WARNING! The following article contains descriptions of a serious medical condition affecting a child, criminal behavior and illegal drug use. If any of these things offend you, leave now.


Raynaud’s restricts blood flow the the extremities. Black fingers look worse, but white indicated no blood or blood flow versus pooling of blood.

One should always be cautious when thinking someone else has it better. Money does not solve all problems and paying “anything” to fix a problem does not guarantee even the most limited of service or results.

It amazes me how many readers want to emulate my path in life. Frequently I hear a reader seeking a rural life coupled with a career in accounting because they read this blog. It was a path that appealed to me and one I enjoy. It might appeal to you as well, but you should always think hard and reflect on what is most important to you without consideration for what some crazy guy in the Northwoods of Wisconsin did.

Money causes people to overlook the less than desirable parts of their mentor’s life. Business, financial and family success are important indicators in people you wish to follow and learn from. What money doesn’t do is eliminate the most difficult decisions and medical issues.

Mrs. Accountant and I have two daughters, both with serious medical issues. If my path were different, one with less financial resources, it is likely at least one of my daughters would no longer be with us. Money withstanding, that fate may not be far off anyway as you will see shortly. (You can read more about my youngest daughter’s medical conditions here.)


Descent Into a Medical Nightmare

Heather, my oldest daughter, entered the world a bit early. Nineteen days in the neonatal intensive care unit was the start she needed to be a normal healthy child.

Heather has always been petite as she grew. Many foods did not agree with her so she ate little and is very thin. This is different from not wanting to eat. She wants to eat everything, but so many things make her ill.

By the time her age reached double digits she developed serious medical issues. She was diagnosed with Raynaud’s. Later scleroderma was added to the list. Both are autoimmune rheumatic diseases. People with Raynaud’s frequently suffer from scleroderma as well.

By high school Heather was so thin and was so unable to keep food in her that we had her institutionalized for a short while. She was so thin the police were called in because the doctors worried it was abuse. They realized quickly we had Heather into every doctor we could find searching for a solution. The institution was at just as much at a loss as the doctors and we were.

If you ever saw film of the Nazi concentration camps, that is what Heather looks like in her skivvies. I can’t tell you how scared Mrs. Accountant and I are by this. And it is not an eating disorder; she wants to eat! Recently Heather told us it has been so long since she felt hungry she doesn’t know what it means anymore. All too often what she eats goes right through her.

I can’t count the number of doctors Heather has seen or the number of medications she has taken. And Mrs. Accountant and I have not been sitting on our hands either. Medical research is a daily part of life in the Accountant household. 

Nothing seems to work. Every medication tried doesn’t improve the situation and Heather’s body has no more to give. This kid barely breaks 80 pounds (36 kilograms). She is 5′ 4″ (162 cm). As you can see, we don’t have room for another failure.

The last visit to the doctor took all the wind from our sails. The doctor gave up. She said there was nothing else she knew that could be done. Heather has tried virtually every medication known to man. She is in constant paid. Serious pain, the kind that brings tears to the eyes. It is devastating to watch and even worse as a parent.

One of the medications prescribed Heather is Sildenafil, aka Viagra. Raynaud’s usually isn’t a serious condition. But, as the doctor once said, Heather has the worse cases she has ever seen. With Raynaud’s blood flow is restricted, especially to the fingers and toes. Death of tissue and gangrene are serious possibilities. Discussion of the amputation of her first digit was recently discussed. 

Sildenafil is prescribed for men who need to “get it up”. In a family that can still laugh in the face of such dire consequences, I call Heather’s medication her “boner pills” and remind her not to get too excited when she takes her medication. The cats don’t like it when she acts that way.

Except it is getting hard to laugh. Sildenafil causes her massive headaches and pain throughout her body, especially in the area of a surgery she had years ago to deal with the same medical issues. The hope was Sildenafil would increase blood flow to her extremities. Unfortunately it only puts her in more pain.

Nothing seemed to work. Everything tried seemed to make things worse. It is unbearable watching a child in never-ending pain. I can’t imagine what it feels like to be her. 

And now the last doctor has given up. She said she doesn’t know what to do. She has joined the long list of doctors before her. The doctor then prescribed Tramadol for Heather.  

Tramadol is a highly addictive prescription for moderate to severe pain. Heather refuses to take the medication because she does not want to become another statistic in the opioid epidemic destroying America. Like I said, she is a good kid. If the paid gets to be too much she will relent, but she doesn’t want to go down that path.

All the while this is unfolding I am immersed in research material on Raynaud’s and scleroderma. Scleroderma is especially insidious as it hardens the skin. The disease moved inward, attacking her internal organs. Heather’s lung capacity has been dropping rapidly. One lung is approximately half calcified or callused or whatever the medical term is for a lung that is one lump of hard scar tissue.

A few months back I found a possible solution in a baby aspirin. I read about this before many times and discounted it as too simple a solution.   

It started when I asked Heather a series of questions. At some point I mentioned aspirin with the warning aspirin thins the blood (which could help blood flow to the fingers and toes), but could make it difficult to stop bleeding. It was then Heather informed me she doesn’t bleed when cut. Just the thought of that makes me shiver. Not bleeding seems like a good thing, but that is far from the truth. Not bleeding when it is normal to do so means blood isn’t where it should be with proper pressure.

Heather’s response solidified my thoughts on aspirin. I told her to start with a baby aspirin three times a day. My recommendation was to test dosage and see how she reacts. I was comfortable with the recommendation and dosage because aspirin is so well understood and a baby aspirin three times a day is less than one adult dose. Heather is 24.

Heather is very thin. This old picture shows her low weight.

I asked Heather to also call the doctor to make sure there would be no interactions with other medications she is taking. The doctor’s response was shocking.

The doctor didn’t see anything wrong with interactions, but was more worried about a potential stomach ulcer from long use. She didn’t like the solution I found.

What! She just prescribed a powerful and addictive pain reliever and is worried about a stomach ulcer from long-term aspirin use!? Really! 

I promised not to use certain words on this blog anymore as it is a family publication. You do not understand how hard that is for me to do at this point of the story.

I also have many doctors who read this blog and are also clients. I will refrain from my opinion of the medical community at this point as well. My child, my baby, is dying! And all I get is an addictive pain reliever and admonishment for even considering a low dose of aspirin? 

The doctor relented and said one low-dose aspirin per day would be acceptable.

We also asked the pharmacist if there would be any issues. He checked and said there were none. He also said aspirin was the first thing that popped up on his screen for the medical issues affecting Heather. Why hasn’t the doctor been exploring this simple therapy? The need to keep the patient sick so she can make her house payment? I know of no other explanation.

Here is the kicker. The aspirin had an immediate and positive affect. With Raynaud’s the fingers and toes are frequently black from low blood flow and snow white when there is no blood at all. Within days her fingers and toes were the most normal pink I have ever seen them. Ever!

The toe they were talking of amputating started to hurt. That is a good sign as if means the tissue is still alive! A few weeks later even that toe showed good color.

Best of all, Heather gained two pounds. It isn’t much, but it beats the constant drumbeat to the graveyard.

Unfortunately, the solution came too late. The damage was done. Internal organs would have healed if the solutions were discovered 10 years ago. But is wasn’t. Her stomach is a mass of scar tissue and the lungs are not healthy. Heather is also in pain constantly. (The pharmacist also recommended only one low-dose aspirin per day as well from the material he looked up. I wanted a larger dose to deal with the pain. Heather settled on one dose per day with another dose at night if her fingers turned black.)

Time had run out. It is bittersweet to find the answer to a serious problem after it is too late. Her digits are better, but internal organs need time to heal and time is up. The increasing weight didn’t continue. If only I had more time. If only there was a way to give Heather’s body more time to heal before time ran out.

And that is where one last piece of research came in. I knew of this solution for some time, but it will require me commit a serious crime. And it has me thinking about ethical criminal behavior.


Crime Spree

What I am about to share is something I never in a million years would ever have thought I would do. What I am contemplating is so foreign to me I barely believe I will do this.

The alternative is no better. Standing around at my daughter’s funeral with my hands in my pocket telling people as they offer their condolences, “At least I didn’t commit a crime.” seemed rather cowardly to me. I cannot stand idly by as Heather deteriorates. The doctors admit they are out of ideas. Well, I never run out of ideas and I never quit. (Maybe when I’m dead I’ll stop. Briefly.)

There is a product that works as good as aspirin (has the same qualities as aspirin we are looking for in this instance) and also reduces pain and increases appetite. Yup, you guessed it. Weed.

I never used any illegal drug in my life, but always said if I ever got cancer and was in pain I would have no moral objection to using weed if it made sense medically. I also don’t look down on people who use weed recreationally. I see no need to try it myself, even though weed seems to be innocuous compared to alcohol and nicotine (two legal drugs).

Weed is still illegal (very illegal) in Wisconsin and at the federal level. Michigan allows recreational drug use, I understand. 

Heather’s situation is acute. Smoking weed would be really bad as her lungs can’t take such an assault. But edibles offer serious promise. Research, including long discussions with people who have used edibles for medical reasons (usually cancer) and recreational users has me convinced this is worth trying. I even ran across a lady with Raynaud’s that came to the same conclusion and has used weed for years to deal with the pain, eating and blood flow issues.

If this will reduce or eliminate Heather’s pain while increasing appetite there is a lot to like here. If we can get some weight on this girl her body might start to heal itself, eliminating the need for illegal medications in the future.

Neither Mrs. Accountant, my girls or I have ever used an illegal drug. It is something so foreign to me it is almost impossible to believe I am contemplating this. Of course, I can’t do this in Wisconsin. Law enforcement has no problem allowing people to die in jail without proper medication. Like some doctors, it’s job security. (Yes, you hear a tinge of bitterness in my voice.)

This will require a trip to Michigan or Colorado or some state where it isn’t illegal (at least on the state level). 

One person I spoke with while researching weed recommended a benefit. I explained money isn’t the issue. I would give all my financial wealth to save my daughter without a bit of remorse. What I can’t do is help her from a prison cell or stand around with my hands in my pockets.


Ethical Criminal Behavior

As of this writing I have not yet committed the crime. But I see no way around it. Driving to Michigan is still a haul and my guess is Heather will need regular dosing as most medications require. This isn’t going to be easy.

So why am I publishing a confession? Remember what I said about standing around at my daughter’s funeral making excuses for being too cowardly to take steps to save my daughter’s life? I could never live with myself if Heather died because I didn’t have the balls (that is as far as the language will go here) to save her life due to a law that said it is better to allow your child to die than take the medication.

I do not take this decision lightly either. I always tell people my reading tastes are catholic (lower case “c”), which means universal. That is only a little white lie. The one thing I try to avoid is books on illicit drug use. I don’t watch movies or TV with such activity either. I find nothing appeals at all in drug abuse. In fact, I find it repugnant.

And now, after I raised two wonderful, moral, ethical girls, I am considering this. Heather is shocked by my recommendation since she knows my feelings about illegal drugs. She also admitted once, when in serious pain, she was willing to try anything, including weed.


Financial Blog?

I imagine some will wonder what this is doing in a financial blog. Well, medical issues are a major financial issue, especially in the U.S. Medical problems have destroyed more than one small fortune in the past in the Land of the Free.

Today is Thanksgiving Day here in the States (the publication date). I have been the luckiest man alive and am forever grateful to God for all the blessings bestowed upon me. Yes, my family has many medical issues. But as Jordan Peterson once said, everyone you meet is either fighting a medical issue, has a family member doing so or someone close to them is. If you meet that lucky someone who is not, they will in a short period of time. It is the nature of life.

Illness is the norm. Treatment the solution. Modern technology has given us the tools to solve many medical problems. Our sensitivities have not kept up. As a society, we are willing to have laws that prevent very sick people from having comfort. As a society we are willing to have laws that prevent cure in people with cancer and other illnesses. As a society we still have maturing to do.

Even if you live in a country with universal heath care, illness still affects your finances. If you can’t work, money becomes an issue.

This is a personal finance issue. It is also a moral and ethical issue. 

As stated earlier, people sometimes want to emulate me. I discourage that kind of behavior. However, if faced with an ethical or moral dilemma, I wanted you to have my story, Heather’s story, as a reference to help you make the right decision.

Society has no room for people with my attitudes toward life. If this blog goes dark you will know what happened.

I read a lot so I also have plenty of references to pull from also. A Tale of Two Cities by Charles Dickens might be the best selling novel of all time with over 200 million copies sold. Many people remember the opening line:

It was the best of times; it was the worst of times. . . 

What people remember less are the final words of the novel:

It is a far, far better thing that I do, than I have ever done; a far, far better rest that I go to than I have ever known.

What I am about to do is very unnatural to me. It stands against everything I believe. This is what I call ethical criminal behavior.

And only the courageous and truly wealthy, those wealthy in here (pointing to my head and heart), can do.



More Wealth Building Resources

Personal Capital 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 Capital is free?

Side Hustle Selling tradelines yields a high return compared to time invested, as much as $1,000 per hour. The tradeline company I use is Tradeline Supply Company. Let Darren know you are from The Wealthy Accountant. Call 888-844-8910, email Darren@TradelineSupply.com or read my review.

Medi-Share is a low cost way to manage health care costs. As health insurance premiums continue to sky rocket, 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.

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

Worthy Financial offers a flat 5% on their investment. You can read my review here. 

In the summer of 1982 the world stood still in the Rust Belt of the United States. The economy sputtered, stalled and then declined in the second leg of a double-dip recession that sent the unemployment rate to the levels last seen in The Great Depression. 

In this economic void a future accountant was finding his way as he came of age in the early summer of that year. Working on a family farm in its last death throes, our wayward accountant was there in those last few months before the bankruptcy became final. 

With most of the animals gone and the fields untended, our hero and his uncle, Daryl, filled their days with 500 Rummy and throwing darts at a dartboard of a picture of the Ayatollah Khomeini (Google it). 

After the farm gasped its last breath, our hero worked in his dad’s business repairing silos. Anything to put food on the table. The pay wasn’t good. But anything above zero had its appeal.

The unsung hero, the listless future accountant, felt trapped. In the county he lived there were no jobs available. Employers would not even waste the paper to take your application. The answer was NO!

A way of life, farming, was no longer an option. Working in dad’s business was not appealing at any level, but the only choice at the moment. Turning a wrench in a business not his own was not a life he could foresee enjoying.

As the economy slowly climbed out of the economic malaise of the early 1980s, our hero quietly built several businesses. He sold imported goods at any retail outlet that would take his junk, ah, I mean products. He also prepared tax returns for other employees and vendors of his dad’s firm. 

After four years he amasses enough wealth, thanks to a soaring stock market supercharging his savings, to strike out on his own, away from the family business. He bought a car, a mobile home (hey, it was mine at least) and moved out. I was 22. (Notice the change in perspective in the story.)

By 1986 dad’s firm was growing and profitable. Hard work separated us from subsistence. The future accountant was now doing enough tax work to technically say he was an accountant, rather than a future accountant. A small steady income and a modest nest egg allowed our heroes eyes to wander to the horizon. And it was a crisis on the home front.


Living at Home

My story of early adulthood has many similarities to those growing up in the Upper Midwest of the U.S. at the time. Farm life was different from city living, of course. But the hardship was still significant. 

There was a massive diaspora of my high school class after graduation. Jobs were far away and if you wanted to start your adult life, travel was required. When the economy improved many came back to our rural community. It is hard to take the country from the boy.

The year I turned 18 was the worst year economically in the U.S. since the early 1930s, with my home town dead center of the disturbance.

Growing up on a farm had its advantages. We always had food and while we were poor, we always had something to do. The best part is I grew up with my extended family. My grandparents, uncles and nuclear family all snuggled on our family farm bought by great-great-grandpa Accountant when he moved to the U.S. from Germany in the 1880s.

Now the way of life was gone.

Back in those days the question this post title asks was simpler. If you grew up on a farm your would never really ever move out. And unless the kids were violent you never kicked them out.

Farm life in the U.S. is such a small subset these days it is hard to provide guidance on this issue for them. For the vast majority, in these much better economic times, the lament of many a parent is: When do I kick the kids out?

Kids were a massive benefit on the farm. In town it is a different story. Fewer chores mean the extra hands are not a necessity. Once the kids can fend for themselves, they become a burden. At least financially.


Missing the Kiddos

Parents sometimes find it hard to detach from the kiddos after they reach adulthood. If the kids are not kicked out on their 18th birthday they start to settle in. It then gets harder to pry them out the door at a later date.

Kicking the kids out is always a difficult discussion sure to raise dander. Do you consider the economy before giving the kids a firm deadline to vacate the premises? Do you allow for a certain level of resources (job, savings, accumulation of pots, pans and blankets) before the decision is made?

When I was 18 I was scared to death to move out because the economy was so bad. Four years later, with a good economy and some personal resources, I was out the door of my own volition. 

That created a crisis. Dad needed the help in the business. Finding employees with a farm boy work ethic was difficult by 1986. Both mom and dad enjoyed having the extended family together. Those farm roots are hard to break. 

Buying a car meant freedom and that triggered the crisis. Dad knew I would be gone soon now in possession of my own vehicle. It all ended well, however. I left, built a life of my own, and returned frequently. The family expanded for the better.

I suspect many parents don’t encourage their kids to leave sooner for the same reason. You love your kids and will miss them, annoying as they can be at times. There is also something disturbing about looking down the maw of being an empty-nester. As a parent of two adult daughters I keenly feel this emotion.


Healthy Habits

It might not be healthy for children to stay living with parent too far into their 20s. At some point they need to start their own life. Things are always tough starting out. Money is tight and expenses high. There are significant advantages to living at home with mom and dad.

Knowing the right time to prod the younglings out is more art than science. Too soon and they could catastrophically fail; wait too long and they become institutionalized. 

I have seen many young people forced out at a young age and the problems it creates. With nowhere to go they settle for whatever keeps a roof over the head and food on the table. That frequently leads to disastrous results.

I also see many parents in my office with older kids still living at home (upper 20s, 30s and older). There is usually some disappointment their children have not moved on. 

My oldest daughter is looking down upon her 25th birthday soon and the youngest is 19. I have strongly encouraged the oldest to consider moving out. However, serious medical issues have had me encouraging her to stay at home where it is cheaper to live and there is a built in support group in case she needs emergency medical help. 

The youngest still has time to decide. At 19, and also with serious medical issues, she is still finding her way and building wealth while she decides.

Both girls have jobs and help around the house. There are no drug, alcohol or other inappropriate behavior to concern us. Having the girls at home gives the home a full feeling. 


When the Kids Must Move Out

Yes, you will miss the kids when they move out, but you will adjust to your new freedom. And odds are they will come back often, seeking your advice and for companionship.

However, you must insist the kids move out at a certain point or you will harm them, perhaps irreparably. They can’t truly grow up until they are on their own.

You bounce better when you are young. Struggle is a natural part of growing up, moving out and finding your way in the world. There will be scars. That is the natural order of things.

It hurts. Life hurts! You fought through the difficulties when you were young. It is how you got where you are. A bird never learns to fly sitting around in the nest.

There are a few exceptions. My daughters have medical issues that have me second-guessing my advice. (More about this in the Thanksgiving Day special post.) 

As parents, you know if your kids are better at home for a bit longer or if they should move out. There are instances where it would be unsafe to have your kids on their own.

But don’t let that cloud your judgment. The medical or other issues need to rise to a level where holding your kids back (allowing them to stay living at home) is the only viable option. Lazy is not a medical condition. 

Your kids also need to see the real world and how it works. Earning an income, paying bills, buying a home, investing and building their own family happens out there away from their childhood home. Mom and dad are always a phone call away for help, moral support and advice.

The best thing for you and your children is to move them out as soon a they are able. (Notice I didn’t say ready.)

Here are guidelines to help you decide when it is time to move the kids out:

  • College: College is expensive enough, but it is still a good time for the kiddos to spend time out on their own. Lessons you shared with them as they grew up will hold them in their stead. If they are ready for college they are probably ready to live away from their parents. Just make sure they are moving into a safe environment as 18 is a tough age to strike out on your own.
  • Age 25: After college (if they attended college) the kids sometimes move back home as they transition to a new job and/or family life. By age 25 most kids should be encouraged to see the world solo or with a significant other. Remember, they can’t really start their life until they leave home. 
  • Money: Finances are a consideration. Out in the world bills accumulate automatically while income takes effort. Starting out there are few reserves to take the kids through a rough spot. Parents have resources accumulated over a lifetime. The kids are starting at Day 1 in their wealth accumulation adventure. Hopefully they got a mild head start saving and investing while still living under your roof.
  • Health: This is always a difficult decision. My oldest daughter would be on her own by now if not for serious medical issues. We still insisted she live in a dorm while attending college. Once her health improves she will be required to move out.
  • Keep an open line: The kids moving out is not a funeral! Make sure your child understands you are always there for them. Be slow to enable when financial difficulties arise, as they always do for the young. They need to learn to fight their way through it. You can always provide moral support and guidance. When the chips are down the kids listen to mom and dad better than ever. Who ever knew mom and dad knew so much?
  • Visit: Just as moving out is not a funeral, it isn’t a divorce either. You get to talk to each other as much as you want. When I left the nest at the ripe old age of 22 I came home every Sunday to spend with family. The days and time have changed when visiting happens, but there is still a lot of visiting (and card games). I get along better than ever with my folks. As a kid I needed to break away. Having broken away I feel a strong affinity to extended family. It is the way things are supposed to be.
  • Safety net: While it is never a good idea to give your kids a free ride, helping out is one of the most important tasks remaining to a parent, or should I say, grandparent. I discourage bailing out the kids financially except in the most dire of circumstances. Medical would be an easy call. I’d help. But babysitting is a real benefit to all involved. The kids, now parents themselves, can avoid a major expense in childcare, while you get quality time with the grand-babies. The best part is that they go home at the end of the day. I’ve heard grand kids are better than kids. I’ll let you know once I find out. (Hint-hint, girls, if you are reading this.)
  • Be firm: Some kids try to wedge themselves in tight. It is not healthy for all involved. You, as the parent, must be firm! At some point, the kids must move out. Do not enable poor behavior. They don’t know what they want or what is good for them. They will find it out there.

This may be the most important financial decision you help your kids make. Staying at home past curfew is a bad idea. I understand you will miss them. It still must be done.

The last part of parenting is watching your children grow and explore as adults. They will surprise you in so many ways. They with have tremendous failures and incredible successes. 

My daughters have always amazed me. Their interests are so varied and so different compared to mine. Soon it will be time to open the cage door and insist they fly on their own. I gave them all I can teach them. Experience is the final teacher.

Your job is mostly done as a parent at this point. Now you can enjoy your kid’s successes and encourage them when they fall. You also have time to explore things that interest you that having kids didn’t grant the time for. 

You also have more time for friends and that wonderful significant other you love. 

It is a mark of a life well lived, seeing your children enter the real world.  They are also the future. They will design it in ways we never dreamed of. That is what makes the world such a wonderful place.



More Wealth Building Resources

Personal Capital 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 Capital is free?

Side Hustle Selling tradelines yields a high return compared to time invested, as much as $1,000 per hour. The tradeline company I use is Tradeline Supply Company. Let Darren know you are from The Wealthy Accountant. Call 888-844-8910, email Darren@TradelineSupply.com or read my review.

Medi-Share is a low cost way to manage health care costs. As health insurance premiums continue to sky rocket, 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.

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

Worthy Financial offers a flat 5% on their investment. You can read my review here. 

Some tax strategies are so common most people know about them. Why is it then almost nobody is using the strategy?

A large part of my tax practice is consulting. There isn’t much room for more tax preparation clients. However, I love helping people reduce their taxes, so I spend considerable time outside tax season working with good people designing strategies tailored to their personal needs.

The past several months I have repeated the tax break in question countless times. It is missed nearly 100% of the time. Of my regular tax clients, the ones using this strategy did so at my encouragement. 

It started earlier this year when I published this post on traditional retirement accounts and how they have an implied interest rate on the tax savings. Before that I published this post because I was seeing consulting clients who had rather large retirement accounts at a young age.

It is to be expected in a community of savers and investors to have large retirement accounts at an early age. My lament was about how big those accounts were going to get and the loss of control over tax issues in the future as a result. 

When the accountant loses control over managing your taxes it means you pay more. This might not seem like a such a big deal because these people have a large amount of liquid investments, much of it in traditional retirement accounts, and can afford to pay more in taxes. But people don’t stop by this place to hear they need to pay more. 

Folks around the FI (financial independence) and FIRE (financial independence/retire early) communities tend to max out tax deductions up front so they can build their net worth faster. I cautioned against this knee-jerk reaction.

Most people in these communities would be hard pressed to give the appropriate amount to invest in a Roth versus a traditional retirement account for their optimum tax advantage over their lifetime. At Camp Accountant I discussed the issue further.

The more I thought about the issue of large traditional retirement account balances the more I realized this was not just a wealthy person issue. There is a tax strategy with the ability to make a real difference for people even in lower tax brackets, in fact, any tax bracket.



The problem is the required minimum distribution (RMD). Before the RMD kicks in at 70 1/2 you retain control over your tax situation by making choices best for you. In the earlier posts I outlined how some people with modest traditional retirement account balances would see very large balances after another 30 years of growth. I illustrated an example of a client facing $500,000 in RMDs down the road. There isn’t much tax planning you can do after that.

Of course, many readers felt this was not a real world issue. It is, but not for many. 

Charitable giving, like this animal shelter, has never paid so well. Make a difference that really counts.

The problem with the RMD is loss of control. Once you reach 70 1/2 you have until April 1st of the following year to distribute a certain amount from your traditional retirement accounts. If you wait until the following year you need to take out double that year. Therefore, for most, it is best to start taking the RMD the year you reach 70 1/2.

The RMD is required every year you have a traditional retirement account once you reach 70 1/2. The Secure Act working its way through Congress could delay the RMD until age 72, but that has not yet happened. If you are still working you can delay the RMD for money in the 401(k) where you work, with some restrictions.

The RMD can do serious tax damage. For example, if your only income is Social Security and an RMD from your retirement account of $40,000, some of your Social Security benefits will be taxed. Worse, you could pay more for Medicare coverage the following year.

By age 70 you are probably not itemizing. The house is paid off so all that remains is state and local taxes (SALT), which are capped at $10,000 per return, and charitable contributions. Yes, if you have really high out of pocket health insurance and medical expenses you might get a deduction there, but it is really hard to get the deduction as the first 10% of adjusted gross income (AGI) needs to be exceeded before you can claim any of the healthcare expense.

If you donate large amounts to charity there is another problem. The RMD increases your taxes and could turn some of your Social Security benefits taxable as well. Then you need to exceed the standard deduction ($24,400 for joint returns/$12,200 for singles for 2019) before any of the charitable deduction counts.

And that is where out tax strategy shows up.


The Gift that Keeps on Giving

Under current tax law you can give to charity directly from your traditional retirement account (tIRA, SEP and SIMPLE, including inactive SEP and SIMPLE plans that no longer receive contributions), up to $100,000 per year, per person, once you reach age 70 1/2. If you are not this old yet you certainly have friends, family and neighbors who are and they need to hear about this.

Money sent directly to a charity from your traditional retirement account is excluded from income up to the $100,000 limit!

For this to work the retirement plan administrator must send the money directly to the charity. You will still get a 1099-R at the end of the year. Nothing on the tax document tells you how much was sent directly to the charity so you must tell your tax professional the amount to get the tax break. My office tax software has a “special situations” page I go to on the 1099-R screen to enter the amount to exclude from income. 

This is important. While only a few will suffer the consequences I outlined in prior posts, many will pay at least some tax on their RMD. Many will also end up paying tax on up to 85% of their Social Security benefits and pay more in Medicare premiums than they have to.

Let me clear up a few points before continuing. You can have more than the RMD sent to the charity from your retirement account. The limit is $100,000 per person, per year, as stated above, that can be excluded from income each year, even if your RMD is lower. If you give more than the RMD, the excess will not lower the next year RMD, but is still excluded from income up to to the limit. The RMD is still required in subsequent years without regard to prior distributions in excess of the RMD in past years.



There are no drawbacks from using this tax strategy. The qualified charitable distribution (QCD), as this strategy is called, is excluded from income, never reaching the front page of Form 1040. This means that your income is lower. Your Medicare premium may be lower as a result and Social Security benefits might be taxed less or not at all.

There are other issues on your tax return that might be affected as well. Your facts and circumstances will determine those additional tax savings.

There is one lifestyle change required if you are donating to your church, synagogue or other religious organization. You should make your donation via your traditional retirement account, up to $100,000, to your church. No more money in the plate on Sunday (or whichever day you have services). This means you will not be tossing an envelope in the plate at the service. It’s no big deal because the additional tax savings mean you can fund your religious organization more from the tax savings. But it might feel weird not donating to church each week when the plate is passed.

You must be 70 1/2 or older at the time of the donation, not just the year you reach 70 1/2. If you reach 70 1/2 on November 18th, then the first day you can gift with a QCD is November 18th.

Be sure the charity gives you a receipt for the donation. You will need it for your tax records should you be audited.


Who Can You Donate To?

This is where it gets fun. The Internal Revenue Code (IRC) allows a wide range of organizations you can donate to under a QCD, as listed under IRC Section 170(c). Here is the list in English:

  • A U.S. state, possession, the District of Columbia and the United States federal government itself. Yes, the government will give you a tax break for giving all the money to them. Just had to get that out of the way.
  • Any community chest, corporation, trust, fund or foundation (organized or created in the U.S.), operating exclusively for charitable, religious, educational, scientific, or literary purposes, or for the prevention of cruelty to children or animals. 
  • Your church, synagogue or other religious organization.
  • War veterans’ organization or its post, auxiliary, trust, or foundation organized in the United States or its possessions.
  • Nonprofit volunteer fire companies.
  • Certain civil defense organizations.
  • Domestic fraternal societies (operating under the lodge system), if the contribution is used exclusively for charitable purposes.
  • A nonprofit cemetery company in some instances.


Part of your legacy planning starts long before your leave this world. You can make a difference. You built wealth with hard work, frugal living and prudent investing. These skills mean you are unlikely to spend it all. By giving to worthy charities of your choice you can enjoy the fruits of your giving by seeing your donations in action.

By using the QCD tax strategy you can reduce your taxes, reduce or avoid taxes on Social Security benefits and potentially reduce your Medicare premiums. This means you will have a larger legacy for your loved ones or to fund charitable causes dear to your heart at a greater level. 

You worked hard for your money. Now you can make a bigger difference than ever. The pay-it-forward revolution starts here.



More Wealth Building Resources

Personal Capital 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 Capital is free?

Side Hustle Selling tradelines yields a high return compared to time invested, as much as $1,000 per hour. The tradeline company I use is Tradeline Supply Company. Let Darren know you are from The Wealthy Accountant. Call 888-844-8910, email Darren@TradelineSupply.com or read my review.

Medi-Share is a low cost way to manage health care costs. As health insurance premiums continue to sky rocket, 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.

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

Worthy Financial offers a flat 5% on their investment. You can read my review here. 

On a sunny spring weekend in Seattle nearly five years ago I attended a conference. In the audience was Pete Adeney, aka, Mr. Money Mustache (MMM). 

MMM took to my message immediately, interrupting my presentation to inform me I was his new accountant. I took it in stride. My gift to gab exceeded my surprise.

What caught the ear of MMM was a strategy I have used for decades to save business clients money: the S corporation.

The beauty of the S corporation is that some of the profits flow through to the owner outside self employment or FICA taxes. At 15.3% for many, it is a meaningful savings.

Not everyone should use an S corporation (or LLC electing to be treated as such).  Side hustles frequently do not have enough profit to make it work. Profits under $30,000 are best left as a sole proprietorship or partnership, without consideration for legal and other matters. Between $30,000 and $50,000 it is time to start running the numbers and once profits exceed $50,000, and are likely to continue to do so, you need to get serious about an S corporation.

Many factors come into play. The previous paragraph is only a suggestion and not hard and fast tax advice. I have S corporations in my office with less than $30,000 in profits and businesses with over $50,000 in profits still waiting for the S corporation to benefit them.

That presentation in Seattle five years ago was the spur for me to start this blog and is one of my first posts. It also prompted MMM to publish on the topic as well

And now the advice is all wrong.


More than One Flavor of Corporation

Corporations come in two flavors: the regular, or C, corporation and the S corporation. Small businesses are familiar with the S corporation because it was designed for them. Profits flow to the owners because the S corporation rarely pays income taxes. 

Regular corporations are generally larger due to tax issues. Most stocks listed on U.S. exchanges are C corporations. 

Small business owners: deduct all your child care expenses. New tax laws have made it easier for owners to deduct personal tax-free benefits. #ICHRA #HRA #QSEHRA #Fringebenefits #employeebenefits #childcare #deductionsBoth flavors of corporation can be organized in one of two ways. The first is to organize as a corporation and the other is to organize an LLC and elect to be treated as a corporation for tax purposes. You can then elect S status, if desired.

The S corporation avoids double taxation on dividends paid out of profits. The drawback is that C corporations can provide more benefits to owners without restrictions. The dreaded “except for 2% shareholders” phrase in the tax code limits the advantages of the S corporation. In the past C corporations faced a higher income tax rate compared to tax rates for individuals. 

The Tax Cuts and Jobs Act of 2017 (TCJA) changed all that.

Regular corporations prior to the TCJA had a graduated tax rate on profits that started at 15% and climbed to 35%. C corporations now pay a flat 21% income tax rate. Individual tax rates (the rate profits from an S corporation are taxed at as they flow to the owners) top out at 37%.

Instead of profits flowing to the owners on a K-1 annually, a regular corporation pays taxes on its income and pays dividends from the remaining profits. The dividend can be qualified, but multiple additional issues abound with dividends paid from a closely held C corporation we will not be able to address in this post. (The link is to an old article from the AICPA which is still relevant today.)

C corporation dividends are NOT deductible by the corporation, but are taxable to the recipient, hence the double taxation since the corporation already paid income tax on the profits. The corporation paid income tax on the profits at 21% and the owners pay tax again at the rate for dividends (qualified or non-qualified). 

Up to this point it still looks like the S corporation is the way to go for virtually all small businesses and you would be right. However, for fringe benefit purposes, an S corporation is treated as a partnership, and a greater than 2% shareholder is treated as a partner rather than as an employee. To reiterate, this is for fringe benefit purposes only. And it makes all the difference.


No Simple Choices

S corporation owners still enjoys access to all the retirement plans of a regular corporation with some modifications. Health insurance premiums (IRC Secs. 105 and 106) are generally added to wages and then deducted on the personal return (Rev. Rul. 91-26). The same applies to group life insurance up to $50,000 (IRC Sec. 79) and meals and lodging for the employer’s convenience (IRC Sec. 119).

Get the most out of your tax-free fringe benefits as a small business owner. #fringebenefits #businessowner #smallbusiness #employeeawards #watch #ICHRA #QSEHRAThis is where the choice is less clear than in the past. The above fringe benefits still have value to the owner of an S corporation as long as a few hoops are jumped through. The benefits are available to C corporation owners as well, just with fewer hoops to jump through.

Numerous benefits available tax-free to employees do not apply to 2% shareholders of an S corporation. With the C corporation tax rate at a low 21% and dividends likely qualified (taxed on the personal return at the long-term capital gains (LTCG) rate), double taxes may no longer be the issue it once was. 

For some individuals, the LTCG tax rate can be 0%. This stops double taxation of dividends in its tracks. Even if dividends are taxed it is at the lower LTCG rate rather than at ordinary income rates. The top LTCG rate is currently 20%, however, there is a small (on percentage terms) additional tax on higher incomes that could push the effective LTCG rate to 23.9%.

But the benefits are the real prize. How many fringe benefits you give the owners will determine if the C corporation is better for you. Some of these benefits are massive, allowing for 5-figure deductions. Something you can’t do with an S corporation.


Deducting Fringe Benefits

We will touch on the most common and valuable fringe benefits you can deduct with a C corporation as an owner where it isn’t allowed as a 2% or greater shareholder in an S corporation in most cases.


Flexible Spending Account (FSA): This is the “use-it-or-lose-it” account you might be familiar with. Employees are allowed to withhold from their wages or salary up to $2,700 (for 2019) per year for medical expenses. If married, a spouse can do the same. 

The FSA does take planning. If the employer plan allows, up to $500 can be carried over to the next year OR up to a 2 1/2 month grace period allowed to use the money in the HSA. 

The FSA is a salary deferral; a deduction is not allowed since it is already excluded from income.

You can use FSA funds for uninsured health costs, such as: eyeglasses and exams or a gym membership or message therapy with a doctor’s prescription.

You can read more about the FSA here.

There is also a Dependent Care Flexible Spending Account (DCFSA) where employees can elect to exclude up to $5,000 from income for dependent care expenses. The employer can also provide some or all of this amount as a tax-free fringe benefit. FICA and FUTA are also avoided. 

There are several opportunities with a Dependent Care Assistance program (IRC Sec. 129) and a credit for employers covering qualified child care expenses (IRC Sec. 45F). You can read details here.


Deduct all your health insurance premiums and medical care costs tax-free. #healthinsurance #benefits #employee benefits #healthinsurancepremiums #medicalcosts #deductiblemedicalcosts Deductibleinsurance #HRA #QSEHRA #ICHRAHealth Reimbursement Accounts (HRA): This might be the number one reason a small business owner may choose the C over the S corporation. 

Once again we have two choices. The Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) and the Individual Coverage Health Reimbursement Arrangement (ICHRA). The ICHRA is available starting January 1, 2020; the QSEHRA is currently available.

The QSEHRA allows a tax-free benefit to individuals of $5,150 and $10,450 for families in 2019 for medical expenses, including insurance premiums (though the Premium Tax Credit (PTC) is reduced by the amount of the benefit, if claimed). The employer pays this benefit. The employee has nothing to report on her return with the exception of the adjustment to the PTC.

The new ICHRA has no annual cap. Yes, you can deduct a lot under the ICHRA! There are some differences, however. If you receive any benefit under an ICHRA you cannot get any Premium Tax Credit. 

It should be noted that the QSEHRA and ICHRA are for employers without group health insurance. Employees with individual insurance is allowed and what these plans are designed for.

There are several considerations with HRAs. Here is a good chart comparing the two.


Employer Provided Vehicle: An S corporation can provide the same benefit, but it is cleaner and easier with a C corporation. The vehicle can be used by the employee for business or personal purposes and, depending on the facts and circumstances, may be tax-free to the employee.

There are a lot of moving parts to the employer provided vehicle. Discuss this option with your tax professional to determine if it is of value for you.


Employee Achievement Awards (EAA) (IRC Sec. 274(j): If you have a written plan it is a qualified plan. The qualified plan can offer awards up to $1,600; $400 if not a qualified plan.

The TCJA changed the rules a bit for the EAA. Cash and equivalents are not allowed: cash, gift cards, gift coupons, gift certificates, vacations, meals, lodging, event tickets, stocks, bonds or securities. Only arrangements that confer the right to select and receive tangible personal property (a watch or plaque, for example) from a limited assortment of items preselected or preapproved by the employer are allowed. (IRC Sec. 274(j)(3). The award must not appear as disguised compensation. There are additional limitations.


The Best Route

There are many more fringe benefits to consider. To keep this post brief I will punt on the other tax-free fringe benefits. It is recommended you review these issues with your tax professional as there are significant opportunities to reduce taxes with these strategies.

Now you need to determine if the S corporation is best for you. It boils down to the fringe benefits. The lower flat tax rate for C corporations are a consideration and your personal tax rate on dividends from your corporation will play a role, too.

However, the biggest determinant will be tax-free fringe benefits. And when it comes to benefits the HRA will top the list. Large deductions allowed with a C corporation can remove enough income from the taxable column to create an overall tax for the C corporation lower than the S corporation. It does take planning to determine this.

The QSEHRA is a powerful tool under the TCJA personal and corporate tax rates. The new ICHRA is something you must examine. With virtually unlimited deductions for health related expenses and insurance premiums, the ICHRA will make the C corporation more valuable to small business owners than ever before.

There is no shortcut. You have to put pencil to paper or have a tax professional do it for you. It might be worth paying a seasoned tax pro to help you determine the best route. Every step inserts additional tax considerations tax professional should be familiar with that a novice may not. Investing in your business can pay hansom rewards.



Tax are never easy. All the good ideas in this post still need a warning label.

If you are an LLC electing to be treated as an S corporation you can elect at any time to become a regular corporation (terminate the S election). However, you cannot elect to be an S corporation for at least five years, even if circumstances (or the tax code) change.

Also, if you are a C corporation with accumulated earnings that elects S status your tax return becomes much more complicated and probably more expensive to prepare. There are additional risks for an S corporation that spent any time as a C corporation; you should discuss these potential issues with a tax professional. The risks could subject the S corporation to additional taxes. Get all the facts before jumping.

Finally, in 2025 the tax code reverts back to 2017 rules for individuals if Congress doesn’t act. Corporate changes were permanent. One more thing to consider before you make a decision.


A small business should hire a competent tax professional to deal with the considerations put forth in this post. Too many variables can intercede.

This post allows you to ask good questions of your tax professional. A small investment with the taxguy should pay you back in multitudes of order compared to the fee invoiced. 

Don’t accept the S corporation as the default for small businesses anymore. The C corporation might save you more money.

Print this post out and/or send a copy to your tax professional and ask if this is something that could benefit you. Pay the nice tax professional. She will earn her keep on this one and it is well worth it to you. 



More Wealth Building Resources

Personal Capital 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 Capital is free?

Side Hustle Selling tradelines yields a high return compared to time invested, as much as $1,000 per hour. The tradeline company I use is Tradeline Supply Company. Let Darren know you are from The Wealthy Accountant. Call 888-844-8910, email Darren@TradelineSupply.com or read my review.

Medi-Share is a low cost way to manage health care costs. As health insurance premiums continue to sky rocket, 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.

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

Worthy Financial offers a flat 5% on their investment. You can read my review here. 

Are rewards programs destroying your finances? All those points might be killing your budget and making you poorer. There is a better way. #rewards #miles #points #budget #travel #bonusesFrugality has changed from a few decades ago.

Growing up in the backwoods of Nowhere, Wisconsin frugality was a necessity of life. Rural communities once had strong emotions started during the Great Depression. My grandmother spoke of having one egg per week (and we were farmers—the rest were sold) which the man of the house ate because he did more physical work and needed the strength. 

We also heard stories of eating lard sandwiches and “learning to like it, too”, as Grandma Accountant used to put it. Things were hard in those days; harder than anything experienced in these parts by anyone under 100 years of age.

Frugality was an ingrained part of life. Debt was to be avoided like rabies. Old-timers knew it was impossible to survive either. A lot of good men met their end back in those days when things turned sour and the lessons were never forgotten.

Frugality was more than just not spending or bragging rights for a blogger. Spending on anything not an absolute necessity was akin to sin. And it was hard to look up at the cross on Sunday morning if you committed such an egregious sin. 

Those days are long gone. Only a few with a long memory remember grandparents warning of the perils of frivolous spending. 

It was easy to define frugality in those days. Frugality meant saving a very large percentage of your income and sacrificing at least some necessities. Frugality also meant industriousness. Flaunting of wealth was as bad or worse than foolish spending and nobody wants to be the fool.

The lines have blurred in the last decade. Frugality is easier because it is easier to game the system. We even brag about it—a social crime in the not so distant past. 

Now we can travel the world on someone else’s dime and still claim the trophy of frugalism. Websites and blogs abound in strategies to shift your spending to another’s financial statement. Gaming credit cards is all the rage. And credit cards are not the only game. There are so many moving parts in the financial system now you can drive a truck through it without hitting a frugality checkpoint.

But is this really frugal? Not by any definition from the past. Our grandparents would not consider the current state of affairs frugal. They would actually be appalled at modern behavior passing as financially responsible behavior. 

With new rules and a new world order it is time for a better definition of frugality. It is unacceptable to claim current spendthrifty behavior as actually frugal behavior. This has always led to disaster in the past and there are no indications the laws of economics have changed.

So today we will attempt to redefine frugality for a modern world with options to game true frugal living. 


Measuring Frugality

The problem stems from what we measure. In the past we measured frugality by spending levels, or better yet, by the savings rate. In the backwoods it was common to see 50% savings rates and higher, emphasis on “was”. People just did not spend what they earned. 

Money is no longer an accurate gauge of frugal behavior. A few quick financial maneuvers can provide points from whatever source good for cash, prizes and/or travel. The tax-free cash doesn’t count as spending in most people’s minds. That is an unfortunate belief to have. 

Travel is the worst offender. Free and semi-free travel is all the rage. It has even affected business and first-class travel as so many can now achieve such levels at very low cost. First-class isn’t what it used to be according to what I have read.

The damage to the environment is all the same. The climate doesn’t care if you think you are frugal as you dump a few more tons (or tonnes for my non-American readers) of carbon into the atmosphere without personal financial cost because you cashed in some points. Earth thinks you still did the spending; Earth thinks you are less than frugal regardless what you exclude from your budget.

Redefining frugality in a world or rewards points, bonuses and free handouts. All that unrecorded consumption affects the planet and environment while exposing your finances to new risks. #risks #finances# #frugal #frugality #spending #rewards #rewardsprograms Measuring “earned income spending” is not the truth. Your impact on the planet is still very high if you engage in off-balance sheet spending. (Yes, this is a twist of words. I know spending goes on the P&L. I used this analogy as a twist on the questionable behavior of public corporations that use off-balance sheet debt to mask their true financial condition.)

All spending counts. Better yet, all consumption counts!

Because the claims of frugality are so easy to fraudulently (an ethical crime only) acquire today a better way to assess frugal behavior is by measuring consumption. 

I’m guilty of the same crime. I avoid travel as much as possible, but have no problem if people travel to me. How is that different from a blogger taking a free trip to a conference just because they are a blogger? The environmental damage is all the same; the resources still consumed.

I’ve gone a step further (and hence have committed a higher crime). My home (and water) is heated and cooled by a geothermal heat pump. Very energy efficient. Then I plow said savings into a 3,000 square foot home with a hot tub, Jacuzzi and a two acre pond. (Save the “hypocrite” catcalls for later.)

Odds are my next vehicle will be electric or some hybrid of such. The miles will be driven with a lower environmental impact. Yet, the massive consumption of an auto purchase is present.

My carbon contribution to the atmosphere is smaller than most Americans and probably on par with a typical European. This puts me well above levels of African nations and most nations, for that matter, outside Western Europe and North America. I have to be careful how loudly I proclaim my innocence.

And the free gifts keep coming. Over my adult life I received plenty of free promotional items as enticements. Blogging is no different. They even have laws now where bloggers have to disclose if they received compensation or free use of the item or service they blog about.

On The Wealthy Accountant Facebook group I have asked people what they consider spending. The vast majority confess they don’t consider credit card rewards as spending. Well, it is tax-free income so it shouldn’t count as spending then either, should it? 

But it is spending! Consumption, too! 

Measuring frugality is extremely difficult due to all the changes in modern society. Spending has been distorted and even CO2 emissions are an inaccurate way to measure frugal behavior. Each method can be gamed. A good start might be to track your CO2 emissions or equivalents with a basic calculator from the EPA. It isn’t a perfect solution, but better than mere spending as a frugality gauge.

Greenhouse gas emissions are also a problematic measuring tool. That electric vehicle might spill less pollutants into the air as you drive, but the contribution from production might be tremendously high. At best it is hard to measure.

And not all costs are included in the environmental equation. The polluting of the land, water and air extracting oil is not included in the price of a gallon of gasoline. We act as if dumping pollution into the environment is a free ride. The tragedy of the commons is in full swing. 


Building a Better Frugal Human

If spending and CO2 emissions do not accurately reflect frugal behavior, what does? It all circles back to consumption.

Asking you, kind readers, to track your greenhouse gas emissions would be too much. Even the accountant in me would not stay true to that course for very long.

A better way to determine your level of frugality is to measure consumption and its equivalents. If you get a better price you are considered more frugal. An electric vehicle is still better for the environment than an internal combustion engine (ICE). If you reduce costs by utilizing technology you are still frugal. 

But you also must include all the free rides from gaming the system. Using points to fly around the world first-class is still something like $30,000 or more in consumption equivalents. 

This is different from taxes, by the way. Business owners can shift personal spending to the business ledger legally. It doesn’t mean you (or I) were frugal. Deducting my travel expenses to FinCon or other financial or tax conferences, while a deductible business expense, is really a personal expenditure to be added to the frugality thermometer since their is an element of personal pleasure. 

If you are not brutal in your assessment of consumption you will inevitably game the system to your favor, skewing the results and fooling yourself into believing you are really frugal when you are actually not. 

I have been known to brag about spending only about $20,000 per year to live. This is true. But. . . 

But that is not a true picture. What is the cost—and continuing costs—of maintaining 3,000 square feet of home? The pond? Hot tub? And what about the stuff from the business? Do I acknowledge business meals as also a part of personal consumption? I had better if I want a true picture. Thousands in annual credit card cash rewards used for books for my personal library are personal consumption, even if they are business related! I would buy and read them even if not in business because I enjoy my work.

I see bloggers all the time claim serious levels of frugality. It does not take a deep dive to determine this is smoke and mirrors. Their social media feeds are filled with travel tales that paint anything but frugality. Add the actual cost of the free airline tickets as real consumption to the expenditure column and the consumption level starts to look quite hedonistic. 


Why Does It Matter

Why do I or should you care about frugality? Does it really matter if we don’t count the freebies of life in our frugal measurements?

Actually it does if you consider your impact on the climate and the world at large. The impact on the environment is your concern as it does affect quality of life. If you dump pollutants into the air with reckless abandon you by default give permission to others to do the same. When the herd of lemmings run off the cliff in synchronized fashion it makes a splatter spot at the foot of the cliff noticeable to all. 

Keeping spending low by pushing the cost on somebody else is a bit rude, but acceptable in our modern world. The spending shift is sometimes by design of those doing the paying; those without any real frugality concerns. These gifts are nothing more than inducements to get you—or others in your sphere of influence—to take up the additional consumption.

Overcome spending, consumption, debt and financial problems. Rewards programs are designed to get you to spend more and keep you in debt. Break the cycle with these secret tips. #secret #tips #spending #consumption #rewards #debt #financialproblemsYou are better than that. Gaming the system is not a bad thing and no worse than gaming the Tax Code to reduce your tax liability (a really good thing). I am 100% for using credit card rewards and still accept the benefits of business ownership. If my meal or travel is paid by someone else it is still an acceptable behavior as long as I acknowledge I engaged a level of consumption.

But when it comes to consumption I have to admit I am less frugal than I pretend. As I grow this blog and other business projects I find I am on the road more often. I can call it whatever I want as long as I am honest in admitting my personal consumption is really personal consumption. It is hard to be truly frugal as a business owner of any size. Businesses spend to survive.

My personal spending is low. When I bow out of the business life a few business expenses will end up on the personal financial statement it was really on all along and some expenditures will cease. Travel and other consumption will stop or be severely curtailed. Then I may regain my badge of frugality. True frugality

Until then I need a serious reality check and so do you. You are consuming more than you admit and if you want to really be frugal that has to stop because the planet can’t take anymore. And shady personal accounting will not lower environmental pollutants anymore than shady accounting made Enron a profitable company.



More Wealth Building Resources

Personal Capital 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 Capital is free?

Side Hustle Selling tradelines yields a high return compared to time invested, as much as $1,000 per hour. The tradeline company I use is Tradeline Supply Company. Let Darren know you are from The Wealthy Accountant. Call 888-844-8910, email Darren@TradelineSupply.com or read my review.

Medi-Share is a low cost way to manage health care costs. As health insurance premiums continue to sky rocket, 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.

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

Worthy Financial offers a flat 5% on their investment. You can read my review here.