Monthly Archives: January 2014

PERSUASIVE LETTER WRITING

Posted in Accounting by

In the normal course of business you will receive notices from various governmental entities. Many are standard type notices, informing you of tax rate changes, new laws, or confirming receipt of returns you’ve filed.

You will also receive notices regarding errors on your tax return filings, which usually result in additional tax owed, but occasionally a refund. In some cases you may receive a refund check you weren’t expecting.

In all cases, you must investigate the problem and then communicate with the entity that sent you the notice. These communications can be written or oral. I usually choose written communication if the issue requires detailed explanation and backup.

When writing a letter, keep these points in mind:

  1. Make it clear what notice you are responding to. Reference it on the line right above the greeting, for example re: Notice Number xxx;
  2. Restate briefly what their letter said. This should be done in a sentence or two. I also include the date of their letter in this part;
  3. Indicate your response – that you disagree with their findings, along with your reason. Include backup to show why yours is the correct position;
  4. Tell the entity what you want. You have to be crystal clear on this point. Since it is so direct, I like to include ‘respectfully request’ as part of the sentence. For example, ‘we respectfully request that the penalty be abated.’
  5. A helpful closing statement.  Indicate that you are happy to provide any additional information needed to process the request. Include your phone number (even if it is also on the letterhead) to show that you are willing to discuss the issue further in the event of disagreement;
  6. Always include a thank you line, for example, ‘thank you for considering this request.’
  7. Enclose a copy of the notice as well as any backup you’ve referenced in the letter.

One final thought – if you receive a refund check you weren’t expecting, particularly from the IRS, don’t cash it right away. Call the issuer to see if they can provide more information. If you cash the check and it turns out it was issued in error, penalties and interest may be charged until the money is returned. It doesn’t seem fair, but I’ve had it happen. Of course you may be able to sweet talk your way out of it, but it doesn’t always work. Better not to put yourself in that situation at all.

 

 

FEEL THE FEAR – DO IT ANYWAY

Posted in Horse by

In the last few months I’ve been thinking about what I’ve been doing and if I’m happy with where I am in my life. I would have to say that I don’t have many regrets. I’ve set goals and worked to achieve them, in some cases ‘to the bitter end.’

I’ve structured my life around my equestrian pursuits because no matter what I was doing in my life, it was my number one priority to be able to afford to do what I wanted with my horses. It meant sacrificing a more lucrative career, but I parlayed my overall efficiency into a nice niche in the accounting world and I’m well paid for what I do.

As far as the horses, I’ve had to overcome a lot of fear (mostly in my mind) in order to keep going towards my goal. I have horrible horse show nerves, and trailering my horses anywhere gives me great angst. How do I overcome this and do it anyway? I’m not sure, but I think the main reason is I see the fear as an impediment to my progress towards my goal, and if I let it stop me, then I lose. During show season I’m in a constant state of anxiety. I sometimes wonder how I am able to leave the house. The key is to recognize your fear and do it anyway.

I traveled three days from Washington to California by myself to participate in a couple of shows. I wasn’t that competitive, but it was important to me that I face my fear of long distance hauling and show my horses in a totally unfamiliar place. I was surprised how well I held up during the 2 ½ week adventure. I slept in the tack room of my 2-horse trailer. It is not a living quarter’s trailer, so I was roughing it, but everywhere I went there seemed to be a shower. I met a lot of nice people and had a fun time.

When I got back I felt like a changed person. Hauling to local shows still causes anxiety, but not as much. Horse show nerves just come with the territory so I doubt that will ever go away, but as time goes on I have increased confidence in my abilities which seems to take the edge off somewhat.

Facing my fears has really changed me. You take small steps and before you know it you have a solid foundation on which to stand and reach even higher. You see opportunities that you didn’t think were there. You can transform yourself in ways you never thought possible. It’s worth a little mental pain.

YOU ARE THE BEST STEWARD OF YOUR RETIREMENT SAVINGS

Posted in Investing by

I have always believed in saving for my retirement. I put the maximum amount away every year from my paychecks, to take advantage of the employer match. I felt I was doing a good job with my saving. I didn’t feel like I had to pay too much attention to what I invested in, the money would just grow like I had always been told.

At the time of the 2008 financial crisis, my 401k had been rolled into an IRA that I kept invested in mutual funds. That account was cut in half. I was really upset, but I just ignored my retirement account, it was too painful to look at the huge loss.

At the end of 2011, when it had finally almost come back to pre-crash level, something told me I had better take charge of my savings and think about my future because nobody else was going to.

I had kept my account invested in mutual funds, thinking that was diversified enough. The problem with mutual funds are the high fees which pretty much wipe out any gains you might make. So my account was growing at a pace that was less than inflation, in essence, I was losing money every year.

I found an investment advisory service through an ad on TV. It was a video link explaining the US Federal Reserve. I never understood the FED or what it did, but in a nutshell, I discovered that the money printing by the FED was causing not only the devaluation of my retirement account, but also the many booms and busts of the stock market.

This issue is complex and too much to go into in this post, but suffice it to say it drove me to make the decision to move my entire account to a self-directed IRA. A self-directed IRA is a retirement account where the user controls the investments. You decide which stocks, bonds, ETFs or mutual funds you want to invest in.

I converted all the mutual funds I held to cash. Then, with the help of my investment advisory service, I learned how to value stocks and pick solid companies to invest in. I also became familiar with DRIP plans, where any stock dividends paid are re-invested back into the company’s stock, so I end up owning more shares and earning an even higher rate of return.

So far I’ve achieved over a 10% return over the last few years. There’s nothing better than taking control of your financial future. I know that I care more about my money than someone else.

Is it a lot more work? Not really. I look at my account every week and rebalance as necessary. I’ve learned additional techniques to juice my returns and protect myself against losses.

I would highly recommend Stansberryresearch.com. They have many different product offerings to suit any budget. I’m currently a lifetime subscriber to their buy and hold services, but by far my favorite is the 12% Letter. I encourage you to check out their website and choose a service that’s right for you. I’ve earned my money back many times over.

If you are interested in subscribing, it’s best to call their toll free number. They are usually running promotions and if you talk to an operator you’ll get the best deal. You should be able to subscribe to the 12% Letter for an introductory rate of $39.

Dan Ferris is the analyst for the 12% Letter. He has been quoted in newspapers and has even been on TV a few times. Here are some links if you’d like to check it out.

http://video.foxbusiness.com/v/2991950656001/will-stocks-continue-to-rally-into-2014/

http://stansberryresearch.com/news/should-apple-partner-with-tesla/

The only downside to Stansberryresearch.com is the relentless promotional emails. However, they are usually very informative, so even if you aren’t interested in the product offering, you’ll learn something from watching them.