Wednesday, June 15, 2011

I Don't Have to Pay My Loans Either

My wife and I have an ongoing spat. (OK, I am making it up to make a point.) The argument is centered around how much we should spend on certain items in our family budget. I think we should fill the fridge with food, fund the retirement accounts, and invest for the kid's college fund. I am willing to work a few more hours to pay for these things.

My wife thinks I'm an idiot. She can't wait to move my tail out of the house and bring in a husband that thinks like she does. She says we should work even fewer hours and cut spending. Who cares about college and retirement so far in the future. As for the leaking roof, my wife thinks a patch is better than replacement. Since she holds the checkbook, she refuses to pay the credit card bill and mortgage until I agree with her and cut our income and spending. I tell her she is nuts. She says she called the mortgage and credit card company and they were fine with us paying late if it helped us get out financial house in order.

The above example is exactly how Congress is acting with the debt ceiling limit. Wisconsin Rep. Paul Ryan says he talked with U.S. debt holders and was told a late payment is fine, especially if it leads to more fiscal responsibility later.

Back to our example. The due date for the credit card comes and goes without payment. Two weeks later the wife and I kiss and make up. The credit card is paid. No harm, no foul. Right?

Wrong! The bank now knows we are willing to leave bills unpaid even when we have the money to pay. The money was available to pay the credit card. We just chose not to pay it until we agreed to get along. The bank IS okay with the late payment because the interest rate was hiked from 8% to 18%. It will stay that way for years even with no future late payments.

Back to the real world. Do you really think U.S. debt holders will be fine with a missed or late interest payment? To a point, maybe. But really? No. Debt holders will now need a higher rate to compensate for the risk. Not just the risk of hard economic times, but lover's spats, too. Treasurys will no longer be the premium cash management tool they once were. All Americans will pay the price then for the stupidity of Congress and for a long time.

The Republicans and Democrats in Congress need to stop acting like an old married couple with an ax to grind and start acting like the professionals the American people thought they hired to run the country. Americans, and the world, are counting on it.

Sunday, June 5, 2011

Gus What?

Now that tax season is finally winding down I have the time to reflect on what I want to do with the extra three or four free minutes I get each day. (Yes, I know it is June. I'll explain later.) This blog post will help you understand how your friendly accountant thinks. It is insightful because I see a lot of people over the year and how they manage their money, time, and lives. I recently had a brainstorm that can help you in your life if you open your mind to the possibilities.

First some background. Tax season does NOT end on April 15th; it ends around Memorial Day. Tax season begins around mid-December with setting up tax software and mailing calendars and pre-appointments to clients. Between Christmas and New Year's Day the office is fully staffed with all non-tax preparing employees and additional part-time help. Pre-appointments take a lot of time to set up in the computer. Happy Holidays guys!

January is flush with year-end payroll reports, 1099s, and W-2s. All regular full- and part-time employees begin their tax season schedule the first workday of January. A few small tax returns straggle in by mid-January with a rapid influx the last few days of the month and escalating to season heights in early February.

With a large number of smaller tax returns done, March puts the rush on corporate returns due March 15th. By now the entire office is living on caffeine to keep going. But there is no time to lollygag. The April 15th deadline is fast approaching.

All this time, from mid-December to mid-April, I promise people I'll get to my other work as soon as tax season is over. And, like clock work, the phone rings 926 times with 23, 439 emails on April 16th. Every phone call and email starts with, "Getting ready to enjoy your vacation time?" I smile, but my teeth are grinding. I roll up my sleeves and dig in hot and heavy. By about June 1st I am reasonably caught up. Then I sit back, crack open a cold one and sleep the day away until next December. Oh wait! That last bit was my fantasy. Sorry about that.

I know what you are thinking. You think I am a lucky stiff that works half the year and takes it easy the other half playing golf and other assorted distractions. Well, I am sorry to burst your bubble, but, things only slow down from the hectic to the barely manageable for the last half of the year. What the slow down does allow is for some time for personal interests.

Accountants make their money (virtually all of it) in the first half of the year. It is common to work for six months at a loss to make a nice income in the spring. Accountants are also tight with a dollar. We have to be. The paycheck we get in late April needs to last until January. Compared to most accountants, I am even tighter. My wife says it takes the Jaws of Life to open my wallet. She also says Washington and Lincoln squint when my wallet is opened from the rare glimpse of sunlight.

Accountants are practical people. At least I like to tell myself such. That extra three or four minutes a day allows me to have a nice garden. I am up to four this year and am proud to tell you I should break the 1000 pound mark for harvested potatoes this year. I also added three varieties of grapes and raspberries this year. This fall we should can 50 or more quarts of pears and another 30 of plums. I make home-made wine (dandelion, red clover, current, and grape are my favorite), can and freeze hundreds of pounds of beans carrots, cauliflower, broccoli, and anything else I was crazy enough to plant. We also dehydrate hundred of onions, pears and apples.

I tell you these things so you understand where I am and how my thought processes work. You see, I like to extend the period of time I make money. I need something to add to the garden that takes only a modest amount of work, makes good money, and takes time outside tax season only. And that leads to today's topic: Gus What?

I have a small asparagus patch that has kept me satisfied for years. But this year I bought a few more crowns and propagated what I already have. Next year my production should skyrocket over 400%; the year after should exceed 2,000% of this year's take. Within five years I hope to harvest asparagus (which I affectionately call gusses) by the ton. Asparagus sells for $3-4 a pound in local grocery stores. One acre well tended can produce between 3 and 8 tones of asparagus. It takes an hour or so to pick an acre of asparagus. Asparagus picking season is one month where I live (from mid May to mid June). Asparagus keeps well if the cut ends are placed in cold water and kept in the fridge. Asparagus can remain fresh months this way. I can see a nice new side business developing.

This morning for breakfast I enjoyed gusses cut into one inch pieces, sautéed in olive oil, mixed with scrambled eggs until completely done, and covered in Tabasco. My god, I was in heaven.

Oh! I gotta go. My wife is coming and she doesn't like me talking these fantasies. She knows I'm just crazy enough to do it.