I can clearly remember the first time I heard about the Pay it Forward philosophy. The year was 2002; the location Schenectady, New York; the event Albacon.
Back in those days Mrs. Accountant and I were groupies of the science fiction convention circuit. The insanity only lasted a few years, but it was a fun ride while it lasted. We met scores of bestselling writers. I can’t speak for Mrs. Accountant, but I drank in every word.
Albacon is a science fiction convention held in the Albany, New York vicinity most years. It’s a small convention, at least it was back in 2002.
It’ll be rare if I don’t mention a book I just finished or am working on. Television is a wasteland, so don’t expect a mention of some popular program or sporting event. I have Netflix. I have to confess I haven’t been watching that much either lately. (It’s been a few months since I watched Netflix.)
I do enjoy YouTube, however. Documentaries are always an attraction, while humor is a fine pastime as well. Then comes music. Yes, I listen to some really strange sounds. Tax season is the worst. I use certain music as a way of closing the door and getting work done.
The “stalking” posts will always be short. I’ll use links so you can follow what I’m up to. I’ll share blog posts that moved me and periodically regurgitate a random thought onto the digital page. I hope you didn’t expect me to be the World’s Most Exciting Man.
But I might be somewhat interesting. Or at least mildly stimulating.
What I’m Reading
My curiosity surrounding energy and how it fuels human development is legend. I just started this book and I’m already hooked. Smil outlines how humanity has been shaped by how we employed energy throughout history. This book isn’t just a modern rendition of human energy consumption either. Early energy use included simple things like harnessing animal power and later wind and water and fossil fuels. From what I’ve read so far: highly recommended.
What I’m Watching
Last night I watched an interesting video of an interview of Nobel prize-winning economist, Paul Krugman, as he discussed tax reform.
Music I’m Listening To
I warned you. That said, it’s good music to work to.
Who I’m Stalking
In the past week or so I started following @richardbranson on Twitter. It has exploded into a full-blown bromance.
I’ve been familiar with Branson for ages. His accomplishments in the business world are extraordinary. Twitter thought we should hookup so I did. Branson tweets fairly often things about his life. I was most moved by his dedication to family. It created a new-found respect for the man. I was so impressed I purchased three of his books:
Crazy Thing I’m Doing
It’s -9 degrees F this morning and I’m enjoying a crisp walk around the back of the farm. The sound of snow crunching below my boot when the temperatures drops below 10 degrees F is addicting. To me. Care to come?
Before anyone complains about the time I publish on Saturday, know I have no set schedule for the weekend. In short, I’ll get to it when I get to it. During the depths of tax season I may even miss a week, but unlikely, as I like to tell people what deviant behavior I’m up to.
And last, a short discussion on buying books. This community is frugal; I get it. A common question, however, is: Frugal people tend to have one thing they splurge on to keep balance in their financial life. What’s yours?
Books. I buy and read lots of books.
I also raid the library on a regular basis. But I love my personal library; frugality be damned.
My attitude toward traveling is less than exuberant. Still, I’ve traveled the world more than nearly anyone alive. I’ve also traveled through space and time, visited alien worlds and met the greatest actors the human race ever created.
I did all that reading a book.
I can clearly remember the first time I heard about the Pay it Forward philosophy. The year was 2002; the location Schenectady, New York; the event Albacon.
Back in those days Mrs. Accountant and I were groupies of the science fiction convention circuit. The insanity only lasted a few years, but it was a fun ride while it lasted. We met scores of bestselling writers. I can’t speak for Mrs. Accountant, but I drank in every word.
Albacon is a science fiction convention held in the Albany, New York vicinity most years. It’s a small convention, at least it was back in 2002.
Once I read Santiago I started stalking Resnick. I read every book of his I could find. His style of Space Western appeals to me. His fast paced stories also caused me to miss more than a few nights of sleep.
I also read the few remaining science fiction magazines in 2002. Isaac Asimov’s Science Fiction Magazine listed a select number of upcoming conventions. I noticed Resnick was the Guest of Honor at Albacon. The road trip was on.
Not What I Expected
Albacon was either the first or one of the first SF conventions Mrs. Accountant and I attended. My hopes were high as we packed the car and drove from northeast Wisconsin to Schenectady. For the record, that is a long drive.
My expectations were high which is always a bad sign.
I figured my literary hero would welcome guests with open arms. He didn’t. He was there and mostly stuck with his friends.
High expectations usually end with disappointment when reality meets fantasy. Mike is a helluva nice guy and the problem was more with me than him. I’m rarely at a loss for words, but my dry tongue swelling in my mouth was a barren hole in the dead center of my face.
I sat listening to Mike talk with several groups and eventually managed a few minutes to express my gratitude. I sounded like an idiot actually. Mike Resnick was bigger than life in my eyes and I had no idea what to say to the man whose writing I spent so many hours enjoying.
As disappointed as I was with myself and the opportunity I squandered, I still received a gift I hadn’t recognized.
Pay It Forward
At one point in the weekend convention Mike spoke to the small group gathered in his honor and talked about paying it forward. He explained how he helped other writers find their legs as his way of paying it forward. The people he helped would have no way of paying Mike back. He did it with a promise from those he helped to keep the ball rolling and to pay it forward when they were in a position to do so.
You’d think I’d have heard about the Pay it Forward philosophy prior to Albacon 2002. I probably did, but the skull of a Neanderthal from the backwoods of Wisconsin is thick so it didn’t sink in.
Mike Resnick changed all that. Whatever he said, it sunk in and I thought it was the most brilliant idea ever devised. For a year or so I thought he was the guy who invented the idea. Backwoods, people. Real backwoods.
The years have kept counting and my consumption of fiction of any kind has been declining. I still read a novel here and there, but the bulk of my reading in nonfiction.
It is with sadness that I report I haven’t read much of Resnick’s work of late either. His stories still resonate with me, but my interests changed.
The stories I did read are still buried inside me, bringing me continued pleasure. And I can never thank Mike enough for pounding the Pay it Forward concept into my head.
As we race to the finish line of 2017 it’s my turn to Pay it Forward. Don’t get me wrong. I’ve done plenty of paying it forward. It’s just that now I want to codify the process so I can ramp up my game.
I have been blessed beyond words. I started from humble beginnings and the journey to today has not always been smooth. What I’m saying is there was no free ride for the Accountant household.
As humble as those beginnings were I have achieved more than any one man deserves. I am fortunate to have the best wife to ever live. I can prove it too! She puts up with me. Nearly 30 years now.
I have two awesome daughters who never gave mom and dad any real reason for concern. They are moral, kind and generous.
My business life has been nothing short of phenomenal! I struggled early on with finding my way and later with figuring out how to run a growing business. Through it all I survived, even when the power that be worked very hard to destroy what I was building.
Financial success is the biggest surprise. There were no warnings signs some schmuck from the frozen tundra of nowhere would amount to anything. Yet, I managed to amass a tidy fortune recently breeching $14 million. The number has grown so big over the years it no longer moves me when another milestone is surpassed. The whole experience has turned surreal. I expect this to happen some day soon.
With all my good fortune, much is expected. I could pay it back to those who helped me along the way, but I never kept a list and the number of folks who supported me is legion. Besides, the people who helped me don’t need the favor returned!
All that remains is the future.
My business continues to add to the stack of wealth. This blog is starting to make a contribution as well. And all the previous investment soldiers are hard at work reproducing. The compounding effect is mindboggling.
And this is where it ends.
This blog earns a growing profit. I need a profit as a scorecard to motivate me. Once the numbers are in and I’m amply motivated, it’s time to make the most important business decision of my life.
Writing The Wealthy Accountant is a way of paying it forward. But more is expected of one who has been blessed so mightily.
From this point on all profits of this blog will go to charity. I recently outlined one avenue of charitable work. Reach Counseling will continue to enjoy the fruits of this blog’s success so they can expand their work helping abused women and children. Previous work with Special Olympics will also be expanded.
I will update you, kind readers, from time to time on the charitable work this blog is doing. When you support this blog it strokes my ego, but all the profit goes to those in need. My way of paying it forward.
Not Good Enough
As altruistic as the above statement is, it isn’t good enough. This blog has a tidy profit, but not overwhelmingly so, at least not yet. So giving the proceeds of this endeavor is still rather small.
I’ve discussed my giving habits in the past along with ways to use the tax code to increase the value of your gift.
Above the monetary contribution of this blog’s profits I will extend a helping hand to all bloggers and podcasters in the FIRE demographic contribute in an efficient way to charities they hold close to their heart without cost.
I know it sucks, but businesses have better opportunities to maximize the value of their charitable giving. The new tax bill makes it even worse. The tax code offers opportunities for businesses to give to charity and get a deduction on the business tax return; no itemizing required.
I wish I could extend this offer to everybody. Unfortunately, I am one human being with limited time and resources.
Bloggers and podcasters who want to donate to charity in a way that promotes their blog or podcast and maximizes the value of their gift should contact me. You still write and send the check. (You don’t have to give all your blog/podcast profits!) What I’ll do is help you decide the best way to give so you can give the most without a certain uncle in Washington taking his share first. I’ll even organize the necessary paperwork so you have no problems with the IRS.
I discussed this tax strategy in the past. In short, instead of giving a traditional gift, you sponsor a program at the charity of your choice. Since your blog/podcast gets recognition, the gift is really a promotional or advertising expense.
It not exactly that simple, but you get the idea. What I will do if you contact me and give me the go-ahead is I’ll contact the charity to find an appropriate program you can sponsor. You will get the necessary paperwork for your tax record. And you write and send the check. No money goes through my account. I don’t want the extra headache.
So there is my year-end offer to end 2017 with any even bigger bang than it already has been.
Life has been beyond awesome this year! We can do this together. We can pay it forward.
So the next generation has a chance to feel the same joy we experience every day.
The recently passed tax bill signed by the President is the largest change to the way Americans and businesses are taxed in over 20 years. Starting January 1, 2018 the new rules take effect, but there are several considerations before we retire 2017.
The biggest issues involve the changes to itemizing and the limitations placed on deductions of state and local taxes (SALT).
The First Issue
The standard deduction has been increased while personal exemptions have been eliminated. This means itemizing will be harder to do until the temporary provisions (corporate tax changes are permanent while individual changes are in effect until the end of 2025 where they revert back to the old rules) expire, are extended or made permanent.
People landing in the “zone” could face a modest increase in tax or at least find their itemized deductions of the past worth nothing extra on their tax return. The “zone” is defined as the amounts between the old and new standard deduction. Example: a married couple itemizes $19,000 per year. Under the old law the additional deductions helped reduce their taxes. Under the new law, with exemptions eliminated and the standard deduction $24,000, the value of those expenses in less than the standard deduction and will not lower their tax burden any further.
The Second Issue
The biggest issue is the limitation of SALT to $10,000 annually. Again, considering a married couple, if you are limited to $10,000 in SALT, where do you have enough deductions to itemize? Mortgage interest is a big one, but even that is limited to $750,000 of acquisition indebtedness versus $1 million under the old law, plus a small amount for home equity interest. (You read that right. Home equity interest is no longer deductible on January 1, 2018.) At today’s low interest rates taxpayers in states without high real estate prices will see less opportunity to itemize.
Charitable deductions are an option if you are inclined to contribute. At least the new law allows a deduction for cash contributions of 60% of AGI, up from 50%. Excess contributions to charity are carried forward up to five years, same as with the old law.
Medical deductions are back to the tax law from a few years back where expenses above 7.5% of AGI are allowed.
Some taxpayers will feel real pain from the loss of miscellaneous itemized deductions. Traveling sales people and others with large amounts of unreimbursed employee business expenses will feel the pinch.
Without a large mortgage itemizing gets difficult. And the allowable mortgage interest is curtailed. No matter how you look at it, itemizing will play a smaller role in the future of tax preparation.
2017 Planning Strategy
There is a one-time window to deduct SALT without limitations (with the exception of the alternative minimum tax and phase-out rules).
Many taxpayers will benefit from paying their property taxes before the end of the year (you can thank me later for giving you plenty of notice (I’ll blame it on Congress when you do)).
Since SALT is limited to $10,000 per year starting January 1, 2018, paying property taxes now are an advantage in high tax states.
Also consider paying your 2017 state estimated tax payment due in January before the end of the year. You can also make a 2018 estimated payment (ES) prior to the end of the year. You only need to pay the state ES payments early because only state taxes are deductible as an itemized deduction on the federal return. Pay as much as possible in 2017 for 2018 to maximize the benefit.
The alternative minimum tax (AMT) didn’t go away, but is, ahem, minimized for 2018 and after. Prepaying taxes can cause issues that mitigate the benefits. As a general rule, if you already are paying AMT the strategy I’m outlining may not work. If you aren’t paying AMT on your latest tax returns you might be okay unless you were right at the line. Covering AMT is beyond the scope on this short post. Talk to a tax professional if you have any concerns.
More Good and Bad News
I intentionally avoid business tax issues in this post, opting for advice beneficial to individuals, including year-end strategies.
As mentioned above, AMT is unlikely to be an issue for many taxpayers after 2017 as the exemption amount has been increased to $109,400 for married couples filing jointly and $70,300 for single and head of household filers.
The phase-out of itemized deductions has been suspended until December 31, 2025. Considering all the other limitations individual taxpayers face in the new tax bill, phasing out itemized deductions would be rubbing SALT in a wound. (Yes, I intended that pun.)
529 plans, the college savings accounts, have been expanded. After December 31, 2017 you can withdraw up to $10,000 to cover tuition (and only tuition) expenses for elementary or secondary public, private or religious school. (I want to see the politicians putty knifed off the ceiling a year from now when somebody (perhaps me) publishes the amount of tax avoided to send kids to a Muslim school. These will be interesting times, indeed.)
Personal casualty losses are limited to federally declared disaster areas. Uninsured losses outside declared areas are not deductible under the new law.
Exclusion for qualified moving expenses: Gone.
Exclusion for qualified bicycle commuting reimbursement: Gone. (Mr. Money Mustache will not be happy when he finds out.)
Alimony is still deductible for old divorces, but a divorce finalized starting in 2019 does not allow a tax deduction for alimony. Alimony is not reportable income for divorces starting in 2019 either. (I recently concluded a massive alimony case against the IRS after fighting for two years. We kicked the crap out of Revenue for a very sizable refund for my client. There is an outside chance it’s my fault they included this in the tax bill as a result.) (You know I’m kidding? Right?)
The health insurance mandate is gone in 2019.
The inflation index has been changed to the chained CPI-U. All you need to know about this is that Congress wants a smaller reported inflation number for tax issues so more money gets taxed in the future. Old tax guys like me know why President Reagan introduced indexing to taxes in the first place. Reagan must be turning in his grave!
The child tax credit goes from $1,000 to $2,000 and can be claimed to age 17 instead of age 16. There is also a new $500 temporary tax credit for non-child dependents, like older children and dependent parents. The phase out of the child tax credit has been increased to $400,000 for married filers and $200,000 for singles.
Good news! Student loan interest is still deductible up to $2,500.
Many readers will benefit from paying their property taxes this year instead of the due date in 2018. Making ES payments due in January 2018 in 2017 will avoid the limitations of the new tax bill.
You can also make 2018 ES payments in 2017 to take advantage of the old tax rules. (See note below.)
The New York State Tax Department emailed to remind me Governor Cuomo signed an emergency Executive Order allowing payment of 2018 property taxes in full or part in 2017. (See note below.)
We finish with Wisconsin, a weird tax animal if there ever was one. Wisconsin has a $300 property tax credit. If you double up property taxes allowing you to miss a calendar year with a property tax payment you will lose the property tax credit worth up to $300. Wisconsin residents need to consider the property tax credit when planning prepayments of property taxes for federal purposes. (Taxes can be so fun. And crazy.)
For New York you need to contact your tax receiver to determine your property tax payment options.
Wisconsin already has their 2018 ES forms out. Check your state tax department for ES forms.
As you can see, the new tax bill doesn’t do a lot for individual taxpayers. If you are lucky you hit it right and benefit. If your luck is less than reliable you might even see a tax increase. Most individual taxpayers will see only modest reductions in tax liability unless they have a high income.
In the near future I will present additional ideas to optimize personal taxes under the new tax bill. Unfortunately, the best ideas will go to business owners in the new world order.
Then again, if you give me enough time I might figure something out beneficial to all parties involved. There are a lot of holes in the Swiss cheese tax bill.
Note: I no more than hit the publish button and went to work when the IRS issued clarification on pre-paid property taxes. The IRS released a statement saying property taxes may be deductible if they are assessed AND paid in 2017. That means my idea of following the states who were allowing the activity by extending the strategy to estimated payments will not work unless you want to take your chances in Tax Court (not recommended).
Think of the most beautiful sound you ever heard. I bet it was the sound of a child singing at Christmas time (or holiday of your religion).
The video above of children singing Christmas Canon for the Trans-Siberian Orchestra is a moving sound. It echoes into the heart and soul as their voices lift. Multiple sounds come from every direction to create a pleasant feeling inside.
Then it’s over. The song is done, the singing at an end.
And so it goes.
The beautiful and the vile all come to an end. But it’s the beauty that sticks to the soul and lingers; a song you can’t get out of your head.
We believe there is always another day to hear the sound again. We know when the sound is broadcast it also races into the depths of space at the speed of light. However unlikely, there is a chance a faraway species might someday pick up the broadcast and hear the beautiful sound for the first time.
We believe. But there are no guarantees. On day the sound will end forever.
One day the last child will gently murmur a joyous noise before it stops without hope beginning again. As with all things, it will end.
The end of such an incredible voice is impossible to understand by mere mortals. How can the children stop singing?
But it will happen; we all know it!
Maybe we destroy ourselves in a fit of rage, misunderstanding or ignorance. Maybe nature brings the Anthropocene to an end in a terrorist haste as it did the dinosaurs 66 million years ago. Maybe we avoid those fates to await the aging of our sun as it expands, boiling the surface of Earth sterile.
Regardless our fate, the sound of beauty will end. We can take solace knowing electromagnetic waves carry the voices of our children deep into the ether. That is until the universe expands so much that the message is diffused so thin no technology can ever recover what once was.
And maybe there is nobody to listen. Or nobody able to hear.
Someday the music will end as all things do. A beauty so great it moved a people, will cease to exist.
The day may come tomorrow, in a hundred years or eons in the future.
But not today. Today we hear a sound. A sound of Christmas. A sound of beauty. A sound of children singing.
It’s the most beautiful sound ever heard anywhere in the vast universe and we are fortunate to live in a time and place where it is possible to experience the joy.
We must listen to the incredible sound; we must recognize out great fortune for someday it will be part of history as it evaporates into the emptiness of space.
But not now. Not today. Today we can hear the sound.
We are the few, the blessed. Never forget how fortune has smiled on you.
Merry Christmas, kind readers.
Normally I don’t like to comment on a tax bill before it becomes law, hence the reason I’ve only commented once on the current bill as it wound its way through the halls and committees of Congress. Now that the bill is sitting on the President’s desk awaiting his signature I’m comfortable opening a dialog on some of the issues I see the regular press has missed.
Since the beginning I’ve called this a Swiss cheese tax bill because it has so many holes in it I can drive a truck through with my eyes closed without a worry I’ll hit a wall. I suspect many of these holes will be closed in time. Until then, fuel up the truck fellas. We’re going for a ride.
The Missing Link
Pass-through entities don’t pay taxes at the corporate rate, instead, passing certain items, including profits, to the owners to be reported on their personal tax return. Income is generally taxed at ordinary rates.
The current bill reduces the tax rate for regular corporations (C corps) to 21% while individual tax rates top out at 37% for individuals. To level the playing field between regular corporations and pass-through entities (S corps) the bill included a 20% deduction on pass-through business income.
The deduction is limited to $315,000 of eligible income for married couples and $157,500 for single filers. However, a last minute change greatly enhanced the advantage!
A formula was inserted which will allow the 20% deduction of income on amounts greater than the income limits. The formula for the deduction is the greater of: 1.) 50% of wages, or 2.) 25% of wages, plus 2.5% of the value of qualified property at purchase.
Real estate is the target of this formula. It will allow for massive deductions for certain real estate investors at rates tremendously higher than many other small business owners will get.
But that isn’t what I want to talk about today.
A Load of Swiss Cheese
Traditional news outlets will give you the basics of the tax bill. I’ll touch on the same issues in the near future. For now there is a pressing issue we need to discuss instead.
The above business deduction for pass-through entities makes current year (2017) business deductions more valuable than if taken next year if you are under the income limit! This includes real estate investors where the deduction can be much higher.
As I read the bill, my interpretation is the deduction extends to sole proprietors and small landlords. When the IRS provides regulations on how the new deduction is handled I may have to give updated advice later. It’s unclear if small landlords and sole proprietors get the deduction without creating a pass-through entity. As I read the bill it is allowed without the extra paperwork. But the IRS may disagree and it might be necessary to hold real estate in a partnership, or if there is only one owner, an S corp. (Gulp! Did I say that?) I’ll keep you up to date. As soon as I have more clarity I’ll pass it along. Either way, there should be a way for owners of income property and sole proprietors to take advantage of the new deduction.
There are two reasons for business owners/landlords to accelerate expenses before year-end: 1.) Tax rates are declining slightly for many individual taxpayers, and 2.) A deduction is worth less next year.
This might seem counter-intuitive, but Congress may have passed a tax bill that discourages pay increases and capital expenditures by small businesses and investors of investment property.
Deducting as much as possible this year makes sense with rates going down in 2018. Buying an asset and expensing it, if possible, is worth more now than it will be in a week and a half after publication of this post due to the lower rates AND the business income deduction!
An example illustrates the disincentive to invest in more capital expenditures and payroll next year. Suppose we have a small business with $200,000 of profits. If the business is planning an investment in a new piece of equipment costing $50,000, the owner’s tax benefit is reduced by 20% in 2018 and after! It looks like this under the new tax bill:
Without equipment purchase:
20% business deduction: $40,000
Income reported on personal tax return by owner: $160,000
With equipment purchase:
Deduction for expensed equipment purchase: $50,000
Income after equipment deduction: $150,000
20% business deduction: $30,000
Income reported on personal return by owner: $120,000
The equipment cost $50,000, but the reduction in income is only $40,000! The business owner saw a reduction in tax benefits from the increased expense by 20%.
We can debate the method used to deduct the property (expense versus depreciate), but the premise is the same: every business expense is worth 20% less starting January 1, 2018!
Look at it this way. If a small business owner increases wages, as Congress says they are incentivized to do, they will suffer the cost of the higher wages AND a reduction in the new business credit! The business owner will cough up the added payroll expense, plus payroll taxes, and face a decline in the business credit.
If the small business owner REDUCES wages, they are rewarded under the new tax bill! If a business owner cuts payroll by $100,000, she will save payroll taxes AND have a higher income of which 20% is deducted. The $100,000 increase in business income will only have $80,000 subjected to tax.
One last example: Prior to January 1, 2018 it is illegal to deduct 20% of a business’s profits for fake business miles or other non-cash deduction. Starting January 1, 2018 you don’t have to cheat to get the benefit; it’s codified!
Congress has sold this massive tax bill as a job creator. Instead of taking time to get a solid piece of legislation written, they rushed it and it shows.
The incentive to small businesses is clear: CUT PAYROLL! This will have the opposite effect of what was intended.
Sure, businesses will need to spend on updating equipment eventually. But the longer they can hold off the better they will fare; they get a 20% deduction off the top before they spend a penny. A smart small business owner will have more incentive than ever to CUT wages and capital expenditures. And for the altruistic business owner, a tax penalty applies in the form of a reduction in the new business deduction if they do increase wages.
Real estate investors tend to hire fewer people so the effect is less. Even still, spending on improvements entail up to a 20% penalty for each outlay as the business deduction is reduced.
My favorite deductions have always been of the non-cash nature; I get a deduction and keep the money, too.
I hope y’all love Swiss cheese because there will be plenty to go around until they change the tax law.
Note: This is self-serving as all get-out, but this is one simple example of how this tax bill will harm the economy and the workforce, the backbone, of America. If you can see past my self-promotion, spread this post everywhere: social media, email and links. Don’t forget your elected officials in Washington. Don’t be afraid to expand on the consequences of this tax bill. There is plenty to spur the economy. But there is also plenty to slow the economy as well. With small business employing so many people in this country it is imperative to get the word out so the people who can facilitate appropriate change can take action with this new knowledge.
A clickbait title like above requires some quantification before we begin. It’s not what you think. Fewer than one in a thousand have a clue what I am about to reveal. And the personal finance ramifications are incredible. If you live the story the cost can be a million or more; it can even cost your life.
J Money from Rockstar Finance recently sold his site so he could focus on his blog: Budgets are Sexy. J’s work over the years is legendary. His work has helped countless people in desperate need. As he exited the building he had cash remaining in the community fund. I was contributing $10 per month and added $500 to the Debt Drop program in September in honor of Suicide Prevention Month. The community fund was ending as new management took over Rockstar.
J emailed bloggers asking any who would be willing to take $100 to do a good deed in their community and write about it. I answered I would, but didn’t need the $100; the $100 would be my contribution and the idea I had would require a bit more than $100. J’s original goal was to enlist 20 bloggers; he now has 21. Another example of how the FIRE (financial independence, retire early) community is making our world a better place.
Before we begin, would you hand me the box of tissues next to you. What I am about to write is very personal and painful. This is a story about how I almost sold my business and walked out on life. I had the pills in my hand as I contemplated ending it all. A moment that should have been filled with joy changed my perception of life and love forever.
And it started from my misconception of sex, or more accurately, gender.
The Gift of Life
I’ve become so numb, I can feel you there
Become so tired, so much more aware
By becoming this all I want to do
Is be more like me and be less like you.
—Numb, Linkin Park
Mrs. Accountant and I waited to have children. I wanted to be financially secure before bringing a life into this world. The truth is I never wanted children. Deep down I felt I’d be a terrible parent and the thought scared the wits out of me.
When we decided to have children Mrs. Accountant was so happy; I prayed to God the day would never come.
Finances were better than they ever were when I was growing up in the backwoods of Nowhere, Wisconsin. I remember our kitchen table when I was a young child consisted to two sawhorses with a piece of plywood laid across them. I was too young to know how poor we were. Then I grew up.
Now it was my turn to start the next generation. Mrs. Accountant had difficulty conceiving, not that I was complaining. For this crazy accountant it was all fun without a baby bump. I was happier than a pig in, ah, you know what I mean.
Then the inevitable happened. Our first child was on the way and I adjusted to the New World Order.
Regular doctor visits indicated everything was going smooth. We attended Lamaze classes. These sessions were designed to give the mother confidence in giving birth, as if she had any choice at this point. Dad was there to learn a thing or three, too. Unfortunately, fate would exempt me using the newly acquired knowledge.
It was right after the holidays when Mrs. Accountant didn’t feel well one morning. Within an hour her water broke and we on our way to the hospital. The baby was due February 28, over a month early.
The doctor suppressed labor to give the baby time to develop more before breathing air. Eventually the wait had to end. Our first daughter entered this world early and spent 19 days in intensive care at Theda Clark hospital in Neenah, Wisconsin.
In the end it was a minor problem modern medicine could fix. Life was good.
Until we tempted fate again, that is.
The Son of Cronus Awaits the Fool
My brother and I are five years apart in age. It’s only a coincidence my daughters are exactly the same number of years apart in age as well.
Waiting to have children is a double-edged sword. I was 31 when my first daughter was born. If we wanted another child we needed to make up our mind soon.
I wanted more time before we added to the herd; Mrs. Accountant felt her biological clock ticking. I’ll give you one guess who won.
Since it took time for Mrs. Accountant to conceive the first time we needed to get to work. (It’s good work, but the pay is, well, shall we say, awesome!)
We were prepared this time around. Medical issues with our first daughter meant we needed a specialist to prevent a repeat. We found an OB-GYN with ample experience with delivery issues. What could possibly go wrong?
The pregnancy went smooth. Soon the happy day arrived and it was time for baby number two.
Due to the emergency nature of the previous birth I wasn’t allowed in the delivery room. This time I would see the magical moment my child would enter the world with my own eyes.
Our first child came cesarean. The doctor decided it would be best to do the same this time around so no labor issues could ruin what was so far a picture perfect pregnancy.
As reluctant as I was to have children I was eager to see the process in action. Three doctors were working in the delivery room as I watched. The incision was made and then widened a tad before the doctor’s hands massaged my child’s head through the opening.
Once the head was out the rest of the baby slid out easy.
The OB-GYN said, “Congratulations sir, you have a son!”
Another doctor immediately said, “Look again, doctor. Sir, you have a daughter!”
All I remember is mumbling, “It’s both.”
I actually called my child “It.” I was so numb I felt nothing. It? What was wrong with me?
The delivery room was dead quiet from that point on. Mrs. Accountant kept asking what was wrong. For once in my life I couldn’t find words.
Boy or Girl?
The doctor closed the incision as I was shown to a waiting room. I was informed the doctor needed to make some calls to figure out what to do.
I was allowed to see Mrs. Accountant. I managed to explain what had happened.
The birth certificate read:
How could I face the world? My child, my baby, was a. . . A what?
The first question people ask when you have a child is, “Boy or girl?”
I had to answer, “I don’t know?”
People think you are pulling their leg when you say it.
It was the middle of tax season (no comments on my planning skills). Mrs. Accountant needed rest so I went home to pick up my oldest daughter from my parents. My office is between the hospital and home.
Bev was still working when I stopped. I couldn’t even enter the building I was trembling so badly. All I could get out was, “I’m not coming back.” I tried to tell her to sell everything; I was done. Bev feared the worst and I wasn’t in good enough shape to tell her what happened. Even driving was a stupid thing for me to be doing.
If you think this story has nothing to do with personal finance you’re going to see how wrong you are. This story is perfect for a tax and personal finance blog.
We had insurance; thank God for that. The medical bills approached a million dollars in the first few years and the out-of-pocket was substantial, too. My wealth at the time was working toward the second million. It is a blessing I had the financial ability to make sound medical decisions without considering money.
Our child needed several surgeries the first few months. The gonads were purplish masses and precancerous. It was, as the doctors said, a “medical imperative” they be removed immediately.
The gonads hadn’t dropped so they were deep inside in the position of ovaries. They were removed when she was three weeks old. That was surgery number one.
Our baby had ambiguous genitalia. There was a distended, though not fully formed, penile structure and a vaginal opening. The urinary tract exited both and was certain to cause infection soon if not corrected.
A decision had to be made in the gender of the baby. The University of Wisconsin Medical School in Madison did a genetic test. The results was X iso Yp.
In laymen’s terms it meant our baby was conceived male. After a few cell divisions the Y chromosome became isolated. Our baby, my baby, had ~15% of her cells with the XY chromosome, or male, and 85% X. XY is male; XX is female. When you only have X instead of XX it’s like have no sex chromosome at all! In such cases the human body tends toward the androgynous, or feminine. This explained the ambiguous genitalia.
In my mind X meant girl. 85% beats 15% so girl it is. The doctors also encouraged us to choose female for our child. One, it’s easier to make a female medically. Constructing male organs are usually less functional and our child would always tend to be more feminine in appearance. And two, the genetic test said girl and my analytical mind would have taken any result with greater than 50%. It’s how I’m wired.
That was surgery two. There were many more to follow.
Guilt took over. It was my fault our daughter was deformed! The Y chromosome only comes from dad and my genetics failed. The guilt was overwhelming. Get me in a corner talking about this and I still fight back tears. The wound cut deep and the pain never went away.
All the while the stuff above was happening I fell deeper and deeper into depression. One night I went out to the barn and put my head in a noose. A few nights later I emptied a bottle of pills in my hand. In either case I stopped short. Don’t ask me why. The pain was so deep there was no feeling left.
As this was happening I attended a support group from Reach Counseling. Only a few children are born each year in Wisconsin with such issues. I was told once an average of two babies per year in the state have what my youngest daughter has. A traditional support group wasn’t available.
This support group had every sex issue known to man in it. Victims of abuse and even a few sex offenders attended. (Many sex offenders are victims of sexual assault in their childhood and seek out support groups to deal with their issues.) And then there were the odd couples like Mrs. Accountant and me.
I thought the whole thing was stupid at first. There was a young woman dealing with a childhood of sexual assault while her dad was there due to assaulting his daughter. Several men were dealing with sexual assault issues from their childhood. Then there was a guy I affectionately called Dudeman. Every sentence he said ended with “Dude!” He was a good guy, just weird.
Every Thursday our group met and talked out our emotions and problems. I broke down every week. “My baby’s an abomination and it’s my fault,” I cried. It was an emotional roller coaster with the only ending a bad one. I shirked my parental duties for a pity party.
Shortly after my daughter’s second surgery I was in the support group crying when a young Asian man dealing with assault issues of his own turned to me and said, “In my culture you would be the most popular man in the village. Your daughter is special. Every man would want your daughter as his wife.”
He was from Laos. His childhood wasn’t easy. And here was this man who could only speak broken English telling me my child is a gift!
The pain and guilt have never gone away, but that was the day I stopped thinking about me and started thinking about my little girl. She is NOT an abomination! She is a GIFT! I was acting like an a$$. My daughter needed her dad and not some sanctimonious coward trying to find the courage to end his life.
The tears stopped instantly. I continued attending the support group for about a year. The young man from Laos eventually moved on. I doubt he even knows he saved my life and gave a beautiful young lady a good childhood.
My youngest daughter reaches the age of majority in a few months. She is a happy person filled with joy and dreams. Maybe I wasn’t such a bad dad after all.
Reaching for Help
Then I got an email from J at Rockstar Finance.
The moment I read the letter I knew I had to participate and I knew exactly what I wanted to do.
I hated Reach Counseling at the time. They symbolized my greatest failure in life, or so I thought. Now, almost 18 years later, I wanted to contribute to the organization that changes the lives of so many, changed my life.
Reach Counseling helps sexual assault victims in northeast Wisconsin. They also have programs to help sex offenders rebuild their life. The work never ends.
Even if you read the news poorly you know of all the women coming out in the #metoo movement. The Silence Breakers are Time Magazine’s people of the year. The number of people floating through my social media feeds raising their hand as also a victim of sexual assault is depressing. Most people knew back brain about the casting couch. Harvey Weinstein isn’t a total surprise.
The real surprise is the massive swell of victims silently suffering finally coming out to be heard. I’ve seen plenty in my days and know the devastation sexual assault causes. Almost from the beginning of this blog a woman reached out to me for help. She was sexually assaulted by her step dad since she was three or four years old. The assaults went on for years. She is in her forties now and struggles with the issues. She is intelligent and hard working. She is a survivor! Now I help her with personal finance issues so she can have the life she deserves, the life her stepfather raped from her.
I contacted Reach Counseling and showed them the email thread from J. I spoke with Kim Massey at Reach and explained to her what I wanted to do. Mrs. Accountant came with me. She said I was shaking as I told the story. The emotions are still there as I fought back tears. I haven’t evolved as far as I pretended.
The goal is to pay it forward. I can’t pay Reach back for what they did. Sure, I can donate money and I did: $500. But there was much more I had in mind.
I outlined a three pronged program serving victims of abuse, sex offenders and those at risk of abuse. I surmised if money is the number one reason for divorce, financial issues might pay a role in sexual assault and the healing process.
The issues people face when assaulted runs deep. Emotions run wild as the victim of crime tries to deal with what happened. And the kids still need food on the table.
Women are disproportionately affected. When I donated the $500 I had no string attached. I was informed a few hours ago by Kim Massey (I’m writing this the night before it’s published) some of the money was used to help a single mother with two children ages 9 and 12. They just moved into an apartment and have no furniture. The money was used for a Christmas tree and some gifts for the kids and even something for mom. The unspent money is in a fund for other families. I was told “. . .this gift filled their house with joy!”
J reminded me why I write this blog in the first place: to help people understand money better. I am working with Reach to build a program where I personally help people with serious financial issues. They need this advice more than anyone. I will use my experience and knowledge to make my community a better place.
In the past I’ve raised funds for Special Olympics. Now The Wealthy Accountant will adopt Reach Counseling, contributing a significant portion of its income to their cause along with my time and talent.
Please join me in this important work. Together we can do more than any person alone can. Support organizations similar to Reach Counseling in your community. Consider donating to Reach as well.
The workload is endless and demanding. You can read more about Reach Counseling and contribute here. No gift is too small. Consider an automatic monthly gift. This community is blessed with so much we can make a difference. You never know who you will help. It could be a woman fighting to survive after an assault; you might help a young girl break free from a violent and abusive environment; or maybe you’ll help a crazy accountant who needs a knock up beside the head to understand his child is a gift, a beautiful, wonderful gift.
Reach Counseling also has a crowd funding fundraiser going on right now. If you think men can’t be victims of abuse, think again. There is a moving video at this link of a man who found Reach after childhood abuse. It gave him a new lease on life.
Christmas Eve and Christmas morning I’m going to raise my glass in a toast to the single mother with two children struggling to survive.
May you have peace, my friend. May you have peace.
Note: I’ve attempted writing therapy on this issue in the past. I always cover with something different to get the true story out. You can read an earlier attempt here.
The world is crazier than it is sane. People complain about having no money and then get rid of what they have as fast as possible. How many people can’t make it until the following week without money issues? A short week and most people are already down to fumes. Thank God, payday is Thursday so you can stop at the bar on the way home. Anything to relieve the stress of money.
Chaos is all around us. Concerns over an overheating stock market and economy are always present in the background. If it isn’t the economy being too good, it’s the bad economy. There is no just right.
Before anyone forgets, there’s plenty of chaos from politics. Talk about a distraction! Best if we all stand alert in case Rex Tillerson, the current Secretary of State, calls us for advice. One never knows.
Talking about politics, it’s hard to get any useful work done when a fat guy from the backwoods of Korea (not necessarily close to the backwoods of Wisconsin where your favorite accountant resides if anyone’s concerned) is waving missiles and nuclear weapons around.
It’s easy to get distracted with the chaos all around us. Traffic, work, a screaming client, the wife and kids all add to the endless disruption of our natural flow of productive activity.
Complaining doesn’t help; it only encourages complaint! There is good news, however. Great men and women throughout time have all had the uncanny ability to focus on the important while the world burned around them. If you don’t believe me, ask any mother with an infant.
An American Hero
President Herbert Hoover is an unlikely hero to most Americans. Most people consider him a failure because all they remember is the Great Depression starting about the same time as his presidency and he was unable to solve the issue. It’s the wrong impression. The Great Depression would have started when it did regardless who was President. If Hoover weren’t President, he would have been the guy called in to fix the problem.
I had the same distorted disillusion of Hoover most of my life. My interest in Hoover was more about the market collapse than about the man. Then a recent issue of The Economist recommended a book by Kenneth Whyte titled Hoover: An Extraordinary Life in Extraordinary Times. I love books and knew this one had the promise of heavy use for years so I bought it.
Over the years I built a spotty sketch of Hoover and his life. There were plenty of gaps and misconceptions. Whyte set me straight. So much so I have a planned post comparing Hoover to Trump since we sometimes hear the two Presidents have much in common. No they don’t! I think it’ll be an enlightening read once I get the words spanked onto the digital page.
Today we will focus, ahem, on one facet of Hoover’s personality: his ability to focus under extreme conditions.
My favorite story of Hoover and his can-do attitude started in England.
On June 28, 1913, Archduke Franz Ferdinand of Austria was assassinated. It didn’t seem like a serious issue on the surface. Life went on as usual, but behind the scenes a diplomatic disaster was in the making. Then, a month later, the world exploded.
Americans were vacationing in Europe as usual on the eve of the Great War, as it was called until we decided to do it again even better twenty years later. It can be argued Europe was resting from November 12, 1918 until August 31, 1939; a sort of war halftime to regroup for the second half. (Yes, I know many consider WWII started when Japan made her move in China in 1931. We’ll stick to the European theatre for this installment.)
Hoover was in London with no warning of the impending armies gearing for war. When the fighting started a large number of Americans needed to be evacuated. A humanitarian disaster was certain if someone didn’t find a way to fix the problem.
Hoover never hesitated. He orchestrated the evacuation of Americans with unimaginable efficiency.
Once the continent was cleared of vacationing Americans, another even greater problem arose. Belgium was caught between the warring powers and the Belgium people were suffering. Food was scarce as the country was virtually quarantined.
People were dying! Civilians. Women and children. And neither side cared to help over concern it might bolster the opposing side.
Herbert Hoover never wavered. He worked relentlessly with the Germans, British and Americans to provide relief for Belgium.
Germany controlled Belgium. Germany requested the right to cross Belgium in her run for Paris at the start of the war and moved within days without waiting for an answer. Belgium was defenseless and at the mercy of the German military. The suffering in Belgium during the Great War was some of the greatest human suffering in history.
Amidst the chaos Hoover went to work. He traveled to Berlin to seek aid from the German government to no avail. Great Britain didn’t trust the Germans and Hoover wasn’t even British!
Hoover built a relief effort rapidly, saving millions from starvation. The U.S. government reluctantly, at Hoover’s incessant prodding, provided limited funding and permission to organize the American farmers into producing the food necessary for the relief effort. President Wilson, along with the British, feared the relief effort would help the Germans by diverting food to the German troops.
Enemies allowed Hoover free rein to travel across borders without restriction. He was the only man alive allowed to do so by both sides. His constant drive built the Commission for Relief in Belgium that helped American farmers produce more, raise private and public funding to deliver the goods to Great Britain and get the food to the Belgium people in desperate need.
Hoover visited Belgium several times during the war to see firsthand the devastation and suffering. His mind was always going, working on solutions to the intractable problems of feeding the Belgium people during the war.
At its peak the Commission had an $11 million a month budget with 78% provided by government grants. Over 10 million people were fed daily at the height of the effort.
Only when the U.S. entered the war did Hoover’s relief effort end. Germany would not allow an American behind German lines after that point.
Blocking Out the Noise
Hoover’s ability to focus when distractions were everywhere is legendary. Most people have a hard time reading a book unless there is silence! Hoover could concentrate in any environment.
The ability to focus during chaos will determine a large part of your success. If minor distractions, such as the stock market, can derail your financial plans you are in big trouble.
Marriage, or any relationship for that matter, will have distractions. Successful marriages don’t require all parties involved to never notice other people they find attractive. There will be attractive people! There will be kind, caring, attractive people willing to weasel into your relationship when you are under duress. Especially when you are at your weakest! The marriages that survive a lifetime find focus on the commitment to the relationship. It’s a team sport even when the night is darkest.
Business is the same. Do you really think owning a business is all fun with loads of money pouring in? Heck no! There are good days and bad days. Then a recession comes along and tests your grit. Fewer businesses survive than marriages. In my years as an accountant serving business owners I can attest most issues business owners face involve the lack of focus. Business owners want to do everything until they wear out and fail. Everybody thinks they can be Elon Musk, running 78 ½ different Fortune 500 companies. You’re not Elon Musk! And for the record, the jury is still out on Elon. The boy is amazing, but he has a full plate with no guarantees.
Happiness at the Focal Point
You and I don’t have to be Herbert Hoover. We can have Hoover’s focusing talent by following one simple rule:
- Define your goal in its simplest form.
Hoover’s goal was simple: Feed the Belgium people.
My 30 year marriage is based on a similar simple rule: Remain faithful to Mrs. Accountant. All too often we try to focus and several things at once and fail. In my marriage I always focused on Mrs. Accountant. I would always try to take the path that would cause her the least anguish. Of course I failed at times! Focus isn’t about never failing. But my failures were relatively minor. I never cheated and never felt tempted. I know where I have it good because I focused there. Stupid mistakes happened, but faithful to my relationship with Mrs. Accountant I always was.
You need a focal point. I hear people with the financial goal of financial independence (FI) all the time. Well, what exactly is that? FI is a simple enough goal, but it’s not a defining goal!
A simple goal presented correctly will cover all the “how’s” later. FI is not clear so it misses the focal point. Define FI. Does this mean freedom to travel, retire to the country or run your own business? Focus when you set your most basic of goals.
A better simple goal: To attain a liquid net worth large enough to live off investment income without worry so I can pursue my dream of (travel/running my dream business/pursuing philosophical studies).
The how-to automatically fills in as you focus on the goal. The 4% Rule comes into play without mentioning it in your goal. Saving and investing are automatic in your financial goal.
Focus is a learned trait. Herbert Hoover was in London for business when the world called his name. No other man alive was in the right place at the right time to do what he did. Once tragedy arose there was no time to practice; you’d better be prepared for the unexpected.
You may never face the challenges of Hoover during the Great War. Then again, Hoover never realized his number was about to be called the day before hostilities broke out.
Your eyes must be trained to the focal point at all times.
You never know when they’ll call your name.
Back in the 1980s and 90s a company advertised heavily promoting dividend reinvestment plans (DRIPs). The commercial looked like a staged radio show with a woman telling the audience no one has an incentive to promote these great programs to invest in the biggest companies in America.
I don’t know if the companies with DRIPs had an incentive or not to promote them. They were usually a commission free way to invest in dividend paying stocks. All I know is the woman in the commercial had plenty of reasons to promote these programs.
Her company provided the conduit into DRIP investing. DRIPs usually required one share to start. The woman’s company charged $15 or $20 per stock to get you set up. You paid for one share of stock in the company you were interested in plus their fee and waa laa, you were in.
After that you could send money in any amount within the guidelines of the DRIP you were invested. Dividends were also reinvested. This meant you had fractional shares of the companies you invested in. That wasn’t an issue to me. The real advantage was the ease at investing money as I had it.
It’s been a long time since I watched TV so I don’t know if the company I saw all those years ago is still around or advertising. Time has washed my memory of the company’s name handling this.
I ordered their packet with a booklet of all the companies with a DRIP. I did something stupid then. I picked 12 brand name companies without any real research and ordered my one share of stock so I could add commission free any time I wanted.
Trading commissions seem low now, but back then it could add up. Also, buying $1,000 of stock meant a small commission was still a large percentage of the investment so the DRIP idea made a world of sense to me.
I already owned Philip Morris (now Altria) at the time and MO was my first DRIP selection so I could compound those massive and growing dividends. Some choices were good, some not so much. I joke I’d rather be lucky than good any day of the week. Johnson & Johnson, Wrigley (more on this pick in a moment), ITW, Paychex and Alfac were solid choices. Wrigley was special. Every year they not only increased their dividend, but also sent a box of gum each year around Christmas. Then Warren Buffett gave Mars Corporation the money they needed to buy Wrigley for cash. There went my free box of gum each year and juicy dividend stream. If you’re reading this Warren, Go to hell!
I made some bad choices too. I bought General Electric. The stock had a good run back in the day, but underperformed long before the current debacle.
A Blind Sow Finds an Acorn Once in Awhile
While the Hershey’s DRIP investment did well, other languished. My goal was to pick well known brands with a history of increasing dividends. When I say I did no research that is a bit of an exaggeration. I research by default without even trying. I had an idea which companies I’d be buying. All I needed to know was if they had a DRIP.
Prior to the DRIP plan part of my investing life I kept my brokerage account with Valley Bank, a local bank since bought out. I also owned mutual funds at American Funds. I put virtually all my money in Growth & Income. There were other brokerages around, but the local bank has nearly identical commissions and I could walk into their discount brokerage office any time I wanted.
My investments always seemed to do well, especially if you waited out the few temporary market setbacks during the last thirty or so years. A few dogs reared their ugly head, but then it was back to the steady climb higher.
The DRIP put my investing into hyper-drive. Now I could invest anytime I had $25 or $50. I sent checks to several DRIPs I participated in every month; sometimes multiple times a month. It was an addiction watching the share balance grow.
The only problem I saw with DRIP investing was recordkeeping. If a guy started selling and buying often tracking basis would become a nightmare.
I never sold so all I needed to do was track the purchases and reinvested dividends. I entered all the data in an Excel worksheet. I remember days when I highlighted data and created charts with a jagged line trendingupward at an ever steeper rate. Every dividend increase created a jag higher in the number of shares owned. Each quarterly reinvested dividend was a pay increase as the new shares created a slight increase in the total dividend received the following quarter.
This jagged line racing to the moon encouraged me to add money the second it graced my paw. I became so frugal I was spending under $10,000 per year, including my mortgage! It was the 1990s and early 2000s, but that was still some mighty frugal lifestyle. I never let on why I was so tight with my money to Mrs. Accountant, but now that I’ll read this to her prior to publishing I might have a bit of explaining to do. All I can tell you, kind readers, is it was better than sex watching those share totals climb relentlessly.
Some would argue I needed therapy back then. I’d agree. There is ample evidence I need therapy now, too. My living expenses climbed slightly over the years to placate Mrs. Accountant and to stop being “an embarrassment to the family,” as my parents made my lifestyle choices clear to me were.
But, boy did I amass a fortune in the process!
Eventually the recordkeeping got old. Some stocks needed to be disposed of so I winnowed the list. Wrigley was stolen from me. (I’m still pissed at Warren. Jesus, guy! Didn’t you have anything better to do with your time?)
Valley Bank and their brokerage arm were long a part of history. I moved a large chunk of money to E-Trade and eventually found most of my mutual fund investments finding fertile ground at Vanguard.
I hadn’t added to my DRIP list in well over a decade, but kept adding new monies to legacy DRIP accounts. The erotic nature of watching my share balance climb still thrilled me if only I didn’t have to do so much recordkeeping by hand. All the DRIPs were moved to E-Trade. Dividends now accumulated in cash. I invested the funds when I felt the right opportunity graced my vision.
I still added excess cash to the deck, but my lazy nature was asserting itself. Cash kept piling into index funds. My guess is Vanguard considers me a quality client.
E-Trade holds several accounts for me. One is a mad money account where I can play with ideas and do really stupid stuff with $50,000 or so. They also hold two minor retirement accounts (it’s a long story). Then I have my serious money in individual stocks.
The market has been so good for so long the mad money account is turning more serious.
The serious money account is disturbing the account balance is so high. My net worth figures floating around the internet from a while back is getting outdated and low. I’m waiting for a nice correction back to reality so I’m not updating my net worth publically for now.
A DRIP of Honey
I miss my DRIP investing days. It also irritates me my Atria, Philip Morris International, Aflac, Wells Fargo and Apple dividends are not reinvested. I don’t get a pay increase four times a year anymore and it hurts my feelings. Kind readers, you have no idea what a spectacle a crying accountant is!
Dividends eventually get reinvested, but there is a small commission to buy stock even at E-Trade. Cash sometimes piles up like currently. (I can’t pull the trigger buying companies when stock prices exceed my valuation of the company plus a margin of safety.)
E-Trade has been redesigning their site lately. They messed around with the Portfolio page a few times this year. The latest redesign has a button near the ticker symbol on the Portfolio page where if you hover over it basic information on the company pops up. It’s an interesting tab if you obsess about every friggen tick of the stock price. Otherwise, it lists the latest news items, a stock price chart and not much else of value.
Or so I thought!
Earlier this week I was checking up on my account and accidentally hovered my mouse over the icon on the Portfolio page. I quickly went to move away when something caught my eye.
There was something about a dividend reinvestment plan!
I went to work checking this out. My guess is this has been available on E-Trade since 1894, but I was too stupid to know about it or even inquire.
On E-Trade the dividend reinvestment plan is commission free(!) on reinvested dividends only. You still pay a small commission for original stock purchases. To be clear, only the reinvested dividends are commission free.
Trading fees are so low nowadays as to be background noise at best on a cloudy day. My excitement isn’t about saving $10 or so. My excitement is over the automated process of reinvesting dividends.
Most people get caught up in their account value. Not me. I collect shares! My share total never goes down unless I make it go down by selling. When dividends are automatically reinvested it turns dividends into a compound wealth machine. And each quarter the dividends are reinvested means I have more shares earning even more dividends the next quarter. It’s like getting a pay increase four times a year!
Now I’m excited again.
E-Trade allows fractional shares with their DRIP, just like the old DRIPs I used. All my money goes to work immediately!
As many of you know, I have a lot of Altria and Philip Morris International. Altria alone coughs up twenty-four and change each quarter. This means the DRIP at E-Trade will increase my dividend with Altria several hundred dollars each quarter without Altria increasing their dividend.
I know somebody in the crowd will tell me to settle down, saying, “Accountant, this has been around since Christ walked the green earth.” Maybe so, but it’s new to me! And I bet if it’s new to me it’s probably new to a few readers as well.
I can feel the sickness returning. Soon I can produce charts again with a jagged line crawling to the stars.
Only this time E-Trade will do all the recordkeeping for me.