Assessing the True Worth of Your Accountant

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Assessing the True Worth of Your Accountant Posted: 06 Sep 2011 04:05 AM PDT The problem with assessing the worth of an accountant is that their true value is only discovered when things go wrong. Most of the time their work is of a routine nature meaning that the value you assess for one accountant may differ from another persons assessment. So the key is to select an accountant that meets a number of criteria and then working with them over a period of time to see if the value you perceive is worth the cost. The best way to find an accountant that adds value is to ask others to recommend one! Based upon their experiences and stories it should be possible to come up with a shortlist of a few local providers who, in the eyes of their clients, add value to their business or personal financial affairs. Armed with a shortlist there is no substitute for getting eye to eye and discussing your needs and hearing what they have to say. Apart from ensuring that they are suitably qualified it would make sense to ask questions related to the services needed. Finding someone that is in tune with the way you talk and is familiar with other clients like you saves time in the long run and makes communicating easier. But ultimately the true value can be seen in the quality of the work, the thoroughness of the way that briefings reach you and the clarity of the way technical affairs are explained. Ultimately, the goal is to have your financial affairs in order and any tax returns made on time and in a way that legally and morally minimises liabilities. Remember that there are many legal loopholes that may not fit with your moral stance so make sure that any accountant working for you is aware of your stance on such issues. Accountants can do more that just prepare financial statements and file tax returns. Their insight into current financial and business trends may be a valuable additional source of advice and information. Their connections and knowledge may be useful in helping decide investment strategies or defining plans for the future. Many accountants also specialize in certain areas. For example, some have specialist buy to let property experience or expertise in mergers and acquisitions. Tapping into their knowledge can save both time and money in a tangible manner that would not come from just assessing how the actual chargeable work is completed. In the end this all adds up to a bill that has to be paid. And that means making an objective and subjective assessment of the value of the work done, the advice received and any other soft factors that should be considered. This may even be time and petrol saved by them making evening home calls, for example. With the wide range of on-line tools and self help guides available on the internet hiring an accountant may seem like a financial cost that can be saved. However, there can be more to financial affairs than using an online loans calculator. Sometimes tapping into the knowledge acquired by regularly dealing in an area can be worth the cost incurred. Take all factors into account next time the bill arrives from the accountant. There are plenty out there willing to take your money so make sure you feel that you are getting value for money.

Emotional Investing: Why We Buy High and Sell Low Posted: 06 Sep 2011 04:00 AM PDT "Buy low, sell high." It's the golden rule of being a successful investor. You've heard it too many times to count, and you know it makes sense. Yet time and again, you find yourself doing the exact opposite. Here's a little secret: most of us do. We let our emotions play a big a role the way we invest. And that's almost always a mistake. [Also See Keeping emotions out of investing.] Why we let our emotions rule If you're like the rest of us, you invest to make money. Yes, you know that markets fluctuate and that you'll lose money from time to time. You know that you'll have to ride the ups and downs to make money in the long run. Still, at the end of it all, you want to come out ahead. But what happens when the markets take a serious plunge and you start losing money? Lots and lots of money. Suddenly, you're not so sure you'll come out ahead in the end. Riding things out no longer sounds like such a great idea. So you sell—low. Then at some point, you notice that the markets have been doing well for a couple of years. You start to feel pretty good about investing again. So you buy—high. If that sounds like you, you're in good company. This is how the average investor thinks. This is also a great way to lose money. If you're not convinced this is what most of us do, read up on this 2005 study from Stanford. It showed that people who suffered brain lesions in the areas of the brain that control emotions were more successful investors. In a nutshell, the study's participants were each given $20. In a series of transaction, they were asked to risk $1 on a coin toss. If they said no, they kept their dollar. If they chose to risk their dollar and won the toss, they won $2.50. If they lost, they lost their dollar. The participants with brain lesions were most successful. The study's authors say a lack of fear played a major role in that success. Early in the study, all participants were willing to risk $1 on the coin toss. But as the game went on, the participants without brain lesions became scared of losing more money, and decided not to play further. What we can do about it It's fine to be afraid of losing money. That's what keeps most us from making truly bad investments, falling for scams, or gambling our money away. But when you routinely buy high and sell low, you're not protecting your money or yourself. To avoid selling at the wrong time, make sure you know what your long-term investment goals are, and whether your current investments still fit with those goals. Don't think about how much the market has fallen. And don't try to predict how much further it will fall. Just stick with your goals. If you find that you can't put your emotions aside to make an informed, objective decision, consider talking to a financial advisor or someone else you trust. This doesn't mean letting someone else manage your investments for you, although some people choose to do that. It just means that having someone to talk to—someone who isn't personally affected by how much money you make or lose—can help you gain perspective.

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