This is my first blog post, and since this is probably your first time on this site (and I’ve been lucky-enough in the first place to have you visit) I should probably say something meaningful to have any chance of getting you back again. So here goes…
I am a real-life tax/business advisory accountant and am a Partner at a big firm in Australia. I worked my butt off over a 14 year career to get to Partner, and made some pretty tough decisions to achieve that goal in life at what is considered a very young age for our industry.
I love reading personal finance blogs, but so many of them are very similar, being from non-finance people who are struggling to recover from disastrous starts to their financial lives, or from finance people writing incredibly boring (and not the most frank) articles about things without cutting through to the truth of the issue. Quite often these “finance people” are also the stereotypical hypocrites that do not actually practice what they preach, so I am hoping that I am different enough from “so many” of these blogs that people actually want to read what I have to say. Please feel free to tell me if I am not different enough though!
While I plan to cover a lot in this blog over time, much of it will fall under the five areas set out below.
Being on the inside of the finance industry at a senior level, seeing clients from all walks of life (poor, wealthy, wealthy in appearance but not actually wealthy, not-wealthy in appearance but actually wealthy, young, old, families, employees, business owners, etc), I am quite concerned about the financial decisions that people make. So rarely do you see some key financial traits in clients that are discussed in personal finance blogs, such as:
- Having a high income but not spending in the same disastrous proportions as the poor. For example, the client with a $100k income might spend $25k (or 25%) on mortgage repayments, when the client with a $50k income might also spend $12.5k (or 25%) on mortgage repayments. So despite having twice the income, the first client is just committing the same sins (proportionately) as the second client. Don’t people realise that the way to take advantage of the higher income is to retain a bigger surplus rather than just inflate lifestyle out to absorb the increase?!
- Being open to discussing their personal finances or setting a budget for personal expenditure. Clients really don’t like talking about this, and since we as accountants want to maintain strong relationships with our clients (so that they stay with us and keep paying our fees), we simply don’t go into it. Even recommending a blog that is remotely hard-hitting would be disastrous for our relationships with clients, and if we recommended something like www.earlyretirementextreme.com or www.mrmoneymustache.com they would probably think that we are crazy and never come back.
- Actually planning their future and/or having any actual commitment/determination to achieve their goals. So much is written about goals and their importance for any success, but so few people actually set goals or plan anything in any serious or formal way. And I don’t mean filling out a business plan template provided by your accountant or banker, but I do mean actually projecting out where you could end up based on your lifestyle and looking at the effect that changes can have.
I believe that these three issues alone would provide plenty of material that would interest PF enthusiasts, but there are plenty of other client issues that I can cover along the way.
And before anyone starts complaining, I obviously have ethical standards to uphold and therefore will change all names/distinguishing details of any posts/case studies to ensure that confidentiality of all parties is respected.
I am also concerned about the people that are actually advising the clients as they are usually extremely hypocritical – many are telling clients how to grow their businesses, their wealth and their retirement funds while having done disastrous jobs in these areas in their own lives. And many of these people are my peers in our firm and in the industry generally, but we never talk about it as it is off limits!
For me though, I really don’t know how clients can have any respect for an adviser if that adviser doesn’t even practice what they preach. The only reason they get away with it though is that the clients usually see what appears to be a wealthy facade (nice house, nice car, nice clothes, nice private school for the kids) but don’t realise that there really isn’t any more wealth behind them than anyone else. Why don’t clients actually ask you what you have done? I tell my clients when it’s appropriate, but they almost never ask! If you asked you would work out pretty quickly whether they were actually worth listening to!
3. Career progression – doesn’t seem to work the way that it should and tips for getting your career moving
A third key concern is the nature of the accounting profession (and the progression of staff through the profession itself). Having been through the process to get to Partner, I just can’t help thinking that it doesn’t always work the way that it should.
This is a big topic with more detail to be covered in many posts in the future, but I am sure that anyone working in professional industries (and many working in other industries) can relate to what I’m talking about. Hopefully we can have some lively discussion in the future as my own experience indicates that it is a topic that can get people pretty fired up!
4. Efficiency (or lack thereof) in all things in life
Being an accountant I tend to be fairly analytical in many things in life (much to my wife’s disgust, although she is a fellow accountant so I can’t really understand why she doesn’t think like me), and this often has me analysing whether something can be done more efficiently. So much so that when I see something that is so inefficient or illogical that it defies belief, I have to get the sarcasm under control before launching into a harsh critique which can sometimes result in people refusing to change.
So while efficiency is a big issue for me, it really does link to bringing about change and how best to drag people (often kicking and screaming at first) on the journey with you.
5. General personal finance stuff
The final broad category is general personal finance stuff, and while this topic is the usual fodder for many of the PF blogs out there, I am hoping to put my own slant on the areas that I actually care about or have an interest in (and leave the other areas alone).
So in a nutshell, I’m hoping to talk about these five issues in the blog as well as any others that come up.
If anyone has any questions for a finance industry insider that they actually want answered in an honest and direct fashion, then please feel free to ask. All usual disclaimers will apply, but I’m sure you expected that anyway!