Good off-season poll/discussion

Discussion in 'Lawn Mowing' started by Envy Lawn Service, Jan 29, 2003.

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What's your choice/advice

  1. Finance it all for improved cash flow

    1 vote(s)
    1.2%
  2. Finance the major stuff, pay cash for the minor stuff

    30 vote(s)
    36.6%
  3. Finance only if you can't pay cash

    15 vote(s)
    18.3%
  4. Pay cash, save, pay cash, save, pay cash

    36 vote(s)
    43.9%
  1. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Posts: 11,062

    On this site I have taken in a great deal of good info and as I head towards the new season, a few things I read sticks in my mind.

    Cash Flow V/S Paying Cash for things

    Other than an ex-wife who loved her "secret" credit cards :angry:
    I have generally had very little debt. I have always saved and paid cash for most of the things I've bought over the years. Even though it can sometimes be very hard to turn loose of large amounts of cash money, I still find it easier on me than going in debt. Especially now, after what's mentioned above.

    Right now everything I have has been paid for outright in cash. That is excluding what little I still owe on my house and I hope to pay that off soon.

    However, I see the cash flow topic as a valid arguement and I'm wondering if maybe for once I should consider finacing part or all of my purchases for next season. So I'm putting up a poll to see what choice the majority is making.

    Maybe I should give in a little, maybe a lot, or maybe I should just stick to my guns.

    Any comments, stories or advice is welcomed!
     
  2. I voted for cash pay or no play. I bet some of those guys who made it through that slight exsiccation on the east coast last season would have a thing or two to say about payments.
     
  3. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Posts: 11,062

    We were hit really hard by drought last year. It didn't hurt me as much as it could have. I know it put a lot of people out of business, especially scrubs. I lost a little here and there. But I feel I was very lucky. I had lack of debt on my side, mostly good customers, contracts and some add on work from those people who went belly up.

    It really could have been a lot worse. I have to say my worst thing to deal with was the aggravation of it all. Drought and a slow economy brings out the worst in your customers. That's for sure. I'm glad to be rid of some of them.
     
  4. AL Inc

    AL Inc LawnSite Bronze Member
    Posts: 1,218

    Envy- I think it's great that you have such little debt. Personally, my only debt is my mortgage, which isn't too bad. My wife is a different story......credit cards, student loans, etc, etc. We are working on paying it off and have been successful so far.
    I voted for financing the larger things and paying cash for the small things. I've financed my trucks and mowers. The mowers I can pay off in one year through Sheffeild. This way, I have the machine, and it generates income to pay itself off. That money I would have laid out for the machine goes into a money market account where it earns interest. I then write off the mower payment plus interest.
    As far as paying cash for the small things, do you mean "green"? I've always paid everything on credit- gas, repairs, nursery, etc. It is easier to track everything. Fewer red flags for our friends at the IRS. Keep the "c" word to yourself. Just my .02, Mike
     
  5. Toroguy

    Toroguy LawnSite Bronze Member
    Posts: 1,075

    I am a modern man with depression era mentality. I buy only what I need. I dont need the latest CD or a plasma TV. I dont need two extra bedrooms for storage of items I bought I no longer use, or ever actually needed in the first place.

    The personal spending habits flow into business spending habits. I dont require a 2003 Silverado with four wheel steering, its cool, but not required. I paid $2000 for my truck years ago, and barring a major accident I see no reason it shouldn't last me forever. It most likely will become an expensive liability, if/when that occurs I will again purchase a 6 year old model that will accomplish the task at hand.

    The cash versus finance debate is an interesting one. I find the poor money managers are the ones who defend the finance route. Why, because they have no cash. I believe the majority of Americans live check to check. Which is why in a previous post I took the antagonist approach when it came to the poll results. The majority do rule but are they wrong?

    If I couldn't or any readers cannot afford a $2000 truck with cash, the problem lies somewhere, find it and fix it. Your personal and business financial survival chances are much greater. And to put it into lawnsite words: Scrubs won't concern you.

    Things are alot easier without debt, debt is a cloud over your shoulder and a burden. Ive been there. And Im not returning.

    These of course are only the opinion of toroguy, I believe them, you don't have to.
     
  6. Gravely_Man

    Gravely_Man LawnSite Silver Member
    Posts: 2,075

    Trucks and mowers are the only things that get financed. Everything else is purchased with the money to pay for it.


    Gravely_Man
     
  7. Randy Scott

    Randy Scott LawnSite Bronze Member
    Posts: 1,915

    It's all what the person is comfortable with, where you want your business to go, and what you personally want in life. I finance big ticket items, pay cash for small items. I would say anything $5000 or less gets paid cash for.

    I know everyone is different in their thoughts, so this question can be apples to oranges with responses. Toroguy has a good point, if you don't, or can't, muster up a couple grand for a cheap truck, something is wrong.

    I unfortunately fall into the category of wanting new and nice things. It isn't to impress people,( I could care less what others think) it's because I work hard, enjoy the latest and greatest, and reward myself with purchases. I'm comfortable with payments and it really doesn't hang or loom over my head.

    I guess whatever anyone does is truly their decision and isn't right or wrong for that matter. Enjoy life as you see fit. :)
     
  8. PR0 TURF

    PR0 TURF LawnSite Bronze Member
    Posts: 1,089

    I have yet to officially finance anything. I've taken a few small loans from my parents to get me started but quickly paid those off. I have been contemplating this exact situation for the past few winter months. I'm considering upgrading our 1-ton dump...but not sure if Im ready to finance. Financing is really my only option unless im going to save up $30K. The way i look at it is with our current dump it seems to make one trip into the repair shop monthly for roughly around $300, so by financing a newer one chances are i would avoid that monthly trip to the repair shop and that $300 could be put towards the payment...makes good sense to me.

    :blob4:
     
  9. Lawn Dog2001

    Lawn Dog2001 LawnSite Bronze Member
    Posts: 1,027

    I only finance what I am sure I can pay off in full before winter. I dont what any payments going into winter.

    I have financed items in the past. But only when I absolutely have to. To me if you cant afford to buy it with cash, then you cant afford it.

    Credit can be a dangerous thing. Plans dont always work out the way you hope. I know a pretty successful landscaper who financed a brand new skid loader a few years back and almost went bankrupt trying to make the payments. Did not pick up as many excavating jobs as he thought he would. A contractor who promised to sub work to him, didnt.

    Every person knows what they can and can not afford. Sometimes credit clouds that judgment. Im not saying credit is a bad thing. Its just something you have to be careful with.
     

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