By MIMI BECKER

Coffee with Mimi

‘Tis the season.  However, the  “ho, ho, ho’s,” are more like “oh, oh, oh my’s.”  It’s tax time. The middle of April looms.  The predominant sounds of paper are rustles and shuffles of documents with funny names like 1099 and W-2; not pretty, shiny, red and green rolls of festivity. Typical packages are held together with metal clips, or mechanically attached bits. Unless you have an accountant with a sense of humor, now is not the time for curly ribbon or tissue filled bags filled with receipts and expense estimates. Efficiency, expediency and clearly labeled file folders are appreciated far more than hand lettered greeting cards.

The middle of April is all about the bottom line.  Add this column and that one and subtract the total from that line. Put the result on another line and you have a result. You will either be celebrating, or tightening the belt while refiguring your current plan.

The bottom line is clear. Accountants and do-it-yourselfers are aided by computer programs, which are cold hearted and clinical — this number here and that number there results in a number which is your story for the past calendar year. It’s hard to argue with the bottom line.  Analyzing the past year is revelatory, but not fixative.

This particular bottom line is a reckoning, not always of our making or understanding. Some person, or persons, waved a fiduciary wand and determined the policies and formulas which dictated the flow of numbers attached to our lives, which calculate our previous year’s bottom line.

When I was teaching in middle school, one very important concept throughout the year was “opportunity costs.”  Usually, the concept is associated with decisions which are mostly quantifiable. If you have some spare cash, you can either spend it on dinner out or you could put it in some investment plan, yielding a return and improved future security.  While the result of one option is pretty clear, the result of the other is likely clear. Conventional wisdom and evidence would advise the bottom line on one side of the line is the smarter option.

The “opportunity cost” of the little exercise is a history of yield over time. Put your cash on the line for the long haul. Be prepared.

It is really easy to live in hindsight by charts built with verifiable data. The quandary is that not all opportunities can be assigned a neat number, or even likely a number backed up with historical data.  In reality, history and life are filled with multitudes of big and little decisions with no obvious number to place on the line. And the line on the chart for that very number may be the most important factor in the final decision. 

My go to example of the “opportunity cost” concept was making a plan for life immediately after graduating from high school. It was a decision far enough into the future to not be too threatening or pressure packed, but not as simple as a dinner choice after the ball game. The real life example was my oldest child’s journey through the process several years before. 

We made a big chart on the board and identified three reasonable options for comparison sake based on the actual facts which confronted our family at that time.  He wanted to be an athletic trainer. That was the goal which had been his modus operandi every year since he could remember. Well, at least while in high school. 

We generated several relevant criteria on which to evaluate the options. Guided by real life and information available on the Internet, we filled in the columns with numbers.  It wasn’t a long exercise and a bottom line was calculated for each option.  One option was eliminated immediately as the bottom line exceeded the national debt, in relative terms.  No amount of ideology or prestige of the institution could rationalize the assumption of that much financial baggage.

What was left was two plausible financial and educational choices. The bottom line varied slightly, but not enough to be a slam dunk either way. Ah, now we get to the crux of the matter.  What factors would be the “opportunity costs?” What would be the stuff which tipped the scales one way or the other? What would be the game changer in his college choice?

Much discussion ensued.  The bottom line was not so clear cut. That’s the thing, a bottom line after the fact, is the reality, but clearly not the full picture of the life lived while accumulating those facts. The lesson learned that day was transferable to many situations throughout history and not just in the abstract.

The deciding factor in the college search for our family was distance to school from home.  The choice boiled down to how long a drive it would be for mom and dad to visit and participate in activities. We could do the trip, up and back, and have time to visit, in one day.  In the long run, it was probably the more expensive of the options. But, what was the bottom line? The best choice.