Being poor is a good way to scam the IRS
Being poor is a good way to scam the IRS
By: Bill Mead
Topics:
Posted by editor Wed May 3, 2006 12:05:05 PDT
Viewed 791 times
1 response 1 comment When we sold the Tehachapi News a few years ago my plan was to put the money in a coffee can and bury it in the sand next to my grass shack on Maui. My wife immediately rained on that parade. Instead, we deposited the money with Chuck Schwab and turned over its management to a cranky financial manager in San Luis Obispo. It's probably just as well. I'm not sure I could have lived on poi and roast pork.
Our financial manager is one of the most demeaning people I have ever met, which is definitely a good thing. I try not to contact him any more than necessary because when I do he implies that I need a 24-hour custodian or even a lobotomy. That's why I chose this guy to watch over our meager resources.
Anybody who would agree with my fiscal views would have put us in the breadline long before this.
Our money manager's first hostile act was to put us on a monthly allowance. We don't do allowances very well. Having been entrepreneurs for most of our married lives we long ago developed a taste for tapping the till whenever we found something we wanted to buy. Those days are over. Please bear with me while I try to stop bawling.
Partly as an effort to curry favor with our financial manager we sold our big house in Golden Hills and squeezed into a manufactured home in town. His response was to cut our allowance. But that hasn't been a total disaster. Unexpectedly, we have found a lot to like about our downsized quarters, not the least of which has been significantly downsized living costs that have nearly made up for the downsized allowance. I'm still mad, though. I counted on frittering away these savings instead of having them stashed away for the distant future.
Apparently ignoring the fact that my wife and I are hurtling toward the 80-year-old mark, our manager seems obsessed with making our resources keep producing the same chintzy allowance for another 30 years. He must know something we don't. The result has been his insistence that we balance our muni bonds, which are very predictable, with what he calls “equity investments.” That seems to be how pros like him refer to playing the stock market which is anything but predictable.
Right after he dumped the proceeds from the sale of our house into the stock market the Dow Jones went into a slump. But this past year has been different. The stock market woke up and our tax-free earnings from munis were augmented by decidedly unfree earnings from our stocks and (sob!) we found ourselves in hock to the IRS last month.
This is a situation covered by the maxim that no good deed goes unpunished. The punishment in this case is that our tax obligation has to be paid out of our already-anemic allowance. Can you imagine? We quit buying expensive stuff we don't need, improved our fiscal outlook for when we turn 110 and we end up with less cash in our pockets.
I know you feel my pain but please don't send a sympathy card. Loose change will do just fine.
| Send to a Friend | Report a Violation |
Fri Jun 9, 2006 15:21:33 PDT
You have an excellent manner of combining instruction with humor. It's storytelling and wonderful. Thank you.
