On Friday I met with my accountant to take care of my taxes. Luckily, it’s never that bad of an experience because I use Quickbooks and Quicken rental so I’m pretty organized. Basically, I print off all of the forms, put them in a folder, hand them to my accountant and have him do his thing.
Which brings up the point of finding a good accountant. I literally have no idea how to do my taxes. I have no desire to learn and every time someone tries to tell me about it, I stop listening. It doesn’t interest me whatsoever. Plus, with all of the properties I own and the different LLC’s I have, it gets confusing. If my accountant was a con-artist it wouldn’t be too difficult to rip me off. In all other areas of my life I’m savvy. When it comes to lawyers I probably know more about real estate law than 99% of them and I can easily tell when a lawyer is an amateur or he’s being dishonest.
But not with accountants…
Which is why several years ago when I was looking for an accountant I did extensive homework. I asked everyone at REIA’s meetings who they used. Not surprisingly, the same names kept popping up over and over. Eventually, I ended up going with an accountant who my first mentor recommended. One of the main reasons I went with this guy is because he’s a real estate investor too. He’s been investing for more years than I’ve been alive and he owns multiple properties.
I firmly believe when you build your power team, you should try to surround yourself with people who own properties too and understand where you are coming from.
One of the most important things that my accountant and I talked about when I met with him were retirement accounts. I saw a statistic the other day that only 13% of Americans believe they are going to have enough money to retire and that most people believe they will have to work forever. Given the opportunities here in the U.S. of A. I think that’s a very sad and pathetic statistic.
Let me show you my own personal retirement plan so you don’t become the 87% of people who have to work forever.
I have a two-fold system. First, I have stocks (index funds). I have it all set up through Vanguard. What type of plan you get depends on if you’re self-employed or not, but you can easily set up a SEP-IRA, Roth IRA, or some type of retirement account. I fund my account regularly and if you do too, this should easily have a million dollars or more when you retire.
Second, I have my buy and hold properties that I own free and clear. Almost every successful “grizzled old veteran” investor that I know, owns several properties free and clear, and these guys just live off the income. If all you’re doing is flipping properties, and not holding onto any, you’re doing a real disservice to yourself.
So.. in my opinion I think everyone should start buying and holding properties (and paying off the mortgages) and investing in index funds and there is no reason you can’t have a multi-million dollar net worth when you retire.