you; you’re going to need it.

What is due to the state pay as quickly as you can, and you will never be asked for that which is not due.

—Epictetus, Enchiridion

Al Capone committed crime after crime and got away with it. His one mistake was not reporting the illegal income on his tax return, yet another crime. Capone paid Alcatraz a visit due to a tax evasion conviction. The government put in half efforts when it came to bootlegging and murder, but when the government was due some coin they pursued poor old Al relentlessly. And he could have avoided the whole unpleasant issue if he would have just reported his income from criminal activity.

Tax Planning Tip and Financial Planning Opportunity

It gets interesting here so follow me. You report illegal activity income on the front page of Form 1040, other income, Line 21 on your 2016 tax return. Listen close now. You only pay income tax on the illegal gains. There is no payroll tax or self-employment tax! This means you can bump off the local First National Bank and pay less tax on the haul than if you ran a legal enterprise! Talk about a fucked up system.

Let me remind you how crime works again. If you bump off the bank you are stealing ***FEDERAL RESERVE NOTES***. Eventually this comes out the government’s pockets and once again you have serious problems. Elliot Ness, or some similar character, will turn you into a project. Now if you kill somebody you will be fine, but where is the profit in that (unless you are a gun for hire).

Capone was on the right track: bootlegging. Ya gotta sell something illegal for this thing to work smooth. Drugs or stolen goods will work fine. To keep the government only working half-heartedly to disrupt your criminal enterprise you will need to report the income from said enterprise. If the government gets their cut they are implicit in your crime and deep down not bothered by your behavior. Cut them out of the loop and you would be better off stiffing the mob.

Here is the best part. You will only pay income tax. If you were an upstanding citizen (like a dumbass) you would pay self-employment tax on top of the income tax. But not you. You know how to run a business: either illegal or stay home. Who can afford to pay another 15% on top of the income tax? Honest people (in a sarcastic voice), that’s who.

Think Fast and Plan Ahead

We are not out of the woods yet. If I were an IRS auditor I would challenge a tax return claiming illegal income on the front page of 1040, especially if you have been doing it for a number of years. Here would be my angle as an IRS auditor. I would argue you started your illegal activity as a hobby. If you make a profit 3 out of 5 years the IRS automatically considers you a business whether you are doing it as a hobby or not. They do that to collect more self-employment tax. You’re starting to catch on, aren’t you?

673851993_23999eb911_bI have a few solutions to pre-plan any IRS BS argument in an audit. First, we have a new President coming into office promising to lower taxes on businesses to no more than 15%. Corporations don’t pay self-employment tax either. So, we can sit back and hope Trump sends us a massive gift, in which case we are more than happy to be called a business, or . . .

. . .  we can do what any hard working business person would do: take a multiyear vacation periodically. Consider it a form of early retirement or a side hustle. Well, hustle might be too strong of a word.

I know, I know. I can hear you through the internet already. You claim to be an honest man. Fuck honest! Honest hits you with bonus taxes criminals are not required to pay! If the government wanted you to conduct legal activities they would not reward you criminal behavior and punish the dip shits working those legal businesses. Everybody, especially the government, knows the real work gets done by the underground economy.

Think of it this way. Pretend you need to get some illegal shit across the border. You have to come up with some very creative ways to get the job done. The government appreciates the mindset because it is identical to the way government officials think when they are spying on another country. Get it?

There is no reason you can’t put the kids through college and retire early by using your head. A simple $100,000 profit in a criminal enterprise is taxed $15,000 less than a so-called honest business all due to the self-employment tax. There are other tax saving strategies if you start thinking about it, too. In 30 years you would save $450,000 in taxes. Invested in a broad-based index fund you would be well north of a million bucks. And what criminal stops at $100,000? You’re a smart guy. I bet you could do triple that a year.

A Few Caveats

Now is where I need to point out a few caveats so you don’t piss off the IRS. The marijuana industry is finding out the hard way how this works. Just because weed is legal in your state doesn’t change the fact it is illegal under federal law. If the activity is illegal under federal law you need to follow a few additional tax laws. The IRS has spent plenty of time thinking this through. They don’t care if you put bread on the table by breaking the law as long as they get their cut. So follow the rules. They are there for a reason. To keep you out of prison, unlike our buddy Al.

You are an industrious goodfella. You work hard and keep good records so you pay the appropriate cut to your Uncle, you know, the boss. The government does not allow most deductions in your type of business. Now before we start, these special laws only apply to drug dealers. If you are a contract killer or a prostitute you can write off all those “regular and necessary” expenses of your, ehem, business. Since we are treating this like a hobby by reporting the income on the front page of 1040, the deductions are reported on Schedule A, subject to 2% (look it up). You can’t show a loss, so be sure to only deduct expenses up to the level of reported income. Also be careful not to miss deductions. For example, if you decide to knock over the First National Bank against my advice, be sure to keep track of your mileage. It really adds up after a few bank jobs. Masks are another often missed legal deduction. And if you travel out of town to hit a bank and need to stay overnight (perhaps a short stint in the county jail) make sure you keep a record of the number of overnights. You do get a per diem deduction for meals and incidentals.

You are a smart businessperson and took the advice of a crazy, sorry, nationally renowned accountant from Wisconsin and built a drug business from the ground up with your own two hands. (You built that.) A law was passed back in the 1970s disallowing deductions to drug dealers against their illegal gains. (IRC Section 280E. And you thought I was making this shit up.) You still need good records because you CAN deduct your costs of goods sold since these expenses are not technically deductions; they are a subtraction from gross receipts used to derive gross income. (See, it pays to listen to your accountant. You can learn, and save, a lot.)

But there is a way around this dilemma for drug dealers. If you think about it there are two things going on in a drug dealing business similar to a pharmacy. One business is selling drugs and the other is providing advice and consulting. I recommend you keep excellent records while conducting business for both enterprises (drugs and the advice/consulting business) under one roof. The consulting business CAN deduct all those pesky rent, wage and utility expenses while the drug dealing operation gets the cost of goods sold allowance. (Californians Helping to Alleviate Med. Problems, Inc. v. Comm’r (CHAMP), 128 T.C. 173 (2007). Thought I was bullshitting you again, didn’t you?)

One More Thing

I gave you a lot to munch on. You learned running a legal business gets you fucked by the tax code and criminals get an awesome tax deal if they have good lawyers.  You also know I was pumping you full of it so don’t get any stupid idea. (Yes, I see you in the back row taking notes.)

This post is for the New Year’s holiday weekend. Go out and have fun. Don’t drink too much. Be safe. Most of all have fun. And laugh.

See you next year.

Persons attempting to find a motive in this narrative will be prosecuted; persons attempting to find a moral in it will be banished; persons attempting to find a plot in it will be shot.

—Mark Twain


More Wealth Building Resources

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QuickBooks is a daily part of life in my office. Managing a business requires accurate books without wasting time. QuickBooks is an excellent tool for managing your business, rental properties, side hustle and personal finances.

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endlessknot03dI settled back with a good book on a quiet New Year’s Eve back in the early days of my accounting practice. Mrs. Accountant goes to bed early and was already tucked in. We rarely party or go out on New Year’s Eve. To us it is just another day.

My tax office back then was the remodeled basement so I was always close to work. Since the accounting part of my business was many years into the future, there wasn’t much to do around the holidays except enjoy some great reading. A few preparations for the upcoming tax season were as far as they could go.

Cable did not enter our house back then and network television did not interest me. The World Wide Web was just coming into existence and wasn’t a household phrase yet. Internet service was America Online accessed by dial-up. There were fewer distractions to drag a guy away from a good book in those days.

I was reading one of Will Durant’s Story of Civilization books that New Year’s Eve as memory serves. (I consider Will Durant one of the best writers to have ever live. His 11 volume Story of Civilization series is some of the best writing on human history ever.) My cup of tea was on the table next to my recliner where I was reading.

I lived in town for a few years back then to establish my practice. The living room had a bay window looking out toward the street. It was my custom to keep the curtains open so I could see if anything was happening outside.

A blood-curdling scream pulled my eyes from my book. Out the bay window I saw a woman falling from the passenger side of a car! She fell hard. The car sped off.

The woman lay in the middle of the road. She was barely dresses, only wearing a light shirt, short Capri pants, and nylons. I threw my book on the table and raced out to the woman. I could hear her crying when I got to her side. I looked around for help and worried the driver may return with a weapon. The neighbors either had closed curtains or ignored the plea for help.

The road was covered in ice. It had rained that day and the thin ice had a sharp uneven surface with cutting points. The woman had no shoes and was in no condition to walk on the sharp ice.

“Ma’am,” I said, “you can’t stay on the road. A car will hit you.”

She just kept crying. She reached up so I picked her up and carried her to the side of the road. She was starting to shiver violently. Only an inch or so of snow/ice accumulation was on the grass between sidewalk and road where I set her down.

The road was silent. No cars. I was worried the driver would return and there would be trouble. I asked the woman about who pushed her out of the car and learned it was her boyfriend.

“You can’t stay out here. You’re cold.” I used it as an excuse. “I can take you to my house and call for help. Okay?”

She nodded. I carried the woman to my home and set her down inside the front door. Instead of standing she dropped to the floor and started sobbing again in the fetal position. She was obviously intoxicated. I told her I needed to call the police. She became agitated and begged me not to call the police and to call her brother instead. I got the phone number of her brother and promised to call him to pick her up.

By now Mrs. Accountant was awake from the noise. I left her with the woman and went to the basement office and called 911 for police and an ambulance. Then I called her brother.

The police and ambulance arrived. The street was flashing blue and red in a kaleidoscope of lights off all the ice. I explained to the police what happened. They gave her a breathalyzer and she blew a .28.  Like I said: snookered.

The boyfriend returned at this time along with the brother of the woman. The boyfriend was afraid his girlfriend was hit on the road when he saw all the lights. Before the night was over the boyfriend was arrested for DWI and assault. The EMTs gave the woman a clean bill of health and the brother took her home.

The excitement was over for this New Year’s Eve. Or so I thought.

No Good Deed . . .

Life has a way of circling back on itself. History, they say, doesn’t repeat, but it rhymes nicely. And so goes this story.

By the time tax season started in February the incident was long forgotten. Then a client came in and started telling me a story about one of their renters who was assaulted by her boyfriend and pushed out of the car window while the car was still moving. A kind man, they said, came to her rescue, helping her to the side of the road and then to his home and called for help.

I swallowed hard when I realized who the man was. I reacted as anyone would that New Year’s Eve and now the consequences of my actions were sitting right in front of me. The woman from the car, I learned, broke up with the boyfriend and was trying to get her life back in order. There was no lasting physical damage. And I never learned her name.

I asked my client where this incident took place. They said right around here where I live. Then I told them my story. Then they swallowed hard.

Full Circle

Nothing happens in a vacuum. Every action is met by an opposite, yet equal, reaction. I think a guy named Newton said that about the Laws of Motion a few years back. I could be wrong.

I have been doing this long enough to know everything I do eventually comes around full circle. Same applies to you. We are all connected. Good intentions can go wrong, but in the end we all get what’s coming to us. There are times I thought my actions were a good idea to later doubt the intelligence of my decision. It doesn’t change my intentions; it just doesn’t always go according to plan.

And then there are the times where you make a larger impact than you ever could imagine at the time. I reacted that New Year’s Eve to an event that had all the markings of a disaster in the making. If I didn’t help that woman, the next car would never have seen her. She would have been killed or worse. If I didn’t call the police the end result could have also been much darker.

None of those thoughts occurred to me at the time. All I wanted to do was keep another human being from harm. Only later did I realize the consequences of my actions. Fortunately, the consequences were all positive.

The clients who rented to this woman are still clients. They are much older now; so am I. This all happened 26 years ago. The opinions these clients have of me are molded by the events of that evening long ago.

At it Again

Ideas keep pour out of my head! I don’t know how to turn it off. It is a curse at times.

I was invited to speak at Camp Mustache SE in January. I agreed and put the event to the side. Then a brain storm struck. Why not offer one-hour consultations at the Camp for $100 (far less than my normal fee) with all proceeds going to a charity of the group’s choice? Ten consults would fit nicely into my schedule so we should raise $1,000 for charity doing what I would normally do anyway, except I would personalize it and have the facilitator of the Camp handle the money, sending it to a charity. In my mind I was getting $1,000 to a charity without a penny out of my pocket. Awesome! I thought.

Most of the slots filled within a few hours. (Who wouldn’t want to talk to me for an hour for a measly hundred bucks?) My guess is all 10 slots will fill and the charity will get a cool $1,000.

Then it hit me. My attitude of sharing was sure to have an effect on me at some point in the future. Karma would raise her head and give me exactly what I deserve. I better deliver good advice.

My intentions were to do something valuable for the community we were allowed to have our conference in. A form of Pay it Forward. Time isn’t free, I understand. Still, since I am already at the conference and several attendees might find value in a personal review of their taxes and finances by the likes of yours truly, I thought it was a good idea. It was no extra time for me. Everyone wins! Conference attendees get an opportunity to have their finances reviewed by a guy with over 30 years experience in the accounting and financial services industry, and a charity will be $1,000 closer to their fundraising goals. The community wins as a result.

I offered my services for free with good intentions before it hit me this could end up profiting me. Now, as an accountant, I have no problem with profits. But sometimes I just want to give, no strings attached. But life is not like that. There are always strings! And for every deed a series of causes and effects are sure to follow.

Who is this Karma Chick?

Karma sounds a lot like the Law of Attraction. We usually invoke karma when shit hits the fan. When you fuck somebody and it comes back and bites you in the ass and we say it was karma. I disagree. The Law of Attraction and karma are fine words with wonderful meaning, but they lead us to think some magical force out there is watching our every move, waiting to reward us for good behavior and punish us for being a dick.

Then explain why bad things happen to good people. Karma is not watching; you are. Karma is a subconscious attitude you keep tucked away deep inside your brain. No one knows you better than you do. Only you know the reason why you did what you did. And you keep a very accurate record of your values and actions.

Doing the right thing, helping a stray animal or a fellow human being does not automatically bring an instant reward! If my intentions are wholesome my subconscious will know and keep a record. In most cases when good things happen to us it is because we allow it to happen to us because we know deep down we are worthy of such an honor or reward. The same applies when things go from bad to worse. We all too often talk ourselves into the kind of day we think we deserve.

You don’t have to help an old lady across the street to build a reserve of good karma. Instead, open your mind to accepting the gifts life naturally bestows on all of us. When we hold a grudge it only serves to hurt us, not the person you hold the grudge against. The lady, karma, is not at fault when you get kicked; you are doing it to yourself.

Everyone has plenty to bitch about. The prick that cut you off in traffic deserves boils all over his body. I understand. The boss that chewed you a new one for no reason deserves a bad attitude from you. Your tax bill, landlord, neighbors and even friends all conspire to irritate you. I get it. Been there. But if you want happiness, if you want peace, if you want karma on your side, then you have to let it go. If you don’t, karma will build in your own mind until the acid burns you.

The same applies to good deeds. Do the right thing because it is the right thing to do. Of course, you will realize the consequences after the fact. It does not matter. So good stuff will come your way and your open mind will say, “Yes, I deserve this. I am a good person.”

There is no need to keep your eyes open for opportunities to make a difference. They will come your way all on their own. Your greatest moments will be unscripted! You will react because you are the person you are. No amount of planning can change the outcome more than your values and ethics.

As for payment, I recommend allowing the warm feeling of doing the right thing as your only compensation. If offered, put up your hand and say to the person you helped, “The next person you meet who needs help, you owe them. And if they offer to pay, you must also request they Pay It Forward.”

There is no other way to live your life with meaning. It isn’t karma. It’s you. It always has been and it always will be. Now, how do you plan on living the rest of your day?

396px-a_list_of_the_names_of_all_the_adventurers_in_the_stock_of_the_honourable_the_east_india_company_the_12th_day_of_april_1684A reader of The Wealthy Accountant recently offered me lunch. I have a weakness when it comes to food. Offer me a free meal and I am virtually a prostitute.

I accepted the offer of lunch for three reasons: 1. He is a local reader; 2. He asked nicely; 3. He wanted to discuss quitting his current job and starting a bookkeeping business as a side hustle. The last point is what got me. A local guy who wants to do bookkeeping is also a guy I might build a strategic alliance with to handle some of my bookkeeping work.

As we talked I shared stories like I do here. Eventually I got to a story I like to tell a lot, but failed to mention on this blog so far. I am not sure where to fit it in, but the story is so powerful it needs sharing. So I decided a story about making a list would be perfect for the Christmas holiday.

I Was Home

There is an old sitcom called Night Court. For those of you who don’t remember the show, it is about a night court presided over by Judge Harry Stone. Stone is an oddball, joking and playing around while using unusual methods to help defendants.

In the first episode members of the court complain about Stone’s first day on the job. Dan, the prosecuting attorney, asked how Stone ever got appointed to the bench. Judge Stone said it was a funny story how he got the job. You see, he said, it was Sunday and the mayor’s last day in office and they needed a judge. My name was on the bottom of a 1,000 name list of potential judges for the opening. They started calling the first name on the list, then the second, and so on. It was Sunday so no one was home. Finally they got to the bottom of the list and . . .

The court clerk, Lana, was incredulous. She muttered, You mean you were appointed judge because . . . She paused.

I was home, Judge Stone said with a smile.

Lesson Learned

The audience laughed. I thought it was profound and nobody got it. To make the point, Judge Stone later said to Lana when she was offended by how Stone got appointed: Think of me what you want. My name was the last on that list, but it was on that list.

That is the story of life. It doesn’t matter if your name is the last on the list as long as you are on that list. As a business owner I see people go through all the work and then never show up for a job interview. Every year a handful of people never pick up or file their tax return. The work is all done and in many cases a refund is due if they file. After three years the tax return is out of stat and the refund is lost. It blows my mind.

We are all on the list! Like me, most of us are somewhere near the bottom of that list. But so many people higher on the list are not home or refuse to answer the phone and fail by default.

That is where my reader buying me lunch comes in. He sent an email and expected nothing. He caught me at the right time so I said yes. He was on the list. The last name, no doubt. But he was still on the list. He knew my schedule was tight and getting me to have lunch was a long shot.

More Lists

This blog exists because I was on a list. The Wealthy Accountant was rolling around in my head for years. I secured the url years ago, but never put it together. Getting traffic to a personal finance (PF) or tax blog is a tall order. There are a lot of them out there. PF bloggers make the same mistake restaurant owners make. Restaurant owners mistakenly think running a restaurant should be an easy way to make money. When they walk into my office with the idea they tell me everyone has to eat. I try to temper the excitement by replying: Everyone needs to eat, but they don’t need to eat at your restaurant. In truth, the restaurant business is brutal!

I wasn’t in the mood to make the same mistake. Sure, everyone loves money and could use solid tax and financial advice, but they don’t have to get it from me. There are a gazillion other resources to choose from.

I also did not make the mistake assuming prior writing and blogging success would automatically translate into success at The Wealthy Accountant. The workload on this blog would be higher by magnitudes of order than with previous blogs or writing projects. This blog requires me to expose my personal values and weaknesses. It isn’t easy exposing yourself to the world at large. (I could make a legal joke here, but modesty forbids.)

How I Was Home

4917981949_2f88fa5c99This blog owes its existence to Mr. Money Mustache. Arguably the best PF blogger out there, he also has one of the largest, if not “the” largest, following of any PF blogger. Many accountants over the years tried to land Pete as a client. In case you missed it in the past, I’ll repeat how it happened here.

My goal was to build a partnership with Pete on a business idea. I attended a conference held in his honor in Seattle with the idea of meeting Pete and sharing the idea. Since I would be at the conference anyway I asked the facilitators if I could give a tax presentation. They agreed. Before I had a chance to introduce myself to Pete he attended my presentation. Fifteen minutes in, he interrupted me and stated I was his accountant. The rest is history.

Let me make something clear. I am not the smartest, best, or biggest tax guy on the planet. I am at the top of the list in tenacious, however. Smart people frequently outsmart themselves when trying to reach a goal or when building a relationship with clients. Pete had many accountants try what I succeeded at. There were subtle differences, I am sure, but at the end of the day I got the call and answered because I was home.

Your List

Life is a series of lists. Unlike Judge Stone, everyone is on these lists. Like Judge Stone, we are many times are at or near the bottom.

As we head into a new year, think about the lists you are on intentionally. Working toward early retirement or financial independence is really just a list you chose to be on. Every time you make a contribution to your retirement account you are answering the phone. You are home.

Plans of traveling the world are the same. You put yourself on a list and now are working toward the goal. Plans to start a business or work you do when in business are all lists.

It is the holiday season so I will keep this short. You don’t need more examples or stories on this. Just remember to answer the phone when it rings.


The year is 1991. Mrs. Accountant and I had a foster child that year. On Christmas morning I was to take him to his mother for a day. We got up early and dressed for the chilly morn. I lived in town at the time. His mother lived in apartments near the Valley Fair Mall, the first mall in America.

The mall is gone now, replaced by a variety of shops, a gas station, and a movie theater. The apartments still stand. As I drove down Memorial Drive we rounded the curve toward the apartments. The road was dead quiet. No cars anywhere. It felt peaceful. A major highway completely empty. It only happens once per year on Christmas morning. I stopped the car in the middle of the road and watched a lone snowflake land on the glass and melt. I leaned forward and looked up at the early morning sky out the windshield. The hair on my skin rose with gooseflesh.

“Where is everyone,” asked my foster child, a huge young man from a family with more issues than I care to remember.

“They are sleeping,” I said in barely a whisper. “Resting. But not for long. They are exhausted from all the running and spending. Resting for a day. Tomorrow they will be back, crazed as ever, credit card in hand.” I turned to my foster child, “Never be like them.”


There is a tavern near my office, owned by a client. It is Christmas Eve. I finish a few details in the office before heading home to be with my family. The lights are on at the tavern I do tax work for. I stop. There is only one customer in the place, another client.

All the TVs are off save one. That television has a game of basketball playing. The announcer’s voice is the only sound in the room. As the customer’s glass nears the bottom, the bartender refills it without a word. The words of Billy Joel come to mind:

“Yes, they’re sharing a drink called “Loneliness”, but it’s better than drinking alone.”

I wish them “Merry Christmas”, shaking their hands with a wide smile. They smile back, but their eyes do not. I turn and go home to my wife and daughters.


delicate-arch-night-stars-landscapeThe next year on Christmas Eve I decided to visit a client in the nearby nursing home. She doesn’t come in anymore; she doesn’t make enough and isn’t required to file. The hallways are empty and silent. I walk to her room. I can hear the sound of my footsteps on the carpet. The sound of a small low-quality television is coming from her room.

The door is slightly ajar. I tap. Nothing. I slowly push the door open. My client turns, smiling at recognizing a familiar face. She says nothing. Words are hard for her; she is 97. She hasn’t had a visitor in decades. Her husband died thirty years ago. Her parents and siblings are residents of the local cemetery. She never remarried or had children. I hold her hand as a 1950s sitcom plays in black and white on the TV. Her hand is cold, clammy. She places her other hand on the top of mine. The warmth of my hand warms hers. No words are spoken.

I stand to leave and say, “Merry Christmas”, giving her a hug and a kiss on the forehead. She has a pale smile. A solitary tear streams from her rheumy eyes.

Three days later she dies.


I live and work in a rural farming community. A client of many years with a drinking problem left the house one Christmas Eve. He walked to the barn, the pain of life too much to bear.

The next morning the children wondered where dad had gone. They find their father in the barn hanging from the end of a rope. It is early Christmas morning.


Fifteen years after our foster child went home for good with his mother he notices me at my new office location and stops. He introduces me to his girlfriend. I don’t know what to say. He explains he was hooked on drugs and his mother was the one who introduced him to the drugs. It ended his college and football career. He is a big boy. He could easily have made it in the big league if things were different.

We shook hands and he left. I never saw him again. That was ten years ago.


When the world was half a thousand years younger all events had much sharper outlines than now. The distance between sadness and joy, between good and bad fortune, seemed to be much greater than for us; every experience had that degree of directness and absoluteness that joy and sadness still have in the mind of a child. So begins Johan Huizinga’s The Autumn of the Middle Ages.

That gapping dichotomy of joy and sadness only exists around Christmas now.


The office is growing quiet as Christmas approaches. I stare out the window behind my desk and wonder which client I will see this year. The employees are joking and laughing across the way. All day clients came in dropping off gifts. I don’t give gifts. It doesn’t matter. There was a gift on my desk this morning from my Secret Santa. Chocolate. Dawn, of course.

It is nighttime now. Mrs. Accountant and my youngest daughter are in bed. My oldest daughter sits on the couch watching a movie on her computer. She can see something is wrong. I fill my water glass nearly to the top with Jack and take a deep draught.

I carry the whisky to the front window and look up at the clear winter sky. After a few minutes I put on a light jacket and walk outside. My oldest gets mom and her sister. They watch out the window, afraid I might walk toward the barn.

The sky is filled with diamonds of sparkling points. The crisp winter air causes me to shiver. I wonder if one of those stars has a planet and on that planet is an intelligent creature looking up from her night sky and wondering if anyone is looking back. I wonder.

I tip the cup and drink deeply, allowing the liquid to burn as it goes down. The stars are not crisp anymore. The alcohol is doing its job of killing the pain and blinding my sight. The whisky is reaching its conclusion. I take a deep breath and wonder if my client is at the bar again this Christmas Eve drinking alone.

I wonder. I wonder what happened to our foster children, if they ever had a chance at life. I wonder.

I wonder if the old woman is in heaven with her husband now. I wonder if she ever found peace.

Tomorrow is Christmas Day. Memorial Drive will be as silent as a horror movie the day after the world ends. I will not be there to witness the event.

Two girls look out the window at their dad, one woman at her husband. They can see I am weeping. They know I carry a heavy burden, a burden of years loving and caring for the people I serve. They also know there is a mental and emotional price to pay for caring so deeply for the people you serve.

The whisky is gone now, but the pain remains. Clouds begin to obscure the stars and a few fluffy flakes of snow gently travel to the ground. Mrs. Accountant and the girls are at my side and nudging me to return to the warmth of our home. I know why they are there. They are worried I might not find my way into the house and instead walk to the barn.

They take me by the elbow and guide me back inside as I bid farewell for another year to a

Silent Night.



img_20161221_091909I’ve been putting off this post for a while. Now is as good a time as any to get it done.

Now that I got the obvious joke out of the way it is time we discuss a serious issue facing us all: procrastination. When we least need it, our desire to finish, or even start, a task is put off. There are a variety of reasons for procrastination. The job might be distasteful, it might be a large project, or you might not fully understand the task.

Fear keeps us from acting. We all have had experiences where we put something off and put it off and put it off, only later to find out, once we started, the project wasn’t that bad after all. Many times procrastination begins when we are mentally overwhelmed by the task. Either your to-do list is longer than Santa’s on Christmas Eve or you started a task and hit a road block. Once that dreaded file is put to the side it is in a kind of purgatory. Starting again is almost impossible.

There are various tricks I use to get massive amounts of work out the door. Rather than focus on different scenarios, I will hone in on issues surrounding my office work. We will deal with email, phone calls, social media, and tax returns. Think of my stack of tax returns as the pile of work in your office or the long to-do list at home.

The Dreaded File

Beating procrastination starts with saying no. My gut reaction is to always help. I give advice; people pay me for that. Then they want me to actually handle the process I suggested. This leads to:

Keith’s Rule #178: (Yeah, I know I missed a bunch of rules, but if I went looking for the last Keith’s Rule # I might stop writing and never get this post out.) Just because you can do something doesn’t mean you should do it.

This has been a real issue since this blog began. The amount of work I can take on has exploded. Worse, when consulting I offer suggestions outside the normal workload my office handles. During weak moments I agree to facilitate the project. Because the task is not something I do often (I just know how it works) I don’t have resources to get the job done quickly. It turns into the dreaded file on the far corner of my desk I can’t get the ambition to start.

The second type of dreaded task is the stutter-start. This is where you take on a project, roll up the sleeves and have at it. Progress is made until you hit a roadblock. Figuring out the problem and restarting the task is hard so it gets put to the side when you have enough free time. That could be months! If ever.

The last dreaded project for me comes from overwhelm. It usually strikes during tax season, though emails qualify too any time of the year. It goes like this: Tax season starts and I am a rockin’ and a rollin’! I am knocking out return after return like a machine on a mission. Then I start to get tired. A tax return requiring research shows up and if I focus on that return several other returns will go unprepared. Overwhelm not only causes the problem file to get put to the side, but because I feel guilty, I try to force the issue on that return and end up not getting anything done. Now I have even more clients on the phone wanting an update.

Fixing the Problem between the Ears

Procrastination is all mental. All the dreaded projects listed above and any you face in your personal life are not as bad as first thought once the project is started. Once you begin it goes faster than anticipated. It feels good get the job done, but guilt is still involved because you left the client wait so long. We need to find a way to start. Once we start the rhythm takes over and we are back in the saddle killing our to-do list.

So how do we start? Since it is all a mental roadblock we need to change the way we think of a project. Rather than one big project, I break it down into very small pieces. Doing just one tiny piece of the task is progress even if I wait until tomorrow to take the next tiny step. Most of the time it is about getting started. The first tiny step takes only a few seconds or a minute. Once that minor victory is in the books I may as well do another small step. Before I know it I have the task finished and I feel relieved. I am always amazed at the feeling I have at the completion of a dreaded task. It was never as hard as I perceived it to be.

img_20161221_091920Email, Phone Calls, and Social Media

Modern society has given us a new plague. If email were around when Moses was explaining things to pharaoh, God would have saved the locusts and hit Egypt with an email blast. There is no doubt in my mind the email blast would have been more effective than locusts.

My email folder runs like ocean waves: at times the volume is manageable, other times it is Biblical. Weekends have improved. Weekdays I get 100 or more emails per day. As tax time approaches the number rockets to 300. If the emails were simple it wouldn’t be so bad, but emails I get have tax issues to deal with. Regular clients get a response as soon as possible. Other emails get read, but I respond to only a fraction. It feels cold. There is no way to 300 emails with the attention they deserve so I build walls.

Phone calls are not as bad as I have a better system in place to screen calls. You probably don’t have an administrative assistant as I do. I actually have three assistants: a full-time administrative assistant, a part-time seasonal admin, and an office manager. They are busy cooking the volume of requests into something I can digest.

In the past I always had someone else handle my social media. If you saw me on Facebook, Twitter, or the million other venues, it probably wasn’t me. Blog posts publish automatically and there were times in the past when more than 5 people were tasked with creating my online persona at one time. Social media is the way you promote and grow your company today. Since this blog started I have people communicating with me more via Facebook, et cetera. I still don’t put much on social media (my people do), but I do use it as a communications tool. My only defense is: They started it!


Now we need to find a way to break through all the mental obstacles to clear the inbox, phone calls, and projects cluttering our thoughts.

The type of project does not matter when using tricks to destroy procrastination. Whether it is tax returns piling up, email, phone calls, or cleaning the garage, the most important step is starting. The only way to start is to take a large project or pile of tasks and break it into small pieces. Cleaning the garage is an afternoon project. Rather than think of it as this 4-hour task, start with something as simple as putting one bag of garbage in the barrel. You don’t have to write out the task. Just commit to looking at the job—the smallest of all steps. Look at the garage and find one small thing to do to move the project forward. Once the first small victory is in hand look for the second step. Soon the task will take on a life of its own. With each victory the burden lifts from your shoulders. Before you know it, the job is done.

The same applies to email and phone. Commit to doing just one. Make one phone call, deal with one email. Make it an easy one. A quick 20 second phone call or an email that needs no response is perfect. In less than a minute your workload is one less.

Here are more suggestions:

Whack-a-Mole: Phone calls and email can feel like Whack-a-mole. Deal with one email and two more pop up. It leads to overwhelm and procrastination. Close the door when dealing with email. Working on email offline is simple and keeps distractions away. Email is a distraction that can be distracted by more email, meaning you don’t get your email done. Just writing that gives me vertigo.

The same applies to phone calls. When on the phone turn off the ringer and turn on voice mail. Make your phone calls where you can’t see if new calls are coming in. Leave a message if you get no answer. If they call back they end up on voice mail and in the next batch of phone calls.

Start Small: I handle the most complex tax returns in my office. After a while the mind goes to mush. Lack of sleep and too much sitting take a toll. Rather than allowing myself to bog down, I grab a simple return or three to get momentum back. Working a full day and not seeing a single tax return completed while 30 more returns came in the door is a massive form of distraction. My team can get most tax returns done, but I grab some of their returns anyway when I need motivation. When I see I finished three returns in an hour I know I finished something for the day and it isn’t even 6:00 a.m. yet. Even if I don’t finish the big return on my desk I still feel good. I got three returns out early in the morning.

Make it a Game: Back to email. What happens when you get bogged down? Instead of doing what you want to do (should do), you turn to a video game or dick around on Facebook. I know you; I’ve been watching. Well, as long as games are how you procrastinate, how about an email game? The link is to an online program which forces you to handle your email in order and fast. The whole thing is turned into a game where you earn points. So, instead of another Sudoku puzzle, you can play the email game and get work done at the same time.

Phone: The cell phone is a massive distraction and procrastination tool. Take social media off your phone! I never have and never will look at Facebook or Twitter on my phone. There is no reason. Turn the phone off when you are working. No buzzer either. I know, I know, it might be important. Well, if your house is burning down they should call the fire department, not you. What are you gonna do, carry a bucket of water? If someone has died, it can wait. Unless you can perform a resurrection there is no reason you must take the call now.


I can hear you through my computer yelling: HYPOCRITE!

Yes, your favorite accountant is a major fuck up in this area. The blog made it worse by bringing in greater volumes of work. I am still building the infrastructure to handle it. I’ll get there. But that is not the confession I want to make.

I have one of those dreaded files on my desk right now. It has been sitting there a while and I need to explain how I got to this point and how I intend to remedy the issue. First I have to make a disclosure. The client I am talking about reads this blog. I will never share names or details which could lead anyone to know it was a certain client. My goal is to provide solutions other can use; to learn from my mistakes. That said, don’t take it personal if you are the subject of my story. I am never upset with a client who wants their stuff done. Trust me when I say I want it off my desk worse than you want it done. Each passing day causes my guilt to grow.

What Happened: A regular tax client asked for a consultation on finances. It was determined a hodgepodge of investments needed consolidation into index funds at Vanguard. Moving the variety of high fee accounts will take time and work. I agreed to help with the transfers. (I consult on many issues. I need to stop volunteering to do the work.)

The Mistake: Back in the 1990s when I sold investments, I had a back office to handle all this stuff. I no longer have a back office at a brokerage firm to handle details. I also don’t have access to resources to move funds fast and easy like I do with tax issues. I took the job because brokers will want to put the client is their fee-based products which means they may as well stay where they are at. I end up the only one in the office who can do the job and no third parties that handles this type of account either. Remember Keith’s Rule above.

Roadblock: I took the project before Labor Day! I needed to talk with Vanguard to handle transfer issues. First I was told the client had to be present so I set an appointment. During the appointment Vanguard had high phone volume so we ended up on hold until we gave up.

Now the problem was pushed to the side. Taking the next step is mentally difficult. A half day was wasted already with zero progress. Where to begin is the first question.

The Plan: This thing has been sitting there long enough. Rather than think of this as one huge project, I need to break it down. A personal account, several retirement accounts and a kid’s account all need service. It is overwhelming! My commitment today is to give 15 minutes and work on their non-qualified account only. If I can complete one small step I should be on my way. Completing one transfer will make the client happier; it will make me happier.

Outcome: When this project is done I will wonder why I waited so long. Once I get started I know it will go faster than anticipated. If I remember I will give an update.

Time to end this post I have been putting off priorities long enough. All I need to do is take one small step and I am back in the driver’s seat.

5193adhz9hl-_sx352_bo1204203200_Now is the time to start a tradition of sharing the best books I read over the past year. The first full year of The Wealthy Accountant is fast approaching. Each December as the year draws to a close I will list my three favorite books I read during the year. Many books I pick up from the library, but the best books really belong in your personal library to read and reread. If you are like me you keep books close at hand for research. There is still time to order from Amazon and have these books in your hand to fill in  the quiet time during the holidays.

Some books I consider the best were already reported earlier. Of the three books recommended, there will be additional books mentioned that compliment the recommended book. Time is precious. Books are a must if you want to succeed and reach your goals. A good life starts with learning and books are the only way. Neither the internet nor formal training can do what books can. Sure, the internet, college, and formalized training are part of the learning process, a part you also need to seek out.

I read 30-50 books every year, depending on the size of the books. Reading is part of every day. Your schedule is just as tight as mine is. You still make time to eat, drink, breathe, and sleep. Time for books is as important as food. Food for the mind is vital. The short list allows you an opportunity to read the most books that convey a powerful message without reading as much as I do.

The Daily Stoic: 366 Meditations on Wisdom, Perseverance, and the Art of Living by: Ryan Holiday

Holiday has become my favorite author lately. His work on the Stoic way to reach the good life resonates. The Daily Stoic is written in the same manner as a devotional. There is a short excerpt from a great Stoic teacher of the past with a short story to illustrate the lesson each day. The reading takes a minute at best, but to gain the most value you need to reflect on what was said. I have started each day with the appropriate entry since The Daily Stoic arrived. Of course, you can read it straight through. To fully digest what is said requires a long-term review of the text. By reading a small entry each day there is almost no time requirement. Reading and reflecting takes five minutes. Returning each day builds a positive habit.

The Daily Stoic isn’t the only classic from Holiday. The Obstacle is the Way: The Timeless Art of Turning Trials into Triumph and Ego is the Enemy are two books you want in your personal library also. There is no doubt in my mind you will return to these books repeatedly, as I do. In an uncertain world, Stoic literature helps us find meaning and the good life. Most Stoic thought comes from the ancients. A few modern authors have provided quality guides of the Stoic philosophy. A Guide to the Good Life: The Ancient Art of Stoic Joy by: William B. Irving comes to mind. All these books are excellent additions to a personal library. You will find as much meaning and comfort from these books as I have found.

Kirinyaga: A Fable of Utopia by: Mike Resnick

My science fiction reading days are in the past. I still crack a novel open a few times a year, but most books I read are nonfiction. Kirinyaga has been on my shelf for years. I pulled it off a month ago and enjoyed an afternoon and evening of thought provoking entertainment.

Resnick has a history of award winning stories. The Kirinyaga series is about the best ever produced. The novel contains eight separate stories that weaver together one long story arc. The best story of the group is the second: For I Have Touched the Sky. That one story alone is worth the purchase price of the book.

The stories revolve around Koriba, a witch doctor who took his people from Earth to a planet far away to live their lives the way they should, without technology. Koriba keeps a computer hidden so he can communicate with civilization should an emergency arise.

For I Have Touched the Sky is about a Kikuyu girl, Kamari, who found an injured pygmy falcon and brought it to Koriba for healing. He broke Kamari’s heart when he said the bird could not be saved. He said since the bird has touched the sky it could never live in a cage. She insisted. Koriba relented and said he would try if Kamari would clean his hut. She agreed.

Kamari finds Koriba’s computer and slowly learns to access it. She learns to read and about other worlds, technology, and peoples. Then the pygmy falcon dies. Kamari is heartbroken. She agrees to continue cleaning Koriba’s hut as promised. Koriba eventually discovers Kamari is accessing his computer and that Kamari has learned many things, including creating her own language and how to write. Women are not allowed to write, Koriba told her.

This creates a crisis. Koriba cuts Kamari’s access to the computer and demands she never speak of what she knows. She desperately wants to learn more. Koriba refuses. Kamari grows more despondent each day until she commits suicide. Koriba is tasked with going through Kamari’s belongings and finds strange writing on a skin hide. Koriba takes the skin to the computer for analysis. He is told the writing is the language of Kamari. When he asks what is says the computer translates:

I know why the caged bird dies—/For, like them, I have touched the sky.

For I Have touched the Sky is a moving story you will not soon forget. The message is clear, we cannot go back. Knowledge, once released, cannot be returned to the bottle. Human beings hunger to learn and know. Take away the opportunity to grow and the human dies. Take away the ability to learn once you have touched the sky and there is nothing to live for.

Resnick writes fun stories that read fast. His bestseller, Santiago: A Myth of the Far Future, is his most famous novel and put his name on the map. His short stories have received numerous awards over the years. If you are in for an evening of light reading that makes you think after you put the book down, Resnick is a good choice.

Valuation: Measuring and Managing the Value of Companies

I wrote about Valuation earlier in the year. It is a bit expensive for a book, but worth every penny and worthy of a second mention as one of the best books of the year. You will need a yellow highlighter when reading this book. There is so much powerful information you want to take notes.

img_20161218_195650Valuation is used as a college textbook. The reading is crisp and clear while the subject is in-depth and complete. For readers interested in investing in individual stocks or business owners looking to increase the value of their firm will find the tools necessary to complete the job. Creating value is why you invest. Business owners (investors are fractional business owners of a large company) need to understand how value is created. A simple answer like: A return on invested capital in excess of the cost of capital creates value, is only a small part of the equation. There is much more.

My copy of valuation is marked up and I keep it next to my desk as a reminder, and a resource, of what I am in business for. Business decisions and investment decisions are clearer with a better chance of success because of this resource.

There you have it. Three books to keep your mind active. I know, I know. I talked about several additional books connected to the books discussed. Use this list as a starting point.

One final point. The links to Amazon will generate a commission for me if you buy the books (or anything else) during the same visit you clicked on the link. If you think I am worth it, feel free to use the embedded links. If you would rather I not receive compensation for the links you can go to Amazon directly and order that way. Either way is fine as long as you read more good books and learn—so you too can touch the sky.

8632234386_56ed10483b_zOver a hundred years ago an Italian economist made a discovery while in his garden. Vilfredo Pareto noticed on a pleasant 1906 afternoon that 20% of the pea pods in his garden produced 80% of his pea production. His interest piqued, Pareto wanted to know if this 80/20 ratio applied to other areas, including business. In every place he looked the ratio held. 80% of results came from 20% of the inputs.

Today we call this the Pareto Principle or the 80/20 Principle. The ratio isn’t perfect, but more of an approximation, somewhere around 4 to 1 or 5 to 1. And it happens everywhere, not just in business or an Italian’s garden! Think about it. You wear 20% of your clothes 80% of the time; use 20% of your home or apartment 80% of the time; eat the same food 80% of the time.

Illinois Tool Works is a large public corporation that has turned the 80/20 Principle into a profitable business plan. ITW buys smaller competitors on a regular basis and then sends in their teams to ramp up profitability by firing clients! Sort of. The 80/20 Principle says 80% of profits come from 20% of clients. Yup. It does. I ran the numbers in my own office. A small list of my clients brings in the bulk of profits. And ITW capitalizes on this fact to improve profitability in companies they purchase.

Think of your personal life. You spend 80% of your waking hours doing the same 20% of activities. If a normal day includes 20 activities, about 80% of the time will be spent on four of those activities.

The Other Side

At first glance the 80/20 Principle looks like a cool way to look at the world. Turn the principle upside-down and you will find ways to game the system to your advantage. If 80% of profit comes from 20% of clients, then 20% of your profits come from the remaining 80% of clients. Yikes. You could actually cut your workload 80% and only lose 20% of your profits!

ITW takes the 80/20 Principle to the extreme. If you ever read their annual report you will see the 80/20 Principle front and center.

The ITW teams don’t just fire 80% of the clients, employees, et cetera. They realize the way the purchased company is organized is the real problem. Dropping 80% of the clients could cause a reputational problem for ITW. Rather than starting a massive firing program of clients and employees, ITW sets up distributors which then handle the 80% least profitable clients. Now ITW has one large distributor buying from them, reducing cost and increasing profitability.


Return on effort declines rapidly. Focus on the high performance activities.

The added efficiencies mean employees don’t face layoffs. Production is now focused and sales tend to rise rapidly for a few years in the new division of ITW until a new higher level of sales is reached. Clients have a dedicated distributor to work with so they are happy. The distributor is more profitable because they focus on their narrow niche.

The process is more involved than a short intro to a blog post can detail. What we have learned so far, however, can help us in areas of work, business, home, and personal life. Let’s explore.

You Work Too Hard

Your workday at the office or in your business is filled with interruptions, phone calls, and emails. These, and a few other things, consume 80% of your time yet only generate 20% of the profits or results. Applying the 80/20 Principle with a butcher knife would mean ditching all this non-productive work which could also cause problems with the profitable 20% of your time. Time to put the butcher knife away.

Working for a company limits how you handle the 80% of your time issues. You still have the ability to manage your time more effectively within the framework of employer demands. Writing endless memos, checking emails all day rather than at designated times, and idle chit-chat with coworkers can waste most of your day. And the boss notices more than you think she does.

It gets worse if you own a business. Your bad time management skills spill over into the work habits of employees. 20% of employees bring in the bulk of the company’s revenues and profits. You can either fire the employee or change the parameters they work in.

Clients are the same. 20% of clients will consume 80% of your time and they are not the 20% most profitable clients either. Time for a plan.

Strategic Alliances

I am not a big fan of outsourcing. A recent post published here on outsourcing was only a first step. Outsourcing has too many problems so I prefer alternatives. A follow-up post to come in the next few months will outline a network of strategic alliances I have created to improve efficiency while serving new clients.  The network I am building will be available for anyone to use, including other accounting firms.

There are two ways to build strategic alliances: with existing firms or by setting up a new firm. ITW is a master at setting up new distributors and selling the bulk of clients to these new distributors or existing companies. Small business owners will usually be better served by working with existing companies.

My practice started as Tax Prep & Services. We did taxes. Period. Eventually a few payroll and bookkeeping clients showed up. Regular tax clients needed the extra services and we obliged. But I was still a tax firm. Then the write-up work exploded. We did good work until so much work walked in the door it started hurting quality. We lost focus by offering too many services to clients. Still, all the services we provided are provided by accounting firms. The only way to provide large accounting firm services while retaining a small firm feel is with strategic alliances.

The company name was changed to Tax Prep & Accounting Services. How original. It reflected our newfound attention on the accounting side of the equation. What I really did was lose focus. I’m a tax guy. Now I was the jack-of-all-trades and master-of-none. It started to show.

Finding and keeping employees that could do a bit of everything was impossible. Everything suffered from quality to productivity to profitability. Enter the strategic alliance.

Like ITW I started to forge alliances with experts in narrow portions of the industry. The core of my practice will remain, including consulting and speaking engagements. All the sideline stuff will be handled by a strategic alliance partner. Low profit activities will be managed by a third party with economies of scale. Better yet, the partner generally has increasing economies of scale. This is where each new client costs less to serve than the one before at an increasing rate. The more clients, the cheaper it is to serve them and at a higher level of quality.

And the remaining core tax business will have certain limited economies of scale too. Under a strategic alliance my tax clients will also be the client of other firms within the network for payroll and other services.

Payroll services were never very profitable in my office. By partnering instead of outsourcing, our clients are better served. My firm gets a residual income which is almost 100% profit. Our workload drops massively freeing time to focus on the core business and we finally turn a profit on that dreaded payroll department. Best of all, the client receives a much better experience and service. The room is filled with winners.

aaeaaqaaaaaaaagkaaaajdq0ngu4nznlltdkmtktndu0mc05mjg4lwyyzmzjzmq4njiynqTime to get Personal

The 80/20 Principle is fine and dandy for the business community, but how does it apply to our personal lives?

Optimizing your duties at home reduces stress and opens more time to spend with your significant other and children. The bulk of our day at home is filled with TV and surfing the internet, including social media.

Time wasted on meaningless activities eats away at relationships, happiness, and joy. Living the good life requires attention on the things which matter most. Track a normal day and I think you will find around 80% of your activities are not giving you what you want or even bringing happiness. Hours playing a video game is a way to distract yourself or to avoid doing something meaningful. It certainly is not a happiness producing activity once more than a token amount of time is spent playing the games. The same goes for social media, email, and web surfing. How many cute cat pictures do you need to see before it is no longer cute or funny?

And now we get to your stuff. You can downsize and minimize easily. You haven’t used 80% of your stuff since Bush was in office. The old shoes need to go. Nobody needs 38 pairs of pants. Nobody. Less stuff means less stress which means more joy and happiness in life.

Talking about joy, it is the Christmas season as I write this. Nowhere else is the 80/20 Principle more in effect. We spend 80% of our time running to Christmas parties, shopping, and running around getting all the stuff we need to get done before Christmas. Don’t forget about football. Your team could make the playoffs and your watching the game might help their chances. Life is hectic around the holidays. Never enough time to get it all done.

At least you have the 20%: the time you spend with your son and daughter, wife or husband, or parents, if they are still alive. The warm feeling of time together with friends as a gentle snow drifts down outside is so satisfying. There is no feeling like it in the world. It boggles the mind why you only spend 20% of your time doing what makes you happiest.

586746403_1280x719Goodwill Industries of North Central Wisconsin provides a multitude of services to the poor in my community. Everything from help with medical, job search services, to the iconic Goodwill thrift store are there to benefit the poor. Another program is the Financial Information and Service Center, otherwise known as FISC. FISC provides personalized counseling in financial matters: bankruptcy, student loans, budgeting, credit card debt, and delinquent taxes.

Every year FISC calls me in to speak to their group. Counselors from around Wisconsin come to hear my message. Sometimes it is an informal presentation more along the lines of an inquisition (Q&A session). Other times we fill a large room and food is catered. A few of the counselors are clients as a result.

The FISC counselors are not tax professionals or even trained in tax matters. For their worst cases they refer their client to my firm. And so it was this past week. A man in his mid 30s had serious tax problems. When no one else can help there is always me. I take a limited number of impossible cases each year. These people have limited funds for my services so I charge a very low fee or just do it pro bono.

Things have been busy around the Wealthy Accountant office with the blog stuff and all. Still, I took the appointment from this young man. He arrived on time (not always a sure thing in cases like this). He was polite and obviously poor. He was living in a homeless shelter. Wisconsin was riding his ass and was garnishing his meager wages. Then he mentioned he has a parole officer. I have to know my client so I ask the obvious question. It seems my new client committed a gruesome crime against a young girl.

He had one count of 1st Degree Sexual Assault and two counts of 2nd Degree Sexual Assault. In Wisconsin 1st Degree Sexual Assault involves sexual contact with a child under 13 years of age. What it looked like to me is he fucked a 12 year old girl and then continued after she turned 13. There were a few other charges to round out the destruction of his life. He explained the judge refused to listen to him; the girl was not that young. Okay, she was thirteen; so now you have three 2nd Degree Sexual Assault convictions. Good for you.

Passing Judgment

As heinous as his crimes were it didn’t bother me. I was hired to solve a problem and that is what I will do. As I mentioned earlier, I take some cases no one else will touch. Over the years I have represented embezzlers, murders, stalkers, pepping toms, and a variety of sex offenders. I also represented prison guards and sheriff’s deputies. Call me an equal opportunity guy.

I have no sympathy for this man’s plight and make zero excuses for him. He admitted to me he committed the crime. That is not what concerns me. What bothers me most is what led him to the place he is at. His tax problems are not that bad. I billed him a modest amount and my staff will make short work of his case. Then life will set in for this man.

There are a lot of things people will forgive you for. Sexual assault is a tough one. Fucking a twelve year old when you are in your mid-20s is even more difficult to look past. His life challenges have only begun.

I don’t know all the circumstances leading to opening of his mind to the possibility of harming a very young girl. I don’t care either. What I will do is speculate because it affects us all.

My guess is it started with pornography at an early age and that he viewed pornographic material daily. Mark Manson wrote an article outlining how pornography can ruin your sex life.  His research shows many men suffer sexual dysfunction from rampant viewing of pornography and compulsive masturbation. It does go hand in hand. (Yes, I am trying to be funny.)

Porn destroys intimacy and perceptions of beauty. It also distorts your worldview. Before long the addictive rewards of porn viewing eats away at relationships and time with friends and family. And then there is my new client. He raped a twelve year old girl and justified it. (It does not matter if she consented. At twelve you can’t give consent so it is rape. Period.) What he sacrificed to get his jollies or to fulfill his distorted worldview of a healthy sexual relationship will continue adding up over his lifetime. He will never get away from it. Ever!

prison-407714_960_720Manson encouraged his male readers to undertake a “no more porn” challenge. The rules were simple. No porn for 60 days. Most men starting the challenge finished successfully. You can read the results yourself, but I will include a few interesting facts here. The men reported some weird symptoms the first few weeks as they adjusted to the challenge. By the end of the 60 days most men reported improvements in their mental health, better relationships with family, friends, and significant other, and reduced need to masturbate.


Addiction to porn is still being defined by the psychiatric profession. The boundaries of addiction are more difficult to see with porn. You can be addicted to sex, but at what level of activity does it become an addiction? Where is the line defining where control is lost?

Other reports show a direct link between viewing pornography and sexual performance issues. It also affects interpersonal relationships. Worst of all is how the brain begins to refuse to react to sexual stimulus. Sexual gratification with a significant other is no longer possible as the porn addiction has taken control.

Viewing porn affects the way you think, feel and interact with other people at work, home and at play. There is something called the Coolidge Effect. Without it internet porn would not exist. The Coolidge Effect works like this. Once a man is spent with a woman he is generally done. But if a new, novel female enters he is ready to go again. The same effect is seen in women too. This can continue until the man is exhausted to the point of collapse.

It all boils down to dopamine, a powerful neurotransmitter in the brain. Without dopamine we would not eat, have sex, watch porn, climax or do much of anything. Dopamine gives us desire. And nothing comes close to the amount of dopamine released as from sex, masturbation or viewing porn. Porn sends dopamine into overdrive. Each new image triggers the Coolidge Effect. But after a while it gets harder and harder becomes increasingly difficult to reach climax. The dopamine overload destroys the pleasure you were seeking. And that is where it bleeds into the rest of your life.

Patarei prison, Tallinn

Patarei prison, Tallinn

Financial Independence

What does all this talk have to do with personal finance, wealth or taxes? Remember my new client we opened this post with? He is not alone. I’ve seen a lot of stuff over the years. It is nigh impossible to live in our society today and not be exposed to pornography. Internet porn is considered protected free speech by many libraries. You can’t get away from it.

Before I stand too tall on my soap box I have a confession. I am far from innocent. Like the majority, I have seen internet porn. There was a time I actively looked for it. Curiosity and dopamine are to blame. Taking responsibility for my own actions is asking too much. I got lucky, however. Before I destroyed relationships and my finances I realized this wasn’t going to work for me. Mrs. Accountant is too important to me to throw away over smut. And I have junior accountants to think of too.

Porn statistics boggle the mind. Here are a few numbers to build perspective:

  • Men are 543% more likely to view porn than women.
  • 56% of divorces involved one party with obsessive porn viewing habits.
  • 64% of college men and 18% of college women spend time online each week for internet sex.
  • 9 out of 10 boys are exposed to pornography before age 18.
  • The average first exposure to pornography for men in 12 years old.
  • 6 out of 10 girls are exposed to pornography before age 18.
  • 1 of 5 mobile searches is for pornography.

And this will not harm your personal life? Marriages, relationships, and finances are all affected. The addictive nature of internet porn is too powerful to allow into your life and not expect consequences.

Building wealth and early retirement are all fairly easy to acquire. The debilitating effect of a dopamine high from porn stops these worthy goals in their path. I watched many good people, good clients over the years, sink into destructive behavior. It always ends the same: broken marriages, destroyed relationships with family and children, poverty, legal bills, disease, mental health issues, and lost jobs and businesses. I could easily fill 20 posts of clients I served over the years who succumbed to some form of sexual addiction. In most cases it involves mostly broken marriages/relationships. Sometimes disease destroys more. Sometimes the line is crossed into the criminal. Then twelve year old girls suffer.

Help is on the Way

Back when I was growing up (sounds like granddad talking) in the 70s, the only way a boy saw porn was if one of the boys found a Playboy in dad’s sock drawer and brought it to school. The exposure was limited and so was the damage. That world no longer exists. The internet is filled with porn. Even if you never intentionally search for porn you still get exposed. On this blog I use my own images and images from Creative Commons. Some of the most innocent searches periodically have a pornographic image tucked in with the rest. Google is good at knowing what you are searching for, but stuff gets through.

Your children live in this new world of easily available porn. A significant number of boys are viewing more porn by age 18 than you or I viewed in our entire life, combined. It is just too easy to get and kids are curious.

Divorce and broken relationships cost money. Viewing porn at work (I can’t believe people think they can do this and not get caught) will cost you your job. Guys, your lovely wife or girlfriend does not find your internet viewing habits endearing! And then there is the time wasted. How many books or blogs on personal finance did you miss reading because you were rubbing one out, as Bill Burr would say? How much love and intimacy have you missed due to porn? It is costing you much more than you can imagine.

Before you lose your marriage or job or freedom, stop. Stop the porn addiction. I sell dreams on this blog. Dreams of living a good life filled with fun and meaningful and fulfilling activities. I sell the dream of business ownership and lower taxes, the dream of financial independence in only a few short years, the dream of retirement at virtually any age. None of those dreams are possible if you call me as a referral from FISC. None of these dreams are possible if you spend 10 years in the slammer for fucking a child.

You owe it to yourself, to your children, parents, siblings, and significant other. There is help. You can call 1-888-997-3147 or read this website to start down the path to freedom. Financial freedom is not possible if you are buried in porn. The time wasted each day away from what is really important is costing you health and wealth. I do not want to hear about another twelve year old girl messed up from a old guy jumping her. I do not want to hear about another man’s life destroyed over porn. If I never get another referral from FISC with that kind of client again I would be happy.

Think about it. While you still have time.