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  #81  
Old 02-19-2012, 11:45 PM
living Green Property living Green Property is offline
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Originally Posted by Puddle of Oil View Post
I agree with all of what you said.
I read on here all this questions how much to charge and what to spend. I am like umm you should run the number right after you decide to get into business. no wonder why you are 5 years in and not making money.lol
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  #82  
Old 02-19-2012, 11:57 PM
lawnagent lawnagent is offline
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Living Green Property you said, This is such a stupid thing there is nothing wrong with going in debt. I just bought 2 exmarks and I got 0% interest why pay cash when they are going to keep the money in it for me? That was awfully nice of exmark.lol Yeah I could have paid cash but now I have that 15 grand in my bank account gaining interest so I am making money off loaning. As long as you have capitol you will be fine. Cash flow is important and you want to make sure you have a nice cushion especially in this business.

Are you paying this off before the terms end? If not it is not zero percent. The idea and good one at that at avoiding the debt is that we cannot always control what happens, get in a car wreck family member gets sick, swarm of locusts, whatever. Let one thing happen to cause you to not pay it off on time and you could be up the creek. On 0% finance deals let one thing cause you to not pay it off in time and suddenly you owe an astronomical amount of interest, those non payoff interest rates are the maximum percent interest rate the law will allow. AND you WILL be back charged interest over the ENTIRE length of the loan. NOT just one month cause you were a month late paying it off. ALL the months. So it just makes sense to pay cash. Besides everyone argument about needing a cash cushion doesn't hold water. If you are debt free then you can pile cash FAST as you are able to stockpile nearly everything you bring in. Why take a chance?
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  #83  
Old 02-20-2012, 12:28 AM
living Green Property living Green Property is offline
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Originally Posted by lawnagent View Post
Living Green Property you said, This is such a stupid thing there is nothing wrong with going in debt. I just bought 2 exmarks and I got 0% interest why pay cash when they are going to keep the money in it for me? That was awfully nice of exmark.lol Yeah I could have paid cash but now I have that 15 grand in my bank account gaining interest so I am making money off loaning. As long as you have capitol you will be fine. Cash flow is important and you want to make sure you have a nice cushion especially in this business.

Are you paying this off before the terms end? If not it is not zero percent. The idea and good one at that at avoiding the debt is that we cannot always control what happens, get in a car wreck family member gets sick, swarm of locusts, whatever. Let one thing happen to cause you to not pay it off on time and you could be up the creek. On 0% finance deals let one thing cause you to not pay it off in time and suddenly you owe an astronomical amount of interest, those non payoff interest rates are the maximum percent interest rate the law will allow. AND you WILL be back charged interest over the ENTIRE length of the loan. NOT just one month cause you were a month late paying it off. ALL the months. So it just makes sense to pay cash. Besides everyone argument about needing a cash cushion doesn't hold water. If you are debt free then you can pile cash FAST as you are able to stockpile nearly everything you bring in. Why take a chance?

Read carefully I sad manage your debt and have a cushion because this industry is feast and famine. As the consumer donít sign a loan that locks you in. you have the choice to go get another loan. And business is a risk life happens and if something really bad happens to you, you pry are going to go out of business weather or not your equipment is paid for. Also if you donít have a title and something happens to you and you are locked in and you canít make the payments you can sell that piece of equipment and just make the payment till the end while making interest on the money. So you will still be ahead, I know there are still factors like is it worth less than what I paid for it. But due to this economy used equipment is still holding its value. And I will agree there are scam loans out there like if you are one day late you get charged interest, well its called responsibility. Make sure you get your payment in on time. And do I look like the type of guy that just signs and does not read all the pages. The loans are 0% for 36 months in 36 equal payments.

But about the pile cash quicker it does not matter if you put in $10,000 of your cash or $10,000 of the banks money in to buy a piece of equipment. You still have money in your equipment weather its your money or the banks. This is hard to understand I get it and Iím giving a crash course in finance. (I have my masters in Economics BS in business and a minor in finance)( and still not good at gramer.lol) So you still have to pay the piece of equipment off. If u drop $10,000 and donít have to make payment thatís great but you still have to generate at least what you spent on the piece of equipment in order to make money so if you walk in to your accountant at the end of the year and said I paid cash for a $10,000 mower and I brought in $12,000 so theoretically you made $2000 (im excluding all the other obvious expenses gas insurance im making this as simple as I can) or you can walk in to the accountant and say I loaned $10,000 at 0% and brought in $12,000. Whatís the difference there isnít one except you had $10,000 all season to use for whatever you wanted. And not to mention if you have you money in bonds or stocks you would have made money off of interest of that money. so you would be further ahead. So if an emergency happens you would be better off loaning problem because you now have a $10,000 cushion until you have a problem with capitol. So see by paying cash you can get yourself in a jam almost faster than a responsible laon. Did I explain it well if not ill try going in depth a little more I spent 6 years of my life studying this its hard to explain in 30 min.
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  #84  
Old 02-20-2012, 12:33 AM
muddywater muddywater is offline
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Join Date: Sep 2011
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Quote:
Originally Posted by lawnagent View Post
Living Green Property you said, This is such a stupid thing there is nothing wrong with going in debt. I just bought 2 exmarks and I got 0% interest why pay cash when they are going to keep the money in it for me? That was awfully nice of exmark.lol Yeah I could have paid cash but now I have that 15 grand in my bank account gaining interest so I am making money off loaning. As long as you have capitol you will be fine. Cash flow is important and you want to make sure you have a nice cushion especially in this business.

Are you paying this off before the terms end? If not it is not zero percent. The idea and good one at that at avoiding the debt is that we cannot always control what happens, get in a car wreck family member gets sick, swarm of locusts, whatever. Let one thing happen to cause you to not pay it off on time and you could be up the creek. On 0% finance deals let one thing cause you to not pay it off in time and suddenly you owe an astronomical amount ofinterest, those non payoff interest rates are the maximum percent interest rate the law will allow. AND you WILL be back charged interest over the ENTIRE length of
the loan. NOT just one month cause you were a month late paying it off. ALL
the months. So it just makes sense to pay cash. Besides everyone argument about needing a cash cushion doesn't hold water. If you are debt free then
you can pile cash FAST as you are able to stockpile nearly everything you bring in. Why take a chance?
I agree. I just cannot imagine people financing these 3-10k mowers AND having fat bank accounts. Just doesn't make sense.

So they finance 15k worth of mowers that they could have paid cash for. Now they have a 15k cushion.... Not much of a cushion if you ask me!

If you REALLY want to save money, buy slightly used equip and trucks. This is immediate savings that add zeros in black ink.
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  #85  
Old 02-20-2012, 12:50 AM
muddywater muddywater is offline
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Quote:
Originally Posted by living Green Property View Post
Read carefully I sad manage your debt and have a cushion because this industry is feast and famine. As the consumer don’t sign a loan that locks you in. you have the choice to go get another loan. And business is a risk life happens and if something really bad happens to you, you pry are going to go out of business weather or not your equipment is paid for. Also if you don’t have a title and something happens to you and you are locked in and you can’t make the payments you can sell that piece of equipment and just make the payment till the end while making interest on the money. So you will still be ahead, I know there are still factors like is it worth less than what I paid for it. But due to this economy used equipment is still holding its value. And I will agree there are scam loans out there like if you are one day late you get charged interest, well its called responsibility. Make sure you get your payment in on time. And do I look like the type of guy that just signs and does not read all the pages. The loans are 0% for 36 months in 36 equal payments.

But about the pile cash quicker it does not matter if you put in $10,000 of your cash or $10,000 of the banks money in to buy a piece of equipment. You still have money in your equipment weather its your money or the banks. This is hard to understand I get it and I’m giving a crash course in finance. (I have my masters in Economics BS in business and a minor in finance)( and still not good at gramer.lol) So you still have to pay the piece of equipment off. If u drop $10,000 and don’t have to make payment that’s great but you still have to generate at least what you spent on the piece of equipment in order to make money so if you walk in to your accountant at the end of the year and said I paid cash for a $10,000 mower and I brought in $12,000 so theoretically you made $2000 (im excluding all the other obvious expenses gas insurance im making this as simple as I can) or you can walk in to the accountant and say I loaned $10,000 at 0% and brought in $12,000. What’s the difference there isn’t one except you had $10,000 all season to use for whatever you wanted. And not to mention if you have you money in bonds or stocks you would have made money off of interest of that money. so you would be further ahead. So if an emergency happens you would be better off loaning problem because you now have a $10,000 cushion until you have a problem with capitol. So see by paying cash you can get yourself in a jam almost faster than a responsible laon. Did I explain it well if not ill try going in depth a little more I spent 6 years of my life studying this its hard to explain in 30 min.
I think we all understand debt. What I am trying to understand is why a profitable established company would want to finance 15k? You can't write that check AND have a nice cushion?

When I buy slightly used(100hrs on a ztr, 300-400hrs on heavy equip, 25-50k miles on trucks) I save thousands and thousands of dollars... which would not be the case if I financed everything new.
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  #86  
Old 02-20-2012, 01:05 AM
living Green Property living Green Property is offline
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Quote:
Originally Posted by muddywater View Post
I agree. I just cannot imagine people financing these 3-10k mowers AND having fat bank accounts. Just doesn't make sense.

So they finance 15k worth of mowers that they could have paid cash for. Now they have a 15k cushion.... Not much of a cushion if you ask me!

If you REALLY want to save money, buy slightly used equip and trucks. This is immediate savings that add zeros in black ink.
True they have fat bank accounts because they are financing equipment. Iím not getting into specific with my finances but I could pay cash for all my loans right now and still operate comfortably. See for me we get a fleet discount from exmark so a lazer z costs me about $8000 new. We put about 650 hours a year on each mower. We only keep them for 2 years. At 2 years they have about 1300 hours on them I then sell them for about $5000 now that means it only costs me $1500 a year to run that Machine. If I break that down to hours that $2.3 an hour. Not to mention we donít have to maintain them that well because we are not holding on to them and if something does happen itís under warranty. If I bought a used one we would have it won out faster and then I would have to replace parts and it would actually be more expensive for us and if we have a break down that would cost me money. we have had motors blow at 900 hours well if it was a 3 year old mower ts out of my pocket and a new motor from experience is $2000 so now im behind. Im not saying every one operates the way we do and each business is different and yes at first buying used equipment is not bad. But as your business grows new equipment is not always a bad thing if you can. Trucks we used to buy used one but now we can buy them for $30,000 run them for 4 years sell them with 80,000 miles for $25,000 so thatís only over $1000 a year it cost us to run them. If I bought one with 80,000 miles for $25,000 and kept it for 4 years it would be worth 15,000 see how now it cost us over $2000 a year. so see how if u need and can afford and have the work for new equipment it pays to buy new equipment. I will buy used like over seeders, bed edgerís and aerator.
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  #87  
Old 02-20-2012, 01:16 AM
living Green Property living Green Property is offline
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Quote:
Originally Posted by muddywater View Post
I think we all understand debt. What I am trying to understand is why a profitable established company would want to finance 15k? You can't write that check AND have a nice cushion?

When I buy slightly used(100hrs on a ztr, 300-400hrs on heavy equip, 25-50k miles on trucks) I save thousands and thousands of dollars... which would not be the case if I financed everything new.

To be honest a lot of landscapers/contracter get themselves in trouble with new trucks I think that you should wait till you are big enough and making enough money to buy a new one. i have seen this alot of times when i worked at an accounting firm.

And you are not wise if you are sitting with an excess of capital in a checking account ( I Am talking about after what your monthly expenses are if it cost you $18,000 a month donít leave $33,000 in your account) because if you loan the money at 0% you can take that money and reinvest it. Lets say in a CD or a mutual fund, or a savings account(you wonít get much interest in a savings account) or E-trade for sakes. Now you used exmarks money to buy the equipment free of charge. Now you can take that money you would have used to buy the equipment and invest it and make more money. Get it?
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  #88  
Old 02-20-2012, 03:04 AM
lawnagent lawnagent is offline
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Well over 90% of borrowers do not pay it back in time and get in all kinds of trouble and pay all kinds of extra money. So I personally will never advise someone to do that. These finance companies are rich because so very very few ever pay it off before getting charged all the interest. In case you can tell, I am a Dave Ramsey follower. Sometimes people with finance degrees give his clients good advice and sometimes people with finance degrees give such stupid advice even I can see the errors. I am truly glad you have been able to avoid the bad side but too many people cannot. I am also glad to see you give the investing advice. Buy I would lump the cd in the same category as a savings account for their pitiful amounts of gain.
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  #89  
Old 02-20-2012, 03:14 AM
StihlMechanic's Avatar
StihlMechanic StihlMechanic is offline
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Here's what you do to be debt free. Buy a POS truck for $1000 cash, a trailer for $500, finance every trimmer, mower, blower you can, operate on credit cards as long as you can, then file chapter 13 and laugh.
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  #90  
Old 02-20-2012, 08:20 AM
living Green Property living Green Property is offline
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Originally Posted by lawnagent View Post
Well over 90% of borrowers do not pay it back in time and get in all kinds of trouble and pay all kinds of extra money. So I personally will never advise someone to do that. These finance companies are rich because so very very few ever pay it off before getting charged all the interest. In case you can tell, I am a Dave Ramsey follower. Sometimes people with finance degrees give his clients good advice and sometimes people with finance degrees give such stupid advice even I can see the errors. I am truly glad you have been able to avoid the bad side but too many people cannot. I am also glad to see you give the investing advice. Buy I would lump the cd in the same category as a savings account for their pitiful amounts of gain.

Haha yes I agree the CD is not the best investment, I also said E-trade and I in no way would advise anyone who does not know what they are doing to play on there.lol I was just trying to give examples. And u knows the sad thing is I believe you are right about people not paying on time. I mean it really is not hard to make a payment on time. I mean that the problem with America people donít take responsibility for themselfís. And again im saying you donít have to take a loan if you donít like the terms donít sign. And Dave Ramsey has a lot of good points but donít quote me because im not familial with all his programs but from what I have seen he focuses more on personal finance not as much business. credit card debt, a mortgage on home, Personal car loan this is considered ďBad DebtĒ and I agree with dave you should pay for it asap. I understand a lot of people donít have that kind of cash around but he is right you should try paying off your mortgage as fast as you can.
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