Is a Culinary Degree Worth It?

Today’s post was inspired by Chelsea Fagan’s article 3 thoughts I've been having about money. She writes about her uncomfortableness with the personal finance community and middle-class privilege, but the line "why the f*** is a woman in as prosperous a country as America six figures in debt for a Bachelor’s degree in the first place?" resonated with me. She goes on to write:

And what can we do, politically and personally, to ensure that more people do not end up in the same situation, rather than simply explaining the best and most efficient ways to crawl out of it?

I immediately decided to write about Alyssa, a line chef working at Huertas in NYC, who I learned about in my latest read Generation Chef: Risking It All for a New American Dreamwritten by Karen Stabiner.* Alyssa owed close to $80,000 in student loan debt incurred while she attended CIA in Hyde Park, New York. She paid for her entire bachelor’s degree with student loans; at the time she thought the degree was essential because she hadn’t gone to college. She was well-paid for a line cook at $13 an hour – most New York City line cooks earned an hourly rate of between $8 and $12. Making ends meet after her loan repayment’s temporary reduction expired became impossible.

She ended up moving back to her childhood home in Southern California to live with her mom. Her first food job had been at a restaurant on the Disneyland property in Anaheim. She hoped to return to one of the Disneyland restaurants. They paid well and offered sizable benefits. She figured with no rent and no food costs she would be able to make a sizable dent in her debt in two to three years.

Other annual salaries mentioned in Generation Chef:

Sous Chef $36,000-$38,000

Jonah (restaurant owner) $50,000.


Is a culinary degree worth it?

The chefs featured in the article Chefs Weigh In; Is Culinary School Worth It? say it is not. Jonah, Huertas’ owner, describes culinary school as a “parochial” experience and is wary of graduates, although he feels hiring Alyssa was an exception.

Then there are articles like this one: Surprising jobs with $100K salaries -- after only a two-year degree. The #1 career on the list is pastry chef.  I was touting the earning potential of pastry chefs, to a friend when she brought me back to reality. Her niece made $11 an hour as a pastry chef only because she worked for another family member. After that restaurant closed, the niece moved to Denver where she now works at a popular restaurant earning $9 an hour frosting cakes and cupcakes.

Then there is the 14-year old daughter of an acquaintance who dreams of going to culinary school and becoming a pastry chef. Her father’s advice: become a software engineer, work in Silicon Valley earning $200,000 a year for 20 years, then retire and open a bakery as your second career.

*In Generation Chef: Risking It All for a New American Dream, Stabiner follows Jonah for a little more than a year as he fulfills his childhood dream of opening a restaurant. His journey isn’t for the faint of heart; despite all his planning and positive reviews, he faced staffing shortages, $700,000 of debt, failed liquor license approvals and not enough customers. If you have dreams of someday owning your own restaurant I recommend reading Generation Chef for a reality check.


What do you think: is a Culinary Degree worth It? 

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The Farm on the Roof by Anastasia Cole Plakias

Why I wanted to read Anastasia Cole Plakias’s book The Farm on the Roof: What Brooklyn Grange Taught Us About Entrepreneurship, Community, and Growing a Sustainable Business:
Since "good" business books is one of my favorite reading genres I immediately added Plakias’s book to my reading list after receiving the following email from a marketing coordinator at Penguin Random House:

I met Anastasia Cole Plakias and the other founders of Brooklyn Grange on their rooftop in the Brooklyn Navy Yard. Of course, there was “the wow factor” of standing on a farm in the middle of the concrete jungle. That night I enjoyed the aroma of fresh basil and listened to Anastasia jokingly lament keeping their adorable but expensive chickens. But mostly, I was impressed with the team. The group spoke so eloquently about how they’d come from backgrounds as diverse as food writing, finance, and hospitality, but had been drawn to this project—building the world’s largest commercial rooftop farm.

In The Farm on the Roof, Anastasia describes how she and her cofounders quit their jobs in the middle of a recession to turn their passion for food and farming into a functioning business. What they discovered was a world rich in opportunity, challenges, and hard-won losses. Today, Brooklyn Grange has established itself as a self-sustaining business that harvests more than 50,000 pounds of organically cultivated produce per year and partners with numerous nonprofits to promote healthy and strong communities.

But their story is about more than just farming. It serves as an instructional guide for anyone looking to start a project that is successful while making a positive impact. Anastasia writes with a wit and flair that transforms anecdotes about partnering with investors (some of whom supported the farm for reasons that had nothing to do with farming) and lease negotiation into scintillating, edge-of-your seat tales from the front lines of entrepreneurship.

As a creator of original content who writes with purpose, I believe you’ll be blown away by the Brooklyn Grange model. They’ve figured out a beautiful intersection of commerce and community. And at its core, The Farm on the Roof is an incredible story about utilizing whatever resources you have to turn your backyard idea into a sky-high success.

My thoughts on the book:

If you are looking for a book on how to create a rooftop garden or an agricultural book you will be disappointed in this book. The Farm on the Roof: What Brooklyn Grange Taught Us About Entrepreneurship, Community, and Growing a Sustainable Businessis Plakias’s account of how Brooklyn Grange, a company she co-founded in 2010,went from a dream to a viable socially conscious business over the course of five years.

I enjoyed Plakias’s writing style which is never academic and the entrepreneurial insight she provides:

Plakias and her partners quickly learn that in order for their business to be sustainable they needed to be profitable and in order to be profitable they needed alternative income streams. To do this they added events and began hosting classes. They also slowed down their growth plan and concentrated on the two gardens they already had. They discovered a good site with a landlord whose values complemented their own is more important that expansion.

I came away with a few tips for my own garden:

Kale, herbs and tomatoes are their most profitable crops. Summer squash needs a lot of space and carrots take 80 days to reach maturity. And I think of them every time I try to harvest lettuce in my husband’s newly created garden – the rows are too wide. A lesson they learned after the first couple of harvests and ended up changing ed their row’s depth during a redesign.

Bottom line:
The Farm on the Roof by Anastasia Cole Plakias is a valuable read for start-ups looking to create a socially conscious business or for those who enjoy reading about business or are looking for  entrepreneurial advice. To learn more about Brooklyn Grange visit their website. I would love to attend one of their butcher paper dinner events.

Do you enjoy reading about business? What business books do your recommend? 

Thank you to Penguin Random House for providing me with a review copy of this book.

If you enjoyed this post you may also like:

The E-Myth Revisited: A Book Every Entrepreneur Should Read

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Does Everyone Over 40 Long For a New Career?

One of the first things I noticed upon meeting my new physical therapist was how unhappy he was in his job.  He began his career as a self-employed physical therapist specializing in workman’s comp injuries. His primary client had been a large factory in the Milwaukee area.  His days had been long since he had to cover all three shifts, but the pay was excellent.  Then in the early 2000's the factory was sold. The new owners had stringent business insurance requirements he was unable to meet. His contract was terminated and he was replaced by a large company.  He was offered a job with this company, but declined.  He questioned the educational background of their therapists and the salary he was offered was insulting.

He spent the next year working with his two small remaining accounts and trying to secure new business, but Milwaukee had lost numerous manufacturing facilities since 1986 and the ones who remained were not looking for a physical therapist.  Eventually he closed his business and accepted a position as a staff therapist with a company affiliated with one of the local medical providers. That was where he was working when I met him.

A lot has changed since my therapist graduated in 1986:

Around the end of the 1990's, a bachelor's degree in physical therapy was slowly replaced by master's and doctorate physical therapy degrees. My therapist who holds only an undergraduate degree was grandfathered in. He tells me his company recently hired a new graduate with a master’s degree.  He points to her and tells me she doesn’t know any more than he does.  She earns an annual salary of $55,000 while he currently makes $75,000. He also has a 401(k), is eligible for state unemployment if he finds himself downsized and has medical insurance. He had had none of these while self-employed.

What he doesn’t like about his job:

He always has to be on.  He has to meet and talk to patients all day while his ex-wife who works as a financial analyst can just sit and stare at her computer when she doesn’t feel like working.

He is now billable and has to track his time hourly. He works with 24 different patients at all times.  He has to have vacation time approved in advance. He can’t just take an afternoon off on a nice day or not go in the day after a holiday if he doesn’t feel like it.

He can’t drink a soda while working with a patient. His new company told him this is rude.  To do so he would have to offer them a beverage as well and they are not in the beverage serving business.

His job is boring.

Every day is the same.  Of his 24 patients three of them usually have elbow tendinitis – my affliction. The treatment for tennis elbow is always the same. 

I suggested working with people in their homes; thinking he might enjoy that more.

He said that would be much worse and more boring than his current job.  You then work with the elderly and your job consists of, “See you again on Wednesday Betty be sure to squeeze the bag of beans when I’m gone.” At least in his current job his patients usually get better.

I asked if he had to maintain continuing education. 

He does and he likes doing that, he enjoys learning something new and his employer pays him for his time while he is out of the office.   He then got up and left.  When he returned he said he had just signed up for a day of CPE.

If he could have a do-over what would he do?

He’d be a TV reporter, but at 45 he thinks he is too old for TV.

At our last appointment he said he thinks everyone longs for a career change after age 40. It is hard to know at age 18 what you will make you happy when you are 40. 

As for me, I kind of think I would have preferred a career as a physical therapist rather than as an accounting manager, but I choose accounting, so I am making the best of it. As to everyone, I am sure many people do long for a new career.  I heard my company's President make two comments in the last week about not being happy with his career choice - running the family business.  He is 47 and at one point wanted to be a lawyer or a politician. 

Do you think everyone over 40 longs for a new career?

How to Get Paid on Time

Stefanie O'Connell, a small business owner, recently wrote about depleting her emergency fund in The Growing Pains of Business Ownership. She writes:

Though my earnings have climbed exponentially over the past two years, I found myself this Friday transferring the last of my emergency fund savings into my checking account – just enough to cover my near-term expenses. Despite successfully maintaining my savings through the financial crisis, unemployment and years as a part-time actress, part-time babysitter, my back-up balances have now dwindled down to nothing.

Invoices are out, but payments have yet to come in. Meanwhile, bills are still due at their usual times and my expenses are up in order to maintain my new business growth.

Since I have worked with accounts payable in some format during my entire career as an accountant, I’ve decided to provide a few tips to help Stefanie and others like her get their invoices paid on time.

First, you need to understand your client’s payment processes. Here is how invoices are paid at my company:

Every invoice must be approved by a department manager before it can be paid.
The payment process at my company is sped up substantially if you can get your invoice into the hands of the person authorized to approve it as quickly as possible. If it arrives in accounting without a purchase order number listed or a name or the location of the person who ordered your product or service it could sit in accounting for days until we determine who needs to approve it.

Securing a purchase order number is not required but is important:
Not only does a purchase order number help identify who placed the order, but having one means your service or product was pre-approved. If the invoice price matches the purchase order price the department manager should easily be able to approve your invoice and forward it to accounting.

We pay in 60 days:
Yes that is correct - 60 days. Regardless of your terms, unless you are a phone or utility company, charge us late fees or interest, offer a discount for early payment, won’t ship future product unless we comply with your terms, or are one of our top six major vendors your invoice won’t be paid for 60 days. (During the recession it was 90 days. Currently our owner would like it to be 45, but at the moment we don’t have the staff to process fast enough). We do make exceptions for freelancers and sub-contractors which we pay within 30 days. We also honor progress payment deadlines for major purchases and projects if we have approved invoices.

Who determines when an invoice is paid?
In my company it is the controller.  The person who ordered your service can request we pay you quicker, but he has no authority to make that happen and has been instructed not to make promises or negotiate with you.  They can try to go around the controller to our President, but the President almost always sends them back to the controller.  Neither the President nor the person who contracted with you know what other financial commitments and obligations are pressing.

We haven’t paid you because our customer hasn’t paid us:
For large products or services we resell to our customers we don’t pay you until we are paid. If we are slow invoicing our customer or receiving payment from them this could be what is holding up your payment. Many companies do this – it is called managing cash flow.

A friend who owns her own business refuses to work with a large company in our area because they utilize this practice when paying their subs. She wasn’t getting paid for 60-90 days, but still needed to pay her employees their weekly payroll check. Once her business was well established, she stopped working for this company.

We require a W-9 form be completed before we will issue a check.
This is an IRS form we need on file to prepare your 1099 at the end of the year. We have discovered if our vendors don’t fill this form out prior to us issuing them a check we struggle to get them. If you don’t know how to fill it out yourself have your accountant provide an unsigned master copy. Then make photo copies of it, sign and submit to clients as needed.

When checking our credit references you should hear good things about us:
Remember those six major vendors we pay in 30 days, they are who we list as references on our credit report along with a company whose owner was once an employee of our company. We pay him in 70 days, but when contacted about payment (especially during the recession when we stretched payment to everyone) he always said good things about us. If we get feedback that a vendor has indicated we are a slow payer we remove them from the list. To get a more accurate indication of our payments check our Dun and Bradstreet report.

Also on a side note, our credit manager does not respond to 95% of the requests he receives on behalf of our customers. He doesn’t want to be put in the situation of angering or lying for a customer, so instead says nothing.

If we haven’t paid you in 60 days we most likely don’t have your invoice.
Send statements. I recommend sending one to the person you contracted with and to accounting. If accounting doesn't have your invoice we will request a copy. We then follow up with the department manager. Occasionally they are holding your invoice because they are not satisfied with your work, but most likely your invoice was lost.

Make sure your contact information is on your invoice:
Include your company name, email address and phone number on your invoice, you would be surprised how often this information is not included.  Also, have clear instructions on who the check should be made out to and the remittance address.

Submit a new invoice for each progress payment:
Don’t assume someone at our company is keeping track of your progress payments. Maybe the employee you contracted with is, but most likely they are not and I can guarantee accounting is not. 

Offer a discount:
Unless we are cash-strapped we always take advantage of cash discounts for early payment. Either 1 or 2% off the invoice price is the most frequent discount offered, but I have seen 3%. (My company does not offer pre-payment discounts to our customers. We don’t want them to get used to paying less and then expect it).

Other tips

Call to ask about payment three or four days after payment was due:
The longer your bill goes unpaid the harder it will be to collect. Good luck getting an invoice paid if the person you contracted with is no longer at the company and the company has no record of the order. And speaking of due dates make sure you’ve indicated your terms on the invoice.

Be nice:
The person in accounting who takes your collection call does not need to be berated or to hear what a low-life scum they are. It is almost never their fault your invoice hasn’t been paid. If you are nice to them or befriend them they may look out for you and your invoices in the future.

Ask for an exception:
In a major cash crunch like the one Stefanie is experiencing above, ask if your invoice could be paid earlier than the terms agreed upon. Only do this if your project is on schedule and the company is happy with your work. Offer to pick up the check or have it mailed to you overnight at your cost. Offer additional discounts above what is stated on the invoice. We have been offered as much as 5%. Give a deadline – by the end of the week or by the end of the month; you don’t want them to take their good old time and still take the 5%. This is also where befriending the accounts payable person comes in handy. More than once my A/P person has asked if she could pay a bill early at a vendor’s request. She will tell me how nice they were, that they are just a small business, that they are in a bind etc. If we have the money, I always say yes.

You could also ask to have the money wired into your bank account.  You would then have your money the same day.  At my company this is a hassle because it involves additional steps and layer of approval.  I usually say no to these requests.

Don’t forget about credit card processing fees:
If you accept credit card payments you most likely are charged a fee by your credit card processing company. My company pays 2.5% on customer credit card receipts. We pass this fee on to our customers for sales larger than $25,000. On a personal level, I have worked with more than one contractor who charges extra if I want to pay with a credit card.

Have your customer sign a contract:
If you are large enough, have your contract verbiage reviewed and/or written by your legal consul.

Did I miss anything? What do you do to insure your invoices are paid on time?

*Part of Financially Savvy Saturdays on brokeGIRLrich,

Was My Neighbor Entitled to a Referral Discount?

My husband recently received an estimate from a tree service contractor to remove a dead tree from our yard.  Apprehensive of the low quote, he asked for local references.  The contractor had plenty; not only had he removed and pruned trees for one of our neighbors, but a second neighbor had hired him after observing his work.

There was a minor glitch to this story:

After the first neighbor* witnessed the contractor working on the second neighbor’s property he demanded a huge referral discount be applied to his bill.  The contractor refused stating the discount was too deep and he’d lose money on the job. Our neighbor then withheld payment for three months until the contractor finally agreed to a discount – not as much as the neighbor initially asked for, but still excessive according to the contractor.         

Did my neighbor deserve a referral discount?

I’m going to side with the contractor on this one.  My neighbor never actually did anything other than hire the contractor to work on his own property.  He didn’t give the second neighbor the contractor’s name or provide a reference.  The second neighbor approached the contractor while observing his work on the first neighbor’s property.  In my opinion, I don't think he deserved a discount.

My husband thinks the contractor should have demanded payment immediately upon completion of the work rather than giving our neighbor terms. After receiving payment, he should have told him he was going to be working for his neighbor and handed him a token $10 Starbucks or Home Depot gift card as a courtesy. 

*On a side note, this isn’t the first story I've heard about this neighbor refusing to pay a bill.

How about you – do you think my neighbor deserved a referral discount?  Have you ever received a referral discount or finder's fee? If so, what was the situation?

Why I Need To Be More Optimistic

I admit it I prefer cynicism and a good negative rant over Pollyannaism any day. My rejection of the happiness movement began when I attended a positivity lecture with a friend at her church while in my twenties. The minister proclaimed acquiring a positive attitude along with donating money to his church would attract good things to our lives. If we believed we would become a millionaire we would become one. If we believed we would find true love we would find it. I remained skeptical while my friend got out her checkbook. Reading Barbara Ehrenreich’s book Bright-Sided: How Positive Thinking Is Undermining America probably did not help my pessimistic tendencies.

Last year while traveling with a co-worker I mentioned I had never read and didn’t believe in the premise of Rhonda Byrne's book The Secret. She spent the next two hours trying to persuade me I was wrong insisting changing her attitude had changed her life. The day after she had decided to become a more positive person an unexpected check arrived in her mailbox. I was not convinced.  

It took Jenn Aubert and her book Women Entrepreneur Revolution: Ready! Set! Launch!: 100+ Successful Women Entrepreneurs Share Their Best Tips on What Works, What Doesn't (and Why) ... a Business and Designing a Life You Loveto help me understand the deeper benefits of a positive attitude. She writes:

One of the main traits seen time and again in powerful leaders at all levels is positive framing. It should be no surprise that to manage the roller coaster that is running your own business, you have to keep an outlook that looks for the silver lining in situations. But it goes beyond just having a rose-colored perspective. It is also about seeing things for the way they are and taking the facts as facts rather than spinning stories that are not true or – for that matter – useful. (Pg. 47)

People who frame things in a positive light don’t let negative feelings paint their reality in a negative way. They see things for what they are and learn from them. They understand that they’re in control of their future and can influence future outcomes, learn and grow. (Pg. 48)

During the 2002 recession the company where I work was hit incredibly hard. The owner had been on leave caring for his sick wife and had left the management of his company with his two inexperienced sons. After our company’s bank refused to renew our contract he returned to save his company. Over the next month he contracted a new bank to provide a line of credit and to take over our existing loans all at more favorable interest rates than we had previously. He negotiated long-term notes with five of our major vendors to pay off outstanding payable balances over the next two years. He downsized and cut costs in every area possible. Ultimately he saved his company. I am not sure if any of this could have been achieved if he were not an optimist. A more negative person would have just sold the company’s assets to the highest bidder.

During the great recession my company was again hit hard. Our owners again down sized and cut costs. They mentioned several times how they never would have made in through the great recession if they hadn’t experienced almost losing their company in 2002. They are convinced the changes they made in 2002 had made the company stronger and better able to withstand future financial set-backs. Talk about a silver-lining.

While Jenn Aubert was interviewing Stella Grizont the founder of WOOPAAH she learned:

Maintaining a positive attitude is deeper than just being optimistic and looking on the bright side. According to Stella what is most important is a belief in your vision and seeing ways to maneuver difficult situations and challenges. While a leader within the Ladies Who Launch organization she worked with thousands of women helping them maintain a positive frame by seeing the possibilities, taking the next step and taking account of one’s previous successes. This valuable tool of reframing situations, challenges and obstacles is a skill that can take you far. (Pg. 48)

I had been missing the true benefit of optimism. I had realized people prefer spending time with positive people and those with a positive attitude were more likely to be hired, make friends and find a mate. But I also thought those who believed in the happiness movement had been brain-washed into thinking all they had to do was be positive and good things would miraculously appear into their life. In reality ridding yourself of negative, trapped and I hate myself thoughts frees up your mind to come up with real solutions.

Perhaps it is time I let go of my own negative attitudes and work towards becoming a more optimistic person.

If you would like to learn more about Jenn Aubert and her book Women Entrepreneur Revolution please see my interview with Jenn Aubert.

Have you embraced the happiness movement?  Why or why not?

 

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Interview with Jenn Aubert author of Women Entrepreneur Revolution

One of my goals for this blog is to read and recommend career books for women. I’ve found a few good ones over the years, but honestly have to say Jenn Aubert’s book Women Entrepreneur Revolution: Ready! Set! Launch!: 100+ Successful Women Entrepreneurs Share Their Best Tips on What Works, What Doesn't (and Why) ... a Business and Designing a Life You Love is one of the best entrepreneurship books for women I have read to date. In addition to providing small business and entrepreneurial advice it includes real-life examples from 100 different entrepreneurial women. I’ve never encountered this in a book before. Almost all of the books I've read have been written by men and were about men's businesses. A few years ago I read a blog comment written by a female commercial lender stating all women business ideas were lame – every single one of them. Obviously this commenter needs to read this book.

I will be writing additional posts in the next few weeks based on the lessons I’ve learned from Women Entrepreneur Revolution: Ready!.  Today I am delighted to share my interview with the book’s author Jenn Aubert:

What motivated you to write “Women Entrepreneur Revolution: Ready! Set! Launch?
Many small moments led to the writing of Women Entrepreneur Revolution: Ready! Set! Launch!. The final 'ah ha' moment happened in the Fall of 2012 after having noticed my book shelf filled with books on business all having been written by men. It was simply an observation. Out of curiosity I went to an online forum of women business owners I belong to and asked them who they were reading, who they were following and learning from, and who are their role models. What surprised me was how few women had noted female leaders and entrepreneurs as role models - other than Oprah. Oprah is fantastic but she can't possibly be the only role model for every woman starting a business. I knew I had to figure out what was going on so. That’s when I decided to take a year and ask 100 women who inspired them and how they've created success for themselves.

Who are your female role models?
I have so many now I feel like I need a board on my wall to remember them all. Each inspires me in a different way. One of my role models is a woman I used to work with when I was in the corporate world. Before she became an executive recruiter she was a co-founder of a biotechnology company and was previous a bench scientist involved in cancer research. She is one of the coolest, most generous, loving people I’ve ever known. I admire her grace under pressure and her ability to lead in a more feminine style.

Others that are newer to my stable of role models is Alexis Maybank of Gilt and Jessica Herrin of Stella & Dot. They both have created significant empires in areas where people thought they were nuts. Alexis is a strong leader in the technology community while remaining approachable. Jessica has created a company that helps women create a flexible living for themselves. Both are also moms.

What is your why and why is that important?
My why is that I want to help women build a sustainable business that will enable them to fulfill every passion and desire they have. My why has been around for years but only recently have I discovered the how to do this. The book is a start. My next venture, LearnSavvy, is the next phase.

What was your biggest surprise or lesson learned from interviewing over 100 women?
I was surprised how willing busy successful women were to take the time to speak to me. They were incredibly kind in giving their time, sharing their wisdom and helping a fellow woman pursue her dreams.

In terms of lessons, many women gave the advice of asking for what you want and need. I realized that I have been terrible at that in my professional and personal life. Over the course of the year and having that piece of sage advice reiterated over and over, I’ve become more brave in my own life in terms of asking for what I need.

Is it possible to attain a work/life balance?
While I was interviewing the women for the book I was franticly trying to find my own balance. I was managing my business and a toddler while interviewing, researching, and writing the book. Trust me, I was asking how other’s were doing it because I felt like I was drowning.

What I found was there is no one answer to the question, “How do you balance family and work?”. Everyone has their unique ways to integrate the two, knowing that true balance will never happen. That’s the one relief that came out of talking to over a hundred women. That no one really has the answer - the magic solution - to “having it all.” And quite frankly, it’s ok.

The key is to honestly do the best you can, ruthlessly prioritize what you most value and let go of things that just aren’t that important. There are only so many hours each day so honor that time and focus on what is most important to you.

What do you know now that you did not know when you were 18?
I think at 18 I was more focused on what I should do and be. I planned on majoring in International Relations thinking that I wanted some high paying corporate job traveling the world. I realize now that you can create the income you want in such a variety of unique ways while living a life that really fits you. You don’t have to have an MBA, wear a suit and sit in the corner office to make a really fabulous life for yourself. But that’s all part of life. It takes doing a lot of what doesn’t fit to figure out what does. It’s like dating, you have to go out with a lot of guys to find just the right one.

Is there anything else we should know about you or your book?
I’ve been surprised to hear from women who are not business owners, that they have gotten so much out of the book. I’ve heard stories of women being inspired to take more risks in their corporate roles and of women taking more bold steps in their philanthropic work. It truly warms my heart that this book is helping women everywhere become the best versions of themselves.

Thank you Jenn.  I am already looking forward to your next project - LearnSavvy.

Who are your female role models?  Please share in the comments below.

Disclosure: I was given a copy of this book prior to this interview.

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Should You Hire a CPA To Do Your Taxes?

I was more amused than annoyed with Harry Campbell's statement, “I don’t think it takes much to be a CPA” in his article why the average CPA isn't worth the money on PFMoney blog.  

I hold a CPA license and have to say passing the certified public accountant exam was one of the hardest things I’ve ever done. Back when I took it, it was a 16-hour exam covering business law, auditing, financial accounting and tax. In order to pass, I needed a strong knowledge in all four areas since you never knew what specific scenario or obscure topic they would test on.

Passing the exam was one of the best things I’ve done for my career. It opened doors that never would have been available to me without it, increased my annual salary $10,000 the first year I became certified and boosted the amount of respect I receive from colleagues and business associates. I still notice a distinct change in attitude when I hand a vendor, banker or auditor my business card and they read the CPA designation listed after my name.

Campbell goes on to say:

Like in any profession, I’m sure there are some really good ones out there but I think it’s a myth that only a CPA can do a great job. That doesn’t mean the average person is smarter than a CPA but if you can read and you have an interest in taxes you can do just as well as the average CPA.

The reason why I feel so strongly is that this year I actually met with two different CPA’s in person. Both were very highly rated by online reviews and I ended up explaining depreciation recapture tax to the first one and arguing with the second one about the passive loss exclusion. The only reason why I knew more than both these CPA’s was because I had just read NOLO'S Landlord's Guide. It wasn’t because I’m a genius, I just spent the time reading up on landlord deductions and clearly these guys weren’t specialists in real estate taxation.

I have never prepared taxes professionally nor do I ever intend too. My eyes glazed over when I read the words depreciation recapture tax and passive loss exclusion in Campbell’s example. I attend several tax-updates each year as part of my CPE requirements, but these classes are designed to keep me informed of tax law changes affecting my industry, company or personal life, not to become a tax expert - my company has an outside accounting firm for that. I can handle cocktail party tax questions, but anything more complicated I can't answer. (I was once asked how much of a capital gain someone would have if they were to sell their printing business.)

Many of the CPA’s I know do not work in tax or even for an accounting firm. Less than 15% of the members in my professional organization prepare taxes professionally. I am confident that those who do would be able to answer Campbell’s questions accurately and with enthusiasm. If they could not, I’m sure they would know where to find the answers.

He closes with:

I got the feeling from both of these CPA’s that they were going to just take my information and hand it to a secretary to enter into their tax software. I don’t need to pay $500 for that and neither do you. My advice is to do it yourself or hire a specialist and take an active role in your taxes.

Should Harry hire a CPA?
The tax-preparers I know who work for larger firms do have interns or assistants who enter client information into tax software, but an actual CPA always reviews and signs the return. Also, they specialize - some work with small businesses, others with not-for-profits or medical professionals. I would suggest Harry call some of the rental property owners in his area and ask for recommendations. One of my co-workers owns rental properties, his wife is a CPA working in industry and he tells me she spends days working on their taxes. Someone that specializes in rental property returns would be more knowledgeable about best-practices, but if Harry feels comfortable preparing his own tax return he can certainly do that too.

Here are some other considerations:

If your tax-prepared deductions seem too good to be true perhaps they are: 
Two salesmen at my company living in two different states are currently undergoing IRS audits for their 2010 returns. Both used an outside accountant to prepare their return. Both audits disallowed their business expense deductions. One received a bill in excess of $10,000. I’m not sure what he could have claimed for $10,000 because he receives a car-allowance, reimbursement for his gas, his entertainment expenses and mileage in excess of 35,000 from our company. 

Not all tax-preparers are CPA’s or have the same training:
H&R Block has an in-house training program. When one of the CPA tax preparers from my professional organization was looking for an assistant at her law firm, she indicated she wanted someone with prior tax experience and working at H&R Block did not qualify as prior experience.

Also, not all accountants who prepare tax returns are CPA’s. If having a CPA prepare your return is important to you make sure you ask if they are licensed.

If utilizing a CPA, be organized:
The CPAs I know charge clients more if they are not organized. One has a client who drops off shoe boxes filled with receipts each year. It takes her at least eight hours to organize all the papers and receipts in these boxes. She charges him for every minute of her time.

Be careful with the home-office deduction:
The home office deduction is the most frequently audited item on a tax return. The rules are very specific about how this space is used. It must be used exclusively and regularly as your principal place of business. My boss, who prepares tax-returns on the side, refuses to use this deduction on his client’s returns.

There is a new simplified option for the home office deduction:
Starting in 2013, you can deduct a simplified safe harbor amount of $5 per square foot up to a maximum of $1,500 (300 square feet). This means you can itemize your full mortgage interest and real estate interest on Schedule A of your personal tax return rather than apportioning between Schedule A and business schedules C or F. In some parts of the country this simplified option may be as much as if you claimed actual home office expenses. If you live in a high expense area this simplified method will probably amount to just a fraction of your actual expenses.

Your tax-preparation fee may be listed as a deduction, but it may not actually be reducing your taxes:
I had a co-worker who didn’t mind paying someone to prepare her taxes because his fee was deducted as an itemized expense on her return. When I reviewed her return for her, the tax preparation fee was indeed listed as a miscellaneous itemized deduction, but the total miscellaneous deductions in excess of 2% of adjusted gross income was zero - meaning her tax preparation fee was not actually reducing her taxes.

The same can be said for medical expenses:
I currently have a co-worker who hires H&R Block to complete her taxes because they itemize her medical and dental expenses for her; something she doesn’t like doing. I told her to make sure she is actually receiving a deduction. In the past, you needed out-of-pocket expenses in excess of 7.5% of adjusted gross income. In 2013, that percentage has been increased to 10%. If you or your spouse is 65 or older the 10% increase does not go into effect until 2017.

Should You Hire a CPA To Do Your Taxes?
If you have a fairly uncomplicated tax return, nothing new or out of the ordinary occurred during the tax year and you are familiar with the various tax reporting forms you probably do not need to hire a CPA. For the past three years, I’ve used TurboTax answering all of their questions to make sure I didn’t miss anything. I was finished in less than two hours. If you do the same, you probably don't need to hire an accountant to do your taxes. If you have your own business you may want to hire a CPA - at least for the first year.

Do you prepare your own taxes?

*Part of Financially Savvy Saturdays on Femme Frugality and Stapler Confessions*

48 Days To The Work You Love

What is Dan Miller's book 48 Days To The Work You Loveabout?
Dan Miller, a life coach, has written a book not about finding a new job, but about discovering what you are going to “be.” According to Miller, failing to make that fundamental discovery is why so many people find themselves in jobs they hate. His book is to help lead you to the vocation you will love.

Motivation for reading:
This book has been included on several must-read career book lists, but it wasn’t until Sarah Ingle mentioned it in her post things I wish I'd been told in college that I decided to read this book. She wrote:

I wish someone had made me read 48 Days To The Work You Love.  I know I talk about this book all the time, but it was the first thing I ever read that actually helped point me in a direction. I think every college freshman or sophomore should be REQUIRED to read something like this before they waste thousands of dollars on classes that are useless and have no direction. 

If you are a regular reader of this blog, you may have noticed I’ve been feeling trapped in my career as an accounting manager for some time now. I’ve worked in accounting for 25 years and would like to do something more fulfilling in the next stage of my life. I was hoping this book would provide some insight.

My thoughts:
This book is not a step-by-step how-to-guide to finding a new career in 48 days; instead it is a book filled with anecdotes and stories from Miller’s coaching practice, the bible and quotations from other books. Each chapter does end with a list of questions designed to get you thinking about your own life and its purpose. Overall, I thought the book was a bit repetitive. I would have preferred a more logically organized step-by-step book, but reading it was not an entire waste I came away with several invaluable insights. Here is a sampling:

Not only know yourself, but know what is changeless about you:
The power of knowing yourself acts as a compass through change. Popular writer Steven Covey says the only way we can handle change is to know what is changeless about ourselves. You need that changeless core, knowing how God has uniquely gifted you and what you value. With that knowledge you can forge through change with clear direction and unshakeable purpose. (Pg. 31)

On having action plans and setting goals:
A plan of action will separate you from 97% of the people you meet. Everyone has dreams, but very few ever turn those into goals. The difference between a dream and a goal is that a goal is a dream with a timeframe of action attached. (Pg. 48)

Only 8% of the general population can identify goals and only about 3% ever actually write them down. (Pg. 56)

Goals are not written in concrete terms but certainly give you a starting point and a destination. The important thing is you are working on your goals; your life has meaning only when you are working towards goals through with your achieve meaning. After all, success is the progressive realization of worthwhile goals. (Pg. 57)

Indecision is the greatest thief of opportunity:
A recent Harvard Business School Study asked, “What are the top characteristics of high achievers?” At the very top of the list, one characteristic stood out: speed of implementation – having the ability to act quickly. Eighty percent of decisions should be made immediately. (Pg. 55)

When confronted with a decision Dan and his wife allow a 2-week maximum for arriving at a decision. Here is their approach to the process:

1. State the problem
2. Get the advice and opinions of others
3. List alternatives
4. Choose the best alternative
5. Act

Look for what you love first:
Looking for the best opportunities in career and jobs often leads to disillusionment and frustration. Look for what you love first. Then you will have the confidence and enthusiasm to find success in places others overlook. (Pg. 188)

I enjoyed the chapter on entrepreneurship. It contained one of the best “Do you have what it takes to be an entrepreneur questionnaire” I’ve seen. It is extensive – at 18 questions and does not include your typical are you a risk taker type question.

The chapter on interviewing pointed out how important it is to appear energetic and enthusiastic during the interview process.

Bottom line:
I may not have determined what my next career will be, but I did gain valuable insights from reading this book. I recommend it to anyone just starting out or searching for a new vocation with this caveat - Miller writes this book from a Christian point of view. If this will bother you, you may want to skip this book.

What is the best career book you’ve ever read?

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