Category Archives: Career

Why CPAs Are Terrible With Their Finances

As I write new posts, I do a lot of looking back to the past. I want to be able to pass along the mistakes I’ve made, so others do not make the same mistakes, and to share the things that have really put me ahead of the game.

As a kid fresh out of college, the people I looked to most for personal finance advice were my seniors at work. They were probably four or five years out of college, CPAs, and I thought they could enlighten me on getting ahead with my finances. This seems like a decent idea, but the problem was, the people I was taking advice from had car loans, overreached when purchasing a home, were day trading stocks, etc. I started to notice this when one of them was eating bologna sandwiches for lunch on the regular.

I was in my early 20’s and instead of saving up for an emergency fund, or accelerating my student loan payments, or contributing to an IRA, I was taking penny stock trading advice from my coworkers. I assumed that since they had their CPA, they would know about personal finance and personal income taxes. These are untrue assumptions based on a few reasons.

Number One – No personal finance education is taught in accounting classes

As I was getting my accounting degree, there was one class on tax and only a small part of the class was on personal income tax, and NO classes on personal finance. I did not encounter a class that involved personal finance until my masters program, and that class was an elective and therefore not required to graduate.

From what I recall, I’m almost positive that no personal finance knowledge was tested on the CPA exam. There are four tests which make up the exam, and only one part of one test was on personal income taxes.

Number Two – Accountants may become very specialized

Just like any career after years on the job, accountants find themselves in an niche, and perhaps specialize in one area of accounting. One year I had a question on qualified dividends and asked my buddy who is a tax accountant by trade, figuring he’d be able to help me out. Well it turns out he did corporate tax returns for one huge corporate client basically all year long, and had no idea about personal taxes and relied on TurboTax to do his 1040.

Number Three – “Financial adviser” internships in college are very deceiving

Some of my friends received “financial adviser” internships during college, some of which were accounting majors. What these jobs really were was a way for large insurance companies to peddle their high commission insurance products on the interns’ friends and families. From what I saw there was no actual advising going on, and this probably gave students and their friends a poor perception of what financial advisers really do or at least should be doing.

Number Four – Their bosses have very high incomes

This right off the bat leads to lifestyle inflation. When I started working I became very star struck by the partners in the firm I worked for. They made a ton of money, and some more senior partners at bigger firms push seven figure incomes. They all have summer homes, spouses that don’t work, and go on amazing vacations. One partner at the firm I worked for right out of college even raced Porches on the weekends (he owned the Porches).

This was very mesmerizing to a young 20-something professional. People start to think (myself included) “well if I’m going to be making hundreds of thousands of dollars in 15 years, why save now?” To try and keep up with their superiors, CPAs will start to stretch themselves financially. They’ll buy cars on credit, overreach for a home, and spend, spend, spend. Basically the “I’ll spend now and save later” mentality sets in.

Moral of the story is don’t go to your neighbor or coworker who has a CPA for personal finance advice, because unless they have been specifically trained, or they have taken time to personally research and teach themselves, you’re better off listening to strangers on the internet*. I know the strangers on the internet approach has definitely helped me the most.

Who did you take personal finance advice from right out of school? Has taking personal finance advice from strangers on the internet worked out for the better?

* – Just to be clear, take this with a grain of salt and consult professionals before you make any financial decision 🙂

Dream Job

In the financial independence community, I think we sometimes get stuck on reaching financial independence and the long-term goals of how we’re going to get to our “FI date.” But what happens if you didn’t have to escape the “real world” and your career that you disliked. What if the path to financial independence wasn’t such a rush, and you did not want to leave your career with its associated paycheck? Do these dream jobs you hear people talk about actually exist?

You know these people I’m talking about… “I’m a teacher (replace teacher with nurse, physical trainer, writer, counselor, etc.), it’s my DREAM job, it’s my passion! I would do it even if I didn’t need to work.” Are they for real? Do they really enjoy their job that much? I’m sure you’ve met these people before. I can’t decide if they’re being honest, or they are just trying to justify their career path to others. I’m sure many of these people are honest, and for that I am very happy for them. Not everyone can find a career they are passionate about and enjoy doing day-in and day-out, while earning a paycheck.

So I started to think, what would be my dream job? I have not figured it out yet (or at least have not found the cahones to quit my career to figure it out), so I came up with a few ideas of what my dream job may be:

1) Maintenance at an RV Campground

Pros: I had this job about 15 to 19 years old, and I loved it. I was making $12.50/hour by the time I was 19, which wasn’t bad. I got to hang out with my friends all day, do some manual labor like weed whacking, and every weekend there was a bevy of teenage girls who were dragged there by their parents because they weren’t allowed to stay home alone while the parents went away.

Cons: No health insurance, pay probably wouldn’t go up much from there, seasonal job in nature, and I won’t even comment on the teenage girls.

2) Certified Financial Planner

Pros: I have always been interested in becoming a CFP. When I had interned at a regional accounting firm during college, I shadowed some people in the wealth management division. I got to sit in on an financial assessment of a woman who wanted to know how her family was doing financially. I loved the meeting, and even 20 year old me came out of the meeting with a whole list of things her and her husband could be doing better. I would really be able to help people out with their personal finances if this was my career (and if they took my advice).

Cons: I would definitely not work for an affiliated adviser as I would refuse to push investment products and strategies on my clients. I would have to work for an independent adviser, and then still I would be reporting to a higher-up and perhaps all my ideas wouldn’t reach my clients. To make this career work I would have to work for myself, but it would be a long road of trying to build up my client base. And I don’t know if I would like taking calls from certain clients every time the S&P dipped a couple percentage points.

3) Carpenter

Pros: My father has always been a DIYer and performed all the electrical, carpentry, and plumbing repairs at our house growing up and I would be his assistant. I’ve assisted in the building of porches, wiring houses, plumbing for hot water heaters, etc. I always liked this work because I was learning something new, hanging out with my dad, and building something tangible that served a purpose when it was completed. My favorite of these tasks was definitely carpentry because I liked using the saws, drills, and hammers.

Cons: A lot of these jobs are unionized and I would have to go through a whole apprenticeship period which would take years. I’ve worked in a lot of these settings when I was in HS and college, and I don’t know how well I would get along with my coworkers and bosses due to different interests. So if I was a carpenter, I’d want to work for myself, but then I’d have to find all my clients with currently no referrals or real experience.

4) Farmer

Pros: My grandparents owned and operated a dairy farm down the street from me when I was a child. I would ride my bike down to their house after school, on the weekends, and all summer long to help out my grandfather. I’d help milk the cows, hay the fields, pick vegetables, and anything else that arose. It was nice to be outside (if the weather was nice) learning about farming and obviously every boy loves hanging out with their grandfather.

Cons: This career is requires some extreme manual labor which can take a toll on the body. Also if you are starting a new farm, there can be huge capital outlays for land and equipment. This career requires your attention 24/7 and wouldn’t have much time to pursue other hobbies or interests.

5) University Professor

Pros: After obtaining my masters in accounting, I somewhat seriously considered getting my PhD and becoming a professor. Accounting professors were in high demand, and if you got into a decent program they would PAY you to obtain your PhD. And then starting salaries at universities after the 4 or 5 years it took to obtain your PhD averaged about $150k a year! Plus think of the pension, time off, and other paid for benefits!

Cons: A big part of being a professor at a university is publishing your work. I don’t know how excited I could get about coming up with ideas to regularly write about in the accounting field. These blog style posts on topics that interest me are way better.

6) Personal Finance Writer

Pros: While I’ve only been writing posts on this blog for a couple months, I thoroughly enjoy getting my thoughts and ideas down on paper. Personal finance is obviously a subject I’m passionate about, and I would love to spread any knowledge I’ve accumulated over the years to anyone willing to listen. So many great writers ahead of me have taken their time to teach others like myself, and I would love to return the favor to the next batch of personal finance students with posts like Post College Finance Guide or Keeping up with the Joneses.

Cons: I have no formal journalist background whatsoever, and my blog is a baby and therefore I don’t have much experience in the field and it may be quite hard to convince someone to pay me to write about personal finance or my other interests.

7) The Suze Orman Show (or better yet The Fervent Finance Show)

Pros: Please don’t laugh! But one of my guilty pleasures is watching The Suze Orman Show. I don’t know why I still put myself through the torment of watching it and cringing every time someone calls and asks a ridiculous question. It usually goes something like:

I make $50k a year. I have $7k in credit card debt, $45k in student loans, and $4k in my retirement account. Can I buy a $40k convertible?

Even though I do not agree with all the advice she gives, she does give great advice to personal finance novices that are clue-less about where to begin or how to get themselves out of debt, and she definitely does not hold back! She does not seem biased as it she tells people when their financials advisers are trying to take advantage of them and that whole life insurance policies are crap. She also usually recommends low cost index funds which I like. If I had her job, I would get to give advice that I felt would actually help the listeners and I wouldn’t have to charge them for it because I would be earning my income from the advertisement revenues.

Cons: Yelling at all the people calling up asking me if they can fund their large purchase by putting it all on their interesting bearing credit card.

In all honesty I think #6 takes the cake! If I had a career that I was exited to show up to, was passionate about, and provided me with a paycheck, it would make reaching financial independence that much easier! Now I just need to convince CNBC to let me take over when Suze retires from the program. Shouldn’t be too hard…

What is your dream job? Are you currently living it? If not, what is stopping you?