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Tom-N-Texas
09-21-2005, 11:22 PM
If you do the following, you are guaranteed to be a rich man someday. Actually it has nothing to do with the lawn service....this is just a common sense reminder to my LCO brethren that will help you live like no one else when you retire. Here is my advice:

Instead of driving that brand-new fancy truck with super-high payments, choose instead to drive a less expensive (used) vehicle that you can pay cash for.

A husband and wife who both choose to drive inexpensive vehicles can save $500 per month each on car payments. My advice is to take that $1,000 that you save and invest it wisely in stocks or mutual funds. A good mutual fund should average you at least 15% per year.

What's the bottom line? In 25 years this will grow to almost 4 million dollars. Now most of us have 25 years in front of us (hopefully). If you are young you have much more. Do yourself a favor and set you and your family up to live the good life when you get older.

I've been investing religiously for the past decade....but I believe this is a great time to start investing if you haven't already. There is a population explosion going on in this country and lots of new people are entering the workforce. Meanwhile the market has been strangely stagnant for the past several years. Because of this I see big growth in the next decade and beyond. Tom

wacamaster
09-21-2005, 11:42 PM
I am an active investor also. I however paid $30k for my truck. I agree with you on not paying a bunch for a vehicle. I won't make the same mistake in the future. I also agree you have to invest, but you have to know what you are doing. I find, the stone cold way to make BIG money is to follow the insiders. Subscribe to a service that gives you realtime insider purchases. If a CEO buys $2 mil or more... LOAD UP! The most recent money make for me, which I am still holding and still making tons of cash on is CHK... insiders started buying a few months ago and it has gone up 100%. I have too many others to list but BBY (Best Buy) is another example of a nice profit since the CEO bought. SPLS (Staples) isn't bad either. (ECLG) Ecollege is running me nicely to.. crankin hard right now.. putting me up 50%.

pasto_guy
09-21-2005, 11:50 PM
I too have seen the error in my ways. I have that big truck payment and hate it. Love the truck but would still have loved one the same with a few more miles on it. I had contemplated buying new mowers this upcoming year, but have changed my mind and decided to run the wheels off of my existing ones. I have finally paid off several loans and credit cards, it feels great. What insider info are you refering to. I finally have the cash flow to start investing. Have been doing a lot of reading about it but no moves have been made yet. Thanks.

Tom-N-Texas
09-21-2005, 11:53 PM
Yea, I agree. I would definately let a trustworthy pro help me with my stock selections. I'm a member of Motley Fool. They give 2 long-term stock selections per month with their Stock Insider membership ($150 per year) I've been playing along with most of their selections for the past 2 years. Many have incredible gains....some not so good. It all evens out quite nicely to about a 50% gain since mid-2002.

TClawn
09-21-2005, 11:58 PM
so what would you recomend for someone like me, who is young? I could probably put $300 in any certain direction as far a stock, or mutual funds go.

wacamaster
09-22-2005, 12:04 AM
I use the insider service from rightsideadvisors.com ... I believe there is a free service such as insidercow.com .. but I think the info is delayed a couple days. I pay $50 a month for my service and it's worth every penny considering the stock price usually starts to move immiediatly and depending on how much your investing, missing out on the percentage point moves could mean thousands. The rightsideadvisors.com realtime service literally pops up on your screen the second the Form 4 is sumbitted. Once you have the symbols.. goto form4oracle.com and enter them. I like the layout they have.. makes it easy to see what's going on. If working with Under $10k but over $2k I would recccomend having a margin account to give you more leverage. If you don't know what this means, you need to study up some. It's really not that difficult.

pasto_guy
09-22-2005, 12:10 AM
thanks for the feedback, I know that I can't do the physical labor forever. I'm only 27 but I figure if I start investing now, then I'll be further ahead than I would if I started next year.

K.Carothers
09-22-2005, 01:09 AM
so what would you recomend for someone like me, who is young? I could probably put $300 in any certain direction as far a stock, or mutual funds go.


A Roth IRA is a wise choice. Keep feeding it(up tp 4000/yr allowed). Individual stocks are very risky.

topsites
09-22-2005, 02:37 AM
You've only touched the surface but you are correct...

Both my Bmw's and my truck I paid for cash, yes, they are older.

You can now CANCEL all the extra insurance you do not need.
Please remember when a LOAN is put on a car, the bank INSISTS you have FULL Coverage (this is so they can be SURE they'll get their money should the car get totalled for ANY reason).
Regardless of your car's worth, a good, defensive driver like myself with a perfect driving record on Minimum Liability ONLY pays 780 dollars/year in insurance for 2 bmw's and the truck. Dig it baby.
Perfect driving record means 5+ years NO citations and NO accidents of any kind (not even one's that were NOT your fault) == LOWEST Insurance premiums.
By the way: Make your insurance payment in FULL when it first becomes due, this saves you even MORE money.
Pay ALL your credit cards at the end of the month in FULL. If you can not do this, re-adjust your spending habits so you can.
- Automated payments save stamps.
- A self-imposed minimum balance in your checking account helps prevent bounced checks. My bank requires 5 dollars minimum, my self-imposed limit is 1,000 dollars - NEVER go below your own limit.
- NEVER write a check until AFTER you are SURE the money is in the bank (yes, by physically LOOKING at your account online), wait at least 3 days after a deposit before writing a check against it, 5+ days is better.
etc, etc, I could write for years...

Brianslawn
09-22-2005, 03:09 AM
you actually have insurance on something topsites. lol. j/k.


lets see how to get rich....

consolidate??? nah. dig in dumpsters for pop cans instead. :p

Sharp Services
09-24-2005, 12:55 AM
I have a little different approach to making it in life.

I won't consider myself rich until ... I am paid in full. No debt. This is what I am doing ... keeping in mind that I am still participating in my retirement accounts (6.5% of my earnings).

I first listed all my debts to see where I was. I then took the total of each debt and divided it by the monthly payment and listed them in order of which will be paid off first to paid off last. I then started adding $50 dollars to the payment each month to the loan that will be paid off first. When that debt was paid off I took the total payment that I was making on it and added it to the next quickest debt to be paid off. I will continue this until I am debt free.

At the present, this does not include my business debt (except my truck).

The other thing I did is sell off stuff that I did not use (like my boat) and took what was left over after paying it off and put it against other debt. I also sold my wifes 35,000 Ford van and purchased a mini-van. This lowered her car payment by the $50 I used to accelerate my debt payoff. It also uses less gas.

Once I am debt free ... I will then make investments. But once debt free, I can live off much less.

Just a thought!!

DLS1
09-24-2005, 01:00 AM
A good mutual fund should average you at least 15% per year.


If you could only find one that would average 15% a year until you retire.

Envy Lawn Service
09-24-2005, 01:22 AM
I'm pleasantly reminded why I walked away from my business and career in the financial services industry and re-entered the green industry.

KenH
09-24-2005, 07:59 AM
Once I am debt free ... I will then make investments. But once debt free, I can live off much less.

Just a thought!!

You should always invest first/pay yourself, then pay off debt. One of the secrets and strengths to investing is TIME.

Precision
09-24-2005, 08:46 AM
I'm pleasantly reminded why I walked away from my business and career in the financial services industry and re-entered the green industry.

9-11 did that for me, but threads like this just show how little the average person knows about investing.

a Good fund will average 15%. PUH-LEASE. The market averages 8.8% overtime. or about 7.25% above inflation. Beating the market consistently is the Holy Grail of investing. Consitently returning 15% is just waiting for the day you loose 50%.

Sure it can be done, but the risks are usually not worth it.

Here is the key to making lots of money in investing. Set up a risk assessment weighted by your time horizon to retirement. Allocate your money according to your PERSONAL risk tolerance accross the market capitalization classes AND accross growth and value sides of those capitalizations. Rebalance those assets quarterly back to your original allocation model. Continue to invest along a realistic set plan every month.

THEN follow the plan with yearly check ups to make sure things in your life/desired goal have not changed. THEN WAIT.

If you put in $1000 to start and $100 a month (every month) after that and make 8% annually after 3 years you will have put in $4600 and have $5350. This is what annoys most people. $750 in 3 years. I haven't calculated it out to 25 years, but the longer you wait the more money can compound. If I have time I will calculate it out But I will guess that your $31,000 invested will be at least $350,000.

That is one way the rich either become or stay that way. That and spending less than they make.

DAVELAWN
09-24-2005, 09:30 AM
If you guys think you can beat the market you are crazy. In fact most professional money managers cannot beat the market consistently, so what makes you think you can? Try reading before investing.

jtrice11
09-24-2005, 01:32 PM
A good mutual fund should average you at least 15% per year.

First, I think yer nuts. And secondly, what if it DOESN'T average you 15% and takes a nose dive. Give this advice to all the rich people like my parents who invested everything in the mid and late 90's and saw their wealth in the millions be decimated to a few hundred thousand.

Tom-N-Texas
09-24-2005, 06:48 PM
Actually I think the market is still trying to correct itself after the irrational exuberance of the 90's. This was period of time where many stocks were WAY higher than they should have been. Then in the late 1990's the Clinton administration brought Microsoft to its knees...which began the downfall of the market. Since then we've had 9-11, war in Afghanistan, war Iraq, and other assorted terrorist actions. I think at this point we are poised for a market upsurge. Lately I've been investing in individual stocks that I believe are undervalued. For those of you who are skeptical about a 15% mutual fund, you may be right in the recent past. But if you look over the history of the market, you'll find that 15% is a fairly reasonable figure over a period of years or decades for a mildly aggressive fund.

Tom-N-Texas
09-24-2005, 07:01 PM
First, I think yer nuts. And secondly, what if it DOESN'T average you 15% and takes a nose dive. Give this advice to all the rich people like my parents who invested everything in the mid and late 90's and saw their wealth in the millions be decimated to a few hundred thousand.

Did they invest in individual stocks or mutual funds? If their money was in individual Nasdaq companies then they lost a whole alot. Many many people lost their fortunes. My parents were sort of in the same boat. My dad retired from Texas Instruments and most of his assets were in the form of company stock. Well that was cut in half. He probably lost over a million dollars. Luckily that particular stock is coming back now. But many stocks will never reach their former highs. The thing is though, my dad's fortune was absolutely MADE in the stock market. When he retired his salary was only $43,000 per year.

jtrice11
09-25-2005, 12:57 PM
Did they invest in individual stocks or mutual funds? If their money was in individual Nasdaq companies then they lost a whole alot. Many many people lost their fortunes. My parents were sort of in the same boat. My dad retired from Texas Instruments and most of his assets were in the form of company stock. Well that was cut in half. He probably lost over a million dollars. Luckily that particular stock is coming back now. But many stocks will never reach their former highs. The thing is though, my dad's fortune was absolutely MADE in the stock market. When he retired his salary was only $43,000 per year.

yeah, they got hammered in the NASDAQ, lost 2/3 of the wealth. I'd have to agree with you from the standpoint that if you invest when you are 30, if you can wait it out until you are 60-62, you will come out ahead. The market trend has been fairly consistent over the long haul since the stock market started. But for those that are already in their 50's and 60's its not a realistic option. I don't like the idea of giving someone or some company my money so they can "try" and make more of their own money. Its the old rich get richer scenario.

Precision
09-25-2005, 10:57 PM
The problem with the "wisdom" in this thread is it is primarily focused on the rate of growth of the money. Although important it is not the most important thing. Retention of capital is way more important than growth to make money long term.

By this I mean if your growth rate is 15% but has a high beta (volatility) then you will never sleep at night and that high volatility will one day be your undoing (NASDAQ meltdown of 99-2000).

remember it takes a 100% gain to erase a 50% loss.

example you have $10,000 in the market and take a 50% loss
you now have $5000. you need to double it (100% growth) just to be back at even.
now that is 5 years of your 15% return to recover from your 1 year of 50% loss.

That is why you must diversify.
When Nasdaq melted, companies like Gillette, JCP, Weyerhauser and tons of small cap corps that no one has heard of did very well.
So by owning funds that play market caps and owning both sides of the split (growth funds and value funds) you will be much better insulated.

IMO a proper portfolio has 10 components
Large cap 1 growth 2 value
Mid cap 3 growth 4 value
small cap 5 growth 6 value
International 7 growth 8 value
Bonds 9 mix of corp and muni
10 cash and cash equivalents

the ratios depend on your time frame, risk tolerance and many other issues.

The other issue other than good diversification is an ability to reallocate these assets back to your risk tolerance level on a set schedule without incurring cost. And automate it. There is little room for passion in investing.

Buying individual stocks with anything other than play money is best done by the idle rich.

My earlier suggestion of $1000 put in and $100 per month was off, but still for $31,000 invested to end up with $103,000. Or $72,000 of "free" money isn't bad.

Start with $10,000 and that alone bumps you up to $169,000 for a $40,000 total investment.

Compounding, that is how the rich stay rich.

Tom-N-Texas
09-26-2005, 12:41 AM
Buying individual stocks with anything other than play money is best done by the idle rich.


Well I have to disagree with that statement. In my opinion, investing in an array of individual stocks held over a period of decades is the one of the best ways to get rich. Mutual funds might do ok for you. But a regular purchase individual stocks from big, growing, profitable companys are THE ticket to long-term financial independence. Granted, you can't always pick winners. Likewise you won't always have good years. But like I said in an earlier post, my dad worked a $40,000 a year job, yet has over 2 million in his retirement accounts. This amount was not amassed through mutual funds, but company stock. (Personally I think he should have diversified his portfolio a bit more, but he's sitting pretty now.)

A $10,000 investment in any of these companies back in the 90's would have made you a millionaire: Microsoft, Aol, Cisco, Ebay, Nokia, dell, among many many others. I'm putting in my $1,000 per month in companies I believe have big growth potential. We'll see what happens in 20 years. Should be interesting. Hopefully I won't have to mow lawns anymore.

Precision
09-26-2005, 09:22 AM
Well I have to disagree with that statement. In my opinion, investing in an array of individual stocks held over a period of decades is the one of the best ways to get rich. Mutual funds might do ok for you. But a regular purchase individual stocks from big, growing, profitable companys are THE ticket to long-term financial independence. Granted, you can't always pick winners. Likewise you won't always have good years. But like I said in an earlier post, my dad worked a $40,000 a year job, yet has over 2 million in his retirement accounts. This amount was not amassed through mutual funds, but company stock. (Personally I think he should have diversified his portfolio a bit more, but he's sitting pretty now.)

A $10,000 investment in any of these companies back in the 90's would have made you a millionaire: Microsoft, Aol, Cisco, Ebay, Nokia, dell, among many many others. I'm putting in my $1,000 per month in companies I believe have big growth potential. We'll see what happens in 20 years. Should be interesting. Hopefully I won't have to mow lawns anymore.


In the year Microsoft made its IPO there were 183 other companies that also IPO'ed. Name one of them. Just to make it easier for you, half of them are out of business. And there in lies my point.

The days of buying GE or Boeing stock in a capital reinvestment plan and just letting it ride are over (at least if you don't want the risk of an Enron). It never was a low risk idea, but now it is much worse with the levels of corruption and amount of money to be make / lack of risk facing corporate officers who kill companies with there own greed.

Can you make money? Sure. Is it a simple way to invest? sure. Is it safe or smart, NO. Is it better than day trading, YES. Can you mitigate the amount of risk by buying companies across the various sectors, yes. Is it as good as what I am suggesting 9either on profitability or low risk end) No.

If for no other reason, you do not have the ability to rebalance your portfolio as one portion dramatically outperforms or dramatically underperforms the rest.

But do what you like, despite the fact that 200 years of market analysis indicate asset allocation with scheduled rebalancing is the best way to grow at market or better rates with anywhere from 1/3 to 1/2 the associated volatility. Read as performing at or near the market on the upside and out performing the market on the downside.

Tom-N-Texas
09-26-2005, 10:27 AM
In the year Microsoft made its IPO there were 183 other companies that also IPO'ed. Name one of them. Just to make it easier for you, half of them are out of business. And there in lies my point.


If for no other reason, you do not have the ability to rebalance your portfolio as one portion dramatically outperforms or dramatically underperforms the rest.


You make some good points. You are obviously well-informed. However trying to pick the "next big thing" when companies are just coming out of the gate is not what I'm talking about. I'm talking about investing in gorillas: The biggest, baddest, most profitable, proven companies of a given industry. With just a little research you can determine if a company has room to grow, a decent PE, and manageable (if any) debt. I even choose to have professional help with this decision to back up my own research.

Also by regularly investing in a personalized fund, you are constantly in a state of "rebalancing."

Is there Risk? Of course! You could be 1 finanancial statement away of having a particular stock cut in half. But once again this is just a short-term view of your investment. I believe with a balanced and strong portfolio the upside is just too undeniable. The market's performance in the past 100 years will prove this.

Lost Pine
09-26-2005, 11:00 AM
If a CEO buys $2 mil or more... LOAD UP! The most recent money make for me, which I am still holding and still making tons of cash on is CHK... insiders started buying a few months ago and it has gone up 100%. .

Hey Wacamaster,

CHK has been good to me this year too !!! Got it @ 20 in May. Which service to you use to track insider buying ????


LOST PINE

PMLAWN
09-26-2005, 02:07 PM
For me it's 2 words DRIP and REAL ESTATE. OK I guess that is really 3 but still if you invest in good dividend paying companies and real estate you will become rich. The problem is that it will take a little time BUT, and again I say BUT, you will have a very good chance of staying rich.
Playing the "newest and greatest stock" game can get you "rich" fast but can also get you poor quick.
I had a lot of the I T stuff go south in the 01's and 02's. 6 figure losses can hurt but most of the drips are still holding on and all the real estate stuff is doing great.
As far as fun and pride of ownership the real estate is also better.

Thought for the day

Getting rich has very little to do with how much money you make and a lot to do with how much money your money makes.

Staying rich has very little to do with what you buy and a lot to do with what you finance.

Bonus--Tell your money where to go--do not ask where it went!!!

Precision
09-26-2005, 03:16 PM
Hey Wacamaster,

CHK has been good to me this year too !!! Got it @ 20 in May. Which service to you use to track insider buying ????


LOST PINE

Although tracking insider buying sounds like a great idea. I used to deal with those very same insiders on a daily basis. They were my clients. If you think they know something about their company you are right, unfortunately most of them know very little about the market or what is happening outside of their walls.

Just because you made the best slide rule ever doesn't mean a thing when the calculator is gonna hit the streets in a month. Insiders usually buy and sell on a program (I used to set them up) so as to avoid all risk of front running or the like.

Precision
09-26-2005, 03:20 PM
You make some good points. You are obviously well-informed. However trying to pick the "next big thing" when companies are just coming out of the gate is not what I'm talking about. I'm talking about investing in gorillas: The biggest, baddest, most profitable, proven companies of a given industry. With just a little research you can determine if a company has room to grow, a decent PE, and manageable (if any) debt. I even choose to have professional help with this decision to back up my own research.

Also by regularly investing in a personalized fund, you are constantly in a state of "rebalancing."

Is there Risk? Of course! You could be 1 finanancial statement away of having a particular stock cut in half. But once again this is just a short-term view of your investment. I believe with a balanced and strong portfolio the upside is just too undeniable. The market's performance in the past 100 years will prove this.


Assuming you DRIP or in some other manner systematically invest in MANY sectors in companies with solid footing and don't get attatched to those companies and refuse to see the writing on the wall (a la Lucent, AT&T) then your plan is a decent one. I prefer mine, less work, less risk, most likely the same or better profit. But to each his own.

Good luck.

mastercare
09-26-2005, 03:53 PM
Precision, congrats for thinking things through about interest rates.

When I'm not cutting lawns I am a financial advisor. Wearing a shirt and tie as we speak. The lawn jobs were going to be "a side gig" that got bigger than expected. But, you bring up good points about interest rates not being as they appear.

There is a difference between annual returns (most commonly quoted) vs. Total return. Total return is what really matters, and no, you won't find a fund that does 15% total return each year.....you might find one that made it in the past....but without that crystal ball you can't pick one now. If you found a winner.....it's probably already made most of its gain.


Quick story. Would you give me $100,000 if I could GUARANTEE an average return of 25% over the next two years? Most people say of course they would. Let me tell you how I can guarantee that rate. I take your money and invest it in bonds. At the end of the first year I send you a bogus statement saying that you've made a 100% return! At this point you love me and think I'm the greatest thing since sliced bread. Now as the second year comes to an end I give you some bad news and tell you that your account lost 50%. I give you your $100,000 back and explain to you that I averaged 25% per year just like I guaranteed!!! ((100%+ -50%)/2) = Average return of 25%. In the meantime I put $10,000 of bond interest in my pocket and just returned your money.

The point is that average interest rates don't mean squat. If you put in $100,000 and at the end of two years you have $156,250 you have actually earned your 25% per year. Theres a huge difference.

While I'm on a roll: People who use "trading services" (online, magazines, papers) to get their information don't realize how stocks work. A stock's price is based on the expected success (profits) of the company in the future. As soon as you see in the paper that something is a "great buy" you are dealing with old information, and the stock price has already gone up to reflect the information that made it a "great buy" in the first place.

Finally, if you're in the lawn business, chances are you don't have the time to be buying/selling individual securities because you can't possibly have more research data available than money managers who do this for a living. The smartest buy is to go with diversified mutual funds and adopt a buy-and-hold strategy that spreads your risk across several different investment classes, company sizes, and different industries. Look for long-term, slow and steady growth, and don't be fooled by the "15% annual returns"

If you live in MI and have any questions about investments or insurance (life & health).....drop me a PM.

Happy investing!

CRM Lawncare
09-26-2005, 04:09 PM
All this financial talk makes my head hurt. This is why I invest my money in real estate and Mopar muscle cars. The freaking cars make me more with the least amount of effort than the real estate.

Precision
09-26-2005, 04:15 PM
All this financial talk makes my head hurt. This is why I invest my money in real estate and Mopar muscle cars. The freaking cars make me more with the least amount of effort than the real estate.


Great plan right up until both of your non correlated assets take a nose dive at the same time because they have been driven up by speculation.

Albemarle Lawn
09-26-2005, 05:14 PM
Paid cash.

Guess I'm screwed, destined to be poor. That Benz could have been $4,000,000.00 some day, right?


This whole oversimplified saving computation based on driving old cars/trucks has little merit.

It doesn't take into account additional repair costs (more repairs and no warranty) and also doesn't take into account taxes when compounding the 15% annuallly. Profits each year are a taxable event. The money must be in an IRA account to grow tax free.

Thats IF you could even make 15%. Recessions/etc will flush that expectation fast.

brucec32
09-26-2005, 06:12 PM
This misguided post is a great example of why lawnsite should sponsor links to basic accounting courses.

There is a difference in COSTS and PAYMENTS.

The money spent on payments on a newer more valueable asset are not poured down a rathole. Older vehicles are not going to last as long, are going to have more breakdowns, and may not meet your needs as well.

The only true costs of operating a vehicle are:

1. Interest
2. Depreciation
3. Fuel
4. Insurance
5. Maintenance/Repairs
6. Tag/Taxes

Only by comparing a breakdown of these costs over time can you make the right decision.

Then factor in what it costs you to have employees sitting idle for lack of a working vehicle, what it costs you in lost revenue when you can't show up on time because you're stuck on the side of the road somewhere, lost time spent under your truck trying to fix it instead of producing income, the time it takes to get a vehicle to/from a repair shop, the hassles of getting a replacement vehicle rented and picked up and returned, and what it costs you in terms of your reputation for showing up on time with the customers who don't drop you. They may be a little less likely to go along with that price increase you had in mind when they recall that you skipped their lawn a few times last season.

Only by comparing all these costs can you arrive at a sound decision.

It costs a little more to run a newer vehicle than an old junker, for sure, but there are advantages to weigh against the costs. My experience is that I wouldn't save enough to make it worth the hassles and worries.

There are also important tax ramifcations to buying periodically rather than sticking with an old machine. See section IRS section 179 depreciation rules.

Buy what you need to get the job done efficiently and not drive yourself crazy with vehicle worries. Overbuying ($40K dually diesels to tow one walk behind on a small trailer) isn't smart either. But you're not "saving" $500/month by buying a clunker.

Tom-N-Texas
09-26-2005, 07:13 PM
But you're not "saving" $500/month by buying a clunker.

On the other hand, your $24,000 truck is costing you more like $33,000 by the time you add interest. Not to mention the extra insurance premiums. Now, just for fun....what kind of car does your wife drive? I doubt you're sticking her with a clunker! More payments, more interest. This mentality is why many people are in debt up to their eyeballs.

I personally choose not to put my money into cars -- but into my house. Since I live debt free (other than the mortgage) I have the luxury of living in an executive neighborhood. (Funny how a lawn guy can live next door to an Orthodontist!)

I bought a 1998 model dodge truck for cash. I also have a back up truck that I paid $2,000 for. My wife bought a 1999 Jeep Grand Cherokee for cash. We have no payments....and as of yet no repair over $200.

A Finer Cut
09-26-2005, 08:36 PM
I agree that a used truck is a great investment. But it can be a liability as well unless you have a BACK-UP truck. Ex. - New truck break down less often AND they are usally covered for repairs. A used truck, if it breaks down, will cost you the ammount of business that you couldn't do AND repair costs. My truck, is an in-betweener. It is a 1997 F-250. I bought it from a govt. vehicle depot. I assume that it was maintained on schedule because govt. trucks have to be maintained as a rule.

It doesn't have all the bells and whistles, but, hey, its a work truck. I use it for work.

I still make payments on the Truck but hope to be done with that if I am blessed with a blizzard this year.

PMLAWN
09-27-2005, 12:32 AM
On the other hand, your $24,000 truck is costing you more like $33,000 by the time you add interest. Not to mention the extra insurance premiums. Now, just for fun....what kind of car does your wife drive? I doubt you're sticking her with a clunker! More payments, more interest. This mentality is why many people are in debt up to their eyeballs.

My wife bought a 1999 Jeep Grand Cherokee for cash. We have no payments....and as of yet no repair over $200.
Each case has to be looked at on it's own.
My wife has a new car (04) and it is financed.
But it is a Chevy Malibu that she was able to work down to about 17K.
She also got 0% financing.
She works in accounting and is very concerned about money. As far as repair cost, that is meaningless. The real problem is if there is down time or one of us has to take the thing in to be fixed. The monthly payment is just a little over what she makes in 2 hours so to buy something that would take time away from the job would be a bad decision.
Many factors work into the mix so it is impossible to say that one way is always better than the other.

dwc
09-27-2005, 08:16 PM
I just got rid of my 1995 chevy work truck and bought a new truck. The difference in the price i was paying to keep the 95 running compared to the new truck pretty well makes the payment. I don't know if you have went to the mechanic shop lately or the parts store, but they are EXPENSIVE. I agree the newer truck costs a little more, but when I was sitting there at the mechanics shop writing the $1,000 check for repairs, I am thinking there are 2 payments right there. Plus I am still driving a used truck. Plus as mentioned before, I had to find another truck to drive, take time out of my route to drop the truck off, and pick the truck up. So lets say 1 hour total for drive time to the shop, and dropoff/pickup time. In that amount of time how much money would I make mowing? Add that onto the repair bill and it starts on that 3rd payment.
No matter what you drive, it will cost you a lot of money. I am glad there are people out there that like used though, cause I trade a lot.