I’m terrified of taxes.
When I say terrified, I mean I would rather be in the same room as a snake, drive myself through Delhi traffic or face Oxford Street on Christmas Eve. I freeze as I am unable to see any way through those complex forms. Some people derive a lot of pleasure from figuring out their taxes and pressing the submit button, but I’d rather have my teeth drilled without anesthetic.
When it comes to tax time I turn into a three year old and like all sensible three year olds, I run to my Dad. Well not my Dad exactly, but to his accountant…. Mr Samson.
Now I’ve never met Mr Samson (yup his name really is Samson), but in my mind’s eye he is like the biblical Samson – possessing superman human strength able to parse the strange missives of the IRS with their acronyms and circular calculations.
As I’ve become embedded in a community of investors both in London and online, I’ve noticed everyone has an army of helpers to help them with various aspects. They might for example buy sector research or talk to accountants, but then do certain things for themselves. Some have complicated accounts but maintain all their books themselves. Some think writing an investing blog would be the scariest thing to do but I personally find it rather fun.
You can’t do it all… strategically outsourcing areas of investing helps us leverage the skills and strengths of others.
However, sometimes it's difficult to decide what to outsource and what to do yourself.
Here’s a little graph I’ve made up where the Y (vertical) axis relates to tasks you either take low or high enjoyment in performing and the X (horizontal) axis is how competent you are at said task. Life is short and we should aim to be working in the top quadrants.
Low Enjoyment + Low Competence (like me & taxes) = definitely outsource it
Low Enjoyment + High Competence = probably outsource it
High Enjoyment + Low Competence (like me and investing) = keep learning and do it yourself
High Enjoyment + High Competence = definitely do it yourself and see if you can get other people to pay you for it
Here are some items in your investing life you might quickly try placing for yourself in the matrix above.
Accounting and taxes
That's all for this week folks. I hope that’s useful….