The Best of The Blunt Bean Counter - Are Money and Success the Same Thing?

This summer I am posting the "best of" The Blunt Bean Counter while I work on my golf game. The work is actually beginning to pay off. While playing the Hoot at Osprey Valley (the 3 courses at Osprey are typically listed in the top 100 Canadian courses), I missed two makeable putts on 16 & 17 or I would have broken 80.

Today, I am re-posting a two-part blog on "Are Money and Success the Same Thing?" This post was described by The Big Cajun Man (blogger behind Canadian Personal Finance blog) as a very Zen post. I figured Zen was good for reading while sitting on your cottage dock with a glass of wine.

Are Money and Success the Same Thing?

Moneyville runs a weekly feature called Fame and Fortune, where famous people discuss various financial lessons they have learned and provide financial advice. The last question is always “Are money and success the same thing?” In the columns I have read, I do not ever recall a featured guest answering yes to this question. Yet, the fact that the question is asked insinuates that some people feel the answer is yes. I would further suggest, that we all have met people who we think would answer yes to this question; or should answer yes, based on their actions.

In my opinion, the brevity of the Moneyville column forces a cliché answer from most of the guests. The guests typically say things such as “money is fleeting” or “money does not buy love” or “people should not be defined by their money”. However, this simple question is actually very complex when you peel back the layers. Success can be defined and interpreted in so many ways. I believe that money and success are not one and the same, but are so closely intertwined in some circumstances, that money may allow you to buy certain variations of success, while in other situations it can derail success.

Today, I will not get into how we look at money, a topic I discussed in a July 2011 blog post, but will focus solely on the success side of the question.

What is Success?

The definition of success is elusive. If you ask 100 people, you would probably get 100 different answers as to how they define success. So I turn to some famous and less famous people and their definitions and interpretations of success (and money) are as follows.

Ralph Waldo Emerson, a famous American essayist and poet, wrote this poem about success (although there is some debate if he indeed wrote this poem):

"What is success?
To laugh often and much;
To win the respect of intelligent people
and the affection of children;
To earn the appreciation of honest critics
and endure the betrayal of false friends;
To appreciate the beauty;
To find the best in others;
To leave the world a bit better, whether by
a healthy child, a garden patch
Or a redeemed social condition;
To know even one life has breathed
easier because you have lived;
This is to have succeeded."

John Wooden, considered by many as the greatest basketball coach ever, had this definition, “Success is peace of mind, which is a direct result of self-satisfaction in knowing you made the effort to do your best to become the best that you are capable of becoming."

According to John Maxwell, an evangelical Christian author, success is when “Those who know you the best love you the most.”

A less spiritual interpretation of money and success is provided by American author and motivational speaker Wayne Dyer who states, “Successful people make money. It's not that people who make money become successful, but that successful people attract money. They bring success to what they do.”

Finally, and I am not sure who said this, but another more financial oriented definition of success is “The world defines success in terms of achieving one's goal, acquiring wealth, status, prestige and power.”

I have been told by other bloggers that the average reader only pays attention for 400 words (I assume my readers are not average, since I breach the 400 word limit regularly) and since I am already over 600 words, I will stop here. However, tonight, when you are relaxing in your La-Z-Boy recliner (ignore the screaming kids and barking dog), contemplate how you would answer the question of whether money and success are one and the same? I will conclude my thoughts tomorrow.

Here is the link to the second part of this series, should you wish to read more on this Zen topic.

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

Are Money and Success the Same Thing?

Moneyville runs a weekly feature called Fame and Fortune, where famous people discuss various financial lessons they have learned and provide financial advice. The last question is always “Are money and success the same thing?” In the columns I have read, I do not ever recall a featured guest answering yes to this question. Yet, the fact that the question is asked insinuates that some people feel the answer is yes. I would further suggest, that we all have met people who we think would answer yes to this question; or should answer yes, based on their actions.

In my opinion, the brevity of the Moneyville column forces a cliché answer from most of the guests. The guests typically say things such as “money is fleeting” or “money does not buy love” or “people should not be defined by their money”. However, this simple question is actually very complex when you peel back the layers. Success can be defined and interpreted in so many ways. I believe that money and success are not one and the same, but are so closely intertwined in some circumstances, that money may allow you to buy certain variations of success, while in other situations it can derail success.

Today, I will not get into how we look at money, a topic I discussed in a July 2011 blog post, but will focus solely on the success side of the question.

What is Success?

The definition of success is elusive. If you ask 100 people, you would probably get 100 different answers as to how they define success. So I turn to some famous and less famous people and their definitions and interpretations of success (and money) are as follows.

Ralph Waldo Emerson, a famous American essayist and poet, wrote this poem about success (although there is some debate if he indeed wrote this poem):

"What is success?
To laugh often and much;
To win the respect of intelligent people
and the affection of children;
To earn the appreciation of honest critics
and endure the betrayal of false friends;
To appreciate the beauty;
To find the best in others;
To leave the world a bit better, whether by
a healthy child, a garden patch
Or a redeemed social condition;
To know even one life has breathed
easier because you have lived;
This is to have succeeded."

John Wooden, considered by many as the greatest basketball coach ever, had this definition, “Success is peace of mind, which is a direct result of self-satisfaction in knowing you made the effort to do your best to become the best that you are capable of becoming."

According to John Maxwell, an evangelical Christian author, success is when “Those who know you the best love you the most.”

A less spiritual interpretation of money and success is provided by American author and motivational speaker Wayne Dyer who states, “Successful people make money. It's not that people who make money become successful, but that successful people attract money. They bring success to what they do.”

Finally, and I am not sure who said this, but another more financial oriented definition of success is “The world defines success in terms of achieving one's goal, acquiring wealth, status, prestige and power.”

I have been told by other bloggers that the average reader only pays attention for 400 words (I assume my readers are not average, since I breach the 400 word limit regularly) and since I am already over 600 words, I will stop here. However, tonight, when you are relaxing in your La-Z-Boy recliner (ignore the screaming kids and barking dog), contemplate how you would answer the question of whether money and success are one and the same? I will conclude my thoughts tomorrow.

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

Do you need a Professional Accountant to prepare your Personal Income Tax Return?

A while back, Robb Engen, who is a rising star in the financial blogging and writing world (the Echo half of Boomer and Echo and writer for the Toronto Star’s Moneyville) asked me when should someone engage an accountant?

Some of the considerations I forwarded to Robb are discussed in a recent Moneyville blog he wrote titled Why I'm using a tax accountant this year.

Today, I would like to expand on this topic and discuss when you should engage an accountant to prepare your personal income tax return. I would suggest that you always should engage an accountant if you have a corporation.

In general, unless you have self-employment income, commission income, rental income, or significant investment income, an accountant will be somewhat limited in the planning they can do for you.

I say this because, if you do not have these sources of income, an accountants experience, discretion and know-how are pretty much muted and you may as well purchase an income tax software program and file your income tax return yourself. That is not to say you may not want to engage an accountant on a one-off basis where required, it just means you are most likely paying for services you do not require if your personal return is simple.

Just so I don’t have a hundred accountants in an uproar, saying that I am steering away business from the profession (although some accountants are not keen to take on personal tax only clients anyways), I also suggested to Robb that you can look at an accountant as insurance. Like life insurance, or disability insurance, you don’t like paying it, but when you need it, you are glad you have it; although, at least we provide a yearly tax return with our yearly charge. 

I told Robb that there may be years when an accountant may not provide much in the way of income tax planning, but there will be a year somewhere along the line, when your accountant may provide advice that covers their fees for the next ten years and part of the reason for the tax savings may be your accountant’s familiarity with your personal situation.

I further suggested to Robb that another reason many people like having a relationship with an accountant, is because when they have a question or have a significant issue such as a new job offer, inheritance or they have lost their job, they can call someone they know who will accept their call and who understands their personal situation. 

The aforementioned situations are typically very stressful, and are often subject to severe time constraints in which a significant financial decision must be made. Without having an established accountant relationship, you may not be able to find someone who can assist you on a timely basis and/or is willing to drop current client work to assist someone with whom they have no prior relationship. That may sound harsh, but it is the reality for many established professionals, be they accountants or lawyers.

Finally, where you have a relationship with an accountant, they may provide unsolicited value-added advice in respect of such financial matters as wills, estate planning or how to deal financially with your children. For example, I recently had a corporate client come in to drop off their personal income tax information. They made some comment about one of their children that led me to ask if they had updated their will recently (which they had not). I then asked if they had upgraded their life insurance to account for the income tax they would incur if they passed away because of the increase in the value of an investment they had (they had not). I then asked them how that investment would be split with an arms-length partner if either of them died (we had discussed the issue before but they still had not officially addressed this in a legal agreement). All these issues are important and will hopefully be addressed in the near future by my client.

Now, ignoring the fact you are probably thinking I have a fixation with death, these are the kind of “add-ons” many accountants provide in the course of working with a client.  

In my opinion, if you have the types of income I note at the outset, I would suggest engaging an accountant is worth the cost. However, if you do not have these types of income, you have to weigh whether the less tangible benefits I note above are worth the cost of the accountants tax preparation fee.

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

Purchasing a vacation property in the United States: Lifestyle vs. Bargain?

The Toronto Star’s Moneyville section recently had two stories on purchasing property in the U.S., the first by Roberta Avery who purchased a home in Sedona, Arizona and the second by Alison Griffiths who purchased a farm in Florida.

I found the articles interesting, as like many Canadians, my wife and I have bandied around the idea of looking for a U.S. property while the prices are seemingly low and there are distress sales. We have also had this discussion with several friends who are also considering purchasing a U.S. vacation property.

Although professionally I know of several people who have purchased U.S. properties, some of whom have bought multiple properties as pure investments, interestingly, only one of my friends has followed through with a U.S. purchase. That is not to say the Avery's and Griffith's have not made the best investment and/or personal home buying decision of their lives, it is just in my personal circumstances, it is still not the time to buy a retirement property.

My reasoning is twofold. The U.S. property taxes for Canadians are typically very substantial and taken together with the other carrying costs such as management fees, interest, insurance and utilities, my budget estimates put me in the red several thousand dollars a year, even if I could rent the property a month or two. With the glut of homes for rent in Florida and Arizona, I am not sure how much rental income one can count on in the near future. In addition, I would prefer to not have to deal with the IRS and file a U.S. income tax return every year, although that is not a deterrent on its own.

The second reason, and the more important reason, is that I have several places in the world I intend to visit over the next fifteen or so years, including Africa, Australia, the Baltic, Greenland and Bora Bora. My wife and I feel that if we purchase a U.S. vacation property now, we would feel beholden to using that property and we want to be free of any real estate shackles.

Alternatively, we could just look at a U.S. vacation property purchase solely as an investment, working with the assumption the property will increase in value greater the the yearly excess carrying costs. I have not ruled out that possibility yet.

I would be interested to know if the Avery’s and Griffiths’ plan to travel the world in addition to carrying these properties? It sounds like both these couples are happy to spend their time in their dream homes. I guess it’s different strokes for different folks, with future travel plans and lifestyle a determining factor.

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.