Posts Tagged ‘DIY’

Teach Children to Follow Their Dreams

This isn’t your parent’s China. China is an ultra modern society with the people curious about the world at large.

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.

Rural areas face the same issue. When few career opportunities exist young people must either leave the area or work in the coal mine. It’s the perfect recipe for unhappiness.

Heather, my oldest, is spending a month in China teaching a 5-year old girl English as a second language. The host family is treating Heather great.

Brooke, the youngest, prefers working in dirt. She works for my dad’s company landscaping. She also has a few side jobs working for people in town clean their yard and garden.

Both my girls are happy. I couldn’t ask for a better gift. I never forced either of my girls into living my life. The goal was to always help them follow their dream. The only constant from dad was the endless indoctrination of personal finance advice. As a result my girls are handling money better than 99%. I guess that means they’ll be the future 1%. Good for them.

Nothing to Lose

Steve Jobs said “you have nothing to lose” in his Stanford commencement address in 2005. Jordan Peterson has said the same thing in many of his videos. What both mean is that in the end we are all dead. Nothing we say or do will change that. Knowing someday you’ll be dead is a humbling attitude you can channel into productive projects. You have nothing to lose by following your dreams.

Failing is part of the process. As much as failure hurts, we know it will all be forgotten someday as the hands of times sweep all our actions into the depths of history. Nobody remembers the details of the numerous failures of Thomas Edison as he worked toward the light bulb. We just remember the one that worked.

Starting a business or side hustle is the ultimate leap of faith. Failure will be displayed to our embarrassment. Or will it? If I didn’t share my many business failures over the years none of you would know! I share the mishaps because that is where learning takes place. Success is a poor teacher so I show where things went wrong.

Go East, Young Girl. Far East

I tried to ingrain the “you have nothing to lose” attitude in my girls. I drilled the lessons into their heads daily without remorse. Early on I was worried they may not be getting the message. Then, as the years progressed, it became obvious they were listening after all.

Heather at a jewelry expo in Beijing. She always loves her art.

Heather worked in my office for a short while and still fills in periodically. She worked in my office at first for the same reason many kids work in the family business: it’s an easy option. It didn’t take long to learn she wasn’t interested in the tax or accounting life. Personal finance was as far as she wanted to go in the accounting world. Dad took a deep breath and allowed his sweetie to cut her own path. It was the right thing to do.

From high school on Heather was interested in East Asia. She built plans to go to college in Thailand and South Korea. Later she learned she could teach English as a second language in countries around the world. Good grades and an unrelenting drive made it a reality. Fundraising and financial tricks learned from dad gave her the chance to see China as an insider rather than a tourist for practically no money!

Her host family is awesome! Heather is seeing China from the perspective of a Chinese family. She lives with her host family, tutoring their five year old daughter, Dora. Dora is such a sweetheart. WeChat allows us to communicate without cost. Dora speaks good English and is a bundle of energy. Heather will be heartbroken when she has to return home. She will always have memories (and friends) in a land far away. The modern world makes it easy to stay in touch.

In middle school you would never have guessed Heather would take the path she did. On a family trip to South Dakota Heather was so anxious we had to stop at every turn off for a bathroom break. We even created a few new rest stops along the way. It was bad. (Heather will probably read this while still in China. She’ll be embarrassed when she does. Consider it dad’s revenge for making him stop every quarter mile.)

Heather inherited the early travel anxiety from dad. I’m crazy when I have to travel. It always sounds like a good idea until the departure date approaches. Mrs. Accountant can tell you many stories of the strangle behaviors I’ve undertake when on the road. I travel for business with rare exception. I keep myself hyper busy so I can control the anxiety. If I’m not chatty, running my mouth a million miles an hour, I withdraw into my own fantasy world. The best non-business trip I ever took was to Costa Rica. My parents invited Mrs. Accountant and me. This allowed for some normalcy with more family around. Still, I didn’t say much during the trip as I mentally withdrew.

Heather and Dora. The world is an awesome (and smaller) place.

Heather outgrew her travel anxiety. Thank god for that. Heather is there, in China, learning their culture and teaching at the same time. The world is much smaller now.

I get to see the world through her eyes and from the perspective of her host family. They seem a lot like people here. They have strong family ties and enjoy time together. They are interested in the world around them. More people speak Mandarin as a native language than any other; English in number three behind Spanish. Still, Heather traveled to China to teach English, whereas Chinese people speak English when they come to the U.S. Strange how they are such an enlightened society as not to demand everyone conform to their culture and language.

The activities Heather enjoys with Dora make me smile. They do so many fun things together. She sends pictures every day. Dora is a well-adjusted young lady. When we video chat Dora keeps hopping in and out of the camera view. We are just normal people to her. Our smaller world reminds us we are all normal people, regardless of culture.

Imagine if I would have demanded Heather work in the family business? All this would have been lost. Heather would have felt a longing for a different life while I dealt with an employee unhappy with her job.

As much as I want to point my girls in a certain direction, I can’t. There was no way I could have guessed Heather would end up where she is. She is better for it too. She called yesterday (about 9:30 p.m. in Beijing) because her car overheated in standstill traffic. I talked her through it. She eventually contacted her host family. The dad stayed behind to handle the auto repairs while mom brought Dora and Heather home. I am so proud of how Heather handled the situation. She really has grown up. She grew up because I allowed her to fly.

The Ground is the Same over Here

Brooke took a path I didn’t expect either. She never even tried to work in my office. She did stuff tax organizers into envelopes over the holidays each year. But her heart was never in the office—any office.

Brooke is interested in computers, but schooling is something she wants to put off for a bit. She has a few coins saved so she has time to decide the path she wishes to travel. In the mean time she likes working in the ground. Heather is traveling land in China while Brooke turns dirt in the backwoods of Wisconsin. It’s a living. And she enjoys it!

Brooke left the door open for college a year or so down the road when she is more certain she wants to learn more about computers. Landscaping and nurseries are acceptable ways to fill a day and gain an income in the mean time.

Again, if I would have forced the issue, requiring Brooke to take a path I thought appropriate for her, she would have been miserable. There is no way a parent can know what will appeal to their children.

There is a way we can help, but is takes a lot of fortitude.

The Guiding Hand of Parents

You can teach your children how to follow their dreams. Engage them. Require them to think about the things they want to do in life. Pay attention to their interests and encourage them to pursue their dreams.

Heather and Dora rollerblading in the middle of Beijing at night. Those two are having a great time and are the terror of China. They’re both cuties.

That doesn’t mean the kids get a blank check to do what they want. Quite the contrary. My girls had to earn whatever path they choose to walk. I didn’t pay Heather’s way to China.

College wasn’t a free ride either. Heather struggled with getting to college. I didn’t support her attempts at several higher education ideas financially. She had to earn her way before I stepped in and helped. Once she buckled down and got serious about full-time college she was able to raise the funds necessary to attend school without selling investments to get there. She got so close before she couldn’t do it anymore. I immediately stepped in and provided the rest. For the record, my contribution was very small, a few thousand dollars. Think about that. Heather will leave college with a degree, no student loans, no debt and dad will still be solvent having invested less than $5,000. And Heather got to travel to China (Netherlands next year). She also has a job tutoring people in China from home (online) while she finishes school. She has a bright future!

While Heather is starting to create a path she is likely to travel most or all of her life, Brooke is just starting out. She is 18 and experimenting with her choices. I can’t say as much about her because her story is only beginning. I see the same pattern in Brooke that I saw in Heather. The only difference will be the ultimate path taken.

Parents worry about their kids. It’s only natural. Here is what I did:

  • Provide a supporting hand.
  • Be consistent.
  • Freely offer advice and guidance without doing it for them.
  • Let them explore the available options.
  • Don’t force them into the family business.
  • Let them fail. Failure is the only way to learn.
  • Let them fly. All the way to China, if you must. Your heart will eventually begin beating again.
  • Love them regardless their choice.
  • Share your stories, your wisdom.
  • Use humor.
  • Hug them. It matters.

Most of all, always welcome them home. It’s hard letting go. It is for the best. It is so much sweeter when they return.

 

 

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?

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.

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

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

Create Your Own Basic Income

The universal basic income doesn’t solve all inequality problems. It might even make the problem worse.

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?

In the United States we have a modest solution in our tax code called the Earned Income Credit. People with a low income qualify for a refundable credit to compensate for their poverty level earning. It also happens to be the area of the tax return with the most fraud.

Around the world experiments with a universal basic income are in the planning stages, ready for implementation on an experimental scale or recently concluded, as we saw in Finland.

What is certain is that more people than ever are ready to try a universal basic income. The Finland experiment was concluded early without plans for a wider roll-out. I take this to mean the results were less than hoped for. If anything, it probably exacerbated inequality problems as it encouraged more people to work less.

This isn’t a debate about the merits of a universal income. The video below is one of many discussions on the issues. I don’t agree with all the comments in the video, but they do provide ample starter fuel for an argument discussion. We will focus our attention on something more important today: creating your own personal basic income.

Back to Basics

At times I will sound like a rabid liberal when discussing universal basic income and an unrepentant conservative at other times. I am neither. Rather, the issues are complex and it is nearly impossible to stand firmly on one side of the aisle at all times.

The FIRE (financial independence, early retirement) community is a perfect example. These people (most people if we are honest) look forward to the day when they can either retire or live a semi-retired lifestyle. There is nothing wrong with such an attitude. I even argue it’s a healthy one. A universal basic income will only make it easier for people to achieve their magical goal. An extra thousand dollars a month can do wonders for those determined to build a nest egg large enough to retire early.

Unfortunately, it also encourages disengagement. If a basic income doesn’t work as planned in a place like Finland (where many feel it was a failed experiment) then it is unlikely to work anywhere at all. Higher taxes to pay people not to work will not bring the best out of a society. Social safety nets are necessary for a moral society, but there is a difference between feeding hungry people and providing unemployment benefits and giving everyone a handout.

All that said I still love the idea of a basic income. Notice I didn’t say “universal”. Don’t take this to mean I think people should be left out. Quite the contrary. Anyone who really “wants” a basic income should be allowed to have one! And I’m going to show you exactly how you can get your very own basic income.

Perception

In its broadest terms a universal basic income provides everyone in the community with a minimal amount of money every month just for being above ground. The cost is prohibitive, but if machines do all the work due to increases in technology and automation, there is nothing left for people to do to earn the money needed to buy the stuff automation is producing. The idea is to tax the crap out of the automation processes and spread it around.

Since this story has been around in one form or another since mankind decided to move from manpower to draft animals, we have plenty of reference points to learn from. The most import thing learned is that people over blow the consequences. In 2008 the world was coming to an end and now we are at full employment and then some. The next economic slowdown will bring the basic income idea front and center again. Don’t fall for it.

But if you are anything like me you wouldn’t mind a juicy check showing up every month like clockwork as a base line to the household budget. The universal basic income is always some modest payment sure to bankrupt the government while providing modest improvements (if any) to families. What I propose is far more draconian. Rather than few hundred or a thousand dollar per month, I suggest something a bit north of there.

A universal basic income is small thinking. It doesn’t do enough to really solve the problem. But if $3,000 or more shows up each month early retirement is in the cards! So how do we get the government, anyone, to send us $3,000 or more each month?

A Multitude of Basic Incomes

The small thinking mindset requires the government to tax and redistribute massive amounts of money. Worst of all, the beneficiaries of the basic income are reliant on one source for their bonus. This is just plain stupid.

What you need is multiple sources of basic income flowing into your bank account on a regular basis. The source of your basic income should also be more secure than the next vote in Congress!

Here is the secret. The wealthier you are the more likely you are to be receiving the multiple payments of basic income. In fact, the total of all these streams of income aren’t so small. Now I, as a wealthy accountant, will share the secret to the crowds. If you read my body has been found in a ditch somewhere you’ll know the bourgeoisie got to me. Too bad the word will already be out.

By now I’m certain you figured out what I’m talking about. Multiple streams of income are the hallmark of wealthy people. There is nothing preventing you from engaging in the same activity regardless your economic status. A lower income means you start slower, but you can still start.

Sources of Basic Income

Sources of basic income are everywhere. Index funds provide an income stream in the form of dividends. A side hustle can line the household budget nicely.

Passive income is where it is really at. Dividends and interest are nice. Rental income can be much larger than dividend income with a smaller investment. Income property can provide a steady passive income stream without hardly any net worth! (I recommend you pay down the mortgages as fast as possible for a margin of safety.) The trick is buying the right properties.

Free money! Woo-hoo!

I’ve provided plenty of ideas in this blog for generating additional income. A side hustle as a forensic accountant is a fun part-time job that pays like a full-time job. Selling tradelines on the side is another way to feather your personal basic income program. No tax increases required. Here is one last link to an article on a dozen high income part-time seasonal jobs.

The ways to produce passive income is nearly endless. You should always maximize retirement plans for maximum tax benefits. Even in a nonqualified index fund dividends and capital gains are taxed at a lower rate than ordinary income. Income properties generally have higher cash flow than reportable profits on a tax return.

The universal basic income is a grand idea whose time will never come. When machines and automation destroy jobs, new opportunities arise. People in the vinyl record business lost their job in the 1980s. More jobs were created than lost in the CD business. Digital is doing the same today. Yes, the horse industry died when the automobile showed up, but the automotive industry is the largest employer in the U.S. today. And it’s not just the manufacturers. Repair shops, gas stations and the oil industry have more than made up for the lost jobs raising, training and feeding horses.

Technology and automation increases efficiency which means we have a better quality of life and standard of living. This is a good thing and not to be feared! I know it seems scary out there, but remember all the Chicken Littles frantic the sky is falling. The sky is fine. And brighter than ever, I might add.

Social safety nets are the moral thing for a society to provide. A constant struggle for the “right” amount of safety net will drag on until the end of time. What you need to understand is a basic income is yours to have. You decide the amount.

Your personal basic income will start small with one rent check, one dividend payment, one tradeline sale. Reinvesting your great fortune only grows your basic income larger each month. Soon, you can have a basic income greater than your financial needs. Then you can step back and let the next person enjoy your old job while you live on the multiple streams of income. In the new basic income world, fewer people will need a traditional job. But you will still provide value to society without working yourself to death.

 

 

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?

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.

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

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

Should I Prepare My Own Taxes?

We had some cold this winter.

The age-old question has flooded my in-box: Should I do my own taxes?

I try to give a short encouraging reply, but it always feels contrived. Normally I write: If you are comfortable preparing your own taxes you should at least see how the process works by trying. If you run into an issue or don’t know the tax law on a certain area of your return you can always call in a professional.

You may have already received a similar email from me if you asked the question. In the name of efficiency I should keep my reply in a file for a faster copy and paste. But I don’t. I write the thing out every time and it’s starting to sound like a broken record.

The short answer salves my conscious by answering a call from the dark. There real answer, however, is a bit more involved.

If I do this right you should be in a better position to determine if you should be doing your own tax return so pay close attention. I’m only going to say this once.

Either Way I Win

The reason so many people email me with “the” question is because they see I offer a DIY tax program on this blog. The banners and links are an affiliate program. I also get paid when I prepare a tax return. I win either way.

Don’t take this as an arrogant slight. My intention is to disclose my relationship to whatever decision you make. Someone in my profession is getting paid regardless.

Comfort Zone

My biggest concern when people prepare their own return is they think they know what they’re doing when they really don’t. I see self-prepared returns often enough to see some really ugly problems the IRS will take a serious interest in.

Refi student loans at low rates.

That doesn’t mean you should hire a pro. Many errors I see on self-prepared returns have nothing to do with tax law! Unreported income and missed deductions are the two biggest issues I see. This isn’t a tax law issue; it’s a sloppiness issue.

A recent return my office amended, the client reported all the rental deductions (except depreciation) but missed adding any rental income. It was a serious matter!

My first recommendation for you when considering preparing your own taxes involves organization. If your tax records are stuffed in a paper bag or scattered everywhere you probably need a tax pro to crack the whip. Guys like me are in a better position to make a judgment call on missing information. There are disclosures a tax professional can attach to a tax return telling the IRS how the situation was handled. If the tax pro uses a reasonable method it virtually avoids an audit on an issue with no clear answer. Remember, the last thing you want is to be in an audit going, “Ahhhhhhh . . . .”

Call in the Troops

There is nothing wrong with doing your own return to the best of your ability and then hiring a tax pro for the return you will file. (Read the last sentence again and again until it sinks in.) Yes, you might have two prep fees for the year: one for the DIY program (required when you print) and the accountant. But you will also see where you missed things.

An alternative is to hire a tax pro when you have a unique issue and then go back to preparing your return for a couple years. Some accountants hate this. I don’t. What you consider hard I consider a normal day at the office. My computer updates your personal information annually so when you come back is six years I just pick up where I left off. I probably have data you already forgot about allowing me to bring you back up to speed.

Finally, there is no harm in having a tax pro review your return prior to filing. Yes, you will be charged. You want to be billed for the review! A knowledgeable tax pro will demand payment for her time. Payment also increases the chances the tax pro will give your return the review it deserves.

Preparing your own tax return is scary for some people. It shouldn’t be. Most software, including the program on this blog, has plenty of help features. If you plan on preparing your own return I hope you consider the 1040 program links and banners here. (Man has to eat.) If not, no worries. (Zig Ziglar always said you must ask for the sale. I never argue with Zig.)

Even if you hire your tax work done, consider opening a file at 1040 (the DIY software here) and seeing how well you do compared to the pro. There is no cost until you print and/or e-file. You might be better at it than you think.

Regardless, you can always call in the troops if you find yourself in too deep. Hiring a pro if you are concerned about anything on your work is not a sign of weakness! At the very minimum you have a better understanding of what the accountant is doing on the other side of the desk.

Tax pros get it wrong, too! Much of what we get wrong is the result of a misunderstanding or outright lack of knowledge of your personal situation. You know you better than I ever can. If I don’t find the right questions to get the answers needed for an accurate return I’m going to get it wrong. Even practicing DIY preparation can open your eyes to additional tax liability reductions. No tax pro would ever be offended by that!

The Boss is Back

After several years of adjustment to a national footprint my firm is finally gaining traction. I’ve trained new staff, added new technology (something old guys set in their ways resist) and focusing on our niche, we are ready to accept a few additional clients this year.

I’m opening the gate (LOOK OUT TEAM!!! THE HERD IS LOOSE!) a smidge. Technology will free serious amounts of my time to work with more clients directly. Scanning technology enters virtually the entire return so my task is to review and organize the return for maximize efficiency and audit proofing.

Now that the computers will enter most data I stand a lower risk of a carpel tunnel relapse. (I never had carpel tunnel issues and hope to keep it that way.)

You don’t want to pay me for data entry services; you want me for my experience and tax knowledge. By unleashing the IT guys we can do more, better than before.

Game Plan

If you need an accountant, contact me. We aren’t the cheapest (just so you know up front), but I dig deeper than most accountants you’ve met. I don’t stop at a merely accurate return. I’m always looking for items missed. In short, I give every return moving through my office a proctology exam. Don’t worry. I have plenty of latex gloves.

Be prepared for a summer consulting session considering the new tax laws if my office handles your tax return.

I strongly encourage you to try your hand at preparing your own return. If you have a business or rental properties you might want to forgo the DIY option. A good tax pro will know many ways to cut your taxes the DIY programs can’t possibly ask in these situations. It is still a valuable exercise to walk through the process yourself, however, to see if there are things even the accountant didn’t ask.

If you start to feel uncomfortable you can always call in the troops.

An Even Better Game Plan

2017 tax year will look and feel like previous years. You can continue preparing your own return without much issue. The few changes from the TAX CUT AND JOBS ACT that do affect 2017 should be handled automatically by the DIY software (all of them, not just mine) as long as you enter the data correctly.

2018 is another animal. You might want to plan ahead. Secure an accountant for the 2018 tax return or at least have a consultation on issues pertinent to you.

Finding a qualified tax pro is hard to impossible. I feel your pain. I need to hire tax pros to do the work and face the same issues. But it’s not impossible.

Accountants will be under a lot of pressure over the next year as small business owners plan for the tax law changes affecting them. Time will be at a premium.

A summer consultation is probably a good idea. Be sure to provide the tax pro a copy of your filed 2017 return. Nobody has been shot amending a return to correct missed or incorrectly handled data except for three guys in Ohio, but they had it coming. (Sorry for picking on Ohio. I still love you guys. (Maybe I should have said Delaware.))

If you find yourself in too deep preparing your own return, call a tax pro! Yes, we are all busy during tax season. But nobody has ever been shot for filing an extension except for those three guys again from Ohio.

Oh, who am I kidding? Use good judgment preparing your own return or call me (or another tax pro).  It’s your only hope, especially if you’re from Ohio.

 

How to Save Money with a Do-It-Yourself Home Energy Audit

Winter seems like a lifetime away. A quick check of the calendar and a shiver will run down your spine as only a few months remain before the heating season begins in the northern latitudes and creeps south.

Saving money is my favorite pass-time. What other hobby provides so many tax-free financial benefits? 

If you are reading this at its regularly scheduled publication date, Mrs. Accountant, the girls and I are heading to or are enjoying the eclipse. Trevor McDonald contacted me a few months back asking to write a guest post. We worked together (he wrote, I edited and provided guidance and recommendations) until he had a solid piece you will enjoy reading. 

I’ll let Trevor take the driver’s seat and explain.

How to Save Money with a Do-It-Yourself Home Energy Audit 

A professional home energy audit costs $600 or more while saving up to $1,000 annually. Smaller homes can run less, but larger homes often cost more. The bigger the home, the bigger the potential savings.

If you could skip the $600 fee you’d only have to pay for energy-efficient home improvements.

So if you want to save money from the start, forget professional home energy audits and opt to DIY.

Here’s how to conduct your own home energy audit.

Locate the Air Leaks

You may already know where your home is leaking air. Make a list of these areas. You may cut your home energy bill anywhere between 10% and 20% each year by reducing these drafts. You’ll also be more comfortable (no one likes to sit near a drafty window).

Run your hand around windows, doors, plumbing fixtures, electrical outlets and baseboard gaps. If you feel a draft, add the drafty spots to your list. Perform this step on a cold day or during the evening when it’s cooler.

Note: You may also use a lit candle to find small air leaks in your home. Turn off your central air or heating system and place the candle near any areas that could be leaking. If the light of the candle dances, you have a small air leak.

Check Your Attic

Depending on your home’s age its insulation may not be energy efficient. If you have an exposed area, such as a spot in the attic, assess the insulation by checking its R-value. The higher the R-value, the greater the insulation. Check the Department of Energy’s website for R-value recommendations in your area.

Check under the insulation to see if there is a vapor barrier. This may be some type of paper attached to fiberglass batting or it may be a plastic sheet. If there’s nothing, consider painting your ceiling with a vapor barrier paint. This paint helps maintain the above insulation’s integrity by keeping water vapor out.

Look around to see if there are any unsealed pipe or duct openings. Seal any electrical boxes with flexible caulk.

Finally, check your attic’s hatch. Its insulation should be at least as thick as the rest of your home and the edges should have weather stripping. Before you leave, make sure there’s a tight seal when you close the hatch.

Check Wall Insulation

Turn off the circuit breaker and choose an outlet on an exterior wall. Test the outlets to ensure they have no juice running to them before you take the next step.
Next, remove the cover plate from the outlet and carefully probe into the wall with a screwdriver. If you encounter some resistance, your wall is likely insulated. You should notice resistance right away. This means the entire cavity is likely insulated.

Insulating a finished wall requires some handy work, but the energy savings should be worth the effort. Blow-in fiberglass, closed-cell foam or cellulose insulation works best in these cases. You’ll need to make a small hole between each pair of studs for the machine’s nozzle. These holes are typically placed halfway up the wall to adequately regulate density from top to bottom. Save the cutout you’ve made and use it to patch the wall after it has been re-insulated.

Check the Basement

If you have an unfinished basement or crawlspace that is open to the exterior, look for insulation under the home’s flooring. If there’s no insulation, insulate with an R-value of 19 or greater.

If you have an enclosed basement or crawlspace with heating or cooling elements, insulate the space’s perimeter instead of the flooring.

Also insulate the water heater, hot water pipes and furnace ducts.

Inspect Heating and Cooling Equipment

If you have a forced-air furnace, check and replace filters about once every month or two (more often during cold spells). Have the equipment cleaned by a professional each year.

Consider replacing your heating or cooling equipment if it is more than 15 years old. Newer units are more energy efficient so you should save money in the long run.

Look around for streaks of dirt on your ducting. This may signal an air leak. Seal any air leaks with duct tape. If your ducting travels through an unheated space, insulate those areas well. This is a simple step that will help ensure your unit is working at its highest efficiency.

Replace Lighting

Save money by changing out old light bulbs with energy-saving incandescent, light-emitting diodes (LEDs) or compact fluorescent lamps (CFLs). Shop for new bulbs based on lumens instead of watts to ensure you get the right amount of lighting in each room. Lumens are a measure of a bulb’s brightness. This measure is a predictor of a bulb’s performance whereas watts are a measure of energy.

Assess Appliances and Electronics

We worry about keeping light bulbs on, but appliances cost more to run and can stay running for up to 24 hours.

A 46-inch LCD TV alone can waste about $11 per month in electricity when plugged in but turned off. Consider using a smart energy strip to conserve power on “sleeping” appliances and electronics.

Most repairs will cost a small amount of money to perform, but they will help reduce your energy bill every year. And remember, you’re already saving money by performing the energy audit yourself, so kudos to you!

Trevor is a freelance writer who focuses on health and wellness, energy, and finance. He enjoys using his talent for words to help educate others. In his free time you can find him writing for different publications or outside enjoying about any type of fitness activity imaginable.

Prepare Your Own Taxes the Right Way

It’s that time of year again where we need to reconcile the previous year’s income for the government. The task can be daunting, but with armies of tax professionals and online software, many people can tackle their tax return with few issues.

The trick is finding the right tax software when you plan on preparing your own tax return. The most popular online packages are dummied down versions of better tax software programs. The Q&A required by most online programs can become daunting (and time consuming) if you have any tax knowledge at all. The biggest problem is finding tax software that is professional grade that offers just enough help to not be invasive.

I want to introduce you to an online tax program I think is superior to other online software: Drake Software. The banner below is a direct link to the software for individual users. It was featured last year on Mr. Money Mustache. It also happens to be the same tax software I use in my office.

Over 50,000 tax professionals use Drake software to file over 26 million tax returns.  My office was one of the earliest adopters of the Drake interface (one of the first 200 if my ID number is any indication).

Back in the late 1980s I sought out a professional software package that was not only robust, but offered economical e-filing. Back in those days it was common for software to charge $35 or more just to e-file. Drake was an industry leader, charging only $1 per e-filed return. My office could offer free e-filing before anyone else due to Drake and their powerful software platform.

Time has only made this software better. Of course, my office still e-files for free, but it is so much more. Drake branched out into other areas of the accounting office. They also offered accounting firms like mine an opportunity to provide an alternative in the DIY tax preparation segment.

What I liked from the start was that Drake incorporated the entire professional grade platform in their online version for people preparing their own return. No other online software offers such a robust program to the general public, in my opinion. They market the program under the 1040.com name.

Advantages

There are two major advantages to this software in my opinion.

  • Drake Software has the familiar Q&A of other online tax software, but is not nearly as burdensome as the other DIY programs. You can bypass most of the Q&A to enter information directly on the tax return, saving time. Plus, when the return is calculated, the software gives you two types of diagnostics. The first addresses issues which must be corrected on the return before filing. The second is a list of reminders and suggestions based on the information you entered on your return. These two powerful tools allow you to prepare your tax return faster and without error. You see what tax professionals see.
  • The cost of the 1040 preparation is among the lowest in the industry. Couple that with the professional grade software provided and I feel it is the best value in the market today.

Disadvantages

There is one disadvantage you should be aware of. The only way Drake can make it easier for you to prepare your return in less time is to waste less time is mindless Q&A. The Drake platform has to assume you have at least a basic understanding of tax preparation and filing rules. Drake helps a lot with their Q&A, but falls short if you have no understanding of the tax preparation process. In my opinion, you need to hire a tax professional if you can’t use the online Drake program, but if you want to DIY, Drake will make it easy to prepare the return faster.

I think most people understand what a W-2 is and want to plug the numbers in as fast as they can along with their other numbers so they can finish as quickly as possible. Entering data quickly and using the software generated diagnostic pages makes it easy to handle most tax situations with only basic tax knowledge.

Fees

It’s easy to brag, “We are cheaper.” Here is the fee structure for Drake.

  1040EZ Free ($9.95 per State)
  1040A $19.95 ($14.95 per State)
  1040 $39.95 ($19.95 per State)
  Extensions $14.95

There is no fee until you either print or e-file the return.

Also, Drake offers all the bank products stuff, too. I don’t have that pricing available and never recommend spending money on tax bank products when direct deposit is so fast.

Disclosure

I am biased for a couple of reasons. First, I use the software in my office and like the way it works. Second, I get paid a percentage of the fee you pay to Drake Software. The DIY online tax program is the largest source of income for this blog. It pays the bills, keeps the lights on, and gives me a reason to keep writing. I think it is only fair to let you know up front my relationship with Drake Software. I would not recommend the program if I did not believe in it; I wouldn’t use it in my office either.

If you want to support this blog, be sure to start with the link on this page. If you don’t I will not receive any income. Once you have opened the file there is no problem. You might also want to bookmark this page for future years when you file. For some reason I keep getting hungry every year so I really appreciate return customers.

Regular Programming

Now that I got the obligatory promotional piece out of the way I can get back to writing stuff I prefer writing. I have quite a few ideas in the queue. I also received an email a few days ago with a question I think many people have on their mind. It will probably be a long post, but necessary with all the information I need to provide. Fingers crossed I can get it done over the upcoming weekend. So no one hurts themselves wondering what this grand topic is, I will whet your appetite.

Nick H asked my opinion on tax-advantaged accounts versus regular accounts (non-qualified or non-tax-advantaged accounts.) Specifically, he wanted to know if it is always a good idea to max out tax advantaged accounts before investing in regular accounts. You would think the answer is simple, but it isn’t. The answer changes depending on your situation. The answer also requires digging into tax loss harvesting issues—Betterment, for example. Sometimes you want to tax loss harvest; sometimes you want to increase your basis instead. I am so excited I am salivating just thinking about writing that darn post. There are so many powerful ideas I want to share that I know you will find valuable—and profitable—in your journey to financial independence and beyond.

Thank you for supporting this blog and my work. It is appreciated more than you can imagine.

2016 Review; 2017 Plans for The Wealthy Accountant

statistics-706384_960_720Well, the first year is in the books. The Wealthy Accountant came to life on January 15th, 2016 in anticipation of a shout-out by Mr. Money Mustache. The project was on the drawing board for years, however, the workload caused me to drag my feet. But when I start I am all in.

This isn’t the first blog I’ve run, nor is it the only one I write at this time. Running a blog is work and something I held back on because I knew once I started writing this blog it would take over my life. But here I am and I am feeling good.

Other people writing a blog and curious readers are usually interested in statistics. The growth pattern of The Wealthy Accountant is taking a different path from other online venues I used. For example, the website of my tax practice has low traffic and no ad revenue. Just about every visitor of http://taxprepusa.net/ wants to be a client of my firm so we don’t want hundreds of thousands of visitors.

Then there is a content farm I wrote a hundred or so articles for years ago. After Google slapped the funny off the faces of content farm writers I moved my writing elsewhere. Still, HubPages sent me $439.93 in 2016 on 87,719 pageviews. Not bad for not doing a thing on HubPages in five years.

And then we have my flash fiction blogs to disclose before we discuss The Wealthy Accountant. I fancied myself a novelist in my youth and dreams die hard. I write two flash fiction blogs daily. Even with stories under 500 words, my output is still close to the equivalent of two full length novels. The names of the fiction blogs will remain a mystery to protect the innocent, namely me. What I will share are a few numbers:

Fiction Blog A: The best blog I have for traffic is the first fiction blog. 344,872 users viewed 1,643,664 pages in 2016. This is massive for online fiction where traffic of any kind is hard to find. The money writing fiction online is not so good. Google revenue was $2,075.09 and a third party totaled $120.40. The third party only has a few months under the belt so things should grow in 2017. Amazon made money, too, but I included the revenue under The Wealthy Accountant (TWA). I keyed a few trackers wrong early on so the numbers are not 100% so they all go to TWA.

Fiction Blog B: Revenue for the fiction blogs is combined. Traffic to fiction blog B consisted of 433,053 pageviews from 157,870 users in 2016.

statistics-754120_960_720The Wealthy Accountant by the Numbers

I published 174 posts in 2016 for a total of 248,646 words. This is the amount of material in three average sized novels. Coupled with my other writing I am pumping out the equivalent of over five novels a year. Throw in writing at the office and one begins to wonder why I haven’t mentioned carpel tunnel.

Here are some additional statistics:

Users: 32,729

Pageviews: 215,509; Pageviews climbed throughout the year at a slow pace. A few mentions by Mr. Money Mustache spiked my traffic in February and late October. Traffic moderated afterwards, but at a higher level each time.

First Post: January 15th, 2016; Tax season kept me busy so I published less into spring and early summer. In mid-summer I turned prolific and went crazy. Then burnout and the office took over. I settled for a three post a week schedule and it allows me to do a better job researching and writing.

Comments: 504; Some comments were my responses to readers.

Revenue: I think the numbers for the first year are acceptable. They certainly need to grow, but I am happy with the start TWA has. Here is where the money came in:

  • Google: $572.02; Google revenue started really slow and payouts did not start until late in the year. Remember my rules to writing a blog: first content, then traffic, then monetization.
  • Amazon: $1,638.96; some of this revenue comes from the fiction blogs as mentioned above.
  • Credit Cards: $480.00; I offered credit cards later in the year so I am starting to get a modest income from them.
  • Prepare Your Own Tax Return: $9,034.09; Here is where the tire meets the pavement. As a blog that focuses on taxes it is no surprise this would be a good area to generate revenue. I am unable to differentiate where the traffic comes from with this revenue stream. This income got a significant push from Mr. Money Mustache also.
  • New Clients: I added over 200 clients, plus consulting. The revenue from this area pushed well into the six figures. I will not give exact numbers because there are more expenses running a business preparing tax returns than running a blog. Yes, I do know the numbers, but after thinking about it felt uncomfortable sharing.

Failures

Starting a project of this size always has a few setbacks and even an outright failure or two. I was completely disillusioned when I stared the TWA. I had no idea what to expect. A major personal finance blogger (MMM) was going to give me a shout-out. I expected blog traffic, but never anticipated the level of demand for my services personally. I’m still digging out and apologizing more than I should have to. I need to learn the word “no” better. Answering every request is impossible. What the above numbers don’t reflect is over 12,000 emails from people interested in personalized tax/financial services. There is such a thing as too much of a good thing.

My biggest failure in 2016 on TWA is deciding to publish every day in late summer and autumn. I made a few mistakes when writing. Normally a blog post contains plenty of opinion and my personal worldview. When I dig deeper I need to do more research. Thinking of a client when writing means I leave out important facts some readers might face. Worst of all, I wrote a paragraph of tax advice that was 100% wrong. A reader called me on it and I made a tiny change, but stuck to my guns. I reread the post in the last week and rewrote the entire paragraph. Some of the information was completely wrong. I don’t know what I was thinking. That is why I slowed down the publishing pace. Tax articles take more research and time. It is different from dealing with one person only and their unique situation. When writing I need to consider other possible issues readers will face instead of a narrow view based on experience with a particular client I recently worked with. For this I apologize and promise to work hard to never let it happen again. I do learn from my mistakes.

The last failure of 2016 to mention is traffic. Traffic could easily be higher. I know how to get it, but focused on writing only and not much else. Deep down I would rather write than manage a blog. From now on it is man up and do the job. It’s not that bad. It’s just that I like telling stories too much. I like talking.

Goals:

The Wealthy Accountant: Tim Ferris always says you should set really big goals even if you don’t know how you are going to get there. So here are my 2017 goals for TWA:

  • 1,000,000 pageviews
  • 150 high quality posts
  • $25,000 revenue
  • Roll out the strategic alliances network readers and other accountants can use.
  • Attend more conferences (Camp Mustache, World Domination Summit, FinCon, et cetera)

Business: My tax practice is tied in too tight with this blog. My first goal is to separate the two at least a bit so TWA can act as a stand-alone company. Right now TWA is integrated into my tax practice. By year-end I plan on separating the two businesses with their own management.

I started a network of strategic alliances I will share over 2017 in blog posts. What I am building any reader can use and accounting firms should find it a powerful tool to increase efficiency in their firms. The payroll portion is done and once my clients are converted I will share so you can piggy-back what I built. Bookkeeping, taxes and other areas of the industry will follow once I have tested each program.

More employees have been hired and training is ongoing. The client base will increase, but I have no definite number goal because the size of the account makes a difference. I also don’t want to force the issue. If the workload is too large I have to say “no” to new clients to do a good job. Fewer is often times better. It is also important to separate from clients who do not fit the corporate culture. Now that my firm is growing fast again I need to stay vigilant in ending an engagement with a client who takes too much time.

Personal: Most of my personal goals are just that: personal. I save well over half my income and invest the majority in index funds. If opportunities arise I am willing to add a minor portion of my net worth into a new investment. My savings goals remain the same and income goals I wish to keep personal.

There are two goals I want to share publically. The first deals with investments. For many years my dad, brother and I owner a large number of investment properties around the state as a partnership. We sold the last property in 2001 and I had a few personally for a few years after that. I would like to add at least one rental property in 2017 to my investment mix as long as it returns an adequate rate of return, including property management expenses. I want a few rentals, but do not want the day-to-day management headache of owning investment properties. This goal is fluid. If I don’t find the right property at the right price I will take a pass.

My most important goal deals with health. Earlier this year there was a scare I passed away. It was a joke back in October to illustrate a point. But health is no joke. Quality of life is more important than quantity. An ample measure of both would not hurt my feelings.

Several years ago I pushed 220. For a farm boy this is still heavy as I carried a good portion around the waist. I decided to take up running and built my endurance to a level where I could run a marathon. My weight dropped to under 170 where I started to not feel well. When you run that heavy you eat a lot of everything.

My knees and lower back started to feel the stress of running so I cut back and don’t run often. I lift weights three times a week and get plenty of walking and other daily exercise. The problem stems from eating. I am still eating like I am running (too many carbs) and now push 210 on the scale. The weight is not as bad as before as I have a lot more muscle mass. Still, the midsection is showing off again. For 2017 I need to add at least a bit of running to my schedule and my diet has to change. Soda is out; alcohol (oh, it pains me to say this) needs to be curtailed; and a focused, healthy diet followed. My weight goal is 190. I’ll give updates.

Roundup

It was an awesome first year at TWA. I haven’t felt this alive running my business in a decade or more. Once you reach financial independence and have an established business it all becomes automatic. It feels good to step outside my comfort zone. As much as I loathe travel I will doing more of that too. I am speaking at Camp Mustache SE on organizing life for maximum profits and minimizing taxes in less than two weeks. You cannot imagine the anguish this Wisconsin boy feels being forced to spend nine days in Florida in January. 2017 will be the best year ever. I hope to meet many of you along the way. Keep reading. This is a cult you want to belong to.

Save 98% on Laundry Costs

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Supplies you will need to make your own laundry detergent.

What people spend on laundry is insane. Today I will show you how to cut your laundry costs to 2 cents per load, plus the cost of the machine (your own or the laundromat). Mixing your own detergent and a clothes drying rack combine to reduce laundry costs so much there is no incentive to reduce it anymore.

Making your own laundry detergent and fabric softener is fun and take only a few minutes. As an added bonus, you feel like a mad scientist as you mix your concoction. The best part is I will talk a whole lot less today as I let the pictures do all the talking for me and any time you can get me to shut up for a day is a good day! (A picture is worth a thousand words so I am technically talking your ear off.)

You will need a few ingredients sometimes hard to find. I have included links to Amazon so you can get to work fast. Amazon prices are pretty good on this stuff. The two hard-to-find items are usually Washing Soda and Fels-Naptha. The rest of the stuff should be available locally.

Here is the mad scientist recipe for laundry detergent:

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Grate the Fels-Naptha into the kettle. Then add 8 cups water, Heat, don’t boil, until Fels-Naptha is disolved.

1 bar Fels-Naptha

½ cup Baking Soda

½ cup Washing Soda

½ cup Borax

5 Gallon Bucket

A few drops of scent (optional)

For folks living in town this recipe can be diluted to produce 3 gallons of liquid detergent. Stained clothing: Rub the stain with Fel-Naptha. Grease covered or heavily soiled clothing: Add a small amount of additional Washing Soda to the wash machine. Even if you use store bought detergent you can use these tricks to get clothes clean. Use sparingly. A little goes a long way.

I am showing you the liquid detergent formula. The same formula mixed dry can also be used. The dry formula is VERY concentrated. Don’t overdo it. It would be like pouring half a bottle of store bought stuff into the machine. Not pretty.

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One bar of Fels-Naptha grated.

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Add 8 cups hot water to grated Fels-Naptha and slowly heat until dissolved.

One final tip before we start mixing. Use an old kettle, wooden spoon, wire whisk, and grater. You will not want to use these utensils for anything else. It is a one-time expense. Consider it an initiation fee. I have an old stove in the garage we use for canning and for wild concoctions like detergent. You may wish to open a window if you do this indoors. The smell is not too bad, but there is an odor.

Directions:

Step 1: Grate 1 bar of Fels-Naptha into the kettle.

Step 2: Add 8 cups of hot water to the grated Fels-Naptha. Place on stove and slowly heat. Do NOT boil! Stir until the Fel-Naptha is totally dissolved.

Step 3: Pour the water with dissolved Fels-Naptha into the 5 gallon bucket.

Step 4: Put another 8 cups of hot water into the kettle and slowly heat. Add ½ cup Borax, washing soda, and baking soda each into the kettle. Stir until dissolved. Do not boil.

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Pour dissolved Fels-Naptha mixture into 5 gallon bucket.

Step 5: Pour the kettle of dissolved Borax, washing soda, and baking soda into the bucket with the dissolved Fels-Naptha.

Step 6: Stir the combined mixture in the bucket.

Step 7: You have worked so hard the last fifteen minutes I think you need a break. Come back tomorrow and see what has happened to your concoction.

Step: 8: I see you are back early. No problem. Notice the thick layer on the top of the bucket. The Fels-Naptha really expanded! You want to take the whisk and stir that good into the yellowish liquid underneath. I prefer using my hand to squish the stuff up first and then whisk the hell out of it. Your call.

Step 9: Add scent (optional). I save my money and pass on the scent. Besides, I smell pretty without any odor to cover my awesome bouquet.

Step 10: Add water until you have a total of three gallons.

Step 11: You are done. Your detergent is ready to use.

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A day later there is a layer on top you need to stir in.

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Stir vigorously. Add water until you have three gallons. Now do some laundry.

Usage Instructions:

Most people can use a ¼ cup of detergent per load of laundry. Outdoor work clothes might need a bit more, up to ½ cup per load. This means one batch of detergent will handle around 100 loads or more. Rub Fel-Naptha on stains and use additional washing soda in heavily soiled loads of laundry. Additional Borax and washing soda to the above recipe is needed for construction workers, farmers, or oil rig workers. I have a farm and still use the recipe above without any problems.

 

Fabric Softener Recipe:

2 cups white vinegar

½ cup baking soda

Directions:

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Ready to use. I have an old plastic cat food container we use to store the detergent. Shake before each use.

Use an old gallon jug from the white vinegar and mix the baking soda reeeeeal slowly into the vinegar. When the whole thing settles down add water until the gallon jug is full. Add scent if desired. Use a quarter to half cup per load.

 

There you have it. A simple recipe to make your own laundry detergent. It takes fifteen minutes and is loads (ahem) of fun. Now laundry day does not also clean out your wallet.

 

Dealing with Mistakes

Have you ever made a mistake? Of course you have. Like me, you have a few doozies in the closet to air out, too, if you are honest. Mistakes come in all sizes. From the minor mishap to the really stupid to the criminal, we all have our moments of ignorant brilliance.

As luck would have it, mistakes do not define us. Maybe you were drinking and driving and got caught or have been convicted for possessing an illegal drug; maybe you ruined a relationship due to infidelity or sheer apathy; maybe you trusted someone and they betrayed you; maybe you made an investment and after it was too late suffered a major financial setback to your early retirement plans. None of these mistakes define you; how you deal with the mistake does.

The Wealthy Accountant’s Inferno

Before we start talking about you or solutions, I need to confess a great sin I once committed. Many years ago my commercial tax software provider branched into DIY tax preparation. Accountants using their software in their office were given a free license to market the online program. Needless to say, I was excited. I developed a business plan to take it to TurboTax and all the other online DIY tax programs. I would compete on price and quality.

As tax season approached I put my marketing machine into action spending $80,000 in TV, radio, and online advertising before I discovered this was not working as planned. When the dust settled the revenue from my little project netted a bit over $3,000. I took a $77,000 loss on an idea I thought really had potential.

I made one huge mistake and a bunch of smaller ones. The mistake did not define my business or me. It certainly hurt the pocketbook, but I was lucky to have an established business where the investment came from cash flow; no borrowed funds were used.
Fessing Up

The first person I had to admit I made a mistake to was me. Accountants also understand the psychological risks of ‘sunk cost’ where you keep pouring money down the drain to try to make up for previous losses. It was a major loss with a lot of lessons learned. First, I needed to stop the bleeding. In this kind of business venture the upfront spending was high so I ended up too deep, quickly. Realizing the advertizing was not generating the expected results I pulled the plug. If I did not closely monitor the traffic and revenue daily I would have been in much worse shape.

The idea was solid; my business plan sucked turnip greens. It happens to the best of us. All my experience did not guarantee positive results. It was a massive financial mistake. But was it really? I lost $77,000 in less than a month on a business idea with awesome potential. A few problems I identified were: my price was too low (people don’t always respond to price alone) and the software, while commercial grade, was still a first year program (call it a beta version because it was).

That financial loss had me tasting blood in my mouth. I might have a dollar or three tucked away, but $77,000 is a lot of money. (On the bright side, I had a nice tax deduction. (At least I can laugh about it now.)) I finished that tax season and reevaluated. Yes, I lost a pile of money. I still had the software and the software company was improving it by the day. Rather than cry I started writing articles for content farms online and putting in a plug for my online tax program wherever I could, all at no cost except time. Each year I brought in another $500-$800. Still a far cry from recouping my losses, I was at least learning as I went.

As the years passed, my software firm made massive improvements to the program until it became one of the best if you had a firm knowledge of tax preparation. Because I never quit I was always looking for opportunity. I learned my lesson from the initial loss, yet never lost sight of the possibility for gain. Remember when I said a mistake doesn’t define you; how you respond to a mistake does? Well, if it were not for that tremendous loss ten years ago I would never have met Mr. Money Mustache and this blog would never have seen the light of day. You see, I went to Camp Mustache to present an idea to Pete and instead of selling him on my idea he hired me as his accountant and plugged my DIY tax program on his site. That led to over $8,800 in revenue this year. Still not back to breakeven, it is a lot better than it was with plenty of future opportunity.

By focusing my attention after a huge mistake I gained more than I could ever have imagined. This blog is not profitable as I write, but it is growing and daily revenue went from pennies to a few dollars per day. My guess is it will have a small profit by year-end with larger future profits. I also meet awesome new people and do something I love doing, writing, which is a fancy way of saying I get to talk a lot to a large group of people. I’m good with that.

Steps to Fixing a Mistake

This is where I provide a magic bullet to fix all mistakes. Sorry. No one solution fixes every problem for every person. There is a template I can share to make the process easier, though.

  • Acknowledge the errors of your way. Never be afraid to admit you fucked up. Stop worrying about other people; you notice the pimple on your face 1000% more than anyone else. You made a mistake; join the human race.
  • Take a break. Most people have a gut reaction to realizing they made a mistake. The shoot-from-the-hip response is probably another mistake. Take a page from the book of Stoics: sit quietly and reflect on what happened. Practice negative visualization. Image the worst that can happen. For me, the loss of money made me feel poor and stupid. By practicing negative visualization I was able to close my eyes and see all the worst things that could result. When I opened my eyes I realized none of that has happened yet. There was a way out. It would take time and effort. At minimum I had a passive $500-$800 annual income. It ended up much better as time went on. Can you imagine if I would have quit in frustration? You would have nothing to do at this moment since I would not have written this. (Wait a minute; bad example.)
  • Take action. Let’s use some other examples. Imagine you betrayed the trust of someone you love and it was discovered. There are things you can do to make the situation a whole lot worse. There are also things you can do to make it better. The relationship might be irrevocably destroyed, but if you learned a lesson and do not repeat the same mistakes you will not destroy a future relationship. And who knows, sometimes the best things in life come from the greatest adversity.
  • I made a plan and it backfired. That is not a character flaw; it is life. Get over it. Maybe you did something super-stupid like drink and drive and kill someone. There will be consequences, no doubt, but you can either spend the rest of your life crying about it or you can make a difference. In open court you can apologize for your actions and take the time in jail to improve yourself. Scientists tell us most cells in our body are replaced every seven years. Seven years from now the human being who made that massive mistake no longer exists! Always make the next version of you a better one.
  • Have your pity party and then roll up your sleeves and use your experience from the mistake as a tool your do something positive. Think of it this way. Most millionaires are self-made. It is rare to see someone with an easy life doing remarkable things. From pain and loss come the greatest discoveries in human history.
  • Learn from the experience. Read good books on the subject. An alcoholic can take steps to change her life completely. Joining a support group, getting involved in civic organizations or your church, and reading good books are all ways you can grow.

I wish I had a better answer, but that would make life too easy and end all the great accomplishments achieved through adversity. Never forget mistakes do NOT define you. How you respond and react to them does.