Kent accountant

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It’s all about the money…

14th May 2013

15 comments

Kent accountant

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…money, money…

Or is it?

Despite what Jessie J and the modern I want it (but don’t want to pay for it, at least not yet) culture may feel, I don’t think it is.

I didn’t always feel like this. I worked my way up the corporate ladder – sharp suits, bigger house, flashier car, etc etc. The recession then hit, I started working for myself and my views changed.

Family took on more importance; the flash car went and was replaced by a practical one.

Leaving home at 6am and getting home at 9pm was replaced by taking the children to school and sitting down for dinner with the family and working around that.

This was gradual though as for a period of time I had the transition from consultancy (day spent at client’s premises – leaving home at 6am etc) to running an accountancy practice working from home.

Now its home every day with the occasional half day out to meet clients/prospects which makes a welcome break.

Money is very much a secondary consideration which was brought home to me this week when I was approached about a project role which would take around 3 days a week for a 10 week period each year.

Financially it sounded great – money I didn’t need but could save for a rainy day (aka University tuition fees x 3).

Then, after I had time to think about it I thought that actually; it’s not about the money now, it’s about quality of life, working (a lot) when I want to and spending time with my family when I want to – no more missed sports days and Christmas plays, Tuesday afternoons at the beach in the school holidays…because I can – work can wait until later when the kids are in bed.

Kerr-chinggg!!

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Replies (15)

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By User deleted

14th May 2013 23:43

I have to say ...

... it has never been about the money fo me.

Always worked local, never been fussed about sharp suits and fast cars - life's to short to worry about stuff you can't take with you and that can be gone tomorrow.

Best to concentrate on the things that can't be taken away, like memories of time spent with loved ones. (unless of course you get Alzheimer's, or a blow to the head!)

By Glenn Martin

15th May 2013 00:23

I wish I had realised this 10 years ago
I used to think that a measure of success was the car you drove the rest of the toys that Come with it. I worked my [***] off chasing bonuses for last 15 years. In the end I made my boss very wealthy and me very tired and miserable.

I chucked it all a few months ago to go it alone and love it. I'm not making much at present but confident will get there this year I am only looking at getting business to a level where I can draw about £35 to £40K per year and no more.

Now my targets are making sure my desks clear for 3 o clock when my 7 year old comes in. We actually rode our bikes together round the block for the first time last week. Normally I would be lucky to be in before she went to bed.

I have seen money ruin a lot of people which is why I no longer pursue it with such vigour.

By Kent accountant

15th May 2013 10:04

@Glennzy

Similar to me. I was thinking about this recently, when I was at University the idea was just find a nice steady job that lets me enjoy a decent lifestyle.

Went along like this for a while and then in my early thirties the drive for more happened - chasing promotions, changing jobs, bigger house etc. Part of the issue was that I was very competitive - still am.

If we had stayed in the first house me and Mrs KA bought, the mortgage would be paid off and we'd be very comfortable with no financial concerns and I would have had a lot less stress and worry along the way.

Just wish I'd known back then what I know now ;)

Replying to DJKL:

By Red Leader

15th May 2013 14:27

lifestyle

I agree about the lifestyle approach. It's not just the hours, though.

I think part of the lifestyle approach is that it is important to make sure that we're getting paid well for the hours that we do devote to work. Also that we don't have clients that p*** us off.

By B Roberts

15th May 2013 13:39

Not a "waste"

Interesting, however (without knowing - or wanting to know) the financial position of either Kent or Glenzy, it sounds as though the period of hard work was not a "waste" and that the income earned during this period has actually facilitate their current position.

By Glenn Martin

15th May 2013 13:41

@ Kent

Looking back with hindsight, I think you have to put the effort in your late 20's early 30's to nose ahead of the field to end up holding a good managment position, so that by 40 you have a good,secure and comfortable role allowing you to also have a good family life .

I had plans to be a millionaire by 40 and went for it nearly killing myslef in the process. Whilst my earnings were good through the "Blair years" my spending was equal to it. The properties I had bought as investmenst turned to millstones over night in 2007. No matter how much I achieved there was always something else I thought i needed. When it all crashed I survived but the stress of paying mortgages on empty properties, finishing day job at 7 then going to paint flats and do repairs on a night was immense and nearly broke me.

But like Rocky I came back met a good woman, dusted myself and reevalued what I wanted out of life.

Getting married and starting a family was the turning point for me, which my wife points out on an almost daily basis.

The final part was quitting my day job as FD at £30m group of comapnies to return to what I like best, advising small businesses which I love.

Now my ambitons are making sure my weekend is free to enjoy with my family, as oppose to dreaming about boats and cars. (Although I do like the new Range Rover).

By Kent accountant

15th May 2013 14:43

Not a waste

@B Roberts - definitely not a waste, reflecting on the past it’s easy to say I wish I’d done it differently. There are a series of circumstances which wouldn’t have happened had I taken a more relaxed route and there’s always the chance that if I had I would now be saying ‘I wish I’d really pushed myself…’

Financially I’m actually better off than I was in my last salaried position – small salary and dividends for me and Mrs KA – amazing how much better off we are. That combined with lower outgoings really does make a big difference.

Mind you couldn’t get the mortgage we have based on our current ‘salaries’.

@Glennzy – I think it’s recognising these things and making the change which is the really tough part. For a long time I use to wish I worked for myself but didn’t know what to do or wasn’t prepared to take the risk.

The experiences I had when I first started working for myself were tough but do stand me in good stead now.

Working from home I now see my children every morning and evening whereas when the eldest was born my job at the time meant I’d see her Sunday evening and the next time would be the following Saturday morning – not great.

By The man with no name

15th May 2013 15:35

Happiness v money

I’ve worked for myself for almost 40 years and never wanted to expand beyond what I can cope with myself. Most of my clients are longstanding, in some cases second generation of the same family and I long ago got rid of the PTAs.

Could I earn more? Undoubtedly.

Would I want the long hours and stress that go with it? No way.

A few years ago I did agree to carry out some consultancy work for the local council, which entailed being in their offices 9-5 for about 3 months. I hated it. Sitting in traffic jams every morning and evening really didn’t make me want a 9-5 position, and just 3 months of office politics was enough to make me long for my own private office at home.

I make a point of going out to see clients, do my banking, or just get out for some fresh air and a break around midday every day, and really enjoy the freedom of working for myself.

I may not be the richest accountant around, but I bet I’m one of the happiest.

By ShirleyM

15th May 2013 16:07

Silly boy (as Cptn Mainwaring would say!)

A few years ago I did agree to carry out some consultancy work for the local council, which entailed being in their offices 9-5 for about 3 months. I hated it. Sitting in traffic jams every morning and evening really didn’t make me want a 9-5 position, and just 3 months of office politics was enough to make me long for my own private office at home.

After 40 years of your own practice, what possessed you to agree to that??????

It goes against all your other comments, too, so why did you expect it to be anything other than hateful?

EDIT: got it wrong ... Mainwaring would say 'Stupid boy'! ;)

By A mum and an accountant

18th May 2013 17:06

Sounds good
It looks like you have the perfect work life balance but I guess you have to put in the hard graft at some point in your life to get there.

By Kent accountant

21st May 2013 21:40

Not there yet

@Lilac1 - I'm not there yet, but its so much better than it was when I was in full time employment.

Today I worked until 2.30, picked the children up from school, had dinner with them, took son to football practice, read books with them and got them ready for bed. Then back to work at 8.30 for a few hours.

By morgani

03rd Jun 2013 20:56

Getting there now
Sorry to be a bit late on this one I must have missed it before.

I'm going to be 28 this year and I have 4 young children. My desire was to always run my own practice and I chose employment to get me the suitable experience to be there. Our practice is focused around our family as well as earning a living. I never work weekends and although I work until 7pm 2 days per week I also finish at 2:30pm 2 days so I can pick the kids up from school. I also always take the kids to school and only leave for work after 9am once the traffic has settled down.

The plan is to still keep up with the growth but to always keep a good mix. It seems as though I have managed to get things the right way round early enough and can get to enjoy spending time with my family and seeing the kids grow up.

By Kent accountant

03rd Jun 2013 21:29

@morgani

only 28 and all that!! Well done!

You're in a great position:

- had children young enough to be an active Dad when they're in their teens.

- established a business during the difficult years (young children)

- looking to possibly expand further

Picking up on your blog - if I were you I'd keep going as you are for a while. Expand the business when the children are a little older and then sell up and retire at 45 - job done.

By morgani

03rd Jun 2013 21:58

Retiring at 45 sounds great but not sure how realistic it may be.

Think the plan is to grow as we have been and stick to what we know.

Due to the growing of our business we have learned to not spend as much as we have in the past and are very happy with our current income.

By Kent accountant

04th Jun 2013 21:21

45

Ignore inflation and price increases for the purposes of this calculation.

Ok. lets assume current fee income is sufficient to maintain required lifestyle.

Using fee income of £70,000 as a starting point.

If you were to gain, an average 25 new clients (net) per year (you've said you get around 3 a month), with an average value of £500, that's an extra £12,500 of fee income per year.

Lets assume you need to employ further staff and the profit on this additional work after all costs is 40%, so an extra £5,000 income per year.

Over the next 17 years, that would provide an additional £765,000 of 'profit', taxed at 20%, that's £612,000 of net cash.

Let's assume you manage to save half of it - say £300,000

Business turnover in 17 years is £282,500. Lets say you sell for a multiple of 1 and after costs and CGT (using ER) you're left with £245,000.

So, total cash £545,000.

Kids grown up.

Mortgage paid off.

Even a total of £545k well invested should provide you with income without eating too much into the capital, of around £25,000.

I'd be happy to retire on that if mortgage paid off, kids grown up etc.

I'd have to find something to do though :)