You would think that when it comes to wealth, accountants would have an advantage. When we think of accountants we think taxes, financial statements, and money. So it is easy to think all accountants are wealthy.
We might think the same about bankers. They handle money all day so they should have a reasonably large amount of financial wealth. Many do. Some do not.
While bankers and accountants have an advantage when it comes to growing and maintaining financial wealth, it isn’t a guarantee. There are certain habits that separate the average from wealthy accountant. Let’s explore.
1.) Focus On Taxes
Professionals focus. A civil attorney will not handle a criminal case, and for good reason.
The same applies to taxes. No one individual can know everything about the tax code. There is just too much. And since taxes have the potential of taking half or more of your income and wealth, taxes are a priority.
Those thinking like a wealthy accountant understand that they cannot simply trust a tax professional. They must also continually learn the basics of tax law and strategies. Even the IRS know this, requiring tax professionals have a certain minimum number education credits each year to maintain their license. And in case you are unaware, tax professionals talk. We often seek opinions from other tax professionals. Taxes are complex. Accountants, even those focusing on tax, seek the opinion of other tax professionals. If you want to be like a wealthy accountant, you will pay attention to tax issues and consult more than one source for your information.
Consider Peter Thiel, as an example. Thiel is a co-founder of PayPal. He also used his head when it came to taxes. He bought $1,700 of PayPal before it got off the ground. He dropped those shares into his Roth IRA. When eBay bought PayPal Thiel’s share was $55.5 million.
Not one to sit on his hands, Thiel invest $500,000 into a little known company at the time you might — just might — have heard of today called Facebook, now Meta.
Thiel, using his head, understanding tax laws, and finding the right tax professionals and attorneys, turned pocket change into billions. All tax-free!!!
In my defense, I have used this strategy as well to a much smaller degree. Still, it is one of the foundations of my wealth creation machine. This, and other, tax strategies require a focus on taxes. Are accountants wealthy? If they do this they are.
2.) Hire a Team of Professionals
There are three people every wealthy person wants on his team: attorney, accountant, and doctor.
After family, nothing is more important than these three people in the wealthy accountant’s life.
Without a good attorney (or team of attorneys) the wealthy accountant knows she is one step away from losing it all in a courtroom.
Without a good accountant the wealthy accountant knows the government will take too much, limiting how wealthy she can actually be. Even with an accounting background, the wealthy accountant wants to befriend other accountants!
And without a good doctor (or team of doctors) the wealthy accountant knows she will not live long enough or healthy enough to enjoy acquired wealth.
Anyone wishing to copy the success of a wealthy accountant will have these three professionals on speed dial. Of course, they are expensive to have. But not having them is more expensive. It all comes down to who you will pay, willingly or otherwise.
3.) Pays Attention To Other Forms Of Wealth
Wealth is more than money. There are five types of wealth:
- Financial
- Physical
- Mental
- Spiritual, and
- Health.
I went into great detail on this in a prior post I encourage you to review. Financial wealth is the least important of the five wealths. Anyone with health wealth is automatically wealthy. It is easy to be happy when you are healthy. The world is before you and you can see beyond the horizon.
Physical wealth is one step up from financial wealth. Physical wealth is not about building muscles like Arnold Schwarzenegger. Instead, physical wealth is about conditioning. It includes some muscle mass and endurance so you can enjoy getting around in life without pain.
Mental wealth is the building of the mind through learning and reading.
Spiritual wealth is more than religion. Yes, religious faith is spiritual wealth. But it includes other types of spiritual growth as well. Meditation, for example, is a powerful form of spiritual wealth. Learn to master clearing the mind of the detritus that builds up over the day and you will have spiritual wealth.
As you climb the ladder the importance of the wealth increases. Some people are denied some types of wealth. Stephen Hawking had limited physical wealth and even health wealth. But he mastered mental wealth and therefore had a reasonable amount of financial wealth.
Another way to view the hierarchy of wealth is like this:
Assume you are the wealthiest person to have ever lived. You have all the money and anything money can buy. Without a doubt you have massive financial wealth. Unfortunately, you are in a hospital bed dying of cancer. The pain is unbearable. No medication will lower the pain and the law says the doctors have to keep you alive as long as possible. Thank God you are only expected to live six months, if that can even be considered a gift.
Under this scenario, how important is all that financial wealth? Does it mean anything at all?
Yes, this is an extreme example, but it illustrates the ranking of each level of wealth. Without health wealth, all the other types of wealth are diminished, no matter the level of that type of wealth you have. Which leads us to…
4.) Health
Wealthy accountants make health a priority.
Time counts and keeps counting. As we age our health slowly slips from us. We can limit this slip by taking steps to remain healthy. A wealthy accountant eats good food, drinks plenty of water, and gets adequate sleep.
The same accountant will avoid street drugs, alcohol, smoking, and other bad habits that harm health.
Health is a daily activity! Walking and lifting (cardio and strength training) are on the schedule. It does not take a lot to get there. Plus, you take out two birds with one stone! Often the things that support our health wealth are things that improve of physical wealth, allowing us to focus on mental and spiritual wealth. It all works together.
5.) Lifelong Learning
Accountants that are wealthy have specific habits. They all intertwine. Reading and learning help grow and maintain wealth, it also helps slow mental decline.
Think about it. When is the last time you heard of an avid reader suffering from dementia? What about a writer still pounding words to the page? Of course, it happens, but there are fewer examples of readers and writers suffering from dementia, especially advanced stages.
Lifelong learning is not solely about staving off dementia. Lifelong learning is about curiosity. While wealthy accountants are sure to spend ample time learning about taxes, it is a near certainty the same accountant will have other interests.
This author has several thousand books in his personal library and some of the books might be a surprise. Of course there are personal finance books, and books on accounting and taxes. But I also read science fiction novels, mysteries, and (please keep this a secret) a few romance novels. I also read widely among the sciences, history, and biographies. My tastes are catholic (notice the lower case “c”, meaning universal).
I cannot imagine a day without learning. I cannot imagine a day without research. My curiosity is endless. And every wealthy accountant I have met is the same. They always are well read and filled with ideas and thoughts. Wealthy accountants are walking libraries. And that comes in handy when growing financial wealth, except for those romance novels (maybe).
6.) Time Management
Every wealthy accountant knows time is his most valuable asset.
Sometimes people like to steal my work. So that is does not look like they copied word-for-word, they like to mix it up just a tad. For example, the wealth article mentioned above has been hit hard. So they can call it their own they like to switch one of the types of wealth I mention and replace it with time.
Time is NOT a wealth! The richest and poorest person gets the exact same amount of time today. Not a second more or less (unless there is a death, but that only happens once). Wealth is something you have at least some control over. There are things you can do to have more or less financial, physical, mental, spiritual, and health wealth. There is not a thing you can do to make your day longer than anyone else’s.
But time IS an asset!!!
You see, we all get the same time each day. What we do with that time does affect wealth. Some have more opportunities. Some are physically stronger by default. Some smarter, some healthier. Still, time is the one asset you can’t complain favors another. We all get the same amount. And every wealthy accountant knows it.
7.) Have a Plan
Not to be confused with a goal. Wealthy accountants have goals, but they are not always written down in detail. Goals, we thought out, will change with time; will change often.
People rarely become accidentally rich. There was some planning involved. However, that plan was changed more than a baby’s diaper. And for good reason. Situations change. Opportunities change. Can you imagine buying a stock and never selling, even if a better opportunity arose? Same applies in business and in life. Wealthy accountants, and those wishing to be like them, are flexible in thier plans.
But they always have a plan!
8.) Live Below Means
Even Peter Thiel needed $1,700 of seed money. He got that from spending less than he earned.
Overspending is a sure way to a life of unhappiness, stress, and the absence of financial wealth. Overspending is different for everyone, by the way. For example, if I say someone spends $1 million each year you might say that person is overspending until I tell you her income is $57 million per year. Yet someone spending $50,000 can overspend very easily with a more modest level of income. It is all facts and circumstances.
9.) Avoid Debt
Accountants that know how to build financial wealth do so using debt sparingly.
Nearly all financial disasters are preceded by debt. High-interest debt is the worst. Credit cards and payday type loans are a cancer to financial wealth. Credit cards can be a tool if paid in full each month. But carrying a balance is very risky.
Borrowing to purchase a home is usually an acceptable form of debt. The same is not true for a vehicle. Usually if you can’t pay for the vehicle outright you need to buy less vehicle. This isn’t always true, but more often than not.
As an accountant myself I have seen small fortunes destroyed by debt. I may not be as hardcore as Dave Ramsey, but I certainly caution against debt. Experience has made that advice clear.
10.) Long-Term Thinking
Accountants that rise above the average and become wealthy share a long-term form of thinking.
- They think long-term with their investments over day trading. While “forever” might not be their actual time horizon for an investment, it is rare for the wealthy accountant to buy something with the intention of holding that investment for less than five years. Only when the funds are needed (in retirement, for example) or when a better opportunity arises does the wealthy accountant sell an investment.
- Wealthy accountants rarely flip a home. They buy a property to live in for a long time. The wealthy know transaction costs are a wealth killer (except for the real estate agent, attorney, and accountant). Sometimes the wealthy buy a property to improve it and then sell it. That is more along the lines of a business. When it comes to income properties, they buy right and hold on, enjoying the income stream for decades.
- Relationships are also a long-term process for the wealthy accountants of the world. They value quality over quantity so they focus on mutually beneficial relationships.
Honorable Mentions
Above are 10 common habits of wealthy accountants. Of course, there are more habits worth consideration. For example, providing value and expecting value in return is a common trait amongst the wealthiest people.
I can’t think of a single wealthy person that does not have multiple streams of income. Diversification is important to the wealthy because it reduces the chance one event or change in laws take them out financially.
Accountants of wealth learn to communicate clearly. They want effective communication. Anything else risks the loss of financial wealth.
Work-life balance is also a priority among the wealthy accountant class. What value is financial wealth if you have no time to enjoy it?
Successful accountants are more than just number pushers. They learn to think deeply. They learn to understand people and body language. They learn from others. They are aware.
People often ask: Are accountants wealthy? The answer is: Too few are and they should know better.
Learn from the best. Build wealth. All the types of wealth. And live life to the fullest.
