Yesterday was the 2020 tax season filing deadline; I just spent the last 18 weeks working for TurboTax as a “Tax Expert”. It was an extremely rewarding experience, and probably the weirdest job I’ve ever had.
It is a weird feeling when you spend a lot of resources getting expertise and credentials in a certain skill (in my case, becoming an Enrolled Agent for expertise in taxes), but most of your job doesn’t utilize that skill.
Turns out, TurboTax aka Intuit is a very tech driven company, and this job became more about software operation than complex tax questions, in my opinion. It was an interesting experience that I am so happy I had. I learned a lot and felt like I was really helping people complete their taxes and answer some important questions they had on a confusing topic.
None of this has to do with what I want to talk about, I just feel like I need to talk about this experience and this is my only audience, so thanks for staying with me. With the fear of saying too much, I will move on and talk about what I want to talk about which is:
FIRE Movement - Financial Independence, Retire Early
What does this have to do with TurboTax?? I honestly feel like my TurboTax experience can be seen as a mini exercise in FIRE.
FIRE is the idea of working super hard when you are young, saving as much as you possibly can, and when you hit “financial independence” (typically defined as saving 25x your annual living expenses), you are not dependent on any job or person, and you can do whatever you want.
This is the general idea as I understand it. I immediately discounted the idea when I first learned about it (and still do). I am oversimplifying it as there is a lot of information on the “movement” - for those interested, do not take my word and do your own research if it interests you.
Here is why I immediately discounted it: it really isn’t that mind blowing? If you put your life on hold, live at home, have no experiences or fun, then of course you will have a lot of money for later consumption. Not sure why this is so appealing, honestly.
I can say the reverse is true as well: FDRN - Financial dependence, retire never. Spend all your money today because you will have amazing experiences - worry about the consequences later!
Life is always about balance. There is going to be an extreme to each side, and then everything in between. Spending your entire income is setting yourself up for failure, or subjecting you to work for your entire life. On the other hand, saving every dollar you make may result in stress while you are young, missing out on experiences and memories, unenjoyment in life, etc.
I don't have any research to back this up, so these are all opinions - please take them as such. The only expertise I have is in my own life.
TurboTax / Tax Work in General
The tax profession is amazing in my opinion. Taxes are scary to many, which makes people not want to be involved in taxes. So, there are low barriers of entry into the profession.
Anybody can be a tax preparer… you just need a PTIN (Preparer's Tax ID Number) and a background check to ensure you are up to date on your taxes. Barring those two items, anybody can prepare and sign tax returns, as long as you can get people to trust you to do theirs :). Side note: make sure you know your preparer has expertise, because again, anybody can be a tax preparer.
The extra credentials like an Enrolled Agent, CPA, Tax Attorney, etc. are needed to represent taxpayers before the IRS (e.g. in the case of an audit) and just gives some proof that the preparer knows what they are talking about and have some training.
Anyways, the next awesome part about taxes is that it can be temporary, and picked up and put down due to the nature of when returns are due. This has been awesome for me in my first year as a business owner - I could work 20 hours per week to make some money as a TT employee while I built my financial planning business.
On top of that, taxes are very related to financial planning - it almost felt like I was getting paid for extra training, and information that I can use for my own clients and personal development. It was really a win-win for me.
How it relates to FIRE
FIRE came in my mind because of this option to pick up taxes and put them down. In *typically* the first three and a half months of the year, volume is HUGE for taxpayers to be preparing and completing their taxes. There are options to extend your return, as well as situations that extend the general filing deadline (COVID, TX weather issues, etc.), but generally the bulk of Americans prepare and file their returns between the new year and April 15th. Side note: it was really cool seeing trends in how and when people prepared returns with a sample size of millions.
There is an unlimited amount of work during that time, especially for a company like TurboTax that has millions of customers. So, finally getting to my point - I COULD HAVE used TurboTax as an annual “FIRE”, if that is a way that I like to work.
In other words, FIRE is the idea of working hard early in your life to save enough money, and then “retiring” later to enjoy your money and do what you want.
The mass amount of TT customers resulted in endless overtime availability, incentives to pick up hours, etc. I calculated that if I took advantage of most of the offers (80hrs / week with overtime, bonus opportunities, etc.) I could have brought home about $50k of gross income within 18 weeks. That is a really good annual salary, and all received in about 35% of the full year, which leaves 65% of the year for my mini annual retirement!
But, what would have been the “costs”? Obviously, my mental health - I am not sure many people can work 80hrs / week for 18 weeks straight. That would be horrible! I could barely make it through working an average of 20 hours per week. Talking to people on the phone for hours on end is… brutal. Especially for an introvert like me.
I know FIRE isn’t this extreme, but it is the same idea to me. Severely limit your spending in the first half of your career so that you can have more freedom in the future. But that limiting of your spending is going to have a cost in the form of lack of experiences or happiness.
I will continue to find my balance and find what I really like to do - which is financial planning. I want to do it for the rest of my life! I am not saying I want to grind forever or work 40hrs/week all the time. But finding a balance, taking time off, and finding enjoyment and fulfillment in what I do.
Finding more enjoyment in your work is another way of being “financially free” because you are doing what you want to do. Instead of grinding in your current career, take a step back and think about if your current trajectory is sustainable. If it feels like it isn’t sustainable, think about putting an investment in yourself to learn about what you want to do and what brings you fulfillment and happiness. That sounds more like financial independence to me than saving a lot of money and starting your life 20 years from today.
My point
I think this was more of a rant than a blog and I apologize for that. I am usually pretty structured, but honestly, I worked over 40 hours over the past week just with TT to get through the filing deadline, and I am writing this all on the same day of posting.
So, my point is - remember there is balance to everything. FIRE sounds great on paper - save a lot of money and be financially free / retired before the standard age of 65 years old. But when it comes to actually implementing it, it feels like the emotional costs outweigh the benefits.
Find what brings you happiness and fulfillment today. Enjoy your money. Balance your saving and spending; saving too much is just as detrimental as spending too much.
And finally, as always, never compare yourself to others. Everybody has their own path, and the goal is to enjoy the journey, not have the “best” journey.
**This blog is dedicated to my lovely girlfriend, Ashley. Thank you for dealing with me for the past 4 months; I am sorry I woke you up every weekday morning at 8am by answering a phone call and loudly talking into a headset. You know my opening script as well as I do, and that is the support I needed to make it through. I couldn’t have done it without you, so thank you.