Many accountants will not work with doctors. Doctors as a group can be difficult in the best of times, demanding an instant response to their every whim. I disagree completely.

My firm has serviced accounts for doctors nearly from day one. The value doctors provide society is vital and I have always felt they deserve extra latitude. The stress level doctors face daily supersedes anything I deal with. If I make a mistake, money is at risk; when a doctor makes a decision, lives are at risk.

My personality meshed well with the mindset doctors have. As a result, I have been a value added service to my doctor clients. Many hair-raising situations were resolved successfully because I understood the doctor’s situation and was able to integrate their issue into the problem solving formulas of my firm. It also allowed my doctor clients to get very rich.

Getting It Done

One of my first doctor clients has stayed with me all these years. When we first met he was reluctant to hire a small firm with a young owner. He needed someone responsive. After a short talk he decided I was worth the risk.

The situation of our good doctor included two jobs. He worked at two clinics at once because working 80 hours a week offers a young man way too much free time to dilly dally. Income was generous for our doctor. But our story is not about money today, at least not all of it.

Working at two clinics should have filled every available minute of time. Unfortunately there is this really stupid thing called vacation time and weekends. With a few spare second at hand, our good doctor found excitement in researching a medication already on the market. Within a few years he was the expert on the therapy, even more so than the company that produced the medication!

Research requires quiet time. Our doctor built an awesome office in his home to continue his research. The pharmaceutical company by now hired him as a consultant. As our doctor suspected, there were several additional beneficial uses to the said medication. My firm, by providing back office support, was an integral part of bringing these additional indications to market. I was part of the team making the world a better place. My head swelled a quarter of an inch.

Three full time jobs was the breaking point for our doctor. One clinic job was eliminated; at the other hours were curtailed. Research was getting intense and it was consuming all available time. My office invoiced the pharmaceutical company for the time the doctor put into researching and testing their medication for multiple additional indications. Soon I was also knowledgeable on the medication involved.

Working Beyond Home

Working from home is the greatest thing. Unfortunately too many distractions can occur. The wife and kids can pop in any time they want and no matter how hard you try you can still hear some of the activity going on around the house. It can be hard to concentrate.

It was time to move the business out of the home. The clinic jobs were now history. Our doctor now consulted for several firms, including the clinics he previously worked for. He also filled in when the need was pressing for a while.

An office building wasn’t the best choice. He didn’t have clients the way most businesses have clients. His clients were few and scattered around the planet. He was on the road endlessly, traveling to Europe and Washington D.C. frequently. He also worked with firms in Asia and traveled there several times.

It was a unique business that needed a unique accountant advising him. In the end he did move the business out of the home. He bought a beautiful home in Neenah, Wisconsin with some acreage. Our doctor now had the quiet time he needed to do his job better than ever before.

When research got intense he could sleep there overnight. When he needed to recharge his mind he could spend time walking among the apple trees on his land. Good health requires exercise so our good doctor did some work around the place from time to time as a form of therapy.

It worked well and always has. The doctor used the office until recently until he moved to a better location. He has since reached full retirement age and promises he will slow down soon, but he keeps getting requests for help from pharmaceutical firms. He has since helped bring several medications to market and increased the number of indications for use.

You and I Have Some Doctor in Us

Retirement is a misnomer. Just when you think you have it made life throws so many interesting opportunities your way you can’t possible get them all done. Full retirement leads to a side gig; the side gig starts earning some coin; then the side gig takes over, earning more than you did when you were working; then the side gig fills a large part of your time and you need a quiet place to study and think.

The earlier you start at retirement the worse it is. I went straight to retirement, if you will, by starting my own seasonal part-time job from day one. Then life screwed it up. You don’t run a sideline tax prep service without massive additional opportunities dropping in your lap.

Like our doctor, I had an office in the home when I first prepared tax returns. The first year I remodeled an unused bedroom. It took one tax season to outgrow that.

For the next year I remodeled the entire basement except for a small portion for the laundry area and utilities. I laid a new sidewalk around the side of the house to a back entrance. This worked fine for about four years.

By the time I had five years in my client list had grown to around 800 and I had employees. April 15th had cars lined up and down both sides of the street around my home for two blocks. The city politely recommended I get an office outside the home. (They were polite, but clear I was pushing the limits of the city code for running a business out of my home.)

I hated moving out of the house. If I couldn’t sleep I could always go downstairs for a few hours and knock out a few returns. In the middle of the day when it got slow I could go upstairs and take a nap. It was a great arrangement. Unfortunately, my success removed that option.

I bought the office building I am currently in the same year and moved my practice. The good news about owning an office building on a main highway meant many more clients. My client list exploded to over 2,000 in a few years. I was busy, but it was seasonal, so I lived with it.

Doctor Disease

It is no secret I love writing. I also love research. The doctor and I had something in common.

Over the years my firm maintained a fairly large client list and a good number of employees. My firm expanded services to include bookkeeping and payroll, something I only did in a minor way prior. Consulting, public speaking and writing assignments played a larger role, too.

Several years ago I had this great idea for a blog. I didn’t know a thing about building a blog but was determined to give it a shot. I secured the url and hooked up with Bluehost. And there it sat; a great idea with nowhere to go.

I was still publishing on multiple other platforms and writing for other firm and publications. There is something about pushing nouns up against verbs in a variety of ways that is addicting. And still the dream of a “real” blog, a “real” website written and run by yours truly was intoxicating. It was an itch I had to scratch.

A few years ago I met Pete, the venerable Mr. Money Mustache. The blog had to start now! I broke rank and paid to get it done.

Like any new business it can occupy a serious percentage of waking hours. If you love doing it you tend to do it a lot.

I have an office in the home. It has been overrun by some of the animals who roam my house. I call them the wife and kids.

I read and write wherever I can find a spot. Distractions limit the value of any personal brainstorming session or reading time, however.

At my “real” office I always promise myself some quiet time to read and study. It never works. The phone rings, a client comes in and sees my car parked outside, or an employee has a “quick question”. After the 904th interruption I may as well set the book down and open my door.

Reading and studying are a major part of what I do. I am good at what I do not only because I have done a lot of it for a long time, but because I compulsively researched and read on the subject matter. And quiet time is required to increase those skills.

I’m just going to come out and say it. I quit! No, no, no. Sorry, my fantasy barged in.

No, I am now considering the same step the doctor did. I started looking for a home to buy near my office where I can go a day or two a week and just read, study, learn, research, write.

The good news is that real estate is fairly cheap yet in NE Wisconsin. There are several very nice homes for under $100,000 within walking distance of my main office. I am considering it, doing what the doctor did.

Sometimes you need to get out of the house and into a different environment where you can let the creative juices flow uninterrupted. It is a magical place. I will keep the location a secret. If life intrudes into this sanctuary it loses all value.

Sometimes it is healthy to get out of the house and go to the office.

Whether you like it or not You are a brand. Everything you say and do either adds or subtracts from your brand. Ignore You and your brand starts to turn stale.

You, Inc. is your brand. It will take you wherever you want to go. But do you know what You, Inc. is all about?

It is simple to see You, Inc. in action when compared to a business. Take this blog for example. I can speak at conferences or just attend to build contacts. Guest blogging brings more visibility to my work. Or I can spend money to promote my brand. How I act and interact with people around me reflect on my brand. Treat the brand well and it will take good care of me; ignore it or treat it badly and the brand will kamikaze faster than you can snap your fingers.

Building You, Inc. takes time and effort; destroying You, Inc. can happen fast. Your income and net worth are directly related to the brand of You, Inc.  Arming yourself with knowledge is the surest way to supercharge your brand. But knowledge is not enough. Knowledge without action is worthless. Creating a large net worth in a relatively short time is possible. Increasing income to retire debt and grow investments is the only road to financial independence.

Building the Brand

There are two phases to your brand: the building phase and the maintaining phase. In the building phase you attend school and work a job or run your own business. In phase two you have reached financial independence. Building more net worth is unnecessary in phase two, but it tends to happen anyway. In fact, if you do it right, you earn more and grow your net worth more once you reach financial independence than while in the building phase.

There are two reasons for this. During the building phase you are so focused on earning a living, paying bills, raising a family and investing there is no time to see all the opportunities, none the less act on them. Once you reach financial independence you tend to release the huge breath you were holding. The tension is reduced and you finally relax; your vision is clearer than ever before. At this stage you have more experience than at any time in your life.

You, Inc. is a multinational conglomerate. Unfortunately you focus on only one income stream early on because you don’t know better. It hurts the financial statement badly. Economic winds toss you to and fro. Sickening!

A multinational conglomerate suffers when it only cares about income from one division just like You suffer when all you consider is your paycheck.

The best run companies, the best brands, have money coming in from all directions. Any company with a large percentage of the revenues coming from one source is at risk the one customer leaves or the one job disappears. You need to diversify.

It’s Only a Job

I can hear you already. “It’s only a job.” I get it. Your job is a stepping stone to bigger and better things. Your brand still matters and you must work constantly to build the brand. If you disagree, tell me this: How important is the brand of a convict released from prison? It might only be a job, but they are hard to find and even if you do all your eggs are in one basket. How much better to have an awesome brand with multiple stream of income?

If you want a job then get one. A regular wage-earning job is perfectly fine if it is what you want. It isn’t the end however. A job is only one source of income. Your journey to financial independence needs a margin of safety. Your brand needs to expand.

Business owners understand the concept better. One customer is not a business, it’s a job. (Well, it actually can be a business for tax purposes.) When you have a job you technically have one customer and she holds all the cards.

While you build toward financial independence it is best to have many sources of income. Your brand will pave the way. To supplement your wage you can add rental income or a side gig. Once debt is sufficiently reduced your index fund investments throw off a stream of dividends which is another source of income.

Throwing a Net

So how do you build your brand? How do you bring You, Inc. to life? Every situation is different. Your favorite accountant’s practice was generally a local or regional firm until Mr. Money Mustache gave me a push and this blog showed up. Now I have a national and even an international footprint. To adequately manage a larger footprint takes additional effort. I travel much more now than I have in the past. Speaking at conferences is almost a given.

But what about You, Inc. Your favorite accountant is fine and dandy, but that doesn’t help you. For most readers the net you throw will be local or at most regional. A side gig or full-time business will lay limp unless you breathe life into it. The breath of life can either be in the form of expensive advertising (something that doesn’t build a small local brand effectively) or well planned brand building.

Example: How much would you need to spend in advertising to match the advantages of a well executed speaking engagement? Imagine your favorite accountant advertising. Would it grow the business? Maybe. What if I gave a presentation with lots of ideas at the local apartment association, Elks Club or Optimist Club?

Your brand will determine if you speak locally or more broadly. Podcasts are important to grow a blogs brand. But a side gig can get a real boost with a guest appearance on a local radio talk show.

Starting local and expanding from home base is a logical way to build You, Inc. When opportunity arises you can spring into action. If your eyes are always open for opportunity your sphere of influence will expand.

Mister Automatic

A well oiled brand has numerous automatic streams of income. Index funds throw off a growing stream of dividends. Investment properties grow your rental income. A side gig allows you to take on work you enjoy while earning extra coin. The best part is the taxes. The worst form of income is wages/salaries. The IRS beats you silly when this is your only income. W-2 income has few chances to reduce the tax bill.

Clocktower Building University of Otago Dunedin New Zealand

Qualified dividend income is taxed at a lower rate than ordinary income you bust tail to get. Same applies to long-term capital gains. And even if you read this blog poorly you will have noticed the serious tax advantages of owning income property.

Then there are some streams of income that are sporadic and only partially automatic. When your focus is on pounding out as many hours as possible at a job there is no time left to explore better deals. Tax-free credit card bonuses are a good example. Worst of all, with no time to plan you probably overpay the IRS.

There is only one solution: dump phase one. That’s right! Dump phase one, the building or accumulating phase.

The dirty little secret rich people don’t tell you is formalized work is not necessary once you have a small nest egg started. If your annual spending is $40,000, then you need $1 million invested considering the 4% rule. But that is a big fat lie! Many people (most who actually try) earn more once they retire or at least end formalized work.

The cost of working is high! Driving to work, wearing office clothes or other required uniform and lunch on the road add up and you have little control over your income. The biggest expense of working a formalized job is the information and knowledge you miss on awesome deals. You’re either not around to see them or too busy to notice.

Phase one is required, but you need to move beyond the beginners phase as quickly as possible. The real money, the real opportunities are out there. Once formalized work is out of the way you can attend conferences where you meet people of like mind. Before long you have more profitable offers than you can handle. Trust me, I know. You can’t even accept a fraction of the offers.

Phase two is the fun phase. You want to get there as soon as possible. This is the one time it is okay to put the cart before the horse. I tell my children they only need about $300,000 before they can retire. Dividends/capital gains, credit card and other banks giveaways and selling trade lines will be more than enough to pay the bills. A side gig will put the final nail in.

The side gig can be almost anything. My oldest daughter has found so many ways to earn coin while not working much in a formalized work setting. It is disconcerting to her because all her friends do “normal” work. Sorry girls. Dad’s not normal and there is this thing called genetics.

Use media. Facebook and other social media are fine, but the real hidden values are more sublime. My oldest daughter again has this idea she wants to tutor. She devised a method to help children with challenges learning. She tried it out with great success working part-time at the local YMCA. Now she is going on local radio talk shows. Did I mention the word busy? Of course it works! And radio talk shows are so hungry for guests they bleed from the eyes. Christian radio especially. Twenty years ago I published a book and went on radio talk shows around the country all by phone and sold nearly 50,000 copies. And it was a blast!

One financial conference will provide you with more ideas than you can use. You can sit at home watching cable or screwing around on social media. The choice is yours.

Or you can keep the “normal” job. Somebody has to do it. Not me! But you might be fine with it.

Call it a weakness.

You can’t sit down with Bill Gates for more than 10 minutes before he starts telling you about a recent book he read. If you’re not lucky enough to chew the fat with Bill you can get an update on his reading recommendations anytime you want on his blog: Gates Notes.

Ryan Holiday actually has a free subscription service to inform his followers monthly of great books he has read and recommends. Over the years I have found many inspiring and mentally stimulating books from Holiday’s list.

Books are the foundation of knowledge. I read a lot because you will be hard pressed to find a successful individual who doesn’t read on a regular basis and because it is fun. Books have a special feel. Some people enjoy Kindle versions; I still prefer holding a book in my hands. I might get my news digitally, but when I dive deep into a subject I want paper in my hands even if I have to lug it through an airport. It’s just me.

Outside family, books have provided my greatest pleasures in life. I have traveled the world and through time; I have seen great societies and dined with the greatest minds of history. I did it all through the eyes of those who were there. Books have given me all that and more. You are free as long as you can crack a book and disappear into another realm.

It’s time again for me to share some of my enlightened reading. I prefer massive books. I also enjoy books that delve deep into business, science, taxes, accounting, history and math. I am not sure there is a genre I don’t enjoy.

When I was younger I read thousands of novels. Not so much anymore. Most of my time is spent with my nose stuck in a heavily researched book. Take away my reading time and I get cranky. For me, reading books is as important as sleep and breathing and more important than food. I can go longer without food than a book.

I find new books to read in various places. The above mentioned Gates and Holiday have been a reliable source. Sometimes The Economist has a good recommendation. The news gives me books to add to my reading list, too. And now I want you to help grow my list.

Below I will share my reading recommendations for the summer. In return I want you to share some of your favorite reads. It doesn’t matter if you read it ages ago. A good book sticks with you and if it sticks, you should share.

I have starred (*) books I recommend for purchase. The remainder should be borrowed from the library. Starred books I feel most readers will return to again and again so it should be part of your personal library.

The time required to read the seven books on the list is 70 hours (assuming 10 hours per volume) or 10 weeks at an hour per day. You can buy all the starred books used at Amazon (or Kindle) for under $35 with Amazon Prime. A local used bookstore may bring an even greater bargain.


I read two magazines regularly. In the past I read many more periodicals, but most newspaper and magazine stories are online where I read them now.

National Geographic: I travel more than I care to. Most travel is business related and increasing due to this blog. However, I keep pace with the world at large by reading NG. The articles are not long, but contain powerful information. Written different than a news piece, NG writes from the perspective of a traveler on the ground. This allows me a glimpse into the lives of people from all corners of the world. Science and culture related articles interest me most, but I read NG cover to cover every issue.

The Economist: Most news reporting agencies leave me flat. The Economist is packed with news from around the world each week with numerous stories from the business world and the study of economics. You can read The Economist online, have the magazine delivered to your door, or both.


*The Snowball: Warren Buffett and the Business of Life by Alice Schroeder: The news media has plenty to say about Warren Buffett. You can watch interview after interview of him on YouTube and at the end of the day you are left wondering how he does it. Alice Schroeder (no relation to the author) spent years digging deep into the life of Buffett to give us an unblemished look at what makes Buffett Buffett. A short news piece is no match for 832 pages of journalism. Schroeder spent countless hours on the phone and in personal interviews with Buffett, his family and acquaintances. I warm you, this book is addicting; it is hard to turn out the lights when engaged in such a mesmerizing story. By the end you have a much better idea of how Buffett does it. There is no doubt in my mind your investing skills will improve by the time you turn the last page. These skills can be applied to your investment properties, business or side gig and equity investing.

A Confederacy of Dunces by John Kennedy Toole: Our first of two fiction entries is rollicking fun. Dunces introduces us to Ignatius J. Riley, a most intoxicating character if there ever was one. Riley is always scheming. His antics with ways to earn money in jobs and side gigs will have you rolling on the floor. But I warn you, Riley is an idiot extraordinaire. His relationship with family and employers will have your eyes glued to the page. Readers of this blog know the value of a side gig. Dunces teaches us how not to do it.

 Business Adventures by John Brooks: When Bill Gates and Warren Buffett both say a book is the best business book ever written it might be worth the time to read it. Adventures is a collection of articles written by Brooks over his career investigating significant issues challenging businesses. Before the 1987 crash or 2008 financial crisis was stock crash of 1962. Brooks gives us a detailed look at what went wrong and what was done to prevent 1962 from becoming a 1987. Chapter 3 took a look at the federal tax code and its history. For some reason your favorite accountant couldn’t put the book down during that chapter. I also found the chapter on Xerox riveting. What sacrifices are made by a group of people to bring a company to life is inspiring. Note: These business stories are from the 1960s and therefore are dated. However, each story is as relevant today as it was 50 years ago.

It Can’t Happen Here by Sinclair Lewis: Before the current events caused Americans to doubt their government’s ability to lead there was the fear Nazi theology would usurp the White House. Lewis wrote his dystopian novel in 1935 as fear heightened over Hitler in Europe. The story follows Doremus Jessup, a small town newspaper editor, as Berzelius “Buzz” Windrip captures the imagination of the country. Windrip’s promises sound all too familiar today. Of course Windrip wins the presidency causing the country to spin down in violent authoritarianism. The novel does not offer a happy ending. Jessup and his ragtag compatriots build a movement to take the country back by using an underground network to publish the truth. People begin to fight back, but the cost is dear and the road back may never provide a full return. Perhaps Americans should also read The Decline and Fall of the Roman Empire too. Or a brief review on how the Roman Republic ended.


*The Wealth and Poverty of Nations: Why Some are so Rich and Some so Poor by David S. Landes: In The Wealth of Nations, published by Adam Smith in 1776, we learn about the division of labor and its effects on productivity and quality. (You can read The Wealth of Nations online for free here.) Smith also gave us a look at how money really works. Fast forward to 1998 and Landes picks up where Smith left off. No longer are we merely interested in how money works, but why some countries are rich and some poor. Several factors determine the wealth of a society. I’ll let you enjoy the process of learning as you read the book.

*The Simple Path to Wealth by JL Collins: There is a reason I am recommending this book again. Jim Collins has produced what I consider one of the best books on investing ever written. Taken from the pages of his blog, Wealth is pulled straight from his stock series. Before you jump ship on me, understand this book is not about pouring over stock sheets and financials searching for the next good investment. Instead, Collins’ approach is simple: simple to read, simple to follow. The writing is crisp, clean and to the point. This is the perfect book for the restroom (sorry Jim) or ride to work. Each chapter is self contained, yet part of the whole. I am certain you will read this book again and again as I have. I keep finding myself re-reading chapters as a reminder to keep it simple and safe if I want to grow and maintain my wealth. (If you want to read about how the author and Collins nearly took over the world, read here.)

* The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century by Walter Scheidel: Before we start I want to point out I recommend this book for purchase. Unless you plan on using the book for additional research you may wish to borrow the book from the library instead. The Great Leveler takes Piketty’s work a step further by looking back in history to determine where income inequality began, how it ended and reappeared in societies for millennia. This book is a surprising recount of income inequality in all societies since humans decided to leave the hunter/gatherer lifestyle. What I found most interesting was how similar the issues of income inequality are today with the same issue thousands of years ago. Hint: you are not going to like the four possible solutions history provided.

There it is, kind readers; my reading list to round out your summer. Pick and choose as your interests dictate.

Now it is your turn. I am always looking for good books to read. Share some of your favorites in the comments section below. Don’t leave a wayward accountant, a book lover, in the dark.

There are advantages to writing a personal finance blog that go beyond the love of writing and meeting new people. Few things in life bring as much pleasure as sharing knowledge gleaned over decades of experience. Stories are the best. Sharing stories with friends is a time honored pleasure handed down to us through countless generations.

The old adage about the teacher learning more than the student applies in blog writing as well as in formalized education settings. Additional research and looking at a situation considering perspectives wider than just your own is an eye opening experience.

The constant search for a story idea and angle is hard, yet rewarding, work. Topics I would never think of digging deeper into eventually reach the front burner. Unexpected paths are taken. I always have a plan. It never ends up the way I anticipate. Stories have a habit of taking on a life of their own. (At least I started with good intentions.)

Hurt My Feelings, Please

The original working title of this post was: Hurt My Feelings, Please. The original intent of this post was to encourage people to share their thoughts in the comments section.

Over the last few years I have learned so much from you, kind readers, I can scarcely contain my gratitude. The original premise of this blog was to allow people to step behind my desk and see the world from my point of view. Accountants get the opportunity to see the good, bad and ugly of life up close and personal.

My personal life experiences, and those of my clients, I was sure would provide powerful insights into living the good life. They have, in my opinion. I never dreamed I would get an education like I did. Decades of experience pale in comparison to the life experiences of thousands of readers. The group collective of knowledge trumps anything I can spew onto the page. I’m one guy and you, readers, as a group can outdo anything I can. There is potential power in large numbers of people working together toward a common goal.

Some examples are in order. Back in March I wrote about a novel way to get awesome internet service you can take anywhere at a low cost and get a tax deduction too. It all started when I struggled for years to get any kind of acceptable internet quality where I live out in the backwoods of Wisconsin. I tried everything to no avail. And it was expensive. If you know me it all you know how deeply the pain drove when I had to pay for a crappy product and terrible results/service.

Then I ran across a Wi-Fi hotspot that promised real results at a really good price point. Loving value as I do, I did my research and wrote about it. You can read the details of the internet service with the above link. What I want to point out here is my original post fell short. What I wrote about was still too expensive! Michael left a comment with a link for the very same product for about half the price of what I suggested! Thank you, Michael. No really. Thank You.

The tax deduction is what I felt readers here would cling to. Instead, readers pointed out the charitable deduction was negligible and even possibly questionable. What can I say? I’m an easily excitable accountant.

The tax deduction wasn’t the shtick! Backwoods of Wisconsin or no, many readers hungered for quality internet service all over the country at a reasonable price. Then Michael one-upped me. And thank God he did. I ended up buying the service he suggested. (Be sure to read the comments on the linked post above on this. I did not change my post, opting to allow Michael’s comment to carry the day. I may need to update that if people start missing the real value of that post.)

My neighbors, hearing the rumor of my internet nirvana, started to call. For a while I enjoyed a burst of popularity with my community. I would visit neighbor after neighbor with my Wi-Fi hotspot and my youngest daughter in tow who knows how to set it up. We tested the service at neighbors’ homes to make sure it worked for them and gave them the info to buy their own service.

Neighbors talked to each other as more and more opted for the service. People in my small community were getting internet service like never before at a price 70% cheaper! Imagine a prosecutor trying to seat a jury against me in my county now with so many people benefiting from my simple blog post and the ensuing comment from Michael.

Michael sounds like a nice guy. He must be. Look at all the smiles he caused. Imagine if he would have said to himself, as a nice guy, “Awe, I can’t comment that there is a better deal. It could hurt the Wealthy Accountant’s feeling.”


I mean it. The working title was only changed because I didn’t feel it reflected the content of this post. I like the working title better, however, and may change it back at some point in the future if I think it will help reach more people in need of the information.

The only reason this blog should consume electricity is if it provides value. This whole project is a waste of time if the only information comes from me. Some farm boy from the boondocks doesn’t have all the answers just because he has three plus decades running an accounting office. Not good enough.

Three is Not a Big Enough Crowd

There are plenty of additional examples where readers provided better information than I did. I’m learning more now than ever before. Even an old dog can pick up a tip or two now and again.

A few days ago I wrote about my experience helping my oldest daughter get a good car below Blue Book from the dealer. I thought I discovered the greatest thing since sliced bread. It appears sliced bread was not all that great an invention.

My car buying idea in this instance was solid, filled with good advice. But Wes commented a few links where you could get even better deals! Once again, thank God Wes didn’t refrain over fear of hurting my feelings!

Crowdsourcing is all the rage today. Ideas that would never have seen the light of day now have a chance at life. Medical expenses can be crowd sourced; non-profit organizations can build and grow programs to make our communities better; artists can fund projects. The list of opportunities is endless in the new world paradigm.

But crowdsourcing doesn’t end with financial projects! Blogs like The Wealth Accountant start a dialog on a variety of ideas. More personal finance bloggers means more ideas get aired. The blogger only starts the conversation. The readers are the real story. The comments section can be livelier and provide more information than the actual post! I never expected that.

Growth only happens when evolution takes place. This blog is no different. I have seen subtle changes over the last year and a half as I grow my audience and find my voice for this venue. The blog evolves as I grow. And you are the reason I grow and this blog evolves.

Your ideas make all the difference. Many crowdsourcing projects require a cash commitment on your part. If the project is completed you may get some compensation for your contribution. Sharing your ideas in the comments section doesn’t cost you a dime. The rewards are immense because when you share it encourages others to do the same. As a group we are more powerful, wiser and more knowledgeable than any individual of this group, this author included.

Zig Ziglar told a story about how much a horse could pull. I may get a few details wrong in the story—it has been a while—but you will get the message. Zig said, “A single horse hooked to a wagon can pull 4,000 pounds. If you hook two horses to the wagon and train them to work together they can pull 12,000 pounds.” The lesson is clear: the sum is greater than the parts working alone.

We are that team of horses.

Together we can make a difference in our communities, family and personal life. Crowdfunding is more than raising funds. It is possible to crowd source and crowd fund knowledge and experience. We live in a brave new world with more opportunities than any other time in human history.

Never be afraid to share your thoughts in the comments section of this blog. What you may consider unimportant may change another reader life in a fundamental way. It might change the author’s life too.

Everyone has plenty to share. The forum started with a bang and has slowed lately. I encourage greater use of the forum. I added a section for accountants who read this blog and share my philosophy to share their contact information. Just like I don’t know everything, I can’t prepare, or even consult, with every deserving reader.

Together we will create a better world. We will, and are, making a difference. Never be afraid to share. Your unique thoughts and experiences must be shared with the world or we are all irrevocably harmed. You are part of this community, you are friends.

We are a family (if we have the courage).

Residential investment property is forgiving for the most part. Professional managers exist in most markets and except for the very worst of conditions it is possible to fill most apartments even if it is not at a profitable rate.

The number of residential properties available is large and unloading a single family home or duplex is fairly quick and simple. Many economists consider a six month supply of homes on the market a healthy balanced market.

Things get slightly less forgiving when you graduate to multi-unit apartment complexes. There are fewer to select from, they cost significantly more, there are more tenants to manage and it usually takes longer to sell the more expensive buildings. Not as many investors can swing a multi-million dollar deal or even finance one.

It might not be intuitive, but the more expensive the property the more likely it will be purchased as a cash deal. Big buildings carry big responsibilities and risks, but also are coupled with larger rewards.

Generally the rules are straightforward with residential rental properties. Lease contracts are generally standardized in most states and the landlord/tenant rules are clearly defined. The laws tend to protect the tenant more than the landlord. Still, the landlord, if she bought right, should turn a tidy profit.

Real estate investors usually start small, a single family rental or duplex, moving up to multi-unit buildings later. Most landlords stop at the duplex level with maybe a 4-plex or so tossed in for good measure.

The next leap takes courage. Financing a large deal is more difficult. Only a select number of banks are willing to fund a seven figure project. You need good credit, experience and a documented plan. At the end of the day the multi-unit complex is still a forgiving animal in the real estate world.

Then there is the commercial property.

Rules Change

Investment commercial property is a whole different animal. Commercial property spans a wide range, including: land, farm land, land for development, parking lots, storage units, malls and strip malls, gas stations, office buildings and on and on and on.

All real estate must be purchased right to yield a respectable profit. I encourage you to read this article I wrote on the math of buying residential real estate correctly. Rather than repeat what I already said we can move forward.

There are significant differences in buying and managing commercial real estate. The linked article above is accurate with one caveat: vacancies. It is unusual for residential real estate to remain vacant for more than a few months. Commercial real estate can remain vacant for much longer periods of time, even years.

The office building I own for my accounting practice was empty for a few years before I purchased it. The previous owner was willing to sell or lease the building. It just sat empty.

My personal experience in real estate centers on residential properties. Most commercial properties were purchased for use by a business I own. I love my landlord; I love my tenant. Rarely do things work so peachy when you are not on both sides of the deal.

Without personal experience in commercial property I still have plenty to share. Many clients over the years engaged my services to buy, sell, and negotiate leases for their commercial properties. So I may not have had much commercial property in my personal portfolio, but I have plenty of experience with the mechanics of profitable commercial property investments.

Risks and Rewards

Financing: Once you own commercial property for a while you either go broke or make so much money you tend to pay cash for additional properties. In the beginning you will probably need a bank or seller financing. Commercial loans tend to require a larger down payment (20-30% or more), have a higher interest rate and a shorter amortization period. Many banks have a balloon payment rather than play out the entire amortization of the balance or require refinancing of the existing loan every five years or so. Some of this is specific to certain markets and the lender. The type of commercial property also plays a role. Farmland generally needs 50% down or some other collateral. Office buildings may need 30% down while developments may require bank refinancing on a regular basis.

First you find the right property at the right price then you finance it. BUT, it would be in your best interest to have financing available in advance. If the seller demands they finance the deal (for tax purposes) you are still covered.

Lenders will pick a commercial deal apart and for good reason. The money involved is usually large. Using the above link as a guide to ensuring you purchase a profitable property will help in the process. Payments will be higher due to the higher interest rate and shorter amortization. Since vacancies tend to last longer in commercial property the lender will require greater resources to survive any drought.

Leases: Residential rental rules are standardized with laws slightly favoring the tenant because legislators assume the landlord has more resources, hence the advantage. Not so for commercial real estate.

The landlord and tenant are on an equal footing in a commercial contract. No longer do you have standardized rental rules. Commercial leases are business contracts. Both parties need to lawyer up.

Typically the landlord has her attorney write the lease and the tenant’s attorney reviews the proposed lease before requesting changes. Many of the details of the lease are known in advance because the prospective tenant starts the process by providing the landlord with a Letter of Intent outlining the property they want to lease and the terms. Negotiations take place before the lease is written. The LOI looks a lot like a legal contract, but is not binding on either party.

Commercial leases frequently are triple net or nnn-leases. This means the tenant pays the property taxes, maintenance and building insurance in addition to utilities. This is something you never see in residential rentals.

Triple net is nice for the landlord. Once a property is leased the only real expense for the owner is the mortgage and maybe the property manager. Major repairs such as the roof, HVAC, parking lot or other major repair over a certain value may still be the responsibility of the landlord.

Commercial leases tend to be for a longer period. Whereas residential rentals are generally handled with a one-year lease, commercial leases frequently extend five years or longer, sometimes much longer. The longer term lease allows the tenant to feel comfortable they have continuity for their business and the landlord is happy because she has a long-term tenant.

The one thing to remember about commercial real estate is that business law applies. I cannot express strong enough the need for legal counsel in managing a commercial transaction. As smart as I think I am when negotiating a multi-million dollar deal for a client, I know my legal team must be involved every step of the way.

All this said, not all commercial real estate is equal. Farmland will not follow the above facts I list. Most farmers rent land for a set rate per acre and the landlord pays the property taxes, or, if agreed, the property taxes are included with the lease payment. Farmland rent is usually paid once per year or semi-annually at most.

Storage units look and act a lot like a residential rental unit, but it is still a commercial lease. There is no triple net with storage units. The biggest difference between a residential rental and a storage unit is that storage units are generally month-to-month leases.

With a storage unit your attorney will probably draft a template lease which you can use with each lessee without going to the attorney for each unit.

The larger the office building or leased space the more elaborate the lease can become. An experienced negotiator should be involved in the process. Small strip malls and office complexes are handled by a property manager specializing in such properties. Large buildings require an experienced team handling the process from beginning to end. You will usually not be involved in the actual negotiation; your team handles that.

It is vital you have an experienced team on your side. I have played point in negotiations where several accountants and attorneys are sitting on opposite sides of the table. My ability to see the big picture inside the negotiation has earned me the trust to lead teams in these matters. However, I always have counsel available to me.

The Good News

Commercial real estate looks like a lot of work. It can be. Usually you have a team in place to handle most of this stuff for you. Your job is to buy the right property and let the professionals handle the rest for you.

Commercial real estate has its unique challenges, but the rewards are worth it. A fully leased commercial building can pay the owner the value of the property every 7-10 years. Since many leases extend this long, one tenant can buy your entire building for you, cash, and you keep the building so you can do it again. The downside is the thing might sit empty for three years before the money starts rolling in. Commercial is unforgiving to the ignorant.

Reserve requirements for commercial property are larger. Most repairs are paid by the tenant, but when a repair bill is the responsibility of the landlord it is usually a very big amount involved. Resources are also required to handle the long periods of vacancy.

The best part about commercial property is that once it is leased you don’t do much. Lease payments are often times paid by EFT; you don’t even have to go to the bank and cash the check. A property manager handles finding a tenant and your accountant or attorney handles the transaction. As unforgiving as commercial real estate can be, the only real work involved is buying the right property at the right price. Professionals handle the rest.

As a final note: Don’t rush to buy commercial property. It might be best to start with a small commercial property or have an experienced partner early on before going out on your own. You will need a local attorney, accountant, banker and property manager. A lot of money is involved. Do it right and you should be very happy with your commercial real estate investments.

Do it wrong and you could end up bankrupt.

Owners of real estate purchased for $250,000 net of land need to read the following posts I wrote previously:

Cost Segregation

Applying Cost Segregation on a Tax Return

The best part of owning real estate is the tax advantages. Most investors leave tax dollars on the table. If you want to discuss cost segregation benefits contact my office (there is a consulting fee) using the contact link on this page or call Randy. His contact information is provided in the above linked posts.

Experiencing the magical moment when you discover you have reached financial independence is like no other. Early retirement, financial independence and becoming a millionaire are all possible. $10 million isn't what it used to be. #rich #poverty #personalfinance #earlyretirementI remember the day I realized I crossed the seven figure mark. The actual moment of crossing was lost because I didn’t know I was doing so well. There was no party or celebration.

The year was 1996, I was 32 years old and the bank needed a personal financial statement for an investment property purchase. The real estate partnership I had with my dad and brother was in full swing, but I wanted to add a few additional properties to my personal portfolio.

The bank asked for a personal financial statement. It had been a while since I filled one out so I was interested in where I would end up.

Don’t get me wrong. I track my finances closely. Each individual investment gets reviewed annually or semi-annually. I don’t always add up all the numbers to see where my net worth is, however.

As I gathered each asset and wrote its value down I could see this was going to be higher than I originally anticipated. My liquid investments had advanced a lot over the years and the real estate in my portfolio was adding a serious number to my net worth.

Once I had the assets added I knew I had crosses the million dollar mark before tallying the liabilities. Debt was low, even with all those rental properties.

When the final number was entered, my net worth stood at slightly over $1.2 million.

Most people would be excited if they discovered they were a millionaire. I was numb. I didn’t know what to think.

I was also depressed. Deep down I expected there would be some kind of positive feeling when I crossed the magical barrier. But, nothing. I was still me. I did not feel rich and certainly didn’t want to sell my tax practice. I enjoyed what I was doing.

And this depressed me the most. When I was a child I always wanted to be a millionaire and now that the goal was reached it didn’t make me feel different. What was I going to do now?

Growing up poor gave me a distorted illusion of what “rich” was. A million dollars was rich in my mind without understanding you can be rich with or without money. And now that I had a million dollars it didn’t change me. Something was wrong.

I shared the good news with Mrs. Accountant. She smiled and said, “That’s nice” as she went back to tending our first daughter, one year old at the time. Even my wife didn’t think it was all that big of a deal.

It became clear quickly why I wasn’t feeling the glory. In my mind the million had to be liquid, as in stocks, bonds, mutual funds and bank deposits. Much of my net worth was in income producing assets: a business and investment properties.

I never quite got my arms around the concept that I had arrived. After a while I found a way to let it go and not worry about it. Money, lots of it, would never give me the tingly feeling I expected it to. And crossing a net worth boundary wasn’t going to be something you feel as you cross it.

Such are the illusions of a young man.

Twenty Years Later

It was time for the mid-year review of my portfolio. Normally I wait until later in the summer, but I had a feeling I crossed another big threshold in my net worth. In fact, I was certain of it.

In the late 1990s my business exploded to the upside. Profits were very high and I was young enough and hungry enough to want to push hard. We started selling real estate holdings in the family partnership. By 2000 my real estate portfolio consisted of my farmstead, office building, and some real estate paper paying some very nice rates of return. No more dealing with tenants for me.

I kept adding excess cash to my index funds. Spending was always low because there wasn’t much I really wanted. I had my family and was completely satisfied with this awesome gift. There was nothing else I needed.

Late last year I was a whisker away from $10 million. With the continuing bull market I knew I crossed the threshold without as much as a twinge. I’ve been down this road before and expected nothing in the way of emotions this time.

Adding the assets always takes some time now. My liabilities are easy; I have a small mortgage of just over $100,000. The end.

Assets are scattered all over the place. I own the obligatory index funds in traditional IRAs, Roth IRAs, the HSA and business retirement accounts. The non-qualified account also uses index funds.

Real estate was next. I still hold a minor amount of paper on property, plus the farmstead and the office building. I estimated the values conservatively. No room for ego when calculating my net worth.

The hard part is the trusts. As an accountant I understand the value of using trusts to carry out my wishes when I leave this green earth. This leads to a number of entities. Gathering all the trust values required the most time.

Once the assets were tallied I sat back in my chair and wondered how my life ever turned out so good.

Remember the old adage: the first million is the hardest? Well, I crossed plenty of those in the last six months. The final number came in at $12,600,200.

Yes, I rounded! Real estate and the business are estimated, as I have said.

My net worth increased over 25% in six months! This is an astounding number to me. I’m sure it is to you too. Part of my luck stems from a solid increase in the index funds. Where I smoked it is from investments I made in the 1980s. Phillip Morris is one of my first individual stock purchases. I never sold. It kept growing and keeps growing. In the early days it was in a dividend reinvestment account so the dividends kept buying more shares. Morris later changed its name to Altria when it spun off Phillip Morris International a few years back. The dividend grows times two now.

A while back I bought some Tesla, Netflix, Facebook and a few other stocks. The “other” stocks did okay, going up with the market. I don’t have to tell you what Tesla, Netflix and Facebook did, do I?

Lost Dream

Twenty years ago I was depressed I missed the magical moment when I crossed from poor to millionaire. I expected something, I’m not sure what. But I expected it!

After the non-moment wore off I went back to doing what I always did. Nothing special. I ran my tax practice, read piles of books and satiated my curiosity whenever I could with a new project.

Since I invested nearly every dime I had in my paw, there were times money was tight. I subscribed to grandpa’s philosophy: Never take off the pile. I invested first and figured out how to pay the light bill later. What can I say? I always lived that way.

I always felt poor; still do. My goal was to return to the farm and twenty years ago we had just moved into the farmstead I still live in. My dreams were fulfilled. The office was out of the home. My business goals were simple: beat last year’s numbers. More clients, more electronically filed returns, more revenue. Always more. It was the only scorecard that mattered.

I drive bank repossessed cars and grow a significant portion of my own food. Mrs. Accountant loves canning and freezing our excess produce for winter consumption.

You want to hear the really sick part? Mrs. Accountant still refuses to buy any clothes unless it is marked waaaay down. And I mean way down! Like $3 pants and $3 shirts. It gets better. Underwear and socks are frequently purchased at Goodwill. You know, Goodwill sells undergarments with defects really cheap. My attitude is if they don’t have defects when purchased, they will about twelve minutes after I put them on. So I wear the cheap stuff.


Longtime readers of this blog know I muse periodically on why people like Warren Buffett and other very rich people still live frugal lifestyles. Buffett spends under $3 for breakfast he purchases at McDonalds on the way to work. Yes! On the way to work. At 86! He even uses coupons!!!

The exclamations points are for you, dear readers. I totally get why Elon Musk keeps starting new businesses and pushing forward even after snagging upwards of $300 million from his portion of the sale of PayPal. I get why Steve Jobs worked until his body failed. I know why Buffett says he skips to work every day at 86. I get why Jeff Bezos keeps building Amazon bigger when he is one of the richest people alive. I get it.

Do you?

Those guys all have more money than me by a massive amount. But once you reach a level where money is no longer a deciding factor or important, it becomes something else. A scorecard.

Working my business is not about more money. It is about providing value; doing something important; making a difference; finding fulfilling activities to occupy my time.

I invest and expect the investment to go up. I work really hard to make good investment decisions. If they go down my lifestyle will not change one bit. In reality, it doesn’t matter what happens.

But it does to me. I want to win. It is all a big game. And I like winning when I play. If I can’t win, or am not allowed to win, then I don’t want to play anymore.

In the office I still track my performance. I track my performance a lot more than I track my net worth that is for sure. I want to always keep growing.

There are things I wanted to do even after I crossed the million dollar mark. I wanted to farm, so I did. For a while. (A twenty year while, actually.) I backed away from the steers, but still have the acreage. Maybe I’ll go back into raising more animals, maybe not. Right now I have another goal I need to satisfy.

Everyone has dreams as a child. My dream was to grow up and be a writer. (I wanted to be a stock broker, too. That dream has also been fulfilled and I moved on.) I wrote my first full length novel in high school.

Earning a living writing is no easy task. Some of my work sold, but it wasn’t steady work and by then I had different plans. Still, the dream never died. I wanted to be a writer. A real writer.

Over the years I published a lot. The internet offered more publishing opportunities than ever before in history. But I didn’t feel like a “real” writer.

Now I have this blog and it is my dream. I write. I love writing and will keep doing so. The goal is to build traffic and profits. I call it ego, but it isn’t. It is a little boy inside me screaming out his dream. The sound is deafening.

My goals are detailed. Without wasting your time on the details, let me just say I want this blog to be a standalone business with employees and not a sidebar of my accounting practice.

Like Buffett, Musk and Bezos, I don’t need more money to make me happy or to put food on the table. My lifestyle will not change a bit if this blog grows to gargantuan size or fails. I just want it. That sounds so selfish and self-centered. It’s not.

Money is the scorecard to keep track of progress. Nothing more. Traffic statistics help me see how many people I am reaching; money allows me to see the difference I am making. I want lots of both.

I’ll spare you the gruesome details on how I plan to accomplish my goal. Sharing valuable ideas is more important. What I want to share is an insight you must have.

If you have already reached financial independence you already understand what I am about to say. For the rest of you, I want to share this one nugget of advice I wish I understood at a younger age: Stop worrying about what your net worth is. Relax. Don’t worry about becoming a millionaire. Live right and it will happen all by itself without any necessary worrying.

How Warren Buffett reacted when he became a billionaire. Reaching a financial milestone is anti-climatic unless you're prepared. Get rich! Build wealth Reach your financial dreams. Think rich, then become rich. #wealth #rich #billionaire #millionaire #investingI missed the magic second when I went from under a million to over a million. It was only a second and if for some reason it did cause some sort of feeling or euphoria, it would have been short lived anyway and a drug only offered once in life. When I wasn’t looking, there it was. I went from less than a million to $1.2 million. The same happened when I went to eight figures. It still blows my mind. Eight figures? And it makes not a bit of difference in the world.

My frugality is not forced. I am frugal with my money because it is who I am. Impressing the neighbors is something I never did. Let the neighbors laugh. It doesn’t bother me.

Saving half your income is easy once you allow yourself the gift. Investing is easy when you are not trying to shoot the moon. Debts and a low net worth encourages people to gamble with their investments. It’s not necessary. You do NOT have to shoot the moon! It will happen faster than you imagine when you let go. Buying a hot stock tip or a flyer is sure to end badly. Timing the market or your index funds investments usually ends in tears.

The rules are simple. Spend less than you earn and invest in a broad variety of established businesses (index funds). The rest will take care of itself.

One day you, too, will realize you crossed a magic threshold of net worth and missed the moment it happened.

It works that way. Hope you weren’t expecting more.

Wealth Building Resources

Personal Finance is an incredible tool to manage all your investments in one place. You can watch your net worth grow as you reach toward financial independence and beyond. Did I mention Personal Finance is free?

Medi-Share is a low cost way to manage health care costs. As health insurance premiums continue to skyrocket, there is an alternative preserving the wealth of families all over America. Here is my review of Medi-Share and additional resources to bring health care under control in your household.

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

A cost segregation study can save $100,000 for income property owners. Here is my review of how cost segregation studies work and how to get one yourself.

Amazon good way to control costs and comparison shop. The cost of a product includes travel to the store. When you start a shopping trip to Amazon here it also supports this blog. Thank you.

One moment please. I need to wipe a tear from my left eye. <sniff>

There, I am better now.

Regular readers probably were wondering what happened to me yesterday. I normally publish on Friday and there wasn’t a whisper of evidence a certain accountant was anywhere to be found. I have a good excuse for my behavior: my oldest daughter bought her first car.

The process of buying her first car took time. She was working at it for 6 – 8 months. Dad didn’t do it for her either. I only gave advice; so like dad. She did all the work searching for a car and my job was to shoot down the idea. In the past I bought all my cars from the bank or credit union. Unfortunately, most financial institutions no longer mess around with selling their repossessed vehicles anymore, electing to move the assets at auction.

Unless you have a dealer’s license you can’t buy cars at auction. The effort to get and keep such a license is not worth it if you only buy a vehicle every 10-15 years.

My old bag of tricks disappeared since my most recent auto purchase. I didn’t have much advice other than to keep your eyes open for an opportunity. Not the most powerful advice I’ve given in my life. (I love you, sweetie.)

Junior Accountant needed a car and she also needed to learn the process. She would learn nothing if I did it for her. Besides, a new set of eyes might reveal a new way to get a reasonable deal on a set of wheels.

The first stop was the used car dealership. She was out the door so fast I swear I saw sparks fly. It was an eye opening experience for her. The prices were inflated, the vehicles mostly junk and then they wanted you to use their financing at 28%. I have words to say when that happens, but I promised to clean up my writing. No more f-bombs (unless absolutely necessary).

In Search Of

Since it was my daughter’s first car, she needed to walk all the steps. I had her research all the banks in town and call a few of them to make sure they weren’t selling their repossessed vehicles to the public. A few still were, but these credit unions didn’t make many car loans so there were no cars available.

Banks and credit unions had been my best source of wheels for the last 30 years. The banks loss was my opportunity. I was able to buy a relatively new car (usually around 2 years old) for around $4,000 under Blue Book. Not bad. You had to wait for the right car and you couldn’t be picky about what you drove. When the right deal showed up, you snapped it up. For me, once I snapped up a deal I was done for another decade. (No wonder the banks gave up selling to the public with such finicky demand.)

For Sale by Owners was another way to buy a car. This is where I felt the process should head.

My daughter spent serious time on Craigslist researching cars. Most autos listed were from dealerships and my girls had had enough of that racket.

Mrs. Accountant went with my daughter each time a car of interest appeared. Some vehicles listed by the owner had merit. There were no real deals to be had unless the vehicle has serious issues needing repair. For the most part, people selling their own car did their research, listing the car at Blue Book and holding tight. They knew their car would sell at that price reasonably fast.

People selling their own vehicle were more honest than the dealerships. Owners frequently pointed out flaws. If anything, my faith in humanity was restored.

My daughter needed a reliable car at a good price. She wanted a deal like dad brags about getting. And the search went on.

The Bright Light

As so often happens, the greatest opportunities appear when you least expect it. My sweetie was headed to the doctor when she noticed a business with cars for sale across from Goodwill.

She convinced Mrs. Accountant to go with her. The business in question was a collision repair shop. The owner also has a second business buying cars from auction with collision damage. He then repaired the damage and puts the auto up for sale.

Mrs. Accountant and my daughter looked at several cars at this establishment, returning again and again. Finally they convinced me to take a look.

I’ll be honest. I did not expect much. The potential problems with such vehicles were more than I would consider accepting.

Still, I kept hearing the asking price and it was compelling. These cars were selling below Blue Book!

The business owner was not a typical used car salesman either. Nobody came out to greet us when we walked around his lot. When we entered the building there were no salespeople at all!

I asked about a specific car, a 2009 Chevrolet Malibu Hybrid. The desk clerk called the owner over. He pulled the file from his cabinet and showed us the details. “Here is the car when I bought it”, he said, highlighting the collision damage.

There were pages of notes showing what he did to repair the car, including expense receipts. He showed us Blue Book; his price was lower. (I checked Blue Book before we arrived and he did not deviate from my research.) He said he can’t really sell collision damaged and repaired vehicles at full Blue Book.


One Man’s Junk is another Man’s Treasure

The car we were interested in was not a SALVAGE vehicle. That is not always the case.

The Malibu had front driver’s side collision damage. I included a before and after picture for you. My daughter picked the vehicle up for around $1,000 less than Blue Book which means she didn’t take a hit to her net worth the moment she drove it off the lot.

The car was safety inspected and we gave the vehicle a once over to assure there were no hidden issues. A few minor issues were addressed.

All in all it was a pleasant experience. My next car will probably come from the same business or a similar establishment. Cars are something I don’t want to think much about. I want value, if there is such a thing in a wasting asset, and I want it to work for a decade or so.

Since buying a repossessed car from a financial institution is getting harder by the day, it was about time I found another reliable source of purchased transportation.

There are differences between buying from a For Sale by Owner, the bank, a traditional used car dealership and the guy repairing damaged vehicles for sale.

When I bought a car from the bank it usually was two years old. Older cars were available, but I liked the newer cars so I could run the thing at least 15 years. I don’t like shopping for cars!

The bank owned cars could be had for $2,000 to $4,000 below Blue Book.

Most of the cars available at the collision repair dealership were older. My daughter picked up a 2009 Malibu. The car is already eight years old. As an FYI, in Wisconsin, cars don’t often make it to 20 years due to harsh winters and road salt. Therefore, in my opinion, the Malibu has another eight years of life before it becomes less road-worthy.

Salvaging a Loss

Sometimes the repaired vehicles have a salvage title.

My daughter’s Malibu is not one of these vehicles. It has a regular title. This means she can get a regular auto loan and regular auto insurance.

When she decides to sell the vehicle, if she doesn’t run it into the ground first, she will need to disclose the car’s history, but otherwise the car should sell for close to Blue Book. The car is also insured for its value.

[Insurance side note: I do not insure my personal vehicles for collision, especially if the value is under $5,000. Since this is my daughter’s first car I am walking her through the whole process so she is familiar. ]

[Loan side note: My daughter could have paid cash for the vehicle, but with interest rates low I wanted her to experience what it is like sitting at the credit union applying for a loan. She has a very small loan so collision insurance is required. Once she pays off the loan in a year I will recommend dropping collision.]

Salvage vehicles are repaired to good working order, but sell for even less! Before you buy a repaired salvage vehicle, be aware the title will say: SALVAGE.

Each state has different laws. In Wisconsin insurance companies can only insure a salvage vehicle for 70% of its value. (Or so I was told.) The credit union said if it was a salvage vehicle they require 25% down. Neither of these issues is important since readers here don’t have auto loans or insure for collision. But I wanted to mention it for any souls wandering through not aware of our unique demographic.

Wrap Up

I missed yesterday’s publishing deadline so I could help my daughter close on her car and walk her through the whole process. I also wanted to ask more questions before publishing. Many readers should find value from this new information.

There is still the risk it could all go wrong. There are no guarantees. I’ll update if anything meaningful changes.

Please share your experiences in the comments section below. Include laws applicable to where you live.

My guess is this will work pretty much anywhere on the planet cars are driven. Virtually every community has at least one or more of these collision centers buying schmucked up cars and breathing life back into them.

I like the recycling aspect of revitalized cars and love the savings.

Hope it helps you too.

Start your rewards card search here.

The biggest problem most people have with credit card bonus programs is meeting the spending requirements for the bonus. Business owners have an advantage. Landlords do too. Meeting a $3,000 spending requirement in 90 days is a snap of the finger for even a relatively small business or side gig.

But not every side gig has enough spending that can go on a credit card and if you only own a few rental properties and maintenance is not currently required you will need another source of spending to earn a bonus.

Readers of this blog tend toward the frugal side. Spending for the sake of spending for a bonus is crazy and you guys know it. Your personal spending is probably too low to earn many bonus cash awards or miles. Travel hacking gets harder when you save most of your income.

Manufactured spending is the solution bandied around the blogosphere. It sounds so simple at first. Find a source where you can recycle fake spending into cash and miles rewards. Well, how do you do that?

There are two problems with manufactured spending. First, it frequently requires a lot of running around and effort. It boils down to time and what you value your time worth. Running to the store to refill a debit card or jumping through hoops to add a few more dollars toward a spending requirement is a poor use of precious time.

The second problem with manufactured spending is cost. Recently I wrote a post on using the IRS and taxes as a way to manufacture spending. It’s a great idea to create massive amounts of spend, but it has a cost. The cost can be small, but costs, even small ones, add up. The cost of manufactured spending digs into the value of your rewards.

Turning Manufactured Spending Into a Cash Cow

I have never been a fan of manufactured spending. Recycling spending through a program to generate benefits is a fool’s errand. As fast as you can find a program to game the rules change. Siphoning off value costs somebody somewhere something. That somebody soon discovers the issue and changes the rules. Then you get to start the hunt for another source of spending to max out credit card rewards programs again.

There has to be a simple way to increase spending without real cost to the budget. To maximize the value of manufactured spending, the costs of creating this spend must be reduced or eliminated. Cost in this instance is more than just money; it is time, too. To be effective it must be fast, simple and no or low cost.

The ultimate manufactured spending would allow you to buy a large value amount of gift cards of a general use credit/debit card—a Visa gift card, perhaps. This in effect would extend the spending deadline, as required spending to meet reward qualifications are met, while the true spending could happen at a future date using the purchased gift cards.

Top Cash Back (affiliate link) has a unique program where you can buy American Express and Visa gift cards and get cash back. Buying a gift card frequently has fees attached and this case is no different. However, in this instance the cash back covers most, or all, of the fee.

Step-by-Step Process

Let me walk you through the process before I let you get on with your day.

Step 1: Research a credit card with a high cash back or miles reward that meets your goals. You can use this link to review just about any credit card reward program imaginable here. (If you use this link as your gateway into the CardRatings site and apply for a credit card and are approved this blog will receive compensation.)

Step 2: Apply for the card best fitting your cash back or travel goals. Maybe you are looking for a large cash back reward. Maybe you have a miles goal with a specific airline as you plan some travel. You can hone your efforts to any credit card you want without concern over meeting spending requirements.

Step 3: Once you have the credit card use it for all spending, as you have in the past, to get as much of the required spend used within the timeframe required by the credit card. Do NOT spend extra just to meet spending requirements for a reward. That kind of defeats the purpose of the program.

Step 4: As the deadline for bonus rewards required spending approaches, review your spending to see if you are short of the required spending.

Step 5: Go to Top Cash Back and order Visa or American Express gift cards to complete your required spending to earn the reward.

Step 6: You can either cash out the gift card (Visa only) immediately (there is probably a cost to this) to pay off the credit card bill or you can use it to cover future spending needs.

Many of the best rewards programs have daunting spending requirements. This no longer should be a concern for you.

There are many ways to manufacture spending. This is one additional tool to add to your workbench. No one program fits everyone’s personality or needs. The more ways you have to meet spending requirements the better and the more rewards you can earn.

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Bookmark this page for future reference and as a starting point in your research for additional rewards cards.

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Share additional ideas in the comments section below.