Posts by Keith Taxguy

The FIRE Community Needs to Make Room for Semi-Retirement

The FIRE (financial independence/retire early) community is a growing demographic still trying to find its way. The FI part of the equation is easier to understand than the RE part. The issues revolve around the definition of retirement and what constitutes the appropriate lifestyle once FI is reached.

Some of the wealthiest individuals of the last half century provide an example. When Sam Walton was the richest man alive on the planet he still drove a beat up old pickup truck. He saw no reason to spend money on a new truck when the one he had was comfortable, did the job and gave him pleasure (a bit of a status symbol). In a recent interview with the Wall Street Journal, Warren Buffett confessed he has been semi-retired for decades. Charlie Munger, Buffett’s right-hand man at Berkshire-Hathaway, joked Warren is good at doing nothing.

Like Walton, Buffett doesn’t go for the extravagant spending so common among the rich. Buffett’s suit is off the rack and he eats at McDonalds. He also lives in the same home he bought in 1958.

Read More

CAMP ACCOUNTANT HAS ARRIVED!!!

The Event you have been waiting for your entire life had finally arrived! Save Thursday, October 11th (starting at 5:00 p.m.) to Sunday, October 14th (quitting time is vague as an after Camp party is planned, mountain biking and a trip to the local Hot Springs).

I don’t know about you, but I’m tingly all over. Camp Accountant is different from any camp you’ve attended in the FI community. All proceeds go to support the local Boys and Girls Club. In fact, all the registration money is collected by the Club. They pay for the cost of running the camp and put the rest to work serving the community. Everybody wins! Many of the venues are provided at low or no cost so more money ends up helping the Boys and Girls Club.

Read More

Our Heroes Have Failed Us

Anthony Bourdain and Kate Spade were ripped from our lives in the past week in what early reports suggests are suicides. Robin Williams is another star extinguished before his time.

Kevin Spacey betrayed our trust along with a litany of actors and producers and comedians. It seems like an endless parade of successful men ran to the cliff like lemmings bent on self destruction.

Liz Taylor entertained us for decades. As a role model she left us with issues. Marriages came and went until she reached eight husbands over her lifetime. We see the same behavior today without the distraction of marriage in our modern starlets. Adored musicians race from one bed to the next until the world crashes in.

Closer to home we see bloggers and podcasters who failed us. Some crack under pressure while others lose themselves in drugs and cheap whisky. We idolize these people and want to be like them. Then, when we get a closer look, they have warts like the rest of us.

Read More

How Much You Need to Retire is a Lot Less Than You Think

A common question in the FIRE (financial independence, retire early) community involves how much money you need to retire. Before I became a card-carrying member of the community I would hear the question something short of a dozen times per year. This blog means I hear the question a lot more these days. And people still don’t believe my answer.

There is a great misperception over how much money is needed to cash a check and walk your own path. I’ve consulted with 70 year old men worried they don’t have enough to retire. In the FIRE community younger people are more interested in the same question with a different set of rules.

Social Security changes all the rules. The 4% rule is wildly off the mark because they forget two simple facts; facts we will cover right now.

Read More

Teach Children to Follow Their Dreams

From a young age I knew exactly wanted to do. Then I changed my mind.

Such is youth. My dad had different plans for me. My childhood was spent on the family farm and it was an awesome life. My dad owned an agricultural repair business and the plan was in place for me to slide right into the company. There was only one problem: I hated the work.

My children are now adults. One is in China while the youngest just graduated high school. My fondest hope was that at least one of the two would be interested in tax and accounting work. No dice.

Forcing your children into a family business is always a bad idea. The kids might love the work and they should then be welcomed with open arms if they do. But most kids don’t want to follow in their parent’s footsteps. Their dreams are different. Most often they follow their parent’s path because they don’t know where else to turn.

Read More

Stalking the Accountant: Tax Plan Now or Forever Hold Your Peace

A new tax guide arrived late last week: The Complete Analysis of the Tax Cuts and Jobs Act. It’s what I consider light reading on a Sunday afternoon.

Tax season is over, but tax planning is more important than ever with the new tax laws and changes. Consulting and planning with clients started May 1st and continues strong. I’m booked out until mid-July. If you own a business or investment properties you need to consider consulting with a tax professional to take full advantage of the new Qualified Business Income deduction.

One problem from earlier in the year has probably corrected itself. Withholding tables were adjusted in early February to account for the elimination of exemptions and the new tax brackets. The new tax tables overcompensated by under withholding. This meant people would pay less tax while getting a smaller refund or even owing! It was a timing issue of when you would actually pay your tax liability.

Read More

The Best Speech Ever Given

When you think of the most powerful, motivating speeches ever given, Abraham Lincoln’s Gettysburg Address comes to mind. In less than three hundred words* Lincoln encompassed the issues facing the nation. As great as the speech was, it was backward looking (Four score and seven years ago) with hope to the future. Lincoln was able to clearly articulate his message in a few minutes. He struggled up to the moment of addressing the crowd as Gettysburg. It was the planning and preparation that lent to the quality of the message.

Closer to home we might consider the commencement address Steve Jobs gave at Stanford in 2005. At fifteen minutes, Jobs communicated a narrower message with significant reinforcement of his theme. Once again, serious planning took place prior to the presentation. Jobs was legendary in his drive toward excellence. He could speak before a crowd extemporaneously, but preferred formal presentations he could and did practice again and again until everything was choreographed to perfection. Errors were ironed out. He practiced so much that when he was live he could continue without missing a beat if technology failed while he was on stage. A Steve Jobs presentation

Read More

Create Your Own Basic Income

I don’t know who first came up with the idea of a universal basic income. My earliest exposure to the concept was from Sinclair Lewis’ 1935 novel It can’t Happen Here. There is no doubt the idea was around much longer.

It’s an age old story. Mechanization and technology will destroy all the jobs. Computers and machines will do everything so people will be left with nothing to do but wander around the cities and countryside with dazed stares.

The solution is to provide a basic income to everyone so income inequality is reduced. The cause is noble; the solution fraught with problems. If you have freedom, you have inequality; if you have equality, you have no freedom. The real question is: how much inequality will society tolerate?

Read More