Retirement accounts vs. retirement plans

Retirement Accounts vs. Retirement Plans: How do they differ? On the surface, individual retirement accounts and qualified retirement plans are both trying to help you get to the same place, retirement security. While both retirement accounts and retirement plans are there to help you plan for the future, these two vehicles run remarkably differently. Retirement accounts are not the same as retirement plans, as they differ in tax treatment, investment options, and possible employer contributions. So how does a person choose?

While it is possible to contribute to both, you can’t do it with the same dollars. It’s important to understand your retirement savings options and consider their long-term implications. Think about your money in three groups: what you make, what you grow, and what you distribute. Saving money is vital to a happy retirement, and you want to make sure your retirement strategy will give you the results you desire. Here are the major differences between retirement accounts vs. retirement plans.

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How failing to plan for 2018 taxes is planning to fail

Keeping a shoebox full of wadded-up receipts and tax documents and then rushing to your tax preparer at the last moment isn’t going to give you the tax results that you want. No matter how much you dread them, taxes aren’t something you can think about just once a year. Failure to plan is planning to fail. That phrase applies to many aspects of your life, including your taxes. Instead of crossing your fingers and hoping for the best, you can avoid tax-time failure with the right planning. Decide now what you want and how to plan for 2018 taxes.

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When you hear the words “proactive tax planning,” it’s tempting to think of a team of high-powered accountants, financial advisors and tax lawyers working for a large company in a high-rise building somewhere. These setups are known as a “Family Office,” generally utilized by wealthy individuals, families, and entrepreneurs with a net worth of at least $30 million.   Read more

Why outsource/offshore in an America first economy?

1. Manufacturing

There is not a day that goes by that you don’t use a car, use an electronic device or wear clothes that are manufactured internationally. In the tax and accounting business putting numbers in boxes is like a white collar manufacturing business. In many professional service industries, portions of what is done for the client, patient and customers fall into this broad definition of manufacturing. These tasks, if possible can be handled offshore. But shouldn’t we be looking to bring these jobs to the US not take them offshore? Read on…

2. Service

Years ago, when major companies outsourced service there was a backlash due to communication barrier and inability to solve problems, and the purpose of service is to communicate effectively and solve problems. We would not outsource all of our services. We think this is best kept domestic. But email requests, tracking down answers, process following, and many other functions of our business can be offshored, which in essence will improve service.

3. Intelligence and design

When you buy a new iPhone it used to say designed in Cupertino on the box, that is because they are highlighting that the most important part of the phone, the intelligence that goes into the engineering and design was domestic, no one cares that the high volume manufacturing is done in countries most people can’t find on a map, because the phone would be substantially more expensive and isn’t our goal as a country to have the highest standard of living, that comes from the best paying, highest value jobs as the prize? The US is winning that game. We are NOT outsourcing the engineering or design of the Tax Blueprint®, the Tax Operating System®, Bookkeeping with Purpose ®, Tax Annual Review™, the Wealth Blueprint™, Wealth Annual Review™, etc. We are offshoring putting numbers in boxes, see #1. We are outsourcing the manufacturing of the ‘disc’, the music and movie on the disc (the content), which is the highest value, we are keeping domestically.

4.  Domestic Employee Costs are rising, and Domestic Employee Performance is dropping.

Blame it on the millennials, blame in on the lowest unemployment in decades, blame it on entitlement, then why in this case does not matter for me the business owner, that must operate in the environment that exists, not the one I wished existed, what matters is how we serve our clients with the highest level of service with our current environment. Until customers except the excuse, that ‘good help is hard to find’ when we make mistakes or are too slow, or we are too expensive, then we must adapt. So, we are outsourcing #1 and keeping #2 & #3.

5. Lower Taxes

This is our primary goal and we will use technology and systems to be the best. We have no intention of offshoring tax planning, but we are working on making our software Artificial Intelligence-based, this will increase speed, increase accuracy and lower costs. This falls under #3.

6. Numbers that help you run your business and life

This is something we are working diligently on. A real-time dashboard that shows you how you are doing in your business. We want our domestic team focused on helping you interpret the numbers so that you can improve business efficiency and lower your taxes (and other costs, a LOT of services coming in this area). We will be offshoring the production parts of the business wherever we can. See #1.

7. It’s like having elves

Although some of the offshoring happens during domestic hours as well.

We get documents and information in during Pacific – Eastern times. But, our offshore employees are likely on the opposite side of the planet. While we are sleeping the numbers are being put in boxes, we wake up and the work is ready to be triple checked. Many services, like Design Pickle, 99 Designs, Upwork and others like them are great services and work gets done while you sleep, as well.

8. The Robots are coming

Technology is growing at a pace never seen in human history. In the last couple of years, you have heard about driverless cars, in the next two years you will see a driverless car and shortly you will be using one. A driverless car is substantially more complex than putting numbers in boxes. Repetitive tasks are being demonetized, tax preparation and bookkeeping fall into this category. We are moving the company in the direction of #2, #3, #5 and #6. Because if we don’t we will be replaced by Artificial Intelligence and Robots.

9. The tax division is being subsidized

Every business unit needs to stand on its own, the Tax division will be profitable this year due to adding technology, improving internal processes and doing #1. Either we double our fees or manage costs through systems, efficiency, and offshoring, we are choosing the later. Our clients expect more from us than other tax firms, and they expect more at the same prices they pay other accounting firms, offshoring allows us to build something that does not exist anywhere else.

10. One check vs triple check

The new process is our partner puts numbers in boxes, they have a CPA or equivalent (they are only CPA’s in this country, the initials are trademarked and given out by a domestic association/business). Then we look, once again, a third check, once again we are outsourcing #1 and keeping #2, #3, #5 and #6.

11. Security

Here is a list of the biggest data breaches in the 21st century ( Notice something? They are ALL domestic. The technology we are using is much better than a vast majority of accountants.

12. Security part 2

The nesting doll approach – The biggest data breaches were data extracted from a database or the biggest ‘doll’.  But data and documents stored inside a software program, that is stored inside another software program, that is in a world-class cloud service creates a big barrier to nefarious entry. Easier to hack the above mega corporations than us.

13. Security part 3

All your data is in the cloud, every major company has moved to cloud-based computing, the average tax prep, and accounting office is tragically behind technologically, most store all your data on a PC or a client/server environment which is connected directly to the internet, our approach is safer than what most our clients are doing in many other parts of their lives.

14. Security part 4

Your data does not ‘leave’ the country for the numbers to be put into boxes, there are plenty of software options to allow access to software across borders without the data leaving the borders. Also, our partner has no USB ports, no printers and all employees have to put phones in lockers before putting on their headset and logging in to their workstation, data is safer than virtually any business you are working with domestically.

15. Security part 5 – Your wallet

The most amount of risk in your life is in your wallet. The magnet strip on the back of your credit card has more information that a thief can use to impact your life in a negative way. Most people hand their card out several times a day without a thought but are distressed at much safer scenarios.

16. Amazon Effect

We all compete with Amazon now. Not because we are all in the same business, but because they have raised the bar on speed, efficiency, and cost. They have set a standard that things can be cheaper, better and faster at the same time. Amazon is entering every market they think they can improve speed, cost, and quality. If you don’t improve those three things they will get into your business and do it for you.

17. Planned Obsolescence

Intel is famous for starting on the next two generations of chip design as they are releasing the designs they currently have. The 386 and 486 chips were being worked on as the 286 was being released. They competed with their own product because if they didn’t other chip makers like AMD or TI would. We are working at putting the current old business model out of business before a competitor does it to us.

18. Economic/Political shift

In the last couple of years, we have shifted from stagnant employment to a statistical full employment level. Also tightening immigration controls are reducing the labor force further. I’ll let CNBC and Fox News fight over the impact, and whether it is good or bad for the future, but business people must adapt to the real world, not the hoped-for or should be world. We must make business decisions on the way things are not the way things ought to be. That is what we are doing, you should too.

19. America first!?

We are putting America first by focusing our efforts. #5 & #6 will put millions of dollars back into the hands of those that most deserve it, the American small business owner and entrepreneur.

As you can see outsourcing/offshoring is a critical key to our ability to serve you better. As you can also see it was not a haphazard decision, it was thoughtful and it every stakeholder and YOU in mind.


The new Tax Cuts and Jobs Act of 2017 focuses on tax cuts for C-Corps mostly. Yet there are definitely provisions which mean good news for small business owners.

Most small businesses in the U.S. are ”pass-through entities” (partnerships, limited liability companies or S Corporations). Income from these business structures is taxed at individual tax rates, which are changing with the new tax bracket structure. Also, the new tax law is adding a new deduction on Qualified Business Income (QBI). Read more

Do you know how the tax system really works? They say that the way to beat a system is to understand it from the inside out. With that in mind, here’s a quick primer on how your taxes are calculated. Read more

The Tax Cuts and Jobs Act of 2017 begins phasing in for tax year 2018 and beyond, and it’s time to start thinking about how its new provisions, as well as its changes, will affect you and the amount you pay in taxes. Read more

One of the issues of most businesses is employee turnover. What’s even stranger is the difficulties it brings. Criticism (don’t they know what they are doing), second guessing (something must be wrong) and then outright attacks (social media, etc).

I have found that there are 4 things we need for a good employee and the management of them. One is culture, we have outlined our cultural values, we work diligently to operate by them and promote them among the employees that exhibit them. But there will always be employees that will either not be interested in them or will interpret them differently then the company. For example, we believe that “Doing the Right Thing” (a core value) is represented by better systems and processes that allow us to deliver at the highest-level of service (which we don’t always get right, but we always pivot fast). An employee disagreed, she wanted more manual processes and wanted to do it the way “everyone does it”. They quit and wrote a negative review on a corporate social media site.

The paradox is that the team members that embrace the core values (we have 5) have a framework to be happier. The can ‘complain’ about something by easily referencing a core value that is being missed. They have more autonomy to make decisions around the core value and can easily defend decisions based on those core values. I was instrumental in writing the core values, but I don’t live them 100% of the time, but anyone in the company has the right to hold me to the values regardless of position. This is healthy for the team members, it is good for our clients, it is good for the health of the company. But, some still resist, it’s a paradox.

The next is skill set. We have had breath taking problems in our one of our departments, for a sustained period of time (years). The first person got the visual part of the job done, but did not help with drawing intelligence from their department. The replacement was only slightly better. We replaced him with a temp from Accountemps (great company and has helped us many times) who was rock solid, but he left to start his own business. The next replacement did the bare minimum of what could be seen, but it took nine months to clean up the mess left in the wake of their exit. 2 of the 5 had the skills, a different 2 of the 5 had the “experience”. We were not applauded for removing the wrong people from this critical position, we were criticized, internally and externally and did not disclose the issues to, in this case, protect the guilty (activities that required ‘outside enforcement’).

The paradox is that the person at the head of the department, cares much more now that they have seen what not caring looks like and the impact it has on the entire organization. The effort has been herculean! We bought new software to streamline our internal processes, we installed Intacct a middle market accounting package (there is a point where QuickBooks won’t cut it, very happy with this company and what they are bringing us) we hired Concur (super cool automation for accounts payables and expense reports). These purchases were made and systems were created that made us better. We would not have done what needed to be done if the employees in the position had not been bad. Had they been even average we would not have made the substantial leaps forward, and that department is close to running like a finely tuned machine. It’s a paradox.

Experience is the next issue. We have tried to hire very seasoned individuals, but run the risk of “can’t teach an old dog new tricks”. We have tried hiring young, fresh people to “mold them” into our culture and business model. There has been a varying degree of success and failures. The first challenge is getting youth, that know how to do what we are hiring for, because our educational system is really bad. It trains to a text book written by someone that is not operating in the real world. So, a young employee with a Master’s Degree in accounting (the world of books and how the numbers are recorded in those books) can’t reconcile the books of a business in QuickBooks (the real world)? Tens of thousands in debt from a major university and they can’t do the job that the degree should be designed for, which is accounting for the 99.7% of business in the US. But, the right person regardless of education and with the desire to learn, we have found can be great! So don’t believe the myth that all millennials are lazy and entitled! They aren’t, like every generation before them some are lazy some aren’t. We have to find the ones that aren’t. The second challenge is the “old dogs”. Both the men and the women have resisted change away from the way things have always been. We are building something that does not exist, but we need the skills of those working in businesses that are decades old and antiquated in systems and technology. One of our best employees out worked the youth and loved the direction and tech and systems we were implementing, so old dogs can be taught new tricks, and like it! The lack of experience can be a gift and the extra experience can be a curse. It really comes down to attitude over experience. It’s a paradox.

Managing dysfunction; this is the ‘elephant in the room’ issue. Let’s face it we are ALL dysfunctional in some part of our life. The tax person at putting numbers in boxes, but doesn’t really like talking to people and/or customer service. We struggle with getting a great technical expert, but then people have questions and then want to “meet the expert”, and it’s like meeting an ‘idol’ for the first time, it’s a letdown. In some cases, people are offended, because many technical experts are socially awkward (you know an engineer or computer programmer that fits this). Our most dramatic example of dysfunction was an employee well loved, they communicated well, knew the technical better than most and delivered what they knew with confidence. Clients felt like they were being taken care of and all was right with the world after a conversation. What people didn’t see was several years of excessive absenteeism per year. Rampant disorganization, ignoring processes designed to help clients and fought change. The reason everyone liked this employee was they told them what they wanted to hear, but then did not deliver. But when they quit (due to attempting to rein in the issues) “something must be wrong” with Financial Gravity. It’s a paradox.

Sometimes the team members that got you to one point in the business will not be the team members that are with you for the next part of the journey. Great players in a smaller organization may not be great when the organization grows. Some great players will be terrible managers, even though it is natural to promote great players to management, maybe we shouldn’t. Paradox’s everywhere!

The good news is experience is a great (expensive) teacher. We are a MUCH better team because of these bad experiences (another paradox). We are working to better adhere to the Entrepreneurial Operating System, mostly because it is simple, and it works. But simple is not easy. Which is also a paradox.

For more on the Entrepreneurial Operating System, check out these podcasts with Mark Winters on the difference and critical importance of Visionaries vs Integrators. Or Jill Young on getting bosses and employees to see the same thing.

For a terrific book about how the worst in life brings the best outcomes paradox. Check out David and Goliath by Malcolm Gladwell. Hint: With all the facts, David may not have been the underdog, check it out, it’s an amazing read, everything by Malcolm Gladwell is great including his Revisionist History Podcast.

If you think we are failing somewhere and want us to know email us at

If you think you have something that will make us better email us at

For updates of what we are doing and if you want to learn with us check out our podcast at the Financial Gravity website.

What is a paradox in your business? How are you addressing it?

Your CPA is likely well-meaning, and he or she is generally knowledgeable about taxes. But they’re trained to make sure you’re in compliance with the tax code after the fact. Proactive tax planning isn’t their strong suit. But when you look at the tax year ahead, you need a strategy before you get to the end of it. Read more

You’ve likely wrapped up your 2017 taxes by now, and are looking ahead into 2018. The new Tax Cuts and Jobs Act brings numerous changes to the already enormous tax code. More than ever you need a plan. For example, here are just 5 of the things you need to know before the 2018 tax season: Read more