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  #211  
Old 03-11-2013, 01:03 PM
precisionlawnandlandscape precisionlawnandlandscape is offline
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[QUOTE=cpllawncare;4701686]
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Originally Posted by precisionlawnandlandscape View Post

I don't have a mortgage, my investments are growing tax free as well, but I'm talking strictly from a business perspective not a personal perspective I keep the two completely separate.

I also keep my business and personal stuff totally seperate, only way to go in my opinion. I treat myself as an employee of my businees. I was just pointing out that as i said before NOT ALL debt is totally the worst thing ever. This statement holds true when talking about growth and investments only. In a nutshell, it only makes sense when the reward outweighs the cost. If you can't sleep at night stictly because you have a loan of some sort, even if it is at 0% interest, then chances are you can't handle the stress of business ownership anyway. I personally don't have any business debt, but this is a lot easier business to grow with no debt than most others out there.
One of my friends family owns a large machine shop. They got asked to bid on a goverment contract about 8 years ago. They didn't have the correct machine to do the job, however they found what they would need, got a turnkey price for the machine and quoted the contract accordingly. They got a 3 year contract for the job. Even if they lost the job after the 3 years, they would have the machine payed off. Cost of machine was $12,000 per month even after paying about $350,000 down in cash. Now was this a bad business decision to finance this equipment to pick up this job? I don't think so, especially since after that, this defense contractor has become one of their biggest customers, with about 2.5-3 million in contracts per year. It would have been stupid to go by the machine with the HOPE of getting the job. But after getting it in writing, it makes more sense. If they would have had the mindset of some on here, they would have said "hell no, i don't want that payment, that's ignorant". It's just part of playing the game sometimes.
On a side note, out of curiousity i asked him last week if the government cuts were going to hurt him and he said actually it may help them. Some of the higher priced stuff that they don't do is getting cut in favor of the parts that they do.
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  #212  
Old 03-11-2013, 02:48 PM
32vld 32vld is offline
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[QUOTE=precisionlawnandlandscape;4701676]
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Originally Posted by muddywater View Post
And money markets only pay 1%, so the advantage is negligible.

Just refinaced $100,000 mortgage at 2.9%, current investments are averaging 20%+, investment profits are growing tax free each year and what small amount of mortgage interest i pay each year is tax deducible. Think i will keep traveling the current road im on for now, Why would i take $100,000 out of my investment money making 20%+ to save 2.9%? Now granted, you have to be smart here and not get carried away with debt. If it was an 8 or 9% mortgage like was common 10 years ago, now that would be a whole different story.
Getting better interest ROI then Bernie Madoff.
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  #213  
Old 03-11-2013, 05:40 PM
precisionlawnandlandscape precisionlawnandlandscape is offline
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[QUOTE=32vld;4702197]
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Originally Posted by precisionlawnandlandscape View Post

Getting better interest ROI then Bernie Madoff.

Oh, poor Bernie. He's getting the only ROI he deserves right now. As far as myself I can't complain right now, that's for sure. Now granted that's not been my normal ROI for the last 10 years or so. My average for the last 5 years has been a little over 12%, but that's including the huge losses in 07-09. I missed about 90% of that. When it got up about 12,000-13,000 points i took alot and moved it to lower risk stuff, rode out the downward spiral and then moved it back at the start of the uptick. There was some luck involved there also, i just didn't think the huge gains would continue forever (just like the ones now aren't either). I've already done some moving around since last Friday after the Dow hit record highs 4 days in a row, can you say "BUBBLE"

Speaking of the debt discussions and posts from earlier. Found some interesting information on the internet. I'm sure we would all agree (whether we shop there or not), that Wal-mart is a major global powerhouse and economic giant. As of 1/31/13, they had gross sales in 2012 of 443.9 Billion dollars (that's with a "B") and long term debt (debt of more than a years length) of 53.81 Billion. Yes that's right, even Wal-mart apparently can't grow debt free, or perhaps it could be that they see the advantages to certain amounts of debt and it's ability to fuel it's global domination.
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  #214  
Old 03-11-2013, 06:09 PM
newguy123 newguy123 is offline
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[QUOTE=precisionlawnandlandscape;4702353]
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Originally Posted by 32vld View Post


Oh, poor Bernie. He's getting the only ROI he deserves right now. As far as myself I can't complain right now, that's for sure. Now granted that's not been my normal ROI for the last 10 years or so. My average for the last 5 years has been a little over 12%, but that's including the huge losses in 07-09. I missed about 90% of that. When it got up about 12,000-13,000 points i took alot and moved it to lower risk stuff, rode out the downward spiral and then moved it back at the start of the uptick. There was some luck involved there also, i just didn't think the huge gains would continue forever (just like the ones now aren't either). I've already done some moving around since last Friday after the Dow hit record highs 4 days in a row, can you say "BUBBLE"

Speaking of the debt discussions and posts from earlier. Found some interesting information on the internet. I'm sure we would all agree (whether we shop there or not), that Wal-mart is a major global powerhouse and economic giant. As of 1/31/13, they had gross sales in 2012 of 443.9 Billion dollars (that's with a "B") and long term debt (debt of more than a years length) of 53.81 Billion. Yes that's right, even Wal-mart apparently can't grow debt free, or perhaps it could be that they see the advantages to certain amounts of debt and it's ability to fuel it's global domination.
I agree with you that debt can be used as a tool but I don't think it's necessary for our business.

On the other hand, Walgreens is a debt free business...it uses their excess cash to fund their new locations and developments.

So the "you have to use debt to grow" philosophy isn't necessarily accurate 100% of the time.
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  #215  
Old 03-11-2013, 06:57 PM
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Patriot Services Patriot Services is offline
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I worry about the guys that manage to make a bit of money from this and have no idea what to do from there. 2% is sure safe but you could do so much more with your hard earned money. This business is a means to an end. Figuring out what to do with it isn't hard but you do need to educate yourself. Do not put it in the hands of an advisor or broker and turn your back. They get paid whether you make money or not and the last thing they want you to do is take money out. The unquestionable trust people put in these unscrupulous money handlers cost millions of people their nest eggs. You don't need to be a stockbroker to make good investments, but putting it in your mattress or a hole in the wall is just a damn shame.
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  #216  
Old 03-11-2013, 10:23 PM
muddywater muddywater is offline
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Originally Posted by Patriot Services View Post
I worry about the guys that manage to make a bit of money from this and have no idea what to do from there. 2% is sure safe but you could do so much more with your hard earned money. This business is a means to an end. Figuring out what to do with it isn't hard but you do need to educate yourself. Do not put it in the hands of an advisor or broker and turn your back. They get paid whether you make money or not and the last thing they want you to do is take money out. The unquestionable trust people put in these unscrupulous money handlers cost millions of people their nest eggs. You don't need to be a stockbroker to make good investments, but putting it in your mattress or a hole in the wall is just a damn shame.
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I kind of agree with you. I think you need to be an expert at making or getting a return on your money. How many of us are experts in investing???

I know you are probably somewhat of an expert in real estate, and you have a niche. I just think to make a 10% return you need to be an expert. There just isnt much out there that makes a great return without expert knowledge. And i will be the first to admit i an not an expert on stocks, and like you said most stock brokers are not much different than car salesman.

I look at starting another crew as an investment with a 20% return. Why would i leverage this investment? It is the investment....and one i have control over. And an investment i am an expert on.
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  #217  
Old 03-12-2013, 12:45 PM
precisionlawnandlandscape precisionlawnandlandscape is offline
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[QUOTE=newguy123;4702383]
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Originally Posted by precisionlawnandlandscape View Post

I agree with you that debt can be used as a tool but I don't think it's necessary for our business.

On the other hand, Walgreens is a debt free business...it uses their excess cash to fund their new locations and developments.

So the "you have to use debt to grow" philosophy isn't necessarily accurate 100% of the time.

I never once said that you "HAVE" to have debt to grow, merely stated that starting from scratch (this means without the help of your parents or anyone else), it would be hard to grow at an exceptionally fast rate without using credit to your advantage and that cash isn't always king in every situation.

And according to the link below, Walgreens is "FAR" from being debt free.
Even had their credit rating dropped, because of increasing their debt to about 6 billion, to acquire interest in another company.

http://www.moodys.com/research/Moody...ive--PR_252144
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  #218  
Old 03-12-2013, 02:33 PM
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cpllawncare cpllawncare is offline
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I have to agree with Precision on this, to grow at any kind of pace, you really need to be willing to have some debt, it just has to be managed you can't go hog wild. You can grow without it but at a MUCH MUCH slower pace.
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  #219  
Old 03-12-2013, 02:39 PM
muddywater muddywater is offline
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Well cash is always king if you got enough of it! I agree its hard to start up without a loan, but it can be a rough ride. I just dont like debt personally because i would rather own my assets than the bank.

And i think when you are buying equipment and trucks with cash it is easier get great deals. The last guy that bought one of my trucks took 3 days to get financing. Most of the equipment deals i find are gone in less than 24 hours.
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  #220  
Old 03-12-2013, 09:33 PM
newguy123 newguy123 is offline
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[QUOTE=precisionlawnandlandscape;4703278]
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Originally Posted by newguy123 View Post


I never once said that you "HAVE" to have debt to grow, merely stated that starting from scratch (this means without the help of your parents or anyone else), it would be hard to grow at an exceptionally fast rate without using credit to your advantage and that cash isn't always king in every situation.

And according to the link below, Walgreens is "FAR" from being debt free.
Even had their credit rating dropped, because of increasing their debt to about 6 billion, to acquire interest in another company.

http://www.moodys.com/research/Moody...ive--PR_252144
My fault I was thinking of a different company...I think it was RiteAid or something.

Anyways Bed Bath & Beyond is a debt free company...it doesn't really matter.

My point wasn't to dismiss your logic, but to prove there are still large businesses that operate on a debt free strategy.
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