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Inflection Point

The past week has been an interesting one around the Wealthy Accountant world and all I can think of to explain it is. . .

Put up or shut up.

The best way to tell this story is to go back to the beginning.

Long time readers know I opened shop without knowing I opened shop in 1982. I prepared my first tax returns that year because I wanted the money and it seemed like easy work. It took until the 1989 tax season to realize this is something I could do for a living and still appear as a hard working, up standing (that illusion wore off fast) young man supporting his new wife.

The world was a different place back then. The local newspaper had two and a half pages of business card sized ads during tax season for tax preparation services. I was one of those ads. There hasn’t been an ad in that newspaper offering tax services in 15 years.

Leader of the Pack

To succeed in business you need to differentiate from your competitors. The stunt I pulled was free electronic filing. I heard through the grapevine there was a tax software firm only changing their accountants $1 per return to e-file. Back then everyone was charging $25-$35 for e-filing.

I called the IRS to find out who this firm was. Internet was still in the future. A search of the industry journals didn’t reveal what I wanted. And the IRS wasn’t willing to cooperate either. The IRS support member I reached explained they couldn’t help me because the IRS doesn’t endorse any tax software package. I get it.

So I kept calling rapid fire with the same question: Who is the tax software firm offering e-filing for a single dollar? After close to a dozen calls a service rep said, “Drake.” Click.

That was all I needed. I grabbed the industry journals and found Drake Software and called them. A short conversation revealed they were my mark.

The next tax season—my second as a full-time tax firm—I was utilizing cutting edge technology to crush the competition. In my office e-filing was free for all customers from then on. It doesn’t sound like much, but back then it was a big deal.

And the free e-filing offer was a profit center for my firm. It cost me a dollar, but I didn’t have to print a copy of the return to mail to federal. I estimated the cost of printing was at least a dollar so I reduced my costs more than what Drake charged me to e-file.

Wisconsin, my home state, was still a pain in the tail because they didn’t offer electronic filing. Not only do you print a copy of the state return to mail in, but attach a copy of the federal return too.

Then a miracle of miracles happened. Wisconsin tested e-filing. The state selected a small number of firms to test their system (I heard it was three) the first year and my firm was one of them because I offered free e-filing and had zero fraud cases.

My competitors were facing a punishing assault. The next year Wisconsin opened e-filing to virtually all tax firms with a limit on how many they could file this way, except for the original test firms which could file as many as they wanted.

By the time competitors caught on it was too late; I was well entrenched and not going away.

This was the first time in my career where I needed to put up or shut up. You’re going to be disappointed in me. I shut up.


My practice was growing like wildfire! I went from a bedroom in year one to remodeling my entire basement for the next few years to an office building by year five. Growth was out of control! I went from zero to the 2,000 client range by the sixth year in business with growth rates still in the neighborhood of 30%. The only reason it wasn’t higher is because management skills were needed.

I am reasonable good at taxes and personal finance. I like to brag how you don’t need a college education to succeed, but my lack of a formal business education started to show. Managing a rapidly growing business was causing problems.

This was the point where I had to make a choice. The accounting/tax industry has been consolidating for a long time. The choices were clear: sell out to another firm and enjoy a normal retirement at a very young age, open additional locations to expand the company’s geographical footprint or buy out competitors to expand the business. I did none of these.

Retirement is something I’m also not good at. You learn too much owning a business like mine and I love that part of the profession. I knew my limitations and understood my talents were woefully short when it came to running an expansive accounting firm. And I never considered buying a competitor. Finding clients has always been easy for me; getting the work done has sometimes been the challenge.

Stubbornness made me do what I did. I actually shrunk the business from 2,000 returns to 700 over a number of years and added more consulting, bookkeeping, payroll and tax audit services. I was more profitable than ever and happy as a clam.

Competitors became violent in their attempt to purchase my firm. It got so bad that for a few years attorneys would show up in my office and demand to speak with me, a lucrative contract in hand. I could sell for a lot of money and focus on the things I’m best at working for the acquiring firm. Unfortunately I make a poor employee so I sent the guys in suits packing.

A Short Time Ago

By shrinking the firm to a manageable size I was able to regain my sanity. The workload was reasonable until I met Mr. Money Mustache. As Kurt Vonnegut would say: And so it goes.

Rapid growth was back and all the weaknesses reappeared. All I want to do is talk with people to help them solve their money problems. It’s something I like and am good at.

Finding tax professionals at my level is like pulling hen’s teeth. (Any reader out there who has ever pulled hen’s teeth send me a note. There must be a story in that scenario somewhere.) Training one-on-one is not a strong suit either. I’m better in front of a crowd though I am getting better at training individuals in the office, however.

For someone who built his business on new technology and automation, I sure stuck my head up my, ah, head in the sand for several decades. New technology passed me by because I liked doing things the way I always have. You know the old story. Progress is made one death at a time.

I might be slow, but I ain’t dead! Circumstances forced me to grow up and start acting like a leader. Technology was introduced and I was so happy, wondering what took me so long to embrace the new world order. My employees rolled their eyes as they turned away.

New technology solved many problems and freed more of my time, except this blog keeps the flow of work consistent. More time meant I could handle more accounts. To be more accurate, I didn’t necessarily handle more accounts, just bigger ones. Now I need powerhouse tax pros to help me. A big problem.

Fortunately I made modest progress in this area. I found one, yes one, tax professional with the aptitude to be as good as me. She is good now and will exceed even me in as short a time as five years. She doesn’t believe it, but I made a living (and a fortune) reading people. Trust me, if you get Dawn in my office you are in good hands. She still needs my guiding hand periodically, but she gets it. Her intuitive instincts serve her clients well.

But one is not enough and my management skills are still stretched to the limit. I may lack the skills of a superstar manager, but I know how to fix these kinds of problems. But it means doing something that feels unnatural. What I planned would be almost impossible unless I found the right people.

You’re Fired

A recent news article on CNBC (I wish I would have saved the page so I could link to it) told the story of a young man who started a business and had the same problem as me. He was smarter than me in one regard. He knew he was the problem as CEO of his fast growing company and did something about. He fired himself!

A qualified CEO was brought in to replace him and he was demoted (or promoted, depending on your perspective) to lead the creative team. It was what he was good at. Instead of wasting time and feeling miserable trying to manage a company he fired his tail and took the job he was best suited for. It is okay to be the owner and still have a boss!

If I were a true leader I would fire me too. I belong in the creative department consulting with clients, designing products, writing blog posts, researching tax issues, training future tax professionals and preparing taxes. All those things are what brought me into this field in the first place and all the detritus of management has been put on the back burner as much as possible and it shows. A firm any larger would fail due to my mismanagement as the CEO. Next time you envy my position, ponder my weaknesses. I’m great because you read my stories. When the lights go out I have tremendous flaws, many fatal in the business world.

Once again I wasn’t putting up; I was shutting up. And I convinced myself the world was flat because I kept it small enough for me to excel in. Fool!

Earlier this Week

Virtually every day I get requests due to this blog. A few weeks ago I was asked for permission to syndicate this blog by a firm with a mailing list north of 100,000. I said yes, of course, and referred them to my policy of encouraging people to steal my stuff.

A reader offered my family a place to stay near a prime eclipse viewing area. If weather permits I will take him up on the offer. It looks good. All he wants in return is to pick my mind. I’m good with that and informed him I will be bringing a few cases of Wisconsin’s finest Spotted Cow beer. He lives in the bourbon capital of the world and has a few samples for me to try. If you were a gambling man I’d place my money on me imbibing some of those samples.

So I can focus on the eclipse I have a guess post next Monday and another blogger has requested a guest post opportunity. I will say yes.

If all these things weren’t good enough, I continue to get several requests per day from potential clients. A publishing house asked to secure prime real estate on this blog for a banner ad early this week. I’ll probably say no. I don’t think their publications mesh well with my readers. I’ll review more before making a final decision, but the odds are not good. But I still received the offer! Opportunities, people. Opportunities.

Then I received the most important, and probably life altering, phone call of my career. Remember how I said I am not the best candidate for CEO? I think the solution walked in my front door.

In January of this year I met Jonathan from the ChooseFI podcast. They wanted me to be an early podcast in their program. I was okay with that. To date it is the only podcast I’ve ever done. (I’m open to do more if anyone cares to hear my voice.) Jonathan and Brad recorded the podcast shortly after tax season ended and it went live on Memorial Day (in the States) while I was attending Camp Mustache in Seattle. The podcast was well received. Thank God I didn’t end anyone’s career with my normal wit.

Jonathan forwarded a question from a listener this week and I was the appropriate choice to answer said question. Jonathan also emailed he needed to speak with me pronto on an important issue. The Wealthy Accountant felt like he was being called to the principal’s office (as if that never happened in high school).

I recorded an answer to the question and set a time for Jonathan to call me.

When he called he wanted to present me with an idea for expanding this blog and the services it could provide. I have mentioned in passing some of my ideas here and on social media. Jonathan, not one to let a great idea slip by, knew I was struggling with bringing my ideas to life. They are great ideas, but who will mange bringing these things to life? Me! I have a company to run and doing a piss poor job of it. Adding more to the pile of things to do in areas I’m not a good fit for is a BAD idea!

As Jonathan laid out his case, his elevator pitch if you will (it was a long elevator ride), he recommended a program I already had started to flesh out. We discussed several programs to serve you, kind readers, in a way a simple blog alone cannot. The problem for me was digital and Jonathan knows a thing or three about digital.

I never had a dream of running the world. My ego has no such needs. Finding and training more employees is a good idea, but the number of people who need what I have to offer is in the millions! The need for quality tax and personal finance advice is desperate. Jonathan’s idea similar to mine was to train other accountant’s already in place, building a network of qualified tax professionals to serve you, kind readers, one-on-one; the kind of personalized service you deserve.

This is all a good thing! I’m not going to live forever and the world has a hard time dealing with one of me so cloning is out. Without boring you with details I can say Jonathan and I have more discussions planned to make this a reality over the next few years.

There is one more point to make. Jonathan’s talents are different from mine. He is unlikely to be a good fit as the CEO of my accounting practice, but he will be the natural fit for the new entity that evolves from this coordination of efforts.

My job will be creative design. It’s what I’m good at. Jonathan will probably do more of the management and all the digital. I am always available to discuss management issues, but implementing them will probably be stripped from your favorite accountant. No need letting a man with mental challenges run with scissors.

I am excited for what the future hold.

Inflection Points

You may have noticed I offered no solutions to the problem. Everyone, no matter how good they are, will have inflection points like I have had recently. Your issues will be different, but they are inflection points all the same.

Inflection points happen in all areas of life. A crisis of religious faith, the death of a family member, the decision to get married or (gulp) divorced are only a few. Personal finance has inflection points you have read plenty about in this neighborhood. And business is filled with inflection points.

When effort is applied the Wealthy Accountant can look respectable.

You will not see me taking a lap. I struggle as much or more than anyone else. I’m not better so bragging is out.

So why do I bother bringing this topic up? I am proud of how far this blog has come. Now J$ from Rockstar Finance has asked me to guest post on his sister blog (also this past week) Budgets are Sexy. He thinks if I write the story he requested it will be picked up by national media. He plans on giving it a nudge to encourage the activity. I am both humbled and terrified at the same time. It is time to put up or shut up.

My goal here is to share my story so you can learn from it. You are not my competition and I have zero fear you will use my experience to harm me financially or any other way. I wish I could give a few step-by-step answers to make it all better, kind readers, but life isn’t like that and your favorite accountant can’t deliver those goods.

What value can some country boy provide? That was always my opinion so I made a habit of shutting up. Oh, you can build a remarkable net worth shutting up! I’m living proof of that. But the real value is growing up and putting up. And that is what I will now do for the first time in my life. It is all possible due to the remarkable people I have met in this demographic over the last few years.

All the rest is a waste of good talent.


Saturday 26th of August 2017

Keith - I'm in! I've got nascent notions of operating a tax practice, but can't yet visualize how to make it work. This sounds helpful, to say the least.


Saturday 19th of August 2017

Most excited for you.

Keith Schroeder

Saturday 19th of August 2017

Thank you, CreepingonFI, and everyone else who has encouraged me. You are all the best.


Saturday 19th of August 2017

Yes, I think having Jr Wealthy Accountants across the country is a great idea!!


Friday 18th of August 2017

Congratulations on the new opportunities and the courage to seize them! We will all be eagerly awaiting new developments.

Working Optional

Friday 18th of August 2017

Great post. And congrats + good luck on the opportunities. Your optimism is (hopefully) contagious!

Keith Schroeder

Friday 18th of August 2017

It is. Have some.