I recently had a client quit working with my firm. He didn’t like the strategies we came up with. We found a few things initially that could have been reported differently, but it came down to the fact that he wanted dramatically different results and didn’t want to make any changes.
Unfortunately, I see similar stories all too often. Typically, it’s a high income household and the parents work long hours at jobs they frequently don’t like. It could even be in a business that they own or a profession such as a doctor they’ve spent years training for. But the fact is that it has become a treadmill for them. And that treadmill just keeps going faster and faster. There needs to be some reward! And generally, that means spending money. Money for travel, money for luxuries such as sports cars, and money for a bigger house and all that goes with it.
In the end, the family that works very hard to make $300,000 – $500,000, can have nothing left at the end of the month. The answer isn’t always to make more money. Sometimes it’s a question of making sure that you spend at least some of the income on investments, with ROI (return on investment) instead of just another expense. If you can’t turn at least some of your income into an investment, at least make sure you’re minimizing your taxes.
Spending money can be a treadmill. A bigger house means higher payments, higher property taxes, higher utility bills, more expensive furniture, more expensive cars and so forth…most of which is not deductible. And that’s how a person making $500K per year ends up broke.
And, then when they come to me it’s hard to help them make a difference in the taxes they pay because there is nothing left to work with. Things have to change and there does have to be some money spent to set up entities, fund a pension, send money to a C Corporation (that they own) for services or whatever is involved in their strategy. No money for investments. No money for anything but paying for the ever-escalating credit card bills.
There is always a rate of return on our strategies, but it does take some money to implement it. And it will require some changes in how they do business, make investments and at least for awhile, spend their money personally. Sometimes those changes are too much for some people to make.
And they leave my firm.
If you are ready to change the way you do things, knowing that there is a proven gain when you do, call us. Otherwise, if you want to do the same things with different results, we can’t help you.