Friday, January 15, 2010

My Life With Comic Books: Part # 32


In 1983 the comic book business was great. Sports cards and records were also selling in huge quantities. My business was becoming very profitable. I was making enough money to live comfortably. (I wasn’t rich, just comfortable) My wife and I were still driving old cars but our house in Bolton was a nice home and we didn’t have huge monthly mortgage payments so we decided that we could probably afford a new car. Mal was now pregnant with our second child so we bought a brand new Dodge Aries station wagon, just to be practical. It wasn’t a very nice car but it was cheap. Since we didn’t want to pay monthly payments, we paid about $9000.00 cash for it. It depleted most of our savings account but we had set a goal of living as close to debt-free as possible.

Our next goal was to pay off the balance of our home mortgage. We started paying an extra $50.00 each month directly on the principal loan amount and it was exciting to see how fast the mortgage amount dropped. We were getting closer to actually owning our house instead of letting the bank own it. I began to use any “extra” money I had at the end of each week to “pay down” the mortgage and within two years we paid off the entire loan. We were free from debt.

“Free from debt” is not what most financial advisors would recommend to their clients back in the 1980’s. My accountant, Jerry Solomon, would try to encourage me to use as little of my own money as possible. He told me to leverage my earning potential by using other people’s money. Borrow money to make investments and to buy inventory. The advice seemed to make sense but it was against what I had learned in a financial seminar I had been to in the early 1970’s called “Design for Successful Living”. The seminar explained that we could easily become “slaves” to the institutions and people we borrow money from. If you owe someone money, your first responsibility is to repay that loan as you’ve promised to do. Also, when you borrow money there is always a “cost”. Sometimes it’s a high interest rate and sometimes it’s the stress of the commitment to repay the loan. I didn’t take Jerry’s advice.

Jerry was a very good accountant and he did give me some guidance in the early years of my store. He told me to always be honest in reporting sales and paying the full taxes that I owed because it would eventually make my business more valuable and legitimate. He assured me that even with the outrageous tax rates in the United States, I would still keep the majority of the money I earned. This was advice that I took to heart.

I received a request for additional information from the Internal Revenue Service and I called Jerry’s office in a panic. I had never dealt with the IRS before and they intimidated me even though I always kept accurate records and paid my taxes. When I couldn’t get through to Jerry at his office I called his home. His wife informed me that Jerry had had a heart attack and he was in intensive care. She recommended that I get another accountant to straighten out the IRS problem while Jerry was recovering. One of my customers, Cindi Dow, was an accountant and she offered to help. Cindi has been my tax accountant for nearly twenty years. Jerry remained a good friend until he died of cancer in the 1990’s.

Next chapter: I learn a lesson: appearances can be deceiving.

1 comment:

  1. Debt free is fantastic...I will officially see that myself in about two months, when I make my last school loan payment. Can't wait!

    (It's a huge deal to me that I paid my own way, despite it being a loan...I guess we all have our quirks, eh?)