“Real World” Personal Strategy Blog

Smart Planning for Financial Independence in Shakopee, MN

Financial IndependenceI have more to say about financial independence today (since I received some great feedback the last time I wrote about it). But before I get there, I’d like to speak some encouragement to you. A few people in Shakopee, MN wrote me saying that they were feeling pretty dispirited about their personal situation … and that anything discussing “financial independence” really seemed like a pipe dream, and unrealistic for them.

As usual, I know that when a few people write about it, there’s many more that think it, and I’d like to speak a word to you, if you’re in that category.

Don’t give up.

When you go through hard times, financially, it’s easy to believe that there’s no light at the end of the tunnel. But did you know that most millionaires were previously bankrupt at some point? (Just Google it, you’ll see.)

In fact, it’s often the “fire” of these times of trouble which serve to clarify things — and get you into the place of making smart decisions, perhaps for the first time.

So, if you’re feeling the financial heat right now, look out for the blessings in the midst of pain. I know it’s hard — but chances are, you’re being reminded of what’s REALLY important … and often, seeing this again can be a launch pad for living the kind of life that you really want to live.

So, go for it!

Roger Menden’s Independence Month Special…
“FREEDOM!” (Well, free Tax Return Review, that is.)

Simply mention this blog article and bring your return filed by ANY other preparer (including yourself), and we will review it at no charge. You will ONLY be charged if we help you find “missing money” from the IRS, and we, in fact, file an amended return for you.
And don’t forget to
 share this with a friend that needs help.

Now, to the good stuff…

Smart Planning for Financial Independence in Shakopee, MN
“There is no royal road to anything. One thing at a time, all things in succession. That which grows fast, withers as rapidly. That which grows slowly, endures.” -Josiah Gilbert Holland

Money has no value unless you’ve got the time and good health to enjoy it. In fact, if you have to be poor, would you rather be poor now or at retirement? By planning carefully and investing wisely, you shouldn’t have to make this choice.

I believe that you ought to save early and often, making regular, scheduled investments in the stock market through the use of mutual funds, or an actively-managed account.

Of course, nothing in life is ever guaranteed, but historically speaking, over the long term, the U.S. stock market yields an annualized return of about 7-8% (assuming dividends are reinvested). Yes, things are volatile right now … but “market risk” is not the greatest danger to your savings — inflation is the greatest danger. The value of your retirement erodes at a rate of roughly three or four percent every year.

But the stock market has always recovered from even the steepest declines.

Here’s an historical note for you : the worst one-year period for the Dow ran from July 1, 1931 to June 30, 1932. It lost 68.92% of its value. Would you have bought stock then? If your goals were long term, that’s exactly what you should have done. The best 30-year period for the Dow ran from July 1, 1932 to June 30, 1962, during which time it offered an average annual return of 14.34%.

Becoming Financially Independent
Reaching financial independence isn’t always easy. It takes time and work. You cannot accomplish your goal of achieving it by wishing. It takes doing. It takes being committed and absolutely determined to act.

One way you can act now, is to take a look at your personal expenses. Here’s some tips to cut them…

* If you and your partner both work, try to live on only one income. Invest the other.
* Save an emergency fund, but don’t make it too large. I like a small (one-month of expenses) emergency reserve, with everything else invested in mutual funds. Eventually, you should work to build this up to 3-6 months, but initially, one month will do.
* Never borrow money, except to buy a home. If you use credit cards, use them only as a convenience, not to borrow. Of course, I recommend not using credit at all for everyday purchases. Debit cards will really cover any use for which you might want or need to use plastic.
* Pay yourself first. Every month, invest some portion of your income for your future. Again, I recommend setting this up to be happening for you on an automated basis.

Finding more money to actually invest is the best way for you to reach financial independence in Shakopee, MN. And one great way to find extra money is to cut back on your existing expenses.

Yes, you can achieve financial independence, but you can’t get there overnight, and you can’t get there without setting goals and making sacrifices.

So, start now.

I hope this helps!

I’m grateful for your trust, and for your referrals. And don’t forget what’s below as something you can share with your friends.

Roger Menden’s Independence Month Special…
“FREEDOM!” (Well, free Tax Return Review, that is.)

Simply mention this blog article and bring your return filed by ANY other preparer (including yourself), and we will review it at no charge. You will ONLY be charged if we help you find “missing money” from the IRS, and we, in fact, file an amended return for you.
And don’t forget to
 share this with a friend that needs help.


Roger Menden

R. Menden Accounting & Tax Service

Four Keys to Achieving Financial Freedom by Roger Menden

financial freedomI truly hope you enjoyed your Independence Day festivities. Perhaps you’re still enjoying them?

Interestingly, did you know that the Declaration of Independence was actually approved on July 2nd, and most of the delegates didn’t sign it until August 2nd? While John Adams expected Americans would celebrate July 2, the date on the published copies of the document was July 4th … so that little quirk is why we all know “July Fourth”.

Some other facts you may not know about our just-passed holiday…

* Three presidents died on July 4th: Thomas Jefferson and John Adams in 1826, and James Monroe, in 1831. Calvin Coolidge was the only president born on July 4th, in 1872.
* The Massachusetts General Court was the first state legislature to recognize July 4th as a state celebration, in 1781.
* The first recorded use of the name “Independence Day” occurred in 1791.
* The U.S. Congress established Independence Day as an unpaid holiday for federal employees in 1870. They changed it to a federal paid holiday in 1931.

So, for those of you who got Tuesday the 4th off of work, thank the Great Depression-era Congress.

Anyway, all of this about “independence” got me thinking about YOUR *financial* independence, right here in the Shakopee, MN area. Are you on track for it?

But before I get there (and while we’re on the topic), don’t miss this:

Roger Menden’s Independence Month Special…
“FREEDOM!” (Well, free Tax Return Review, that is.)

Simply mention this blog article and bring your return filed by ANY other preparer (including yourself), and we will review it at no charge. You will ONLY be charged if we help you find “missing money” from the IRS, and we, in fact, file an amended return for you.
And don’t forget to
 share this with a friend that needs help.

Now, to the good stuff…

Four Keys to Achieving Financial Freedom by Roger Menden
“You will never do anything in this world without courage. It is the greatest quality of the mind next to honor.” -James Allen

Often, as we strive to keep our heads above water in these culturally crazy times, it’s easy to lose sight of why we’re all working hard each day, especially in Shakopee, MN. What is the goal? What is it we’re trying to accomplish by earning wealth? For me — and for many others — the answer is financial freedom.

Now, I would define this as “having an income sufficient for your basic needs and comforts from sources other than paid employment”. Financial independence implies freedom– Financial Freedom. It’s the condition of having saved enough money that you can do whatever you choose. Whether you elect to keep working doesn’t matter — you have enough saved and invested to follow your dreams.

But is financial independence just a pipe dream? Is it something only for the lucky and the strong? No, it’s a goal that anyone can fulfill, as long as they’re armed with some basic knowledge, and make some smart choices.

As I see it, there are four keys to accumulating wealth and achieving Financial Freedom:

1. Start investing as early as possible. It takes significantly less money to accomplish what you want, and you have more time working for you.
2. Be determined to save on a regular basis. It is an easy way to accumulate wealth — especially when it becomes an automated component of your monthly plan.
3. Begin investing with the largest possible sum you can. You will have more money working for you over a longer period of time.
4. Reach for the highest rate of return you believe you can safely receive on your money over time. Each additional percent is important. The higher the rate, the less money it takes to accomplish what you want.

Financial freedom is built upon these four guidelines.

What Holds Many Shakopee, MN People Back
In order to save money, you must fight to keep from spending it. I encourage you to set goals, to prioritize wants. Since money can be spent only once, you need to decide which wants are most important. To do this, it may be helpful to place a value on each of your wants.

So … here’s an exercise for the week: Pull out a piece of paper and list your wants.

These can range from a new house to a hot tub to a trip to London to a new blender for the kitchen. Next to each item, write why you want it. (You might want a hot tub, for example, because it would allow you to relax with family and friends.)

When you’ve finished, take another piece of paper and re-order the list based on how important each want is to you. If a trip to London tops the list, are you still willing to delay it by spending $40/month for that gym membership you rarely use?

Confront this issue first (keeping in mind those four keys mentioned above), and I’ll be back with more thoughts for you next week.

I’m grateful for your trust, and for your referrals. And don’t forget that great tool above (free return review) as something to share with your friends.


Roger Menden

R. Menden Accounting & Tax Service

Three Practical Financial Tips for the Multi-Generational Caretaker in Shakopee, MN

caretakerWith summer in full swing, for some of my Shakopee, MN clients it means that the children are more “present” than they might otherwise be. The wallet might feel a little more leaky than normal, with summer camp expenses (and there *are* certain tax deductions for those, if you do it right), various activities for the family, and more.

But there is great joy in all of that, of course, and I’ve often said that it’s almost always worthwhile to invest in “experiences over stuff”.

That particular experience, however, isn’t what I’m writing you about today. There is another joy that some of my clients find themselves embracing, and that’s when Mom & Dad or other, older members of the family move in. Suddenly, there are multiple generations “present” in the home. And this can obviously change the dynamics.

But as you embrace this particular joy (and yes, it can also feel like a burden), there are important things to keep in mind as it relates to maintaining your legal and financial footing while you do so.

Here’s what I mean…

Three Practical Financial Tips for the Multi-Generational Caretaker in Shakopee, MN
“The secret of change is to focus all of your energy not on fighting the old, but on building the new.”  -Dan Millman

Time was, families used to be dealing with elderly parents, young children … and everything in between, all in one house! This is less common now, and as a result, many families are actually unprepared for how to handle it — simply because models are much less plentiful.

The reason I highlight it now, is that we can help — whether with specific practical assistance, or even just dispassionate advice. You might know somebody in this situation of being a caretaker — or you could be dealing with it yourself.

And depending on your perspective, all of it can feel like a double-whammy.

Certainly, as with children, it’s always a better idea to focus on the benefits of more time with your parents, etc. … but yes, I’ve seen many times how this can put a major drain on a family.

From what I’ve observed of adults thrust into the role of caring for their parents, the biggest struggle often comes from trying to keep their dual responsibilities segregated.  They try to ensure that the needs of the aging parent don’t impact what’s going on in their children’s lives.

As an example, the adult children feel like they have to choose between making sure that Mom takes a walk for exercise, and attending a child’s piano recital.  No matter what the adult parent chooses, he or she often feels like a failure at everything.

What you need to realize is that this process is not something that you can keep separated in your life.  You’ll do your family a great service by viewing it as an experience to be shared with everyone in the family, and maybe even with some members of the outside community.

If you find yourself in this situation here are 3 practical tips I can offer:

1) Get the Actual Facts. You may have avoided talking with your parents about finances in the past. Whether you were taught that those things are private or “it just never came up,” now is not the time for surprises. You need to know how your parents are doing financially and whether they’ve made any provisions in case they become ill or suffer a long-term disability.

2) Ensure the Estate is Set Up Right.  At this stage of your parent’s life it’s important to make sure that your parent’s legal house is in order. We can help make a recommendation to this end, if you need help.

But, no matter where you get it done, your parents absolutely need to have a financial power of attorney, advance health care directive (a health care power of attorney plus a living will), and a simple will. It may not be the best estate plan for your parents. It might not be proper Medicaid planning. However, it is the bare minimum you will need to help care for your parents.

3) Insure Against the Future. Now is the time to examine long-term-care insurance or assess whether savings will cover an extended nursing home stay, assisted-living facility costs or extended home-care services.  You may be tempted to begin to liquidate your holdings or to stop saving for your own benefit, in order to help pay for the cost of your parent’s care. Big mistake.

Remember that there aren’t nearly the same kind of government programs or lending scenarios that will help you pay for your kids, or their college, or fund your retirement — as there are programs to help support aging parents.  And it’s vital that you continue to save for your retirement.

I’m grateful for your trust, and for your referrals.


Roger Menden

R. Menden Accounting & Tax Service

Roger Menden on Patterns and Habit, via Parable

habitLast week I wrote about worry, and this week … well, the summer is fully upon us, and as things get hotter, some days I come into the office and without the intensity of tax return filing season to keep me distracted, I occasionally find myself a little stuck.

Can you relate?

You see, I’m a creature of habit, and over the course of the summer, I can find myself repeating patterns over weeks and months. Eventually, these patterns can become codified firm policy around here.

But innovation requires that even staid Shakopee, MN tax practices be willing to think outside the ol’ proverbial box.

Which, of course, is one of the reasons why I started blogging for my clients and friends in this way some time ago. Which has really done wonders for us … being able to communicate in a conversational, coherent way with our people has been really fun.

(Yes, I know blogging isn’t exactly “new” … but I like to think we do it a little differently than the norm.)

Anyway, I was reminded of all of this by the following parable that I came across. Maybe it will help you too?

Roger Menden on Patterns and Habit, via Parable
“Life is 10% of what happens to me and 90% of how I react to it.” -John Maxwell

A small brewery launched a fancy microbrew. It proved to be very popular–so popular, in fact, that they were having trouble getting it distributed to all the stores and bars in the area. The management team met to discuss the problem.

“Here’s the schedule,” said the manager in charge of distribution. “You can see that we have our biggest shipments on Monday and Tuesday, and then smaller ones Wednesday and Thursday, and all the local deliveries on Friday.”

“We’ll have to change that,” the CEO said, “but we’d better find out why it’s scheduled that way.”

The team couldn’t find any logical explanation for the schedule, which had endured over the years, until they reached a former distribution manager, long-retired, whose grandfather had co-founded the company. He thought for a while, then said:

“Yes, I remember. When we started out, all our deliveries were made by horse-drawn wagons. On Mondays and Tuesdays, when the teams were rested, they could pull a big load, but on Wednesdays they started to get tired, and by Friday they could only make it a few blocks. So we set the schedule that way.”

Let’s all commit to remembering WHY we do what we do … and not let our methods get in the way of our mission.

I’m grateful for your trust, and for your referrals.


Roger Menden

R. Menden Accounting & Tax Service

How to Stop Worrying by Roger Menden

stop worryingThere are so many things in our modern world that are true causes for concern. Whatever your politics, the atmosphere in Washington is tense. There is unrest across the culture, and a sense that many of the things that we have grown to rely upon aren’t nearly as stable as they once were.

And to top it all off, Batman just died.

But I don’t like to worry about things that I can’t control.

Well … usually. I can’t count how many times I’ve woken up at 2:30AM with a business idea for my Shakopee, MN practice, or grappling over a problem that we needed to deal with. Or over family issues. You name it.

But when I “wake up” in the morning, splash some water on my face and grab a cup of coffee … I am often reminded that what I was worrying about just didn’t make sense.

I’ve lost too many hours of sleep as a Shakopee, MN business owner, frankly. And I happen to know that this is the case for everyone, even if you aren’t called upon to meet payroll.

But I’ve slept much better when I worked through this simple exercise for my worries. It’s from the American Institute for Cognitive Therapy, but I’ve modified it a bit for my own use.

So, here’s an idea that you can use to stop worrying…

Oh, and before I get there — remember that estimated taxes are due June 15th. So if you’re seeing this and you haven’t already taken care of that (and you are subject to paying them), now’s a perfect time to handle it…

How to Stop Worrying by Roger Menden
“I take a simple view of life: keep your eyes open and get on with it.” -Sir Laurence Olivier

For many Shakopee, MN people, worrying about things can become more vexing than the original problem they were grappling with.

Imagine that you are on trial and facing 20 years in prison. You’ve hired a lawyer, and you’re praying she’s going to be able to help you. She leans over and says, “Don’t worry. I know I never do. I never worry about a thing. Instead, I just try to think positive.”

Now ask yourself: Is this the kind of person I want representing me? Someone who doesn’t worry about anything — not even what’s going to happen to her client?

The answer, of course, is a resounding NO. You want a lawyer who’s going to worry over details. And cover everything that needs to be covered, so you don’t end up in prison for 20 years. What you want is for your lawyer to worry, and then take appropriate action so that she is prepared.

(In the exact same way, you want a Shakopee, MN tax professional who is going to pay attention and “worry” over details so you don’t have to. But I digress…)

Now imagine a lawyer who leans over and whispers to you, “Wanna know my secret? I never prepare for a case — I just worry. It’s why I’m known as such a great attorney. All I do is worry. As a matter of fact, a lot of times I actually worry myself sick and have to go into the restroom and throw up.”

Do you want this person representing you? Nope. What you want is an attorney who can help you solve your problems. And that’s exactly what your worry should do for you: help you solve your problems. If it doesn’t, you’re probably participating in unproductive worry, which is unlikely to get you anywhere, except on your way to becoming overly-anxious and, probably, depressed.

So here is the exercise which has kept me from worrying needlessly — but rather doing it productively. I start by asking these two questions to keep worry in its proper place …

1. Is the problem plausible or reasonable? If you’re getting ready to take a trip to a national park, for instance, it’s appropriate to worry about getting accurate directions and your car tuned-up before you go. Worrying about being shot by a sniper along the way, which is unlikely, is probably a waste of time.

2. Can something be done about the problem immediately? If you answer “Yes” to this question, then you can probably come up with an action plan to get something done that will alleviate your worry. If your family’s cashflow is down, how can you INCREASE it by earning more, and obtaining more sources of income — rather than worrying about the expense side of your family budget. If your production at work has suffered recently, what are the positive steps you can take … rather than fixating on who to blame?

You get the idea.

Use these questions, and start sleeping better at night! I know I do…

And I’m grateful for your trust, and for your referrals.


Roger Menden

R. Menden Accounting & Tax Service

What is Estate PlanningThere comes a point when you hear news such as we all saw unfold over the weekend in London (and earlier in the week in Manchester, UK), and it’s tempting to just go numb. It feels like survival, during these crazy times.

But I’m fighting to care, and not just tune EVERYTHING out. There is great wisdom in keeping our minds uncluttered by the 24-7 cycle of chaos and fear that we can find online and on the news channels … but there are also times when our thoughts, and our prayers, really still matter. And we can’t just tune it all out.

So, let’s stand with our friends across the pond, and stand against senseless brutality, in all of its forms.

And sometimes it takes a distant tragedy like this to remind us of the fragility of life, and how we should also fight to protect what matters most to us.

One of the best ways we can fight to do that is to take the seemingly-inconvenient step of establishing good plans for whatever might come. Just as you would want to have emergency plans in place for your household should immediate disaster strike, it’s very important to have plans in place for our loved ones and most precious possessions (children, spouse, home, finances).

You may be asking yourself, what is estate planning? This is a great question to explore and get a strategy in place for. In fact, there are six reasons (at least!) that all of my Shakopee, MN clients should have some kind of estate plan in place, and do it this year…

What Is Estate Planning? Six Good Reasons Everyone Should Have An Estate Plan In Shakopee, MN

“There is greatness in doing something you hate for the sake of someone you love.”  – Shmuley Boteach

Many well-meaning (and very loving) Shakopee, MN parents haven’t yet established an estate plan. That is a sad reality.

Yes, perhaps they’ve downloaded a fill-in-the-blank will from a software service, but unfortunately, with many situations, these don’t cover every important component of your wishes.

Or, they may rationalize that they are too young or don’t have enough money to reap the benefits of a plan.

Many of my clients have already made proper preparations, but I’m aware that YOU might be reading this and have not yet set this up.

Well, here are six good reasons that EVERYONE should have a good estate plan…

1) Loss of capacity. What if you become incompetent and unable to manage your own affairs? Without a plan the courts will select the person to manage your affairs. With a plan, you pick that person (through a power of attorney).

2) Minor children. Who will raise your children if you die? Without a plan, a court will make that decision. With a plan, you are able to nominate the guardian of your choice.

3) Blended families. What if your family is the result of multiple marriages? Without a plan, children from different marriages may not be treated as you would wish. With a plan, you determine what goes to your current spouse and to the children from a prior marriage or marriages.

4) Keeping assets in the family. Would you prefer that your assets stay in your own family? Without a plan, your child’s spouse may wind up with your money if your child passes away prematurely. If your child divorces his or her current spouse, half of your assets could go to the spouse. With a plan, you can set up a trust that ensures that your assets will stay in your family and, for example, pass to your grandchildren.

5) Retirement accounts. Do you have an IRA or similar retirement account? Without a plan, your designated beneficiary for the retirement account funds may not reflect your current wishes and may result in burdensome tax consequences for your heirs (although the rules regarding the designation of a beneficiary have been eased considerably). With a plan, you can choose the optimal beneficiary.

6) Avoiding probate. Without a plan, your estate may be subject to delays and excess fees (depending on the state), and your assets will be a matter of public record. With a plan, you can structure things so that probate can be avoided entirely.

I do hope you carefully consider this. And if you’d like a recommendation for a good estate planning solution, I’m glad to offer that to you. Just shoot me an email by clicking the email button in the upper corner of this page.

Most of all, I’m grateful for your trust, and for your referrals.


Roger Menden


R. Menden Accounting & Tax Service

Millennials In The Shakopee, MN Workplace

Millennials In The WorkplaceMemorial Day is behind us, and our lives move forward.

Mere words, even a full day of memorializing cannot measure the worth and honor due to our fallen service men and women. For many of us, a 3-day weekend ushers in the summer … and maybe that’s because the task of memorializing itself seems not to be enough.

I’m reminded of Abraham Lincoln’s words from the Gettysburg Address:

We can not consecrate–we can not hallow this ground. The brave men, living and dead, who struggled here, have consecrated it, far above our poor power to add or detract.

A federal holiday seems to be a paltry tribute, but we can add our gratitude, and that matters a lot. Despite our current cultural chaos, we are blessed to live in this nation, and I’m grateful for the freedom I have, as a Shakopee, MN business owner and as a citizen, to conduct my life the way I see fit.

And I do have great hope for our next generation. It seems that every generation looks to the youth with trepidation for the future. But no doubt, so did the fathers and mothers of what we (now) call The Greatest Generation.

That said, though … I offer this as a public service of sorts. Forward this along to that graduating young person in your life, and allow me to be the bearer of harsh reality.

Here’s how to be great, whatever venture you find yourself taking…

Millennials In The Workplace
“Leaders aren’t born, they are made. And they are made just like anything else, through hard work.” -Vincent T. Lombardi

You’re young and ambitious, a perfect representative of the new wave of millennials in the workplace. Your energy may take you far, but fair or not, you’ve got to prove yourself to your boss and your colleagues. So, as someone who has been doing this for a little bit longer perhaps, here are some pointers on how to earn their respect…

I know you value being “real”. So, on your resume and in person, resist the urge to embellish your accomplishments or brag about your talent. Let your achievements speak for themselves.

Handle the stress. Show that you can keep your cool when things don’t go according to plan. If you wilt under pressure, managers and co-workers won’t trust you with responsibility.

Cultivate the right relationships. Don’t just kiss up to the boss (but don’t ignore him or her either). Identify people who can help you, and whom you can help, and establish long-term relationships with the potential to benefit both of you.

Learn to communicate! Your email, reports, and notes should be grammatically correct and free of LOL, JK, etc., k? Read everything over carefully to be sure you’re making the point you intend, in appropriate language. Leave out the jokes, and concentrate on content that’s clear and easy to follow.

Don’t complain. Not everything is a perfect social justice moment. You may be disappointed or angered by a manager’s decision. Don’t take it to Twitter. Live with it. If you get a reputation for agitating, you’ll have a much harder time convincing people that they should give you their attention and trust.

Show some humility. You may have gotten straight A’s in college, and you may have the greatest idea for a new product EVAR. But if you insist on telling people how smart you are, you’ll alienate co-workers and managers who would otherwise be willing to help you. Show some maturity, and listen to the people around you with respect.

Perhaps this doesn’t go down as smoothly as it should in order to be perfectly received. But acting on this advice might just set you up for the kind of long-term success that you have always hoped for.


Roger Menden

R. Menden Accounting & Tax Service

Menden’s Guide To Keeping Financial Records

financial recordsThe other day, the New York Times ran a story that spoke to one of my favorite topics: keeping our minds clear.

The subject was the seemingly-endless barrage of news stories about the current administration, and the challenges of navigating your mind to be free of it all.

Whomever you voted for, whatever your political persuasion (and I’m making a point here that transcends politics, however fascinating or dire they might be at the moment) — perhaps one of our greatest challenges in this cultural moment is retaining our focus on what truly makes our hearts come alive.

I’m not suggesting that you keep your head in the sand — but that you would be mindful of what you’re feeding your mind upon.

Because right now, the world is SWIMMING in negativity. And you need to be serious and proactive about protecting yourself from it. Because — if you don’t — it’ll kill your career, kill your business, kill your dreams and everything you really care about.

The mass news media is NOT your friend. Neither are these ever-increasing niche-oriented outlets who yell with (and at) their particular choirs and who point out the massive failures of “the other side”.

They feed on fear, and they sell paranoia, division and hyperbole. It’s what they do.
And not only must you protect YOURSELF from this drip, drip, drip of chaos and depression, you need to fight it on behalf of your co-workers, your friends and (especially) your children and family.

Now then. Let’s move to something a little lighter — and more oriented around what you can actually control: your finances, specifically your financial records.

So, speaking of keeping ourselves clear…

Menden’s Guide To Keeping Financial Records
“Our lives are frittered away by detail; simplify, simplify.” -Henry David Thoreau

With spring in full swing, let’s apply those cleaning instincts to our financial world one of these days, shall we?

This is a guide I post every so often, because even in the days of cloud-document storage, it’s important to have hard copies lying around — in a safe place, of course. If you don’t have a full safe, these are the sort of documents for which you may want to invest in a fire safe, at least.

But here is what you should consider for how long to keep them … and which ones you can safely trash.

Taxes: Seven years
Menden’s Reasons Why:
There are three, actually:

1) The IRS has three years from your filing date to audit your return if it suspects good-faith errors.
2)  The three-year deadline also applies if you’d like to make some sort of amendment because you discover a mistake in your return and can claim a refund.
3)  The IRS has six years to challenge your return if it thinks you underreported your gross income.

All this adds up to keeping that info for seven years. Beyond that, there’s no reason — except for posterity.

IRA contribution records: Permanently
Menden’s Reasons Why:

You’ll need to be able to prove that you already paid tax on this money when the time comes to withdraw.

Bank records: Usually just one year
Menden’s Reasons Why:

Those related to your taxes, Shakopee, MN business expenses, home improvements and mortgage payments will obviously need to be included for next year’s taxes. But unless there is some sort of emotional or posterity reason, get rid of everything after one year.

Brokerage statements: Until you sell
Menden’s Reasons Why:

To prove whether or not you have a capital gain or loss for tax purposes; after this point, shred it.

Household bills: From one year to permanently
Menden’s Reasons Why:

When the canceled check from a paid bill has been returned, you can shred the bill with a clear conscience. However, bills for big purchases — such as jewelry, rugs, appliances, antiques, cars, collectibles, furniture, computers, etc. — should be kept in an insurance file for proof of their value in the event of loss or damage.

Credit card receipts and statements: 45 days/Seven years
Menden’s Reasons Why:

Some families don’t even bother to match up their statements, but if you do so, shred the receipts once you’ve verified everything. There’s no reason to keep everyday receipts beyond this point. For tax-related purchases, you need only keep the statements for seven years — after that, shred it, baby!

Paycheck stubs: One year
Menden’s Reasons Why:

This is to verify that when you receive your annual W-2 form from your employer, the information from your stubs match. If so, shred all of the stubs … if not, request a corrected form, known as a W-2c. After that’s been handled — shred.

House/condominium records: Six years/permanently
Menden’s Reasons Why:

You’ll want to keep all records documenting the purchase price and the cost of permanent improvements — such as remodeling, additions and installations as well as records of expenses incurred in selling and buying the property, such as legal fees and your real estate agent’s commission, for six years after you sell your home.

Holding on to these records is important because any improvements you make on your Shakopee, MN house, as well as expenses in selling it, are added to the original purchase price or cost basis. Therefore, you lower your capital gains tax when you sell your house.


Roger Menden

R. Menden Accounting & Tax Service

Dreaming Big Must Come Before Financial Planning by Roger Menden

Financial PlanYou’d probably be surprised if you sat in on some of the meetings I have with some of my tax planning and preparation clients.

This is by no means the majority of my clients, but there is certainly a good subset of people who have piled away a ton of financial resources … but who are bored, tired and a little numb.

And, of course, there are those among my Shakopee, MN clientele who have not yet reached the financial (or otherwise) zenith they’ve been working so hard towards, and yet they are still stuck in the grind of “everyday living”. Often, they haven’t taken the time to re-assess whether or not what they’re shooting for is, in fact, the place where they will be most alive.

They haven’t taken the time to dream. And, more importantly, they haven’t put a concrete plan to whatever dreams they might have had in earlier days. They’re dragged around by their nose by whatever circumstance comes their way.

Maybe “they” is you?

It’s never too late.

Before I get there I did want to urge you to consider something in light of this past year’s tax return: adjust your withholding.

You’ll want to do this by submitting a new W-4 to your payroll office regardless of whether you got a big tax refund this year or ended up owing Uncle Sam some money.

Ideally, you want to pay in through withholding (and estimated taxes for some of us) as close to your eventual bill as possible. That will mean you will have your money in your hands throughout the year, instead of having to wait for the U.S. Treasury to cut you a check or directly deposit the money.

It’s a small thing, but it makes the tax process so much less painful.

Now, assuming you’ve got your withholding where you want it to be, let’s talk about avoiding that numb haze I’ve seen so often.

In fact, why don’t you consider printing out this note, shutting down your computer, and doing a little dream-planning right now?

Here’s a suggested format…

Dreaming Big Must Come Before Financial Planning by Roger Menden
“Life can only be understood backwards, but it must be lived forward.” -Soren Kierkegaard

Get a piece of paper and make a list of all the things you want to do during your lifetime–no matter how crazy or undoable some of those things might seem. If you want to go on an African safari and become a famous gorilla researcher, then write it down. If you want to sip coffee at a Left Bank café in Paris, then by all means, put it on your list.

Include all the seemingly mundane things you want to do, too. Do you want to spend more time with your children, your spouse, or your parents? Write it down. Don’t hold back. Be as wild and daring as you want to be. Let yourself dream big.

Once you have finished the above exercise (and not necessarily in the same sitting) take another piece of paper and ask yourself, “If I had a million dollars in the bank that was exclusively for me–and I had no responsibilities and knew I would not need the money in the future–how would I choose to spend a perfect day?” Maybe you want to write a novel, talk to a friend, or own a ranch and raise goats. Whatever it is, write out your perfect sort of day. These are not necessarily the big event things you want to experience, but your idea of your perfect day of living. Again, don’t hold back.

People are often surprised at how powerful these two exercises are.

How do they help you?

They help you know what are your ACTUAL big dreams. They help you see clearly where your priorities reside. And they help you see how far away you are from, or close you are to, your dreams and your more ideal daily existence.

And once you know that, then you can lay out a plan that lets you use your precious time for what you really want in life.

This can be really fun, if you let it be so. Shut off your cynicism, take fifteen minutes … and send me an email about your experience with it. 

I’d love to help you formulate a financial plan to get there.


Roger Menden

R. Menden Accounting & Tax Service

How To Buy Happiness In Shakopee, MN

Buy HappinessNot a huge amount of “tax news” these days … we’re watching Congressional movement on tax reform, Obamacare, etc. but right now, it’s all mostly just talk.

But that’s politics, I suppose. Which is a good argument for not diving too deeply into it.

Now … moving to things far more immediately relevant: I’ve written before about the surprising disconnect between significant means and deeper joy. That is to say, that one doesn’t always bring the other.

And wouldn’t you know, apparently it’s science.

I thought you’d be interested in the research I recently came across, because it’s more than just an “ooh, that’s interesting” kind of finding — but I believe that it can actually be applied to your daily life in order to maximize joy. Some of my Shakopee, MN tax clients with significant means may already be aware of what we’re talking about today, but in my opinion, this reality is true regardless of how many zeroes are in your bank account.

So, as we work with you to consider how we are able to best preserve your wealth from the grasping hands of the IRS and various state authorities, I think it it would be worthwhile for you and your spouse or partner to consider these dynamics.

How To Buy Happiness In Shakopee, MN
“A mind, like a home, is furnished by its owner, so if one’s life is cold and bare he can blame none but himself.” -Louis L’Amour

It turns out that the conventional wisdom is wrong: it is possible to buy happiness — when you spend your money on others. Researchers at the University of British Columbia and Harvard University have found that people who buy gifts for others and make charitable donations report being happier than people who spend their money primarily on themselves.

Here are the details of the study they conducted…

The scientists studied 630 Americans and asked them to rate their general happiness, their annual income, and their monthly spending — including bills, gifts for themselves, gifts for others, and charitable contributions. Researchers also measured the rates of happiness for people who received profit-sharing bonuses from their employers of $3,000–$8,000.

Again, the researchers found that it was not how much money the participants received that predicted happiness levels, but rather how the recipients spent the money. Those who donated more of their bonuses to charity or used it for gifts for others rated themselves as happier than those who did not.

In a third look at this phenomenon, the researchers gave participants a $5 or a $20 bill and asked them to spend it before 5 p.m. on the same day. Half were given the
instruction to spend the money on themselves, half to spend it on others. The half who spent their money on others reported feeling better at the end of the day than those who didn’t. And this was regardless of the amount.

The researchers say that even spending a small amount on someone during the day can significantly improve our feelings of happiness.

So I ask you — what will you do with this information?


Roger Menden

R. Menden Accounting & Tax Service

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