Achieve Financial Independence in Kansas City by Outsourcing

Achieve Financial Independence in Kansas City by Outsourcing

If you pay close attention to the news media (which I don’t advise, but in our digital world, it can be unavoidable), you might be feeling a weight, almost as if there is a sense of impending doom. I saw a recent survey that indicated that almost one third of respondents felt that we could be headed towards a second civil war.

That is not a happy thought.

And it might also cause us to feel that the events we celebrate on July 4th are in the very (very) distant past.

But I still believe that, seen in light of the circumstances of the age, the Declaration of Independence was an act of incredible bravery by many people who had plenty to lose by adding their names to it. It’s one of many inspiring acts by our founders, and rightly worth tossing rockets into the air to celebrate and honor (if not more than that!).

As John Adams wrote in a letter to his wife on July 3rd, 1776:

“I am apt to believe that it will be celebrated, by succeeding Generations, as the great anniversary Festival. It ought to be commemorated, as the Day of Deliverance by solemn Acts of Devotion to God Almighty. It ought to be solemnized with Pomp and Parade, with Shews, Games, Sports, Guns, Bells, Bonfires and Illuminations from one End of this Continent to the other from this Time forward forever more.

You will think me transported with Enthusiasm but I am not. — I am well aware of the Toil and Blood and Treasure, that it will cost Us to maintain this Declaration, and support and defend these States. — Yet through all the Gloom I can see the Rays of ravishing Light and Glory. I can see that the End is more than worth all the Means. And that Posterity will tryumph in that Days Transaction, even altho We should rue it, which I trust in God We shall not.”

It is America’s 242nd birthday today. Let us pray that we have reason to continue celebrating for many decades to come.

Now, speaking further of financial independence, I believe that many of my Kansas City clients (probably you among them) already “get” much of what I write about as it relates to debt, avoiding taxes, and other basic financial strategies. Financial freedom, if you will.

But sometimes there are “non-financial” decisions we’ve made or attitudes we’ve fostered that creep into how we approach our careers, our finances, or even our families — and they actually rob us of independence.

Here’s what I mean…

Achieve Financial Independence in Kansas City by Outsourcing
“You will never win if you never begin.” – Robert Schuller

There are many people who are handier, when it comes to fixing things around the home.

But rather than beat myself up over this lack, I’ve begun to embrace my limited ways, and have learned to see why this “deficiency” enables me to think bigger, and grow wealth.

It’s probably healthy to admit that most things you simply cannot do (with apologies to the very “handy” among us): You probably aren’t going to redo the roof on your house. You likely don’t have a clue how to knock down a wall to open up the downstairs. If the toilet stops working and the plunger and Drano don’t work, you’re calling the plumber. Likewise, you might pay someone to work on your car because you either don’t know how to or you’d rather have a professional do it.

But one of the common messages which even the wealthiest among us find ourselves adhering to is: “Do it all yourself and you will save money.” Don’t hire a house cleaner, don’t go out to eat, don’t pay someone to do your yardwork. Do it yourself and save money.

Is that actually wise?

What if we, instead took this as our ethos: “Outsource everything you can and focus on building your wealth.”

Some people have the time or the motivation to do things other people would outsource. I know plenty of people in Kansas City who simply *like* to change their car’s oil. But I also know people too busy (and too productive) to mow their own grass. So you have to decide what aspects of your life are worth outsourcing.

For fathers and mothers, there’s plenty that you perhaps *shouldn’t* outsource: raising your children, engaging with charities, loving your spouse (!).

But conversely, there are likely to be plenty of tasks that sap your energy, drain your productivity (in the home AND in your work pursuits), and which can be successfully handled by an hourly earner.

Personally, I hope to make it possible that I’m so productive I have to outsource just about everything that I’d rather not do. Said differently, I want to move towards the place where all I do is work on great projects, help my amazing clients, love my family well — and pay people to do just about everything else for me.

In my opinion, this is true financial independence.

And sometimes, it’s important to make certain shifts in this direction before we’re as “ready” as we’d like. It may, in fact, initiate a virtuous cycle of productivity that brings us to where we want to be.

Because we then free up the space to do MORE of what we alone can best do. In this way, even before we “feel rich”, we can achieve greater financial independence in our actual, day-to-day lives.

What do you think you can move off of your plate today?

Warmly,

Kyle Nagy
(816) 272-8151
Kyle P Nagy, CPA

Kyle Nagy’s Four Tips On How To Think About Money

Kyle Nagy’s Four Tips On How To Think About Money

It’s been a great pleasure to reconnect with some Kansas City clients this past week, as we have had the opportunity to conspire together about building their financial fortress, with the “new” tax law in mind.

There are still plenty of provisions within these new tax regulations for which the IRS has not yet issued clear guidance, but that doesn’t mean that we can’t make some very solid plans for people like you to implement — all so that we do NOT have to play catch-up next year during tax preparation time.

Meeting with these clients has reminded me about how so many of our financial decisions are driven by *how* we think about money. And, obviously, this subject could be the basis for an entire education, but I thought I might offer you some basic tricks I’ve used to fool my brain into thinking properly about money.

Because the fact is that our instincts are NOT always correct when it comes to how we think about and spend our money.

That’s why these principles on how to think about money might be useful to you. Let me know.

Kyle Nagy’s Four Tips On How To Think About Money
“I am not a product of my circumstances. I am a product of my decisions.” – Stephen Covey

It’s still a bit of a mystery why we make some of the decisions that we make.

And that’s especially true when it comes to finances.

If you have ever read Thinking, Fast and Slow by Daniel Kahneman (who, along with Amos Tversky, has been credited with being the father of modern behavioral economics), then you know how easily we can be fooled by our assumptions, fears and false intuitions.

Which is why it’s useful to put some basic principles into practice when we make decisions about money. This is besides, of course, the regular practices of following a budget, saving, investing and avoiding most kinds of debt.

These are some of the principles that you should be thinking about when you are creating that budget or making the decisions about those investments and savings plans.

Here are four principles I’ve used, and which I commend to you…

1) Opportunity costs
What do you need to give up in order to get something you want? It’s almost always a question of money, but also one that involves time and value.

Pursuing an advanced degree may take years — are you willing to put in that amount of time? Will a sports car give you enough enjoyment to offset going into debt for it?

Whatever decision you end up making about how you are investing your money, should also be applied to how you think about your time. Sometimes it really does pay to invest in a lawn care service so that you can free yourself up to do more “valuable” work on behalf of your family.

2) Sunk costs
This is money you can’t get back — a non-refundable airline ticket, for example. The idea here is that you need to keep sunk costs in the proper perspective. It’s easy to start thinking, “Well, I’ve already spent $100, so what’s another $25?” You’ve got to be willing to walk away sometimes.

Once something is paid for, and cannot be refunded, it shouldn’t impact your future financial decisions. It is a “sunk” cost, i.e., water under the bridge, and whatever you do in the future won’t ever get it back.

3) Quick Interest Calculations: The Rule of 72
Want to double your holdings? The Rule of 72 can tell you how long it will take, based on the specific interest rate. Just divide 72 by the interest rate.

For example, if you’re looking at an investment with an interest rate of 6 percent, then 72 divided by 6 gets you an answer of 12 years.

This is a rough estimate, of course, but it’s pretty effective.

In fact, you can also turn the equation around to determine the interest rate you’re looking at if someone promises to double your returns in a set amount of time. Twice as much money in 12 years? Divide 72 by 12 and you get an interest rate of 6 percent. This rule lets you evaluate investment opportunities quickly and decide where to put your money.

4) The time value of money
According to this principle, a dollar you receive today is worth more than a dollar you’ll get tomorrow. You’ll have opportunity to invest that dollar immediately and begin earning more revenue from it (and also avoid losing value because of inflation).

Again, this helps you make certain calls about your purchases — and your income. It’s the old “a bird in the hand” theory in action for your wallet.

These four principles have served me well over the years.

Are there any that you think I have missed? Do you have questions? I’d love to hear from you, so shoot me an email through the email button at the top of the page with your thoughts.

Until next time.

Warmly,

Kyle Nagy
(816) 272-8151
Kyle P Nagy, CPA

Kyle Nagy’s Tax Savings Strategies Stop Loaning The Government Your Money

Kyle Nagy’s Tax Savings Strategies Stop Loaning The Government Your Money

The government doesn’t need a loan from you… that’s what the Federal Reserve is for.

That said, the most recent Treasury statement shows that the Feds collected a record $1,143,141,000,000 in individual income taxes through the first eight months of fiscal 2018 — that’s $1.1 TRILLION — and still, the government ran a $532.2 BILLION deficit those same months.

So perhaps they will be asking all of us for “loans” in the future.

However, you certainly don’t need to make their job any easier, right?

That’s why, if you haven’t already done so, it’s a very good time to make some tax moves.

Here’s what I mean…

Kyle Nagy’s Tax Savings Strategies Stop Loaning The Government Your Money
“Don’t let yesterday take up too much of today.” – Will Rogers

We have a funny job when we prepare our Kansas City clients’ taxes.

Because, well, we have learned that many people consider it a “win” when they receive a refund back from the Federal (or state) government.

However, as it actually happens: this is a loss on your books.

You probably understand this already, but when you receive a refund, what this really means is that you have been been “loaning” the government your money all year.

A refund means that you overpaid, yes? So, this week, let’s stop overpaying.

And while there are certain exceptions to this principle (e.g. certain people with lower incomes who pay little-to-no tax), that little rush of joy you may have felt by “finding money” via a refund is a trick your mind is playing upon you, and should be checked against the reality that you have lost the usage of that money ALL YEAR, while big Uncle Sam has been (over)spending it on your behalf.

And they don’t pay you any interest, by the way.

So, with new tax rates from the recent legislation (the TCJA), it is well beyond time for you to take a look at your withholding, and likely make some adjustments.

And this is especially true if you have children. Under the prior tax law, the child tax credit (CTC) was $1,000 for each eligible youngster. The TCJA doubled that to $2,000 for each qualifying child.

Depending on your “prolificness”, that could be some serious savings right there.

But in addition to that, there are brand new tax tables to take into account, as well as all kinds of tax savings that we are eager to find for you (via tax planning, if you’ll let us).

So here’s a good idea:

To begin, all you have to do is take your cash flow for this first half of the year, and multiply by two. (Project forward through the end of this month, June). Add up your wages, dividends, interest, and any other income, and then — if this represents approximately what you’re expecting for the second half of the year — double the sum.

By then comparing this against your projected withholding, you can adjust the withholding on your paycheck in advance as needed, and ensure a happy visit to our Kansas City office in the early winter.

This can also be a good time to organize your financial records or get started with some financial software. (YNABMVelopesQuicken, etc.) Getting organized now can make finding even more deductions a breeze, come tax time.

Warmly,

Kyle Nagy
(816) 272-8151
Kyle P Nagy, CPA

Delayed Gratification: Staying Focused to Get Ahead (Later) in Kansas City

Delayed Gratification: Staying Focused to Get Ahead (Later) in Kansas City

For sports fans, that was quite a run last week. The NHL crowned its champion (and the nation’s capital seemed like it was one massive street party for the weekend), the rest of the NBA conceded to the Golden State Warriors, and we witnessed another Triple Crown in horse racing.

Now, well … there’s baseball.

But this is a good thing, as far as I’m concerned, and for anyone who is a sports fan, because it allows you even greater incentive to free your mind from these smaller (albeit enjoyable) things, and to move your life forward in a fruitful direction.

Last week, I wrote about FOCUS, and the difficulties which the summer can bring to that task. And it is a “task”, because as I said, it’s not just the summer that preys against our personal productivity … it’s everything that *we* allow in.

I thought I’d take up the subject once more today, but before I do, a few quick tax things for Kansas City taxpayers:

1) Reminder that estimated taxes for the 2nd quarter of 2018 are due Friday, June 15th. Let us know if you need any help with that. We’re in your corner.

2) (This shouldn’t apply to any existing clients) Thursday, June 14th is the deadline to avoid more serious late-filing penalties for your 2017 taxes. If, for some reason, you (or perhaps one of your friends) has NOT filed their taxes yet, a higher penalty scheme kicks in after Thursday. This is because the IRS offers a 60-day window after the initial filing deadline (April 17th this year), during which penalties are smaller.

So, I know you’re not a delinquent … but if you have a friend who might be, let’s help them avoid any further unnecessary fees.

And again, we’re here to help: (816) 272-8151

And speaking of delinquency. Let’s talk again about your focus. Because it’s something we all need to become more and more ruthless about in this heavily-distracted age…

Delayed Gratification: Staying Focused to Get Ahead (Later) in Kansas City
“You are the only person on earth who can use your ability.” – Zig Ziglar

Recently, I was reading about a study done years ago regarding the effects of instant gratification…

Edited excerpt from Wikipedia
Mischel’s famous research study, “The Marshmallow Test,” showed the importance of impulse control and delayed gratification for academic, emotional and social success.

In the 1960s at the preschool on the Stanford University campus, Mischel put marshmallows in front of a room full of 4-year-olds. He told them they could have one marshmallow now, but if they could wait several minutes, they could have two. Some children eagerly grabbed a marshmallow and ate it. Others waited, some having to cover their eyes in order not to see the tempting treat and one child even licked the table around the marshmallow!

Mischel followed the group and found that, 14 years later, the “grabbers” suffered low self-esteem and were viewed by others as stubborn, prone to envy and easily frustrated. The “waiters” were better copers, more socially competent and self-assertive, trustworthy, dependable and more academically successful. This group even scored about 210 points higher on their SATs.

Fascinating study.

And though there have been recent attempts to duplicate this famous study that have failed, the results and the underlying principle therein provide an important lesson for those of us who want to move our lives forward with intention.

Business thought leader, Jim Rohn, could see it a mile away, when he wrote about the harvest.

Paraphrasing Mr. Rohn: it’s about planning, focus and execution (and later … harvesting) vs. chasing the fad of the week, getting distracted and wasting time you can’t ever get back.

How many “get rich yesterday guru” emails did YOU get today? How many shiny-object advertisements were attempting to allure you out of what you knew you needed to get done?

How many “pressing” business or organization questions did you manage, rather than focusing on growth-oriented tasks for your vocation or business? How much time do they waste?

How many rabbits can you chase at one time?

Now, more than ever, in this digitally-saturated age: Plan, focus, execute and harvest.

Be ruthless about your time. Don’t let the guru of the week waste it by trying to convince you that there’s a golden goose and only they know where it is… and trust me, it’s not in Kansas City. The real experts produce results for themselves AND help multitudes of others do the same.

The guru of the week produces results for the guru of the week and their insider buddies.

Don’t bite.

And, separately — chances are very good that you’re personally executing tasks which could be easily handled by a $15/hr employee/helper (or $10/hr even) … and which are keeping you from pursuing what only you were put on this earth to do.

There really is a tyranny of the urgent.

Fight against it. Instead: Do at least one thing today to grow yourself or your vocational calling. That is your most important task.

I’m grateful for the opportunity to serve you, and for your referrals…

Warmly,

Kyle Nagy
(816) 272-8151
Kyle P Nagy, CPA

Focus Training For Folks In Kansas City

Focus Training For Folks In Kansas City

Now that we’re into June, it really does feel like summer is here. The air conditioning kicks in, the days are hotter … and, if you’re like me, “focus” becomes something I have to set myself towards. It doesn’t just “happen” — especially when the days are hot.

It might be simply because tax season is now fully behind us, and we’ve already turned the page into year-round work. No matter the fact that we work with our Kansas City clients all year, there really is something very focusing about that April 15th deadline every year (or the 18th, in this year’s case).

But as I said: focus is a decision. And whether you’re an employee, retired, a Kansas City business owner, or some other vocational expression — really, WHOMEVER you are — living a life of intentionality has never been more difficult.

Devices, screens, “the internet of things” — all of it is pulling against our mind, our imaginations and our wills. Much of that influence is very positive, obviously (who doesn’t love ordering food with a click and a swipe??) … but it’s probably no big surprise that this digitally-overwhelming world can be a little distracting.

Yes, this topic isn’t *exactly* financial, and clearly not tax-related. I don’t pretend to be any kind of “life coach”.

But we like to see our role here at Kyle P Nagy, CPA as more than merely transactional. We’re in your corner, for all kinds of decisions that affect your finances — and this issue can certainly become a financial drain as well.

So again … focus is a decision.

And here are some things that might be hurting it for you.

Focus Training For Folks In Kansas City
“What’s right isn’t always popular. What’s popular isn’t always right.” -Howard Cosell

Just because you work harder doesn’t mean that you are accomplishing anything of actual significance.

In fact, many times it’s the opposite.

Busyness does NOT equal effectiveness.

Sometimes, you find that you are “working harder” because you have fallen into a pit of poor productivity and efficiency.

What I have found to be helpful is recognizing how there are certain habits and practices that are very likely sucking all of the life-force from your day’s productivity.

As an idea starter for focus training, here are four things that very well might be killing your momentum. For you, these might not be an issue, so I urge you, therefore, to consider what really is robbing your attention these days.

These are not all merely related to DIGITAL OVERLOAD, either.

But all of them are decisions — those that are made, and those that are avoided.

1. App Addiction
If you’re constantly checking Facebook, answering or originating random text messages, or have any social media account alerts turned on, you’ll never be as productive as you could be.

One simple way to decrease your Facebook use is to remove the app from your phone. Even if you just use the browser to access it, it’s that extra step or two that it requires that can help your weaker self resist the constant dopamine hit of social media activity.

2. Email Addiction
Turn off your alerts here, too. Don’t leave your inbox continually open when you are engaged in real work.

Because whenever you click on that “Get Mail” button, your brain drip feeds small doses of Something-Important-Is-About-To-Happen-Juice (i.e. dopamine).

Except, it’s hardly ever actually urgent. It can usually wait for your actual focused attention.

So try this out for just one week and see if you don’t accomplish more than you thought possible.

3. Other People’s Emergencies
Emergencies aside, send your calls to voicemail first and return them only during set times (and perhaps even state those times on your voicemail greeting). This has three instant benefits.

First, it tells people you are a focused person, which they will respect and even appreciate. Second, it makes you a focused person — keeping you on task and freeing you from interruptions you can’t anticipate.

Third, you can determine if you’re the right person to handle the call or if it can be delegated.

4. Delegation
As I’ve said, there is a big difference between being busy and being productive. Want to know where you’re just “busy”? Keep track of everything you do every 30 minutes, every day, for one week. Then take all the items that aren’t moving you toward your goals and stop doing them, delegate them to someone else, or hire someone to do them for you.

What will you do with all that extra time? Concentrate only on activities and processes that make money or move you ahead.

The key to more productivity is not more work. The key is more focus. Creating your “Not To Do” List will reset your priorities, refresh your morale, and could even remake your career.

Don’t let your best energy be sucked out of your day.

I’m grateful for our chance to serve you and your family  — and we are dedicated to your thriving. Which means we want to protect you from all of what could tear you down…

Warmly,

Kyle Nagy
(816) 272-8151
Kyle P Nagy, CPA

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