Originally Posted by Krafty
Also if you go back and read Idealscapes thread thoroughly he also states in there that he does finance equipment WHEN IT MAKES SENSE! I think what you are missing is that not in every situation is it the smartest financial decision to pay cash, and on the opposite side it is also not the smartest decision to always finance. A lot of companies that are a million dollar companies sometimes have their money tied up in other investments. To lay it out there for you in case that is not perfectly clear. This is a made up situation, but if I were to buy a new truck and for instance pay 2.9% interest on 50k. I can guarantee damn tee you I can invest that 50k in something else that is going to bring be a return of way more than 2.9%. Don't take this the wrong way Muddy this is not directed at you, but I firmly believe there is a big difference between a landscape/hardscaper and a business man. On this site I believe there are a lot more hardscapers then business men.
To me the truck or piece of equipment IS the investment. I can get a 20% return on another crew. I can't get 20% anywhere else.
What exactly are you going to invest 50k in that will get a better return than 2.9%??? Everybody acts like they are going to finance a truck then invest that 50k when in reality they don't have 50k in the bank and they don't know jack about investing.
And in this tumultuous economy which could take a crap at any moment, having debt is a terrible idea.
Here is ideal landscapes quote. Keep in mind he has 40 trucks.
We have been debt free since the beginning. The reason we are is because we DONT walk into dealerships, pick out 3 trucks and pay cash for them. We have bought what we need for the job and used it until it is time to replace it. Now John Deere has offered us 0% on a few skid steer loaders and we financed them for about a year, but that was just because it was 0%. Other than that, we pay cash. Again, do not get in over your head...just because you can finance a mower for $100/mo doesn't mean go get it. Really think about if you NEED it. Save your money and pay cash for it!