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  #1  
Old 09-03-2012, 08:55 PM
muddywater muddywater is offline
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Paying cash is a mindset

All my harping on financing and I don't think I really touched on this. In my mind when you finance something happens in your brain. Whether it is 0% or 2%. You are telling your mind it is ok the buy something you cannot afford. I think it is much healthier to save and pay cash. Yes it may slow your growth, but it forces you to save money. And it forces you to examine your profit margins to be able to put money away. I see so many companies that continue to finance... and it never ends. By paying cash, it forces you to look at the actual cost of the asset. How many of us would actually write a check for a 40k truck? That is alot of work to save that kind of money. And it forces me to evaluate whether I really need a truck with 0 miles or a truck with 50k miles. If the one with 50k miles is half as much, is it really worth spending 50k on one with 0 miles? Do I really need to spend 60k on a new skid steer or can I spend 30k on one with 300 hours?

I was eating lunch with a mulit million dollar property investor the other day, and he said "they can't take it from you, if you don't owe them anything." And in this business, if you don't have any debt you are really impervious to any economy swings.

I have bought equipment from several landscape companies that lost everything due to the housing crash. They went from 10 financed skids to 0. Some of them owned impressive businesses but now have nothing to show for it.
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  #2  
Old 09-03-2012, 09:13 PM
Duekster Duekster is offline
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Quote:
Originally Posted by muddywater View Post
All my harping on financing and I don't think I really touched on this. In my mind when you finance something happens in your brain. Whether it is 0% or 2%. You are telling your mind it is ok the buy something you cannot afford. I think it is much healthier to save and pay cash. Yes it may slow your growth, but it forces you to save money. And it forces you to examine your profit margins to be able to put money away. I see so many companies that continue to finance... and it never ends. By paying cash, it forces you to look at the actual cost of the asset. How many of us would actually write a check for a 40k truck? That is alot of work to save that kind of money. And it forces me to evaluate whether I really need a truck with 0 miles or a truck with 50k miles. If the one with 50k miles is half as much, is it really worth spending 50k on one with 0 miles? Do I really need to spend 60k on a new skid steer or can I spend 30k on one with 300 hours?

I was eating lunch with a mulit million dollar property investor the other day, and he said "they can't take it from you, if you don't owe them anything." And in this business, if you don't have any debt you are really impervious to any economy swings.

I have bought equipment from several landscape companies that lost everything due to the housing crash. They went from 10 financed skids to 0. Some of them owned impressive businesses but now have nothing to show for it.

If you do not know finance then cash is the safest way to go for sure
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  #3  
Old 09-03-2012, 09:17 PM
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dKoester dKoester is online now
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Cash is the only way I pay for any big ticket items. There is no point paying off a loan. Because if you can't pay the payment you get repo'd. You lose the money you payed toward the loan and the item. Just save money for what you want.
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  #4  
Old 09-03-2012, 09:36 PM
muddywater muddywater is offline
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Originally Posted by Duekster View Post
If you do not know finance then cash is the safest way to go for sure
If you finance, you pay retail for everything. Doesnt thaT make you feel like a shmuck?
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  #5  
Old 09-03-2012, 09:37 PM
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McFarland_Lawn_Care McFarland_Lawn_Care is offline
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I agree mostly but for business it can be complicated. If having a specific piece of equipment will significantly increase revenues and cash flow is a little tight, financing CAN be the smartest thing you could do for your business. Many variables to be careful of and more often debt is bad than good. But sometimes it is necessary AND good to help grown businesses.
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  #6  
Old 09-03-2012, 09:41 PM
Duekster Duekster is offline
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Originally Posted by muddywater View Post
If you finance, you pay retail for everything. Doesnt thaT make you feel like a shmuck?
If you say so, but there is such a thing as the internet, multiple dealers and strong credit. I am not calling you names but I could roll heavy on math but why waste my time if you are not paying me to teach you?
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  #7  
Old 09-03-2012, 09:49 PM
muddywater muddywater is offline
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Originally Posted by Duekster View Post
If you say so, but there is such a thing as the internet, multiple dealers and strong credit. I am not calling you names but I could roll heavy on math but why waste my time if you are not paying me to teach you?
I have been on a no debt diet for 10 years, and now i dont need credit for anything. I dont go to dealers. Why would i want to add 7% onto my puchase?

What could you possibly teach me? I am my bank. I have been to the school of austerity and it is now paying off. I make interest and dont pay interest.
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  #8  
Old 09-03-2012, 09:50 PM
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grandview (2006) grandview (2006) is offline
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Wait till you get a wife and kid,they'll show you how to spend your cash.
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Last edited by grandview (2006); 09-03-2012 at 09:55 PM.
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  #9  
Old 09-03-2012, 09:52 PM
Duekster Duekster is offline
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Quote:
Originally Posted by muddywater View Post
I have been on a no debt diet for 10 years, and now i dont need credit for anything. I dont go to dealers. Why would i want to add 7% onto my puchase?

What could you possibly teach me? I am my bank. I have been to the school of austerity and it is now paying off. I make interest and dont pay interest.
Fair enough. Consider it done... why did you start this thread again...
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  #10  
Old 09-03-2012, 09:56 PM
muddywater muddywater is offline
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Originally Posted by grandview (2006) View Post
Wait till you get a wife and kid,they'll should how to spend your cash.
Nope they are on the austerity program too. She has a cash budget that she is on. We value the dollar and appreciate the amount of work it takes to earn it.

We shop at goodwill, she bought me a $2 pair of ralph lauren shorts yesterday. I buy my columbia shirts at the outlet store for $10-15 after a coupon. I never pay retail for anything... well just about anything
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