Monday 2/10/225

Yes it is advice from Arnold S who knows something about motivation and success. In my tutorial Conquer Accounting, I point to individuals who are successful in very different fields, tennis, boxing, classic piano, and car racing. They all have a common element, practice. Arnold suggest we do not over think our goal, just do it. I often hear students say, well I am going to take this and that course and then I will graduate and then I will start studying for such and such and exam. Wrong, Dot It Now, read on.  Please watch Arnold's talks about goal setting and why that is important.

The impoprtance of a goal

Arnold's 2018 Motivational Speech

__________________

Today I want to talk about turning off your brain.

Because I have a theory: overthinking has killed billions of dreams. I just saw a perfect example of this, and as you know, I believe the gym is the ultimate classroom.

You might remember when I went on the 2 Bears podcast. One of the funniest members of the Pump Club, Bert, told me his big, crazy goal was to hit a 315 bench. He didn’t just make a vague goal, Bert made a bet that he would do it.

You can watch the podcast here.

I gave him some pointers, and I sent him a pump up video when I heard it was time.

Somehow, the bet became 320. Don’t ask me. Here was his lift.

Let’s start by congratulating Bert. That is serious weight, and he went beyond his goal. He’ll be at 400 in no time, and then I’m sure he’ll be training for the Arnold Strongman Classic.

Some people were surprised by the video I sent him. They thought I’d give technical pointers, not a simple pump up. Instead of telling him to row the weight toward his chest and then explode up, I told him not to think!

Let’s break down why I told him to empty his mind because I think the same advice can help the million of you who read this newsletter.

At that point, Bert had done all the thinking necessary. He made a vision — one that a lot of people thought was crazy. Once he had the vision, he did the work.

I gave him some pointers when he was preparing, but most were to train his mind, not his body, to prepare him for lifting a weight that seemed impossible.

I told him to lift 300 for one rep again and again, to teach the mind that it was happening no matter what. We had him unrack 400 pounds and just hold it, not even try to lower it, to teach his mind that he could hold a weight much higher than his goal.

But once it was time to lift, it was time to turn off the brain.

Overthinking will stop you in your tracks.

I know, I’m always telling you that you need to really take the time to let your mind wander and daydream to find your vision, so it might be confusing to hear me say I want you to turn it off.

You need to learn to become a genius when it’s time to make your vision and your plan — and a total forehead when it’s time to go after it.

Because any time you try to do something you haven’t done before, your brain fights back. You can’t blame it. It is natural.

The brain wants to keep you comfortable. It wants to avoid risk. Doing new things, doing big things, doing crazy things — that’s all very uncomfortable. There is a risk of failure.

Your mind knows that, and if you let it, it will talk you out of any vision. It will derail your plans.

I know that many of you, and even many members of the Pump app, suffer from overthinking.

Let’s just give an example.

You say, “My vision for this year is to finally get in shape.”

Your brain says, “Now hold on, what supplements do you need for that? What is the absolute perfect exercise? Is a fly better than a press for pecs? What’s the difference between a reverse lunge and a lunge because I want to make sure you do the right one? What’s the ideal diet — actually, let’s wait on the diet because first we need to focus on exercise. You can try the diet later.”

Absolutely none of that will get you in shape. Your mind just wasted a ton of time and got you absolutely nowhere.

In the time you were thinking about all of those things and researching, you could have done some squats and pushups and rows in your living room, gone for a walk, and eaten a vegetable and some protein.

You would be much closer to your vision than you are.

Instead, you let your mind take over and keep you frozen, and you make zero progress. You need to realize that’s what your mind wants. It loves to keep the status quo, even if that’s bad for you.

The person who doesn’t know anything about the perfect exercise or supplement or diet but just started doing something will beat you every single time until you learn to hit the off switch on your brain.

And don’t get me started on “trying.”

I see this every day.

People say “I’m going to try to build an exercise habit this year.”

“I’m going to try to diet once I get that habit dialed in.”

Try, try, try.

I know we have encouraged our kids to “try” for years now — and I believe that teaching kids that making the ultimate effort is important and failure is nothing to fear. But trying is just too soft for me.

It’s another trick your brain plays on you to keep you from going all out.

I need you to be honest with yourself. Look back over the past year. How many things have you promised to try? How many of them have you actually done?

Are you the type of person who is always trying and never doing?

It’s time to turn off the thinking. You know your vision. Be a forehead.

Don’t intellectualize it. Don’t research it. Don’t try it.

Do it.

Thursday 2/6/2025

 

The accounting industry's CPA shortage may be more complicated than it seems

By Andy Medici – Senior Reporter, The Playbook, The Business Journals

Feb 4, 2025

 

The U.S. accounting industry has in recent years been laser focused on tackling what it deems a crucial issue — a "dire" shortage of accountants.

The numbers seem as daunting as they are self-evident — the United States has lost about 340,000 accountants over the past five years, even as the number of students taking the Certified Public Accounting exam is at its lowest levels in decades, according to data from the American Institute of CPAs.

More stringent education requirements and a decidedly “unsexy” reputation round out what many see as related issues bedeviling the industry.

 

But researcher Andrew Sutherland is among those deeply skeptical that there is any real shortage.

That’s because, if there was a true shortage of accountants — as in, companies need them for critical work but cannot find any — those positions' pay should subsequently rise based on supply-and-demand economics. A similar dynamic played out for hospitality workers' pay during the Covid-19 pandemic — when those individuals had more bargaining power, that yielded higher pay raises — or in 2023, when pay for tech workers with artificial-intelligence training and skills also shot up because of demand.

The median wages earned by accounting majors in 2011 was about $5,000 less per year than what finance majors earned. That gap increased to $17,000 by 2021, according to Sutherland's research.

Meanwhile, an AICPA report examining the shortage found the average starting salaries for those graduating with a degree in accounting (although not necessarily a CPA) lagged behind finance majors and every other business school major, in addition to salary growth that did not keep up with inflation.

 

From 2017 to 2022, the starting salary for accounting majors grew from about $52,343 to $60,698 — a 16% increase that failed to keep up with the roughly 19% increase in prices during that time. Finance wages saw 18.2% growth while average starting salaries for business-school students that majored in math and statistics saw 26% growth in the same time period.

But the mid-career salary picture doesn't look much better, according to the Federal Reserve Bank of New York, which last year found median wages for mid-career majors in accounting to be $84,000. That compares poorly with other business majors like finance, which had a median wage of $104,000 at the mid-career mark.

 

Why an accountant shortage may not exist

Sutherland, an associate professor at the Massachusetts Institute of Technology’s Sloan School of Management, has a theory: Company investments in technology and automation have resulted in weaker demand for accountants overall, and the fact that there are fewer accountants today is simply a market response as students pick majors and career fields that would yield more obvious — and quicker — gains.

In short, according to Sutherland, there is no shortage because there is no unmet need for accountants, at least at a national level.

“If there was a shortage of accountants, what I would expect to see is that starting pay for graduates would be going up quite a lot. But in real dollar terms, pay has actually fallen over the last six or seven years,” Sutherland said.

In a recent paper, Sutherland and other researchers found investment in technology over time has weakened demand for accountants. For example, many people are now able to do their own taxes, and rote tasks that in the past were handled by accountants have since been automated.

 

While investments in technology can sometimes make professions more valuable, accountants don't seem to benefit from that as much as other careers.

The study found increasing software investment by 11% — the typical growth rate — raises accounting major employment by just 0.8%, compared to 1.7% for other business majors and 2.4% for finance majors. 

"Specifically, technological advances have created new tools that can substitute for accounting human capital, thus reducing the willingness of employers to pay high wages for accounting majors entering the workforce," according to the study. "We find little indication these effects are driven by changes in accounting major prestige or macroeconomic fluctuations, or are confined to only nonpublic or public-accounting work."

The decrease in accountants overall comes from students making calculated decisions to enter higher-demand fields with better pay prospects as well as older accountants retiring, which is a natural response and not a shortage, Sutherland said.

“Would you say there is a shortage of typewriter repair people?” he added.

 

Technology advancements take center stage

A concerted effort to increase the number of degree hours for students to earn a degree and take the CPA licensing exam — which adds about a year of study to the program — has been cited as a barrier to entry for accounting students.

But, Sutherland said, restricting the supply of new accountants, or any professions in any industry, would typically boost the pay and value of those within the industry — something that has not borne out in accountant pay.

An earlier paper from Sutherland found there seemed to be no increase in overall CPA quality from the new requirements and that it tended to box out minorities from the profession. While it could be a good practice to roll back those additional requirements, that would ultimately increase the number of accountants, which would then further drive down demand and depress wages further. 

“I think it’s really hard to fight a technological trend," Sutherland said. "If firms find it more efficient and less expensive to automate things and use software as opposed to hiring a person, my first reaction is that it's hard to think of a policy that will stop it or reverse it."

In 2024, consulting firm RGP released research that found 43% of financial decision makers at companies it surveyed were investing more in end-to-end automated-accounting processes and AI tools, while 31% said they were using consulting talent and 27% said they were using interim staffing solutions.

 

But even if an accountant shortage doesn't actually exist, that doesn’t mean the accounting profession is going away anytime soon, Sutherland said, adding there will always be a need for accountants, especially at public companies, and for people to handle regulatory issues associated with tax work. New federal legislation that calls for additional regulation could renew demand for accountants, as could the crunch time of tax season.

But students who obtain a minor or a major in a technology field alongside accounting tend to fare better than those that don’t — including older accountants who might see companies pick someone with additional skills in technology to hedge their bets, he said.

Accounting programs could potentially revamp their programs to focus less on rote memorization of rules and also do a better job of linking accounting to other professions and disciplines.

“I'm really skeptical of proposals that say we need to do better marketing or better mentoring or make students realize how sexy accounting is," Sutherland said. "I think that underestimates how smart students are."

 

AICPA: Accountant shortage persists

Some disagree with Sutherland's assessment.

The industry trade group AICPA reviewed the study by Sutherland as part of its overall assessment on accounting talent and said it does not see technology as a suppressor of demand. It pointed to Bureau of Labor statistics data that predicts a 6% increase in accounting jobs through 2033, faster than the average growth rate of other occupations.

Sue Coffey, CEO of public accounting at the AICPA, said there is a shortage, despite recent softening in the market and even though pay has seen minimal growth in recent years. She said pay has to increase — even if it hasn’t kept pace with inflation — to get new people into the profession.  

 

But since pay — one of the overall perceived positive attributes of accounting — has become less attractive over the years, students are making the decision to go into other fields instead. 

“We need to fight harder for our fair share of the pie, and compensation is part of it," Coffey said. "During the pandemic, I do know that firms and corporate finance departments really started to take note of this. It’s not just starting pay that you have to look at. You have to look at the whole pipeline of your employee base.”

That includes what Coffey described as a hard first few years in the industry, which is already known for requiring long hours and a demanding work schedule. Those factors pile on to the notion that rewards only come later in an accountant's career, after becoming a partner or a senior member in a firm.

“The younger generation thinks about a career differently," Coffey said. "They are very often not willing to wait for significant compensation in later years."

 

The AICPA has outlined a variety of issues it says need to be fixed within the industry as part of its pipeline report. They include revamping the college curriculum and showcasing that accounting can lead to entrepreneurship or business advisory roles. It also means connecting with younger people in schools, she said. 

But Coffey also pointed to the cost and time of education. Accounting majors that want their CPA license need to take an additional 30 credit hours to sit for the CPA exam, which has a significant failure rate, making it a risky and more expensive bet compared to finance majors that don't have those requirements. 

She said the AICPA is devising ways to make those requirements less onerous, including getting credit for those hours through work experience. But, when asked, she said it didn’t make sense to roll back the requirement for an extra 30 credits because, prior to the current protocol, every state had its own set of licensing requirements, which resulted in a patchwork of qualifications. 

Coffey said while new technologies like automation and generative AI might eliminate tasks that take up a significant amount of an accountant's time and attention, it has oftentimes — at least in the past — opened up new lines of business for accountants and allowed them to take on roles as trusted advisors.

Coffey said firms are now realizing they need to take a step back and take a fresh look at their business models.

"I’ve been around for a long time," she said. "The need for accountants and CPAs has always grown. It won’t be different this time.”

 

What does the accounting industry's future look like?

Mike Manalac, a CPA who's worked at Big Four accounting firms as well as held corporate accounting roles at Walmart and Google, called what is happening within the industry a “talent crisis,” as students decide the “value proposition” for accounting is simply not there.

Low starting pay, long hours and the industry's image problem, along with educational requirements, are barriers students don’t feel are worth overcoming. That means those who do end up in accounting might not be the best talent, Manalac said, adding colleges and accountants themselves can do a better job showcasing to students the wide array of possible jobs and careers with an accounting degree — and not just the typical Big Four work.

 

But what he sees as a shortage of good talent will only get worse, as 75% of CPAs currently working are at retirement age. That means there will be fewer experienced accountants in the coming years. 

“Once they actually do retire, they are going to leave this huge gap or they are not going to find people to fill spots,” Manalac said.

He said, in the meantime, many companies have outsourced accounting work to places like the Philippines and India to avoid hiking starting pay for accountants based in the United States — but, he said, wages will have to grow much more at some point.

“The whole shortage should drive up pay,” Manalac said. "It’s a little bit defying the laws of economics here with supply and demand. Some people are starting to say there is not necessarily of shortage of talent as opposed to a shortage of talent that wants to work for low pay. If you did pay, then the people would show up.”

He pointed to company efforts, such as one last year by Big Four accounting firm EY that pledged $1 billion over three years to help attract accountants — and 10% pay raises for accountants this year. Meanwhile, projections from CPA Practice Advisor, based on data from Robert Half, found accounting role starting salaries are expected to increase nearly 9% in 2025, and audit pay will rise nearly 9.5%

“They are playing the catchup game and that's unfortunate because there is a lot of catching up to do,” Manalac said.

2/5/2025

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