586746403_1280x719Goodwill Industries of North Central Wisconsin provides a multitude of services to the poor in my community. Everything from help with medical, job search services, to the iconic Goodwill thrift store are there to benefit the poor. Another program is the Financial Information and Service Center, otherwise known as FISC. FISC provides personalized counseling in financial matters: bankruptcy, student loans, budgeting, credit card debt, and delinquent taxes.

Every year FISC calls me in to speak to their group. Counselors from around Wisconsin come to hear my message. Sometimes it is an informal presentation more along the lines of an inquisition (Q&A session). Other times we fill a large room and food is catered. A few of the counselors are clients as a result.

The FISC counselors are not tax professionals or even trained in tax matters. For their worst cases they refer their client to my firm. And so it was this past week. A man in his mid 30s had serious tax problems. When no one else can help there is always me. I take a limited number of impossible cases each year. These people have limited funds for my services so I charge a very low fee or just do it pro bono.

Things have been busy around the Wealthy Accountant office with the blog stuff and all. Still, I took the appointment from this young man. He arrived on time (not always a sure thing in cases like this). He was polite and obviously poor. He was living in a homeless shelter. Wisconsin was riding his ass and was garnishing his meager wages. Then he mentioned he has a parole officer. I have to know my client so I ask the obvious question. It seems my new client committed a gruesome crime against a young girl.

He had one count of 1st Degree Sexual Assault and two counts of 2nd Degree Sexual Assault. In Wisconsin 1st Degree Sexual Assault involves sexual contact with a child under 13 years of age. What it looked like to me is he fucked a 12 year old girl and then continued after she turned 13. There were a few other charges to round out the destruction of his life. He explained the judge refused to listen to him; the girl was not that young. Okay, she was thirteen; so now you have three 2nd Degree Sexual Assault convictions. Good for you.

Passing Judgment

As heinous as his crimes were it didn’t bother me. I was hired to solve a problem and that is what I will do. As I mentioned earlier, I take some cases no one else will touch. Over the years I have represented embezzlers, murders, stalkers, pepping toms, and a variety of sex offenders. I also represented prison guards and sheriff’s deputies. Call me an equal opportunity guy.

I have no sympathy for this man’s plight and make zero excuses for him. He admitted to me he committed the crime. That is not what concerns me. What bothers me most is what led him to the place he is at. His tax problems are not that bad. I billed him a modest amount and my staff will make short work of his case. Then life will set in for this man.

There are a lot of things people will forgive you for. Sexual assault is a tough one. Fucking a twelve year old when you are in your mid-20s is even more difficult to look past. His life challenges have only begun.

I don’t know all the circumstances leading to opening of his mind to the possibility of harming a very young girl. I don’t care either. What I will do is speculate because it affects us all.

My guess is it started with pornography at an early age and that he viewed pornographic material daily. Mark Manson wrote an article outlining how pornography can ruin your sex life.  His research shows many men suffer sexual dysfunction from rampant viewing of pornography and compulsive masturbation. It does go hand in hand. (Yes, I am trying to be funny.)

Porn destroys intimacy and perceptions of beauty. It also distorts your worldview. Before long the addictive rewards of porn viewing eats away at relationships and time with friends and family. And then there is my new client. He raped a twelve year old girl and justified it. (It does not matter if she consented. At twelve you can’t give consent so it is rape. Period.) What he sacrificed to get his jollies or to fulfill his distorted worldview of a healthy sexual relationship will continue adding up over his lifetime. He will never get away from it. Ever!

prison-407714_960_720Manson encouraged his male readers to undertake a “no more porn” challenge. The rules were simple. No porn for 60 days. Most men starting the challenge finished successfully. You can read the results yourself, but I will include a few interesting facts here. The men reported some weird symptoms the first few weeks as they adjusted to the challenge. By the end of the 60 days most men reported improvements in their mental health, better relationships with family, friends, and significant other, and reduced need to masturbate.

Addiction

Addiction to porn is still being defined by the psychiatric profession. The boundaries of addiction are more difficult to see with porn. You can be addicted to sex, but at what level of activity does it become an addiction? Where is the line defining where control is lost?

Other reports show a direct link between viewing pornography and sexual performance issues. It also affects interpersonal relationships. Worst of all is how the brain begins to refuse to react to sexual stimulus. Sexual gratification with a significant other is no longer possible as the porn addiction has taken control.

Viewing porn affects the way you think, feel and interact with other people at work, home and at play. There is something called the Coolidge Effect. Without it internet porn would not exist. The Coolidge Effect works like this. Once a man is spent with a woman he is generally done. But if a new, novel female enters he is ready to go again. The same effect is seen in women too. This can continue until the man is exhausted to the point of collapse.

It all boils down to dopamine, a powerful neurotransmitter in the brain. Without dopamine we would not eat, have sex, watch porn, climax or do much of anything. Dopamine gives us desire. And nothing comes close to the amount of dopamine released as from sex, masturbation or viewing porn. Porn sends dopamine into overdrive. Each new image triggers the Coolidge Effect. But after a while it gets harder and harder becomes increasingly difficult to reach climax. The dopamine overload destroys the pleasure you were seeking. And that is where it bleeds into the rest of your life.

Patarei prison, Tallinn

Patarei prison, Tallinn

Financial Independence

What does all this talk have to do with personal finance, wealth or taxes? Remember my new client we opened this post with? He is not alone. I’ve seen a lot of stuff over the years. It is nigh impossible to live in our society today and not be exposed to pornography. Internet porn is considered protected free speech by many libraries. You can’t get away from it.

Before I stand too tall on my soap box I have a confession. I am far from innocent. Like the majority, I have seen internet porn. There was a time I actively looked for it. Curiosity and dopamine are to blame. Taking responsibility for my own actions is asking too much. I got lucky, however. Before I destroyed relationships and my finances I realized this wasn’t going to work for me. Mrs. Accountant is too important to me to throw away over smut. And I have junior accountants to think of too.

Porn statistics boggle the mind. Here are a few numbers to build perspective:

  • Men are 543% more likely to view porn than women.
  • 56% of divorces involved one party with obsessive porn viewing habits.
  • 64% of college men and 18% of college women spend time online each week for internet sex.
  • 9 out of 10 boys are exposed to pornography before age 18.
  • The average first exposure to pornography for men in 12 years old.
  • 6 out of 10 girls are exposed to pornography before age 18.
  • 1 of 5 mobile searches is for pornography.

And this will not harm your personal life? Marriages, relationships, and finances are all affected. The addictive nature of internet porn is too powerful to allow into your life and not expect consequences.

Building wealth and early retirement are all fairly easy to acquire. The debilitating effect of a dopamine high from porn stops these worthy goals in their path. I watched many good people, good clients over the years, sink into destructive behavior. It always ends the same: broken marriages, destroyed relationships with family and children, poverty, legal bills, disease, mental health issues, and lost jobs and businesses. I could easily fill 20 posts of clients I served over the years who succumbed to some form of sexual addiction. In most cases it involves mostly broken marriages/relationships. Sometimes disease destroys more. Sometimes the line is crossed into the criminal. Then twelve year old girls suffer.

Help is on the Way

Back when I was growing up (sounds like granddad talking) in the 70s, the only way a boy saw porn was if one of the boys found a Playboy in dad’s sock drawer and brought it to school. The exposure was limited and so was the damage. That world no longer exists. The internet is filled with porn. Even if you never intentionally search for porn you still get exposed. On this blog I use my own images and images from Creative Commons. Some of the most innocent searches periodically have a pornographic image tucked in with the rest. Google is good at knowing what you are searching for, but stuff gets through.

Your children live in this new world of easily available porn. A significant number of boys are viewing more porn by age 18 than you or I viewed in our entire life, combined. It is just too easy to get and kids are curious.

Divorce and broken relationships cost money. Viewing porn at work (I can’t believe people think they can do this and not get caught) will cost you your job. Guys, your lovely wife or girlfriend does not find your internet viewing habits endearing! And then there is the time wasted. How many books or blogs on personal finance did you miss reading because you were rubbing one out, as Bill Burr would say? How much love and intimacy have you missed due to porn? It is costing you much more than you can imagine.

Before you lose your marriage or job or freedom, stop. Stop the porn addiction. I sell dreams on this blog. Dreams of living a good life filled with fun and meaningful and fulfilling activities. I sell the dream of business ownership and lower taxes, the dream of financial independence in only a few short years, the dream of retirement at virtually any age. None of those dreams are possible if you call me as a referral from FISC. None of these dreams are possible if you spend 10 years in the slammer for fucking a child.

You owe it to yourself, to your children, parents, siblings, and significant other. There is help. You can call 1-888-997-3147 or read this website to start down the path to freedom. Financial freedom is not possible if you are buried in porn. The time wasted each day away from what is really important is costing you health and wealth. I do not want to hear about another twelve year old girl messed up from a old guy jumping her. I do not want to hear about another man’s life destroyed over porn. If I never get another referral from FISC with that kind of client again I would be happy.

Think about it. While you still have time.

 

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Chicken Little and her children.

Chicken Little is in true form this week as the election in the States surprised many. The headlines this morning on CNBC echo and increasing level of alarm: Anti-Trump Portland Protest Turns Into a Riot; Op-Ed: I’m not worried about a US recession, I’m worried about another Great Depression; Trump’s enemies are already paying the price; Donald Trump tweets about unfair protests — then has second thoughts; An ‘ugly period’ for the market is drawing near: Saxo Bank economist.

I haven’t seen such overreacting since, well, I don’t know when. There is certainly a lot not to like about Trump, but overreacting will not make it better. The stock market is rallying on higher interest rates. Financials are doing well while much of the market is down. Overall we saw a nice rally and it might, or might not, be overdone. Over at CNBC again we hear: Cramer warns the rally is ‘getting out of hand’ —better deals found in the trash. Really! Yeah, the market will pull back at some point and there is no reason for stocks to be higher due to a guy winning an election who hasn’t even started his first day on the job.

Interest rates rising rapidly bear watching and could be a problem for housing and the economy as a whole, but as of now the SKY IS NOT FALLING! There are reasons for concern. Unless you are a white man there has been vitriol spewed toward you from the President-elect over the past few years.

Overreacting solves nothing. Rioting certainly doesn’t. Playing into the hand of violence never works. Taking a proactive approach is the only solution. The people most shocked are the ones who worked so hard campaigning for another candidate. I get it. I’ve worked hard for a long period to watch a project utterly fail. But it wasn’t the end. I learned a lot throughout the process. You need to focus your efforts, using what you learned to facilitate change.

People make America great. The guy with the second highest tally of votes won the Electoral College and the election. It isn’t the first time it has happened. And I bet you have experience working with people of less than the highest caliber. We all have. As frustrating as it can be at times, we need to engage our Stoic training. Complaining and whining is not allowed!

Take Control

In a crisis, the person who panics is more likely to die. The screaming lunatic is at a disadvantage to the calm individual assessing the situation and working within the confines of the crisis. A calm mind doesn’t react, it responds using the situation as a framework to get out of the crisis in one piece.

Trump is the President-elect and in January will be sworn in as the 45th President of the United States. This is reality. There is nothing you can do to control the situation in politics at this very moment. So what can you do?

First you acknowledge the only thing you can control: your mind, your response, and your feelings. We have time to look around and assess the situation. If a CNBC commentator is right and we are headed for another Great Depression the only thing you or I can do is take care of ourselves and plan accordingly.

Second, eliminating most debt is now a priority. We do know interest rates are going up because they already have. A CNBC article yesterday said the interest rate increase over the last two days increased the cost of a $200,000 mortgage $28 per month. On a 30 year mortgage that means it now costs $10,080 more to buy a home with a $200,000 mortgage. If you don’t pay it off early. Read the last sentence again. We have known for a long time interest rates would eventually go up. The Federal Reserve printed plenty of money to spark inflation. The likely increased spending under a Trump administration could provide just the spark. Soon we will look back on the good ‘ol days of low inflation and low interest rates. Look on the bright side; your bank balances will earn a return for the first time in years. Debtors will lose. They always do.

Investing in business is the only way to win in the long run. Even business can suffer short-term. People are worried the Affordable Care Act (Obamacare) will go away and worry about paying medical bills and health insurance premiums. Savers find this a minor inconvenience; debtors have some real problems to resolve.

No matter where you stand in life you can take steps to make a difference in your sphere of influence. We must refuse to go to war with ourselves. We are not the enemy! Rioting and violence will make the situation worse. Rioting and violence will not solve the problem; it will give us three dead in Ohio.

Action Plan

A plan requires some information first. We know there will probably be significantly more government spending in the next few years. This means the economy will expand at first. We also know there is a high probability inflation will ignite and the hangover will be painful. Here is the action plan I am using:

Step 1: No panicking allowed. And no rioting, for Christ’s sake!

Step 2: Stop spending. In this environment you are playing defense. All unnecessary spending is out. Don’t worry about the economy; Trump assures us the federal government will spend plenty enough to make up for any spending cuts we make. Trump is not a fiscal conservative; he is further to the left than Clinton on most issues, except taxation.

Step 3: If interest rates are going up, bond have got to go. Holders of large bond portfolios are going to suffer as they can’t unload huge volumes of bonds in a timely manner. Avoid the rush; get out of bonds now. (Note: Bond prices move inverse to interest rates. When interest rates go down, bonds go up. The reverse also applies. The only bond I would consider holding here in limited quantity are TIPS, inflation adjusted Treasury bonds. I said limited quantity.)

Step 4: The real risk to the US and the economy is a trade war. If Trump causes a trade war there will be few places to hide. But you can’t worry about things that have not happened and you can’t control the outcome anyway. So step 4 is to take a deep breath and stop worrying about all the crazy newscasts. They have to say crazy stuff to get viewer. Don’t waste your life on it. Focus on your behavior and thoughts; it’s the only thing you have control over.

Step 5: Stay the course. Investing excess funds in a diversified index fund is the best way to preserve and grow wealth. Short-term declines are just that, short-term. It is easy to stay true to the program when things look rosy. It is trying times like these that determine your ultimate success. An emotional step now is usually a bad move.

Step 6: Keep a slightly larger emergency fund. I don’t carry an official emergency fund in my financial plan. I usually keep the bulk of my money fully invested at all times. My liquid funds will be slightly higher now and will eventually reach a year’s worth of spending. This is similar to what you do in retirement. Your index funds throw off around 2% in dividends and the liquid cash holding will take you a long time to work through. You can weather a really bad storm for a long time. If you are already retired, a larger portion of your portfolio should be in liquid funds, i.e. money markets or guaranteed bank products. I usually recommend two years of spending as a minimum for people in retirement. A side hustle with income allows you to ease up on the defensive cash investments.

Step 7: Now is the time to channel Mr. Money Mustache and your favorite accountant. Keep your spending low ($30,000 or less annually) so you have resources if things go very wrong.

Step 8: Avoid mass media. The talking heads will cause you undue angst. Most news is disguised commentary with an agenda. Then they break for a commercial. Take a defensive financial posture and then go out and enjoy the weather. It has been awesome lately!

Step 9: Stay alert. In a crisis the hysterical get killed. Those who assess their surroundings can make better decisions. Watch as policy is made in Washington and adjust your financial posture accordingly. There is nothing that should cause you to go 100% cash. You will weather bear markets and be just fine. Interest rates spiking too high or too fast should cause you to lighten up on equities and keep a higher cash level. A trade war is the biggest concern. Most economic issues are transitory, but a trade war could do real damage for an extended period. If bond rates are high enough, some money could find a home if a trade war erupts. Otherwise a money market fund may be the best choice.

Step 10: Get some sleep. You make poor decision when fatigued. I have noticed clients and reader’s emails are stressed lately. The most common comment I get the last few days are: I haven’t slept or I am sleeping poorly. Let it go. It is the only way to relax and get the sleep you need. Cut caffeine from your diet if necessary.

This is not the end. If it is, then it is over. I say that with all seriousness. If the nukes fly there is nothing you or I can do about it. Your worst fear could come true, but the odds are long. Stop comparing Trump to Hitler. There is a major difference. Hitler had a hunger for power; Trump has a hunger for recognition. There is a difference. He might make better decisions to save his own skin than you think. Whether people want to face it or not, Trump is further to left than Clinton on virtually all issues, save taxes. That Democrats are upsets is understandable due to the rhetoric. Why the Republicans are so excited is less obvious. Neither case matters. This is what we have.

Warren Buffett has been a voice of calm when he said this morning the market will be up 10, 20, and 30 years from now if Clinton won the election. It will still be up even with a President Trump. If you want humor you have to reread earlier blog posts here. Now is the time to roll up our sleeves and get serious. Okay, I might drop a joke now and again. Life is too short not to, regardless the situation.

img_20161103_233136It had to happen sometime and now was that time. As soon as traffic reached a certain level someone would finally say what was on everyone’s mind: Why are you doing it, Mr. Accountant? If you are so damn rich, why do you bust your ass running a tax practice and writing more copy than Stephen King on meth? The answer seems so simple to me, but I have seen this sickness before.

My buddy, Pete, over at Mr. Money Mustache faced similar comments in the past. Now that the guy publishes around two times a month no one is talking, but they all wish he did write more. (Way to go guys!) Recent comments on The Wealthy Accountant have now touched on the subject. The comments are very polite and not derogatory by any means. That is not always the case. The comment in question casts doubt on all personal finance bloggers claiming to have made it. There was doubt the bloggers are really retired. Between the lines you can read “the blogger needs the blog to pay bills”. There were also a few comments protesting the need for a side hustle. I want to set the record straight.

I have no problem as apologist for the “retire early” community of bloggers. I have met many of these fine people and find them to be genuine. There is no fraud, folks. You don’t go into blogging for the money! First you spend a year or more writing your tail off and then only a microscopic number actually turn a profit or any revenue at all. Even fewer make real money. Real world, dear readers. The people writing these blogs are doing it to share their experiences. No more. If it doesn’t hit big it does not mean back to the cubicle; it means, see ya in Tahiti. They are really retired and travel the hell out of the planet.

Side hustles fall into the same category. Filling the day with something you enjoy doesn’t change the fact you are retired. You can only grab yourself for ten, maybe twelve hours a day. After that it’s time to do something else. Rosy has a callus. There is no fraud here either! Turning some coin after you hand in your punch card does not mean you are pulling the wool over everyone’s eyes. (When was the last time you heard that expression? Think they used that one back in the Dark Ages.)

No Apology Needed

When PayPal was sold to eBay, Elon Musk received $180 million for his portion of the company as co-founder. I think we can all agree $180 million is enough to have fun for a few weeks before heading back to the grind. Right? So why in the blazes did Musk start not one, but three companies: Tesla, Solar City, and SpaceX? The scariest part is he has put his entire net worth on the line.

Another man who could not stop after pushing a stack of cash together was Steve Jobs. In 1985 Jobs was for all intents and purposes forced out of his own company. If they did that to me I’d piss on the grass when I left and would not look back. I would have a serious attitude, to say the least. But not our buddy, Steve! He started a company called Next Inc. which was to eventually be in direct competition with Apple. Sure beats pissing on the grass and never looking back. It gets better. Apple fell on hard times and bought out Next Inc. to get our boy wonder back in the company. What Steve Jobs did from that point until his death is nothing short of miraculous.

Warren Buffett is one of the richest men alive and he still keeps hunting for good companies to buy and expects to turn an above average profit. Bill Gates, good friends with Buffett, stepped back a foot and a half from his company, Microsoft, and dedicated his life to making the world a better place. That’s hard work. So why do it?

I could fill a bookshelf with examples. But the point is already made. Imagine a world where everyone who has had modest success and was able to retire decided to never be productive again. No more Apple, Tesla, or Gates Foundation. It would be a very different world if these people took early retirement as the starting gun to spending a lifetime with Rosy.

When you listen to these people speak it always boils down to the same thing. They enjoy what they do. If early retirement is the goal then why are you not allowed to do what makes you happy once you retire just because if it might make you some money? See how sick this argument gets? I keep running my practice and writing because I like to do it and it makes me happy. There is no fraud or misrepresentation. But there is more.

Karma

They say karma is a bitch. I wouldn’t know. I do know there is no mysterious force watching our every move waiting to reward or punish us for every single behavior we have. Karma is more subtle. Karma is not out there; it is in here. She bites you in the ass when you do stupid stuff and rewards you when you take the high road because it is your subconscious working. You do it to you!

I recently wrote a post on my daughter retiring at 22. I expected some traffic from the post, but nothing extraordinary. My goal was to pat my oldest daughter on the back for a job well done. She still looks for a “normal” job; she wants the experience and working in dad’s office a few years did not do it for her. (I wouldn’t work for me either.) Since she was a wee tyke I took virtually every dollar she made and tucked it away in retirement accounts, mostly Roth IRAs. If she earned money working around the farm, in it went. If she worked at the office, in it went. When she worked at my office a few years I demanded she max out the retirement account. We have a SIMPLE plan which allows $13,000 in contributions per year.

Heather has no real expenses. A bit of rent to dad for living at home. (Yeah, I’m an A-hole for charging my kid to live at home. Must need the money so I can’t be retired.) She pays car expenses and any food she wants that we don’t buy. Oh, and she pays for her own cell phone. In short, she lives on almost no money. She does like the library.

Over the years those invested dollars have really grown. She has low living expenses, no student loans or any other debt, and a net worth in the six figures. She is retired. She is a substitute teacher for disabled kids usually one day per week. She volunteers for the same work at other times. And she loves her art. Slowly she is finding a market and a way to grow her art business. You can read that post, linked above, for more details.

Karma was Watching; Karma Strikes

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Notice the gloved hands? She is required to wear gloves almost all the time due to Raynaud’s. Her fingers are always in pain.

A few days ago a journalist from MarketWatch contacted me. She wanted to interview my daughter. Heather did not believe me at first. (You would think I joke about this kind of stuff around the house to cause such a response. I am offended by such an accusation.) It took a day to convince Heather to do the interview. Today at 11 a.m. Heather will be interviewed by MarketWatch with me in the room for moral support.

Heather was nervous about what people would think if they knew she had some serious health issues. She also worried about the world finding out about her art. It’s a great dream until somebody notices! Then it gets real. I encouraged Heather to just lay it on the line. You don’t have to say everything, but you can still tell your story. And it’s a good story. How many 22 year old kids can say they don’t have to work because they saved like crazy, have no debt, and the market went up? (The same market you could have been invested in at the same time Heather was.) How many 22 year old kids can follow their dream of creating beautiful art? Now you know why she is special.

Heather is worried about the questions. She doesn’t know exactly how she built her nest egg because I taught (and dictated) from above. She had no choice when she was twelve. I explained what I was doing and only now, at 22, do I see a small glimmer of acknowledgement from her. All part of parenting. Investing is boring, but simple. You drop your money in an index fund and go do something else. You come back when you have more money to add. Back to the art project.

I have a confession. I wanted to scream, “That is my interview!” Well, for about three or four seconds. Then I had to smile. This is not about me; this is about Heather. My girl, my baby, was going to be interviewed by a national press. I wanted to use the interview as another launching board for my blog. So self-centered. And a natural and normal response. But the right thing to do is step back and provide support for Heather and let her take the stage. She is going on 22. Now is the perfect time to learn the skill. Karma is a kind gal when you do the right thing.

Heather has her own blog: Stormy Eye Design. Go check it out. You will find a young woman searching for meaning in life through her art. She can explore that path because I helped her do the right things financially when she was a pre-teen to now. It still doesn’t all make sense to her yet, but she has plenty of time to find her way.

And she has one thing I will never have. Patience. I am always jumping around and hyper. Heather has the patience of an angel. That is why she works with disadvantaged kids. She wants to make a difference. A positive one.

Now you know why it is so important to reach financial independence. Now you know why you need to reach retirement quickly. So you can start working on the important things you have to do. And only you can do it.

img_20161101_133227After lifting a set at the gym I pace back and forth gathering my thoughts, focusing on the next set. As I look around the gym all the other people are staring at the TVs plastered along the wall or playing on their cell phone. At the traffic light I take a deep breath and relax. I look over at the car next to me and notice the driver is texting. At the office I always have books on taxes and finance at arm’s length. My free time is filled with learning. During the lunch hour the office is dead quiet as everyone checks their personal email or Facebook.

The above scenes are common. I am certain you have experienced the same thing and more. Our society has devolved into information overload. As a society we can’t sit still for a moment unless we are distracted by some form of mass media. I wonder what Blaise Pascal would think of modern society. Pascal once said, “All of humanities problems stem from man’s inability to sit quietly in a room alone.”  Hell, people can’t stand twenty seconds without checking their smartphone at a crowded party. There are people who actually admit to pollsters they have checked their email during sex. What the fuck is the matter with people!

The More We Get the More We Want

The problem only grows. The more we satisfy this inane hunger the more it demands. Our attention spans continue to shrink. If my math skills were really bad and I applied a straight line to our collective attention span over time, at some point in the very near future our collective attention span would be negative. In other words, we would be distracted to some other pretty light before we even satisfied the first impulse. Oops! Sorry. We already crossed that point.

The lust for another distraction is pervasive. What ever happened to quiet time? Do we take naps anymore? Probably not. The same people willing to interrupt sex for a quick check on the email also check their email overnight. It’s the first thing they do in the morning. Before the emails are finished it is off to check the news and check out some videos and Facebook. How many emails did you respond to? Yeah. Thought so. Too busy moving on to the next distraction.

What We Lose

img_20161101_130000Before I act all innocent and self-righteous, I confess I am far from perfect. I don’t check email from bed and it will be a cold day in hell before I check email or any social media while Mrs. Accountant and I are, ah, well you know, the thing. My innocence ends there. At the gym I can’t avoid the TVs. They are everywhere. So I often find my head tilted up between sets staring with a blank face at the talking heads. At the office (and at home) I tend to read way too much news. Most of it is crap or outright wrong. Still, the addiction is firmly in place.

And it bothers the hell out of me. I’m not so stupid (close, but not quite) as to believe I am not giving something up for all this entertainment overload. When I work out I generally keep to myself, focused on-task. Sometimes I talk to other sweaty people at the gym, but at least I don’t pull out ear plugs before I can hear them. I am so much better than they are. It is a dirty shame. There are a lot of good people over there and I really don’t know them well at all. Too busy catching up on important stuff uttered by the talking heads on the TVs during recovery time.

It goes a lot further. Some of us have crossed over into the twilight zone it is so bad; we don’t have a firm grasp on reality anymore. Our whole worldview comes from a screen. First we lose intimacy and close relationships to feed the entertainment/distraction addiction. We think we are masters at multi-tasking when studies have shown this is an illusion.

When we should be focused on our goals we quickly turn to social media and email. The greatest loss we all face when we allow entertainment overload to control our lives is the loss of thinking. Quiet, undisturbed thinking time. Every successful person I know spends time every day in quiet contemplation, thinking. Elon Musk does it, so does Warren Buffett, and even your favorite accountant imbibes in the quiet time ritual. How do you think I come up with all this stuff?

Loss of relationships is bad enough, but now you are robbed of even having a dream! Let me put the fear of god in you. Most people reading this blog are interested in financial independence (FI) and early retirement (RE). Well, when you are consistently distracted you are not working toward those important goals! How does checking your email 3,764 times a day help you reach FIRE? It doesn’t! Who do you expect will send you an email? The Secretary of State? You’re not that important; neither am I. Get over yourself.

And if you don’t get over yourself you will get what the vast majority of people get: a lifetime of forced servitude and nothing to show for in a retirement brought on by age, not financial security. You also lose love and intimacy. Yeah, the President of the United States might want to take a call during sex. Nukes could be on the way and an immediate response is necessary. You are not the POTUS! So knock it off. (My apologies to the President if he/she is reading this.)

When is the last time you read a book to your child? Kissed your significant other passionately? Hugged your mom or dad? Thought so. Do you know how fucked up you are? Do you really think, as you rest on your death bed, you will regret not checking your email or social media more often? Or will you regret not talking with your children more? Making love with your significant other more? Holding your spouse’s hand during a slow walk daily?

It’s not too late! There is still time. You can end the insanity and regain your life. Unlike hard drugs, you don’t have to go cold turkey. Have a set time to check email and social media. Also demand ample time daily to spend in meaning conversation with people you care about: significant other, your children, parents (if they are still alive), and friends.

You also need to demand quite time each day to think. Nothing is possible until you think it first. Once you have the thought you need to spend time working out the details. This is not worry; this is actually reviewing if the idea will really bring you happiness. Working through an idea is not worry; it is planning. The only way to choreograph the life of your dreams is to first dream. And dreams only become real in the quiet spaces.

According to National Geographic, our National Parks had record attendance in 2015. But the visitors were staying on the beaten path. They are viewing the parks from their car. The number of people backpacking has declined and has been for a while. It is thought many people don’t want to travel somewhere where they are disconnected even for a few days. Once again, they are waiting for that important email from the Secretary of State.

Brave New World

In The Tempest, Shakespeare put these words into Miranda’s mouth:

                            Oh, wonder!

How many goodly creatures are there here!

How beauteous mankind is! Oh, brave new world,

That hath such people in ‘t!

 

How would we know today if the world is so wondrous? We are too busy looking at a screen. I cannot encourage strong enough turning off electronics and unpluging for a portion of each day. I recommend four hours of quite time daily, but that can be a lot to start with. This is in addition to sleep time. You need ample sleep; don’t short change it. There is no reason to check emails or social media from bed. I’m a crazy accountant from Wisconsin and even I have never crossed that line. There is no way you can possibly be more nuts than me.

Quiet time means alone time, but it also means uninterrupted time with loved ones. You can do this guys. You can hold your wife’s hand as you walk for thirty minutes, then face her and just gaze into her eyes. Trust me, ladies like that. For at least a few moments each day make her your entire world, no distractions or interruptions. Don’t even think about the other crazy stuff in the world. Just her. You will not believe how awesome that woman you are holding is. Before you break away, pull her in for a gentle embrace. Hold it just a moment longer than necessary. That is the only moment that counts, but you have to travel the whole distance to get there. Oh, and BTW, you will like it too.

Entertainment overload is everywhere. Real happiness is destroyed when everything has to be entertaining. Even The Wealthy Accountant is a form of entertainment. I tell stories to illustrate a point and work hard to keep it entertaining. If I don’t you guys leave and make me sad.

You have to turn it off! A social media and email sabbatical will not kill you. Trust me. (Nothing bad ever happens when you are told “Trust me”.) Take a day off from all the blogs, too; they’ll still be there when you get back. Regain your life and relationships. The Wealthy Accountant is exempt, of course. Spend as much time here as you want. In fact, I demand you stay here, distracted and entertained. It’s my ego we are talking about.

old-water-pump-11288192674wwep

When I was a young boy growing up on the family farm we had three sections to the farm: the homestead, Newhouse place, and “up by the other place”. Yeah, we really called it “up by the other place”. We were sophisticated hillbillies, I tell ya.

Up by the other place there was a well with an old style pump you worked by hand. Toward the end of our farming days the pump was fitted with an electric motor, but that doesn’t help with our story.

The old well pump up by the other place was a job I hated. Feeding the animals was okay, but getting the tank filled with water was a chore. And a lesson. That old well taught me more about life and success than any seminar or college class I ever attended. The lesson was so simple. It amazes me to this day more people do not understand the lesson of the pump.

The Investment

That old well was deep. Getting water out of that darn thing prit’ near (yes, I am writing this way intentionally) killed me every day I went over there. The only saving grace is water from wells so deep is ice cold and sweet. There is no water in the world that tastes as good or refreshed as well. Getting the water is the issue.

The job was simple. You started pumping the long handle vigorously, up and down, up and down, up and down. You put your whole body into it. In the summer sweat would pour down my face as I gave it all I had. After several minutes I wanted to quit or at least take a break. But that is a mistake. It takes a long time to get the water flowing. With each pump of the handle the water works a bit higher, but if you stop it goes all the way back down and you have to start all over again.

Lesson One

Everything worthwhile in life works exactly the same way. You put a lot of hard work in with little or no reward in the beginning. My tax practice was no different. This blog is still in its infancy. The Wealthy Accountant got a nice lift-off from a Mr. Money Mustache mention, achieving 8,000 unique users in the first few days. Then the numbers declined and kept declining to 1,600 unique users over the prior 30 days. My publishing schedule was sporadic at first; blame it on tax season and the heavy work load from the Mr. Money Mustache mention.

In early July I started publishing daily with few days missed. My readership grew steadily to just under 3,000 unique users in the prior 30 days according to Google Analytics. Then I needed a break so I could put more research into a few posts. My readers jumped ship fast. They want content! Thirty day trailing page views dropped from 19,849 to 17,743 while unique users went from 2,991 to 2,930. Not a big drop, but totally understandable if you ever worked a hand pump.

Like the pump up by the other place I have to keep pumping if I am ever to get to the reward. The water is part way up the pipe. If I stop the water goes all the way back to the bottom and I have to start over. Only continued effort without much in the way of reward will bring me to my goal.

The Reward

As I pumped in the humid summer sun I knew if I kept at it long enough the water would start pouring out the spout. Finally the water started to flow. The animals would come running to the fresh cold water. (That is the other lesson of the pump. Stand around like the steers and watch the dumbass human pump his tail off and then come running when the reward shows up. Of course, the downside to this theory is you eventually become what’s for dinner.)

Once the water started flowing I could slow my pumping. All it took was a little steady pressure to keep the water flowing strong. I could reach around with one hand as I pumped with the other to enjoy the crisp, cold water. The rewards kept coming as long as I kept the pressure steady. The workload was reduced when the reward was pouring fastest.

Lesson Two

That is how it works in business or any other endeavor. When you work the hardest the rewards are few, but once the rewards start it only takes a small amount of pressure to keep the rewards flowing. Successful blogs can enjoy a less demanding publishing schedule while maintaining readers and revenue. Actually, when the traffic finally starts to explode higher, the revenue rises even faster. The revenue per page view is higher on blogs with 1,000,000 views per month than a blog with only 20,000. There is no reason to complain; it is just the way life works.

Like the pump, a steady pressure is required or eventually the water goes back down. Business is not as hard as many people pretend. I have owned several businesses over the years. Some did well, a few crashed and burned. If you were asking for ‘fair’ you came to the wrong universe. Every success story starts the same way: I worked hard to get the thing going and I was too stubborn to quit. After a while it took off better than I ever imagined. Now the thing is on autopilot; a small amount of effort keeps the whole thing purring. Periodic disasters require an extra level of input for a while until the whole thing starts purring again. Happens the same way every time.

What you don’t hear is: Gee, ya know, I was out walkin’ around and before you know I was CEO of IBM, my investments grew to millions (and I never made any investments!), and I am as popular as I am good-lookin. Okay, you hear people say stuff like that but they have mental illness issues. Even most lottery winners have played a long time before they win the big one (not that I am encouraging such behavior).

Formula

There are no formulas to illustrate wealth creation I know of outside business models, so let me introduce the world’s first mathematical formula of personal wealth accumulation:

                W=E*t+i

Remember, you saw it here first. The formula is elegant and beautiful, as the physicists would say. The formula is so simple: Wealth is directly proportional to the effort applied multiplied by the time invested plus intelligent thought and planning. Sitting on your ass all day will not bring you closer to your goals. (Johnny, sit down! I know I sit on my ass all day as an accountant and do very well. You’re messing with my theory.)

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The old barn burned down decades ago, destroying the old hand pump, but not the lessons learned. The pump once lived in this exact spot “up by the other place”.

Pump It Up

What are your goals? Do you want to own investment properties that throw off enough cash flow to live on? Are your plans to build a retirement account so you can retire early? Travel plans? Maybe you are crazy insane like yours truly and love building businesses. Whatever gives you bliss, they are all possible.

Even relationships work on the same principle. When I met Mrs. Accountant I had to work hard to win her over; I wasn’t the prize catch she expected. To make matters worse, Mrs. Accountant was engaged to be married two years before meeting me and it was not a pleasant experience when it ended. Just because the world is always fair, the guy that made Mrs. Accountant’s life miserable had the same name as me! You read that right. Mrs. Accountant hesitated because I had the same name her ex-fiancé had. How messed up is that. She couldn’t say my name above a mumble for years after we were married. I understood.

Early in a relationship you need to build rapport. Not much into spending, Mrs. Accountant and I talked at home a lot. We spent considerable time together building our relationship. Once things were awesome we could detach at the hip. Constant and steady efforts keep the relationship awesome without smothering each other.

Starting projects is hard. Really hard. I’ve undertaken many over the years. The story of the pump comes to mind every time. The first time I heard the story of the pump was from Zig Ziglar. It stuck with me and bears repeating, as I have done here.

If you want easy you can leave the room now; I don’t offer easy. What I offer is an honest assessment of reaching your dreams. I get emails daily from accountants who want to know how I did it. They want a magical elixir to eliminate all problems when starting a business. Sorry. That elixir is only found in fairy tales. It takes a special breed to start and run a business. Steve Jobs said running a business is constant worry and that you really need to love what you do because there are times it hurts so much normal people quit. You have to be insane to keep working under such stress and pain with no current income/reward, Jobs continues. Only the insane survive.

It takes that insane effort to build something people later marvel at. If this blog is to grow into something massive numbers of people read and use in their life I need to continue pumping like crazy. After a while, when people see only a steady effort as traffic and revenue keeps pouring in, they will assume it was all so easy. They missed the hard part. When you get really good at something it looks effortless to outsiders. Michael Jordan made it look easy because he practiced and practiced even when he wasn’t getting paid. Then it turned into a steady flow of performance and endorsement deals.

When it is fun during the hard, pumping like mad phase, you have everything you will need to survive and thrive. And then there are the times when no amount of pumping will work. You just move to another well and start again. That is the way life works. That is the lesson of the pump. There will be failures along the way and painful moments no matter how fun or enjoyable the process is for you. Grinding through the difficult times builds the character and endurance necessary to keep the dream alive when things are going great.

Keep pumping. I hear the water from this well is cold and sweet. Enjoy.

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Bipolar is not a life of extremes as this drawing illustrates. Bipolar is learning to live along the edges, struggling to control the overwhelming flood of emotions.

September is Suicide Prevention Awareness Month. Suicide is the 10th leading cause of death and 3rd among young adults. The issue is too serious to let slip by without an honest discussion. According to Centers for Disease Control and Prevention (CDC), 41,149 people committed suicide in the United States in 2013, 12.6 per 100,000. The suicide epidemic crosses all age groups and racial barriers, however, young adults (2.5%) made a suicide plan at a higher rate than older adults (1.35% for middle aged adults and .6% for older adults). People of mixed race have the highest rate of suicide while blacks have the lowest. All this is according to the CDC.

Statistics are cold and not what I want to talk about today. The story I want to share is about depression and more to the point, Seasonal Affective Disorder. It might seem like a strange topic for a personal finance blog until you consider socio-economic status does not insulate you from depression, suicidal thoughts, or actually killing yourself. Wealth is not a prescription for awesome mental health. Wealthy people may seek help because they have the money to pay for treatment or might have a stronger support group, but financial independence is not an elixir that cures depression or prevents suicide.

Confessions

This is a hard article for me to write. Most people have a hard time understanding what I am about to say, especially if they know me or have seen me in a business setting. I suffer from manic-depression and came this close to being one of the statistics listed above. For a long time I could not understand why I felt the way I did when my life was so good. My marriage is great, I have two wonderful (and moral) daughters, a successful business, and financial independence. Drugs are not a part of my family. So why the deep bouts of depression?

It started when I was in high school, but really turned dark in my 20s when Seasonal Affective Disorder (SAD) doubled-down on the depression as the days shortened in the autumn. November and December were almost impossible times for me to stay alive. Only Mrs. Accountant kept me alive. I had the gun in my hand; I had the rope waiting for me in the barn. The pain was that deep.

When I informed my family I was thinking of writing this post they were supportive; when I said I wanted to provide solutions because I have beaten depression there was a resounding rebuttal. That is one of the truths about depression: those who have it sometimes do not think they are sick. Another truth is more sinister. There is a part of depression that draws you in. There is something comforting in the painful fog of depression, like an old friend. It is why it is so hard to avoid.

According to Psychology Today, about 10 million Americans are estimated to suffer from SAD and research shows as many as 4% of people suffer from bipolar. People with SAD suffer during different seasons, though the shorter days of autumn in the northern hemisphere tends to affect more people with SAD as winter approaches.

Manic-depression is a strange animal. I love, I really love, the manic phase. I get so much done and I feel on top of the world. Unfortunately, after the mania comes the depression. The swings are powerful. I am considered a fast cycler. That means I can swing from top to bottom more frequently than the average bipolar person. Sometimes the depression barges in when I am at my weakest. After working long hours for a long period of time, the exhaustion lowers my guard and the emotions rush in. It is so swift, so powerful, it takes my breath away. Before long I am with an old friend. It is a good thing I don’t keep a gun beside my bed.

Solutions

Enough of the statistics and my problems. I am a solutions type of guy. I have found ways to reduce and alleviate the effects of manic-depression. If you are like me, medications do not work and have side effects which include suicidal thoughts. The best news I can offer is that SAD generally lessens with age; manic-depression does not.

The solutions I offer work for me. You are different! What works for me might work for you. Might. You need professional help to find solutions that work for you. Medication only works for some people. When medication is only a partial or a non-solution, you need to find anchors to help you through difficult times.

If you are having suicidal thoughts I want you to stop reading now and call your local suicide hotline or the National Suicide Hotline at:

bipolar-4-bipolar-disorder

People with bipolar struggle to know who they are.

1-800-273-TALK (8255)

When things get dark you need help. No matter how strong you are you must seek and accept help. I know it is hard. But your life depends on it. It doesn’t seem that way right now, but it will later.

Honing the depression side of bipolar is only half the battle. Taking the edge off the mania can reduce the depression side when it hits. The tug of SAD already is present as the days are noticeably shorter. You should be aware bright light helps, especially as the days bottom out in November and December. In NE Wisconsin November is the cloudiest month of the year. Coupled with the already short days it makes it very hard to push depression back.

Diet and exercise played a major role in reducing the wild swings of bipolar for me. Getting enough sleep also helps. This is really hard when your thoughts are racing, I know. I have a habit of living on very little sleep for long periods of time before I crash. The crash is not pretty. Usually I can keep the mania going for a bit longer in some cases to make it through a busy tax season or to push further into autumn so the SAD inspired depression is lessened.

The Christmas holiday with the pretty lights seems to also help. Once I make it that far I can focus on the upcoming tax season which seems to chip away at the depression until it is gone.

Summer is usually a good time for me. The longer days mean depression is subdued though not totally eliminated.

Regular exercise had played the largest role in reducing depression. The episodes are significantly reduced as long as I keep running and lifting. I take one day off per week and run three days and lift three days. It works for me. Exercise releases chemicals in the brain similar to prescription medications. The self-produced chemicals also seem to work better.

Stoic teachings also helped me immensely. By reading Seneca and Marcus Aurelius I have learned to let things go and only focus on the things I can control. For me, depression has been, in part, related to self-inflicted stress. When things go wrong the manic cycle starts spinning non-stop. Marcus Aurelius reminds me: Choose not to be harmed—and you won’t feel harmed. Don’t feel harmed—and you haven’t been. Easier said than done. As with any philosophy, it is a work in progress. Small steps every day.

Patterns

The days are getting shorter as I write this in late September. I can feel the tug of SAD around the edges of my mind. Luckily I am not in a mania phase waiting for the collapse.

This is deeply personal. How do you tell someone, or expose yourself to the world in a blog, you once held a gun in your hand and struggled to not put a bullet in your head. The perfect fantasy world people sometimes see from the outside of my life becomes totally real once you step inside for a moment. I am just like you. My life is a daily struggle to understand the world around me. The depression has certainly eased over the years, but as my family made clear, it is by no means conquered.

I am lucky in one way. I have a loving family as my support group. They do not judge me. They gently help me through the fog and night of depression until I emerge out the other side. The depression episodes tend to be much shorter in duration as a result.

Readers of this blog tend to have a higher net worth and income. Let me remind you that you and your family are not exempt from depression or any other mental illness. It is nothing to be ashamed of. We are all people with all the accompanying frailties. What defines who we are is how we work together to build a better us.

img_20160910_202211Back in my college days I had a friend who was more frugal than I was. Bill never went out, socialized, or partied. A good night out was the museum if students were allowed in for free or the college library or cafeteria. Spending was off the list.

Bill became such a good friend I asked him to stand in my wedding. He accepted after considering the cost. After college we went our separate ways as life took over. I already had a small tax practice up and going while Bill went . . . I don’t know where Bill went. The last time I saw Bill was when he was on the local news protesting the Iraq War, the first one. It has been a while.

The newscast interviewed Bill for less than a minute. He looked happy and alive wearing shabby clothes and a million dollar smile. He looked as frugal as ever and willing to fight for a cause if it promised to make the world a better place. Whatever happened to the man who stood in my wedding, I’ll never know. I performed a cursory internet search and could not find him. Oh, and he loved the movie, Fiddler on the Roof. His parents had the movie on VHS. (Remember those things?) He never stopped singing If I Were a Rich Man. It was annoying. He is lucky to be a living man.

Regardless of what happened to Bill, I learned a lesson from his rotating frugality behavior. As frugal as Bill was he periodically let down his guard and went on a spending binge. It only happened once or twice a year, but when it did all his frugal behavior the previous six to twelve months was for naught. If Bill were a rich man he would piss the whole thing down the drain. Months of saving was blown on a lavish vacation, car, or other depreciating asset. The worst part is when he partied hard for a few weeks he did so until his reserves were all squandered. For the man who would not party he was the life of the party.

One Moment Can Undo a Whole Plan

Spending responsibly and less than you earn is the only secret you need to build wealth. The frugal muscle is well developed in my life. I watch expenses like a hawk, investing first and spending what is left. Retirement plans and the Health Saving Account are priority expenses in my life. They are not real spending, of course; it is saving and investing. But it illustrates my priorities.

We all have a bit of Bill in us, however. My frugal ways sometimes give way to stupid spending I regret almost as fast as the money leaves my hand. Age has helped smooth out those moments of spending insanity, thank god.

My home is a prime example. I bought my current home in 1995. It was a shotgun shack by Wisconsin standards. I paid $120,000 for the property with 10 acres and a few outbuildings, including a barn. I spent a year remodeling before I moved in; it was that bad.

Before starting a major renovation and additions a few years later I paid the mortgage down first. Once the mortgage was nearly retired Mrs. Accountant and I started planning our home updates. The first draft was a wish list. It was unreal. Mrs. A wanted a big kitchen, but I explained what she was asking for was not even reasonable. Finally I stepped off the kitchen dimensions she designed so she could see how big it was in relation to what we currently had. She changed her mind fast when she understood how much work it would take to maintain such a large area.

Mrs. A was not the only dreamer in the house. I had a massive plan for lots of windows to the north so I could spend the winter months stargazing in the comfort of my home. That was a half million dollar addition right there. That may not sound like a lot to folks in California or other costly real estate markets today, but in 2002 in NE Wisconsin it would have given me one of the pricier homes in the county. The heating costs would also have been devastating. Sanity ruled as I tossed my idea on the same heap Mrs. A’s kitchen plans went.

In the end we settled for a more modest home. We still have 3,000 square feet with more creature comforts than are healthy for human beings.

Two more ideas were tossed into the mix by family members (okay, my dad): dig a pond and remodel the granary into an office.

Good Intentions, Stupid Ideas

People like to float their ideas as something you must do. Spending on a vacation they think would be awesome is stupid if you have no desire to travel there. Buying a car the neighbor thinks is cool or to impress your friends (or a girl, guys) is something an idiot does.

And I have been an idiot a time or three in life. The granary was never remodeled. Spending $25,000 for a fancy office next to the barn would be nice, but unnecessary when I have 3,000 square feet available in the house. Maintenance and utility costs would have added to my baseline spending just to keep the granary in good condition. Then I would have to spend time out there to justify the spending. I would rather spend more time in the house with Mrs. A instead.

The pond is a different story. A low area of the 10 acres required some work. A slough ran from one end of my property to the other. I cleaned the waterway so the water flowed better. My dad kept pounding the idea of a pond. I relented and $20,000 later I have a pond. That was twelve years ago. Sure I had the cash to pay for it, but now I have fish I need to feed (I don’t farm or sell fish). The additional cost is negligible, but constant and takes time. I get razzed for not fishing more. People act like it is so awesome to have a pond and if they were as lucky as me they would fish every day. Fuck! I don’t like fishing that much. It’s just a goddamn job. Cleaning fish is a pain in the ass. For me. You might be different.

During moments of impending depression I pull out my handy calculator and tally how much the pond has cost me over the years, including lost opportunity cost, as in, how much would that money be worth now in an index fund? God, I can be a dumbass sometimes!

Admitting You Have a Problem Is the First Step

It has been a long time since I bellied up to the bar of stupidity at that level. Still, when I feel a bout of honesty bubbling to the surface I start drinking heavy, no, I mean I reflect and learn from past mistakes. I track my spending and only pay cursory attention to income. Income, in my opinion, is easier to get than to control spending. When you stop tracking spending, expenses start creeping higher.

There was a time I wanted to have all the Star Trek episodes on my shelf. Wasted a small fortune to realize that goal. They are all available on Netflix now at no additional cost. The library has the whole series, too. Does not matter; I don’t watch Star Trek much anymore.

Rotating frugality is something I see often with clients and friends. Everyone knows they need to keep their spending under control so they take steps to spend responsibly. Then a brief lapse of IQ sets in and fucks up the whole works. Before you know it you have a pond stocked with perch and bluegills, and a shelf in the living room packed with VHS tapes of Star Trek: The Next Generation and the original series. You can’t give away VHS tapes so the landfill is the only option.

As intelligence would dictate, I keep the movies on the shelves next to where I write most of this blog. It is a reminder of how rotating frugality can destroy a lifetime of responsible money habits with one stupid spending decision.

11971929595_80b618ca62_oTensions were high on September 26, 1983 between the United States and the Soviet Union. By May of 1981 the Soviet Union was convinced the United States was preparing for a first strike nuclear attack due to the rhetoric of President Reagan. Further fanning the fire was the Soviet military downing of a South Korean commercial airliner. Except for the Cuban Missile Crisis, the world was never closer to nuclear annihilation; the only difference is that during the Cuban Missile Crisis people knew how close they were to disaster; in 1983 the world knew tensions were high, but seemed blissfully unconcerned.

Stanislav Petrov agreed to fill in as commander for his friend on September 26, 1983 at Serpukhov-15 of the Russian Aerospace Defense Forces. His job was to watch for a surprise nuclear attack from the United States and her NATO allies. The United States had promised to install 108 Pershing II nuclear missiles along the Soviet border (they did in late November 1983) which could strike Soviet targets within ten minutes of launch and of which the Soviet Union had no defenses against.

The Soviet leadership was convinced the United States was waiting for any opportunity to launch a full-scale nuclear attack. Under this heightened tension the alarms blared shortly after midnight on September 26, 1983 at the Serpukhov-15 facility. The early warning satellite system reported one in-bound missile! Everyone in the room started screaming at Stanislav to launch a full scale nuclear attack against Western Europe and the United States.

Stanislav, the substitute for the evening at the early warning detection center charged with launching a retaliatory nuclear strike should the Soviet Union be attacked, hesitated. Something was not right. The whole room demanded his attention at once increasing the risk he would make a critical error in judgment at the worst possible time.

Only one missile? Stanislav thought. If the U.S. launched a nuclear attack they would send hundreds in an attempt to disable the retaliatory capabilities of the Soviet defenses. It had to be a false alarm.

Soviet radar could not see beyond the horizon to confirm if the missiles were real. The clock was ticking. A wrong decision would cost billions their lives. Then the alarm sounded again! More missiles were on the way. The number was still small, but rumors abound of U.S. stealth technology and President Reagan’s Star Wars Defense Shield. Are there close to ten missiles on the way or hundreds cloaked behind stealth technology? Stanislav held the fate of the world in his hands.

Not a single person in the room other than Stanislav was willing to wait; the button had to be pushed now! Stanislav knew the satellite warnings periodically gave false reports. Something was not right about the scenario. He decided it was a false alarm and did not end the world due to misguided information and the constant demands of those around him to act impetuously.

Daily Crises

How would you respond to the situation Stanislav faced? What about handling a group of people all demanding your attention at work or from family members? There is not much difference; only the consequences are. As you grow as a person more and more people will want a piece of your time, a piece of you. Do you succumb to the incessant demands and allow non-stop interruptions to force you to push the button?

When you are ill you want to see the doctor. You reluctantly tolerate the nurse gathering your vitals. You want the top dog to do everything and fix what ails you. No one else will do.

The wife and kids all have something to tell you the moment you walk in the door. At the most exhausted part of your day the people you love most unload on you. Do you ever get a break?

Your car has been serviced by the mechanic three times now and it keeps breaking down. You bought this vehicle less than a year ago brand new and you want the damn thing to start working. Only the best mechanic will do at this point. Actually, you want the boss to do it personally.

Closing the Door

When crisis threatened civilization, Stanislav mentally closed the door and refused to hear the chatter of demands around him. In a crowded room of hysterical people demanding action, he was able to close the door of his mind and think the problem through clearly. He knew the attack did not make sense. A few missiles would only invite mutually assured destruction in a counter attack. What later proved to be sunlight reflecting off the top of high clouds almost started World War III. It was a clear mind that allowed Stanislav to make the right decision during the most important moment of his life.

Demands and interruptions will occur. It always comes in groups. Google Analytics allows me to see traffic on this blog real-time. You would be amazed how clumpy the traffic is. Late at night when I have not published a new post for hours or even during the day the traffic will cluster in small areas. Literally the traffic will pile up from a select number of small towns. Traffic is never smooth. How do people know when other people are online reading this blog? They don’t. Life just works that way. As the Morton Salt container has said since 1911, “When it rains it pours.” The demands never come in a single file orderly manner.

Business owners and landlords know this only too well. If something breaks down in one rental, there are sure to be more simultaneous crises from the viewpoint of additional tenants. Even if you only have two rental units there are times both units demand attention at once. In my office the phone can be quiet all day and within a few seconds every line is lit up. The callers will come from different time zones even. There is no logical reason why things turn chaotic so quickly, but they do.

Since we know demands come unannounced and from scores of people at once, we need to learn coping mechanisms. Stanislav had no idea at midnight what was about to happen. Then all hell broke loose. He may have been filling in for a friend, but it was also his regular job. He was trained for this shit. When the proverbial manure hits the fan it takes a master leader to shut out the distractions, close the door, and take control of the situation. One false move and whole house of cards collapses.

Applications in Daily Life

For some reason a large number of people call or show up at my office at the same exact moment I am scheduled to arrive at work. They want to burn any plan I have to get work done and replace it with whatever they deem important. Unfortunately, if I allow this to happen I will get no work done the entire day as an endless stream of interruptions control my day.

In a weak moment, if I show any weakness, the crowds are relentless. You know what I mean. The only way to handle the deluge is to close the door mentally, metaphorically, as well as the physical door to your room. You can’t take every phone call as it comes in; you can’t take most phone calls as they come in if you are in business.

By closing the door you give yourself a chance to think logically about all the factors involved. A mistake will cost you freedom, money, time, or other things you don’t want to give. You must remain in control of you. The world is beyond your control. Phone calls and clients will demand an immediate response to their inquiry. If you allow the world to control you, then you have relinquished the one thing you really do have control over: your response to the world around you, how you interpret that world, and your own thinking.

It is unlikely any reader of The Wealthy Accountant will face a crisis even close to what Stanislav did. If you piss off a client, tenant, friend, or family member, you might lose a client, tenant, friend, or be ostracized by the family. The great news is if the worst happens there will be one less person to harp on you when the course of demands begins in the future.

Friendly Advice from Your Friendly Accountant

I have more phone calls on my desk this Friday afternoon than I can possibly call. Many will be left for later. If I feel like it I might come into the office on Saturday for a few hours and make some calls. Usually all the people who wanted me during the week are out and about on the weekend because they value their free time highly. You need to value all your time, not just free time, all time, highly. When you call the doctor, mechanic, or accountant don’t demand to speak with the boss this instant. Leave a message. When I return a call you have my undivided attention because I don’t take interruptions. I also reviewed your account briefly before calling so I know what I am talking about. Demanding to speak with me when I have not seen your file in months will result in wasted time and frustration. I’m getting old and forget what I am doing. They say short-term memory is the first thing to go.

Anyway, where was I? Oh, yes! Closing the door. In my office it is easy to close the physical door. Plenty of folks think that means they knock once before barging in. I think I will sit at my desk naked from now on when I close the door and see how often they knock and enter then.

Coming home from work or a vacation brings a rush of people to greet me. Closing the door mentally is the only way to deal with it; a physical door is not enough if there is even a physical door to close. But how do you close the mental door?

I have found a simple solution to dealing with millions of simultaneous demands. Ignore them all! (I’m not joking.) I can keep a million dollar smile and enjoy the moment as long as I understand there is no requirement I help anyone with any of their demands or requests this instant. If I walk past the front desk while six people want to see me I can nod and say ‘Hi’ without dealing with any issues. If I help one person on the spot it creates chaos as the remaining people try to chime in or feel resentment. When I am ready I bring each person in for private time to discuss the issues. If you don’t have an appointment there should be no expectation you will see me that day; my administrative assistant will be happy to set an appointment. Just because someone is not in front of me does not mean I am available. I will not drop work I promised earlier to take an interruption. Remember, I am an old guy. The line between reason and insanity is thin.

8292545493_8baa0b4f9c_oConsequences

Refusing to block out all the noise will cause just as much damage to you personally as a bad decision by Stanislav in 1983 would have caused the human race. Your choices will affect you and the people around you. There is a reason airlines tell you to put your own mask on first before helping the kids. Focus on priorities first. If you are unconscious you are no good to anyone.

Picture the scene this way. You walk in the house Christmas morning with an armload of wrapped presents. The kids are all reaching and screaming for their present. You can push everyone back and hand the gifts out one by one and create bedlam or you can acknowledge the group without singling any one demand for response. This allows a moment of sanity so you can have all the presents go out at once. The kids will do most of the work for you.

A landlord can have voice mail explaining she is currently helping another tenant and to please leave a detailed message so the caller can be helped as quickly as possible. Now the landlord can focus on problems in an orderly fashion.

When the family all wants something the moment you walk in the door refocus the frenzy into a greeting. This stops everyone from talking over each other until you can address your family’s needs in a logical order.

Business owners need to walk away after a while. If a deluge is consuming my time, increasing stress, but not allowing me an opportunity to complete projects, I pack up and go home. I’m not getting anything done anyway.

Even in a real crisis you have to shut the door mentally and bring order to chaos. Important decisions made when people can be hurt or die requires focus, focus you can only achieve when you push everyone back and you take control of the only thing you have control over: you.