This week was "Bike to Work Week" in Atlanta, and today was specifically "Bike to Work Day." So I made the first leg of my first commute to work on my bike! It's a pretty good way to start off the morning, and it's nice getting in early.
The first leg of my journey is about one mile of uphill, so I was pretty out of breath as I was nearing the end of this stretch. So out of breath that some pedestrian walking by asked if I was okay. My goal is to get in shape enough to not cause concerns for passersby on future commutes!
I guess I shouldn't be surprised, but I didn't notice many extra bikers on the streets this week, or this morning, so I guess ride your bike to work day may not be a famous event in town. But I'm glad they made it, since it motivated me to finally try it!
I wrote a long post with net present value calculations and everything, but then I decided that wasn't a great post, since the short summary is this:
I have to pay $125 of PMI monthly, which adds between 1 and 2% expense to my mortgage interest. Once I have 22% of the loan balance paid down, I can stop paying PMI, and I will have an annual interest rate of 3.82%.
So: If I think I can earn more than say... 5.85% return on my investments, then I shouldn't pay off my mortgage any faster. If I think I can't beat that, but I can beat 3.82%, then I should pay off my mortgage as quickly as possible, until my equity is high enough that I don't have to pay PMI anymore.
My conclusion: the middle road. I think I can set aside $1,000 per month, and I'll put $500 of it towards extra principal payments, and $500 of it towards investment funds. I'm fairly confident that my returns will be higher than 5.85%, and also it will be nice to be keeping the money where I can access it should I need to. On the other hand, it is satisfying seeing the mortgage balance drop each month, and I don't like the feeling of having only 6% equity in the house.
So I'm not really making a decision, but I need some goals to get me back on track with saving. After paying off the loan I've started making more purchases (a bike, stuff for the garden, a pricier-than-necessary vacation, and just this week, a Kindle Fire.)
Original mortgage balance, March 9, 2012: $133,039
Current mortgage balance: $129,963
Total reduction from original balance: $3,076 or 2.31%
Lots more interesting thoughts than mortgages have been swirling around in my head these days - just need to mold them into blog posts before I publish those thoughts! Look forward to some discussion on the fascinating subjects of office arrangements and my favorite Ted talks!
photo from Flickr.com The Commons
Accounting is a popular choice among those who want to study something that will provide them with a steady, well-paid job in the future. (We love steadiness, us accountants!) In my head, I picture it as one of those professions, like being a doctor or a lawyer, that parents push their kids into because of the job stability - with the caveat that it is not assumed to be as highly paid as a doctor or a lawyer, but also not as difficult a degree to achieve.
There are two basic career tracks in accounting: Public accounting, and industry account. (There is also governmental accounting/working for the IRS/working for standard setting boards, but that's another conversation.) Public accounting, which is what I do, involves working for a firm of CPA's, usually completing tax returns, audits, or in my case, both. Industry accounting is being a bookkeeper/controller/CFO in a regular business. Public accounting strongly desires employees either with a CPA license, or on track to obtain one, while many accountants working in industry do not have a CPA license. It is however, beneficial to have the license in some cases, and rarely detrimental.
Public accounting has a very clear career path. Employees in their first to third year of work are considered "staff," typically without much managerial requirements. During or after the third year, supervisory responsibilities are heaped onto the young employee, and around the fifth year, the employee is seen as a manager, who is in charge of running the audit, communicating with the clients, and making sure the tax returns get done. Above managers are partners, who, at most firms, are in charge of reviewing the work and obtaining new business.
In industry accounting, there are also clear levels, but from my experience at clients, there is usually not a direct path at a single firm from one level to the next. Someone with little experience is usually considered a "staff accountant" and their work is usually reviewed by the "controller," who is head of the accounting department. The "controller" is typically in charge in a more micro-manage-y sort of way - directly reviewing employee work, fixing mistakes, etc. The controller is often a person who has a "job" more than a "career" and is not typically part of management. The CFO (Chief financial officer) is the real "manager" over the accounting department, although they often do not have a strong accounting background themselves, but rather a financial and managerial background. Personally, I much prefer to work with clients where the CFO has a CPA, or worked in accounting, as it makes the whole department run that much more smoothly.
Every year, Robert Half releases an accounting salary guide, which is where I obtained the following average salaries for accountants in the following positions. The complete guide is quite interesting, and can be found here. The following are salaries for a "medium" size firm in both cases - not directly comparable, but it gives you an idea.
|Public accounting||2013 Salary||Industry accounting||2013 Salary|
|Auditor 0-3 yrs experience||$52,750 - 77,000||Accountant 1-3 yrs experience||$43,000 - 56,000|
|Senior 3-5 yrs experience||$66,500 - 87,500||Accountant 3-5 yrs experience||$54,250 - 70,500|
|Manager 5-8 yrs experience||$83,500 - 111,250||Controller||$99,000 - 149,000|
|Sr. Manager/Director||$110,750 - 178,750||CFO||$148,250 - 252,500|
As you can see, public accounting generally promises slightly higher salaries, for the lower level positions, but the higher you get, the more earning opportunity there is in industry. That is assuming, of course, that you successfully work your way up from accountant to controller to CFO. In the public accounting career track, people who aren't going to make it to partner typically self select out into a less demanding job in industry, so if you have the energy to continue working in public accounting, you will most likely make it through the career ladder to partner, or at least to associate partner.
Considering that the average family's income in the U.S. is about $50,000, it is pretty clear that even if you go into industry, without a CPA license, and accumulate a few years of experience, your salary will most likely exceed the average household income, so you'll be doing pretty well!
Other career paths in accounting
Here are a couple of past articles I have published about more exciting careers for people with an accounting background:
"Creativity" is not usually a quality that public accounting firms are interested in when evaluating potential employees. In fact, a quick Google search of "creativity in accounting" mostly leads to results about "Creative Accounting" also known as fraud.
However, one of my managers is often trying to squeeze creativity out of our staff, a process which is most likely simply frustrating for both parties. This desired creativity is still not in the realm of our actual work though, but in the area of recruiting, which is really just a form of marketing.
In terms of marketing our firm to potential clients, we seem to be very uninterested in applying creativity. Some firms have adapted to new media by starting blogs affiliated with their websites, but many firms, like mine, have steered clear of getting involved with social media. In a way, I can see that participating in social media does not seem that "dignified" for an accounting firm, but at the same time, how is it different than sending employees to networking events where the clear target of your attendance is to develop connections with potential new clients?
This firm clearly embraces new trends and technologies - they have released multiple "music videos," including this one of their employees forming a flash mob on the local transit system. Again, this is great marketing for attracting young college graduates to come and work for your firm, but what does it do in regards to attracting new business?
I can see that some clients that are media-related, or "newer" types of businesses could appreciate this sort of attitude in their accountant, but am I wrong in thinking that most clients want their accountants to be the serious and studious stereotype? When someone is handling your money, investments, taxes, etc. I feel like people find the image of a serious person in a suit to be rather reassuring. Partially because, while a client might appreciate creativeness in marketing, what is it that an accountant needs creativity for to do the job of accounting well?
The main areas I can see creativity being important in the accounting world is coming up with new ideas to improve processes within the organization. People who can figure out how to use the software in more efficient ways than those that were presented to them in training are valuable to have in an organization. At the policy setting level, it must be important to have people who can come up with better ideas for how to account for items with complex values - intangible assets, such as human capital, for example.
Do you think you would prefer to hire an accountant that you saw as creative? Do you think you would be more reassured by an accountant that seems just like a stereotypical accountant?
There is something wrong with the fact that I'm wearing running tights under my pants, a long-sleeved shirt, sweater, plus a fleece, and it's still cold in here. Meanwhile, we're freezing away, and we are hitting 80 degree temperatures outside. What is with this obsession with over-air conditioning?
Police still haven't apprehended a suspect related to the bombings (that we know of). I've heard several people speculate today that the culprit will turn out to be Islamist extremists, but I could see it just as easily being a homegrown crazy. Apparently the bombs were made out of materials that are very easy to acquire and put together into an explosive device.
The fact that there were 4 might mean it's more likely to be an organized terror group, instead of an individual, but this wasn't anything high-tech.
Police are taking advantage of the iPhone-environment we live in to collect as many angles of footage from the day as possible. It would be awesome if this conglomeration of recordings could help identify a suspect.
Happy tax day everyone! A time for me to celebrate getting everything done last week, so there were no stressful surprises today! Actually, I filed most of the extensions for my clients back in March, so last week was just a couple clients who wanted a return by 4/15.
Sad about the bombing of the Boston Marathon today - such a loved tradition, to be marred by this act of terror.
Hopefully no one lost their lives in the blasts!
Audit busy season is winding to a close, and it was definitely a season NOT like the two before it. Or maybe 3 if you count my busy season internship?
My first two busy seasons with the company, I worked a lot, learned a lot, was stressed out a lot by dealing with what felt like 100 different managers with 100 completely different personalities and quirks.
My third busy season, I worked way more hours, realized that managing people is way harder than being managed, and realized there were several key areas where I did not know what I was doing at all. Surprisingly, I found the busy season to be less stressful as a whole, because I was less emotionally stressed than in previous busy seasons. I felt like I made fewer mistakes, or at least, that the mistakes I made didn't seem like as big a deal as in the past. I think I hit my limit on the number of hours I can work, so I didn't feel any guilt for not having done more to avoid mistakes either. I also have my own house now, and don't share with roommates who make coming home a somewhat miserable experience.
Managing first year's was an eye-opening experience. I constantly had to remind myself of how it feels to be a first year, and how a calm manager is much easier to learn from than one who is frustrated with you! I feel a much greater appreciation to all of the senior staff who were so patient with me my first year. I tried to channel my frustration into a more productive task - creating lists of excel tips and audit software functions that we should include in our trainings.
(Luckily) I didn't manage many jobs this busy season - just two. Well, kind of two and a half. But that was quite enough of a taste to let me know that managing all 6 of my audits this busy season would have been disastrous.
The other cool thing about this busy season was that I like my work more and more now that I am being given more and more responsibility. I feel much more sure that this is a career path that I want to stay on. I can see why the third year is when many people decide to leave public accounting, since it's the time where you are working a ton of hours and getting a taste for responsibility - which is a pretty scary thing to have.
Ah, the fun part of gardening has begun - some sprouts have appeared! It amazes me how fast the little seeds sprout - we planted indoors last weekend, and outdoors last Tuesday evening. Indoors, the broccoli and thyme have sprouted. Outdoors, the cucumber has sprouted!
The square foot gardening book is full of instructions about creating plastic cubes to keep the ground-planted seedlings warm, and creating sunshades to protect the indoor seedlings when they're transplanted outside. I have plans to make a couple out of the extra chicken wire we have (but not 36, which is how many square feet we have in the garden!). But for now, the outdoor seeds are going to have to see how they can handle growing unprotected, since I haven't had the time to make anything.
Anyone have any suggestions on growing from seed? Or transplanting seedlings from indoors to outdoors?
Broccoli on it's first morning as a sprout!
Cucumber, first spotted today, grown outdoors
I'm not the world's best vegetable-eater though, so in anticipation of the harvest from the garden, I've been trying more kinds of vegetables and learning the best way to cook them. So, just owning some dirt and sprouts has already made my diet healthier!