I sometimes play a little game with people to prove most tax returns are prepared wrong. Before any tax professionals reading this start writing nasty comments I confess I also make errors on tax returns. I get it. Tax season is more triage than solid tax planning. However, once tax season slows down it is time to put your tax preparer to work saving you money, building your net worth, helping you with early retirement and making your life easier from a financial and investing point of view.
Certain errors on a tax return are understandable. Maybe you did not know the tax law or you forgot to tell your accountant about a certain income or expense. Other errors are unacceptable. These include transposed numbers or forgotten elections. This is sloppy tax work and it drives me insane. Anyone plugging numbers on a tax return must review their own work and reduce the number of issues on the return to zero before sending it to the final reviewer.Read More
Charlie Munger, the right hand man of Warren Buffet at Berkshire Hathaway, is quoted as saying he never met any wise person who did not read a lot. Reading is how we learn about the world around us. We live better when we educate ourselves. Every year I read 20 – 30 books of substance and a handful of entertaining novels I think have a value lesson to teach. Reading is as important as breathing. Many of the greatest books I’ve read were introduced to me the same way you are being introduced to books here, from a blog.
This list is by no means comprehensive. Periodically I will add more posts with a list of books I feel are significant. Most of you have already read several books on this list. No surprise there; people interested in bettering themselves will discover these gems on a regular basis all on their own. There will be a few you have not heard of and now is your opportunity to add to your wealth of knowledge.Read More
The idea of starting a business or owning rental properties builds over a period of time. Slowly you convince yourself you can really pull it off. You talk with family and friends first before speaking with your accountant. Owning a business is a dream you have had from a young age. The work involved is something you enjoy so you are motivated. A business plan is drawn up with the help of an accountant or attorney. With a business plan in hand you visit your banker for funding.
For our example we will use an ice cream shop as our business. Suppliers are lined up, employees hired, equipment purchased and promotion in place. Business is hard, but you deal with problems as they arise. Before you know it years get behind you as your business grows until locals use your business as a landmark (turn left at John’s Ice Cream Shack).Read More
Several years ago my office building was burglarized. Two young men used a tire iron to break a window and enter the building. Tax offices do not have a lot of stuff worth stealing so they settled on two monitors and an old safe with an empty coffee can in it. People pay their bill by credit card or ACH in the majority of cases; a few still pay by check and cash comes in during tax season and is removed each day.
The young men caused thousands of dollars in damage for the massive haul of two monitors worth maybe $20 each. (New monitors are under $100.) So what were they geniuses looking for? Well, it seems they remembered I had a soda machine outside my building a decade ago and they assumed I moved the machine inside the building. Yes, they burglarized my building for some of that lucrative soda machine money.Read More
Back when I was in high school I started down the road to OCD, I mean toward being a wealthy accountant, by recording everything I did. Every penny that came in and every penny that went out went into the columnar pad. Tracking my progress was so important to me I refused to go to bed at night unless the “books balanced”.
Once I reached adulthood I continued recording my financial progress and expanded it to other areas of life. For decades I have recorded my daily electrical usage. No fancy devices are used because that would cost money and you know how we feel about spending money around here. Except for vacations, I can tell you how much electricity I used on any particular day for the last twenty years or more. (In the near future I will share how my electricity usage obsession helped me reduce my utility bill 80% for the farm and 65% for the office.)Read More
Several years ago while surfing the web I ran across a guy called Mr. Money Mustache, written by some crazy guy out in Colorado*. His claim to fame was that he retired at age 30, to which the Internet Retirement Police took him to task, claiming he did not ‘really’ retire at age 30. Not me. I sat back in my chair and wondered: What took him so long?
Fast forward to last weekend where my 21 year old daughter, Heather, complained about issues with her supervisor at work. It was the perfect opportunity for me, dear ‘ol dad, the Wealthy Accountant, to share some golden nuggets of truth.Read More
People serious about early retirement turn to rental real estate to turbo-charge the process. Saving and investing can get you to retirement fast. With real estate you can go from zero to retired in a few years. It does require careful planning to make it work.
There are three steps in successful income property ownership: buying right, management and taxes. Over the years I have seen many people lose money, even go broke, due to rental properties. I have also seen ordinary people make more money than doctors or lawyers with real estate.Read More