The Counsel of Trent

writing is thinking

Monday, July 10, 2006

Wisdom from the World of Accounting

My old friend who's a CPA now was reflecting on what he's learned in the buisness. I thought it was so good I'd paste it here.

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I see a lot in my business people who work their life building a retirement fund. They don't recognize when the pile is big enough for retirement. Instead it is like the pile takes them over and they work to make the pile bigger instead of spending the pile and switching their vocation, if need be. They could also use the pile to further their personal causes, organizations, etc. Instead, they die and the pile is no smaller than the day they retired. We both know the pile doesn't do them any good where they are going.

A prime example, I had an 80 something old lady in my office the other day. She worked as a nurse until she was 78. Now, she complains that she is running short in monthly living expenses. I tell her that she has $400,000+ (soon to be almost $1 million when she sells her house) in investments that she could partially spend. She wouldn't hear any of it.
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One of my grandpa's was like this. He went through the depression era and only knew how to save. When he died he had a huge estate. The bulk went to his brother--his closest living relative--who bought a big new fancy car and then added the remainder to his pile.

Money is a means. It has no intrinsic value. It's only value comes from what one does with it.

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