When I was in High School I started recording my income and expenses in a three column cash book. I even produced an annual report with a profit and loss statement, and graphs of the monthy cash total.
I received “pocket money” sometimes known as an allowance as well as earning money by mowing our lawns and those of the neighbour and a family friend. I had built a very small business and because I received income, my father said I had to pay for the petrol. It was my first experience in dealing with costs associated with earning money.
My main spending was on electronics, photography and incidental expenes. I liked to analyse where I spent my money and where I earned.
So why did I try and be so business-like?
My father was an engineer at Shell Refining and one day he brought home a book titled Fundamentals of Accounting. He must have been taking some workplace training but I remember borrowing the book and working through the text and exercises. I liked the logic of balance sheets, Debits and Credits.
My father had several investments in shares and he would receive the printed annual report and other communications from various companies including BHP. I would browse these annnual reports and was impressed by pages and pages of numbers and business graphs. I was a maths and science nerd, and there was something very appealing about these numbers and I wanted to understand what they were all about.
Look at this analysis I made of 1972 when I was in Year 9!
I used a typewriter which had a two colour ribbon (red and black obviously!). I liked to create percentages and weekly averages but the pie graphs are almost meaningless. My expenses included fireworks which used to be legal, lab equipment was for chemistry “laboratory” and photography was probably flash cubes and films. This analysis was done before personal computers and Excel! I didn’t even have a calculator, although I may have had access to my father’s Hewlett Packard calculator.
I liked buying the 3 column cash book and felt very business-like possessing such a book. I had several rubber stamps and you can see the page number as well as a stamp I had with a loop of different labels, including the “……/Forward”.
I found two cash books when I was tidying out a storeroom, and they are like detailed diaries. As I read the entries I can remember those days.
The page on the left is from the beginning of my Bachelor of Science degree at Sydney University. In First Year I was able to take a subject from the Arts or Economics faculty. I decided to take Accounting 1 because of my interest in bookkeeping.
First of all, click on this page to view it full size. University was free (no HECS fees) thanks to Gough Whitlam and the Labour party policy of the early 1970s. I received a monthly allowance from the Tertiary Education Assistance Scheme. Textbooks were cheap and I can see a Physics book for $13.
At first I enjoyed Accounting I but I soon started to drown in other topics such as setting up a partnership and a limited company and the associated journal entries to create such entities. I learnt about depreciation and had to write an essay. One piece of trivia was that Tony Abbott was in my tutorial class.
I struggled with the remainder of the course and did so badly in the final exam I was asked to return and take another test. I got a “terminating pass” which is also known as conceding pass. This is a polite way of saying “We will pass you, but please do not return to the Economics Faculty!”. The following year I took Computer Science, Pure Mathematics and Mathematical Statistics.
I have had many encounters with Accounting and Business Finance during my career but these have always been mathematical. Money is represented as numbers in a computer system and I enjoy dealing with numbers and calculations.
Before I got a home computer in 1990 I wrote a simple double entry bookkeeping system on the company computer. I wrote a “front end” program which asked me for the account codes, amount and description. The program captured the details in a database and I could produce journals, balance sheet and cash flow statements. My Accounting 1 knowledge had not gone to waste!
I’m not planning a mid-life career transition to Accounting. I view book-keeping and accounting as a tool for business as well as personal finance. The knowledge required for personal use is about superannuation, taxation, and investment strategies.
If I was going to have a mid-life career transition it would be on the subject of intellectual property law – but that is another story!
Here is a my attempt a balance sheet which I incorrectly called a “Statement of Assets” and mispelt as “Assetts”. I had money invested in debentures and unsecured notes, had some money in the bank and loan to my mother for buying her Volkswagen 1300 “Beatle” car. I understood the concept of presenting the numbers but didn’t understand the concepts of analysing a financial statement. Most importantly I didn’t have to pay Tax!