How To Spend My Money? - Business - Contractor Talk

How To Spend My Money?

 
Thread Tools Search this Thread Display Modes
Old Yesterday, 06:49 PM   #1
Registered User
 
RoofRunner1995's Avatar
 
Trade: Building Contractor
Join Date: Aug 2019
Posts: 2

How To Spend My Money?


I am a young business owner. 24 year old building contractor. We focus on exterior work but do everything. Roofing, siding, windows, doors, building, etc. I have been doing this stuff with Dad since I was 12. He moved away and I started my business at age 22. My first year my gross sales were 480k. First year I bought just about everything I need to operate for what we do. Couple enclosed trailers, PJ High Side dump trailer, have about 15 werner orange ladders and over 10k in tools. Bought a 2015 chevy 2500hd. I am on year two. 4 months left in the season and approaching 600k in gross sales. I have nothing in mind I need to buy for my business. I don't want to "just buy stuff" to write off that won't be used.

What do you guys who have been in business for over 20 years been doing? You aquire equipment over time.. then you get a good year. What do you buy? Just stuff? I have a long way to go and no ideas on what to purchase. I would rather not have a 60k tax bill this year.
RoofRunner1995 is online now  

Warning: The topics covered on this site include activities in which there exists the potential for serious injury or death. ContractorTalk.com DOES NOT guarantee the accuracy or completeness of any information contained on this site. Always use proper safety precaution and reference reliable outside sources before attempting any construction or remodeling task!

   

Advertisement

 

Old Yesterday, 06:53 PM   #2
Fire up the BBQ
 
griz's Avatar
 
Trade: GC
Join Date: Nov 2009
Location: CA
Posts: 21,897
Rewards Points: 2,666

Re: How To Spend My Money?


Investment properties

Retirement acct

Savings

Pay stuff off

Equipment

Boat to take clients out on

If it is REALLY bothering you send it to me.

If i cant spend it my wife will....

Advertisement

__________________
SOME JOBS JUST AREN'T WORTH DOING:
griz is online now  
The Following 6 Users Say Thank You to griz For This Useful Post:
Bull Trout (Yesterday), CScalf (Today), hdavis (Yesterday), pinwheel (Yesterday), Seven-Delta-FortyOne (Yesterday), SmallTownGuy (Today)
Old Yesterday, 07:02 PM   #3
Registered User
 
RoofRunner1995's Avatar
 
Trade: Building Contractor
Join Date: Aug 2019
Posts: 2

Re: How To Spend My Money?


I have actually already bought some rentals. I own 9 units. Unfortunately I can't write off the big down payment or purchase. Only what materials I put into them. I have looked for flips I can buy for low, fix, and resell or rent out. They are just hard to come by and we are so swamped I dont have time to fix them up. Thought about investing into a traditional IRA and Roth IRA.

Like I don't want to just drop 60k on a tractor to move snow in my driveway. Or spend 100k on a big piece of equipment for a business I'm not into. I really have to think outside of the box. I thought about buying a roll off truck and use it for dumpsters, and buy multiple dumpsters for hire and throw a guy with his Class B in it part time.
RoofRunner1995 is online now  
Sponsored Links
Advertisement
 
Old Yesterday, 07:24 PM   #4
Goin' Down in Flames....
 
Seven-Delta-FortyOne's Avatar
 
Trade: Highwayman
Join Date: Mar 2011
Location: Somewhere Between Heaven And Hell
Posts: 3,958
Rewards Points: 2,410

Re: How To Spend My Money?


You do have 6 months to a year of operating capital in the bank, right?

Then, there is anything that you currently rent, that you could save money longterm by buying. Tele-handler, boom lift, skid steer, whatever.

Also, something extra, that would shut you down if it broke.

If your truck blew a transmission, would you still be working, or would it turn into a $#!Tshow for 4 weeks, while you scrambled to find a new rig, and some place to put all your tools?




Just some thoughts.
__________________
Get Off My Lawn.

"There are no big projects. There are only small machines". - R. G. LeTourneau
Seven-Delta-FortyOne is online now  
The Following User Says Thank You to Seven-Delta-FortyOne For This Useful Post:
hdavis (Yesterday)
Old Yesterday, 08:09 PM   #5
Pro
 
hdavis's Avatar
 
Trade: remodeling
Join Date: Feb 2012
Location: CoastalME
Posts: 23,751
Rewards Points: 3,980

Re: How To Spend My Money?


Build your emergency fund, and dump some into an IRA.

Given you're running at maximum load now, look at productivity improvers and margin improvers. Sometimes a little money here pays big dividends.
hdavis is online now  
Old Yesterday, 08:29 PM   #6
Pro
 
KAP's Avatar
 
Trade: Custom
Join Date: Feb 2011
Posts: 11,259
Rewards Points: 34,892

Re: How To Spend My Money?


Quote:
Originally Posted by RoofRunner1995 View Post
I have actually already bought some rentals. I own 9 units. Unfortunately I can't write off the big down payment or purchase. Only what materials I put into them. I have looked for flips I can buy for low, fix, and resell or rent out. They are just hard to come by and we are so swamped I dont have time to fix them up. Thought about investing into a traditional IRA and Roth IRA.

Like I don't want to just drop 60k on a tractor to move snow in my driveway. Or spend 100k on a big piece of equipment for a business I'm not into. I really have to think outside of the box. I thought about buying a roll off truck and use it for dumpsters, and buy multiple dumpsters for hire and throw a guy with his Class B in it part time.
https://www.fool.com/knowledge-cente...p-vs-roth.aspx
KAP is offline  
Old Yesterday, 08:57 PM   #7
General Contractor
 
greg24k's Avatar
 
Trade: New Home Construction-Additions-Remodeling
Join Date: May 2007
Location: NJ
Posts: 7,538
Rewards Points: 8,196

Re: How To Spend My Money?


Send me a few checks keep them both just under 10k, I will help you out
__________________
I never lost a cent on the jobs I didn't get!
greg24k is offline  
The Following 3 Users Say Thank You to greg24k For This Useful Post:
CScalf (Today), griz (Yesterday), SmallTownGuy (Today)
Old Yesterday, 09:22 PM   #8
Pro
 
Bull Trout's Avatar
 
Trade: General Contractor
Join Date: Dec 2016
Location: Salish Sea
Posts: 1,019
Rewards Points: 594

Re: How To Spend My Money?


Quote:
Originally Posted by RoofRunner1995 View Post
I am a young business owner. 24 year old building contractor. We focus on exterior work but do everything. Roofing, siding, windows, doors, building, etc. I have been doing this stuff with Dad since I was 12. He moved away and I started my business at age 22. My first year my gross sales were 480k. First year I bought just about everything I need to operate for what we do. Couple enclosed trailers, PJ High Side dump trailer, have about 15 werner orange ladders and over 10k in tools. Bought a 2015 chevy 2500hd. I am on year two. 4 months left in the season and approaching 600k in gross sales. I have nothing in mind I need to buy for my business. I don't want to "just buy stuff" to write off that won't be used.

What do you guys who have been in business for over 20 years been doing? You aquire equipment over time.. then you get a good year. What do you buy? Just stuff? I have a long way to go and no ideas on what to purchase. I would rather not have a 60k tax bill this year.
Quote:
Originally Posted by RoofRunner1995 View Post
I have actually already bought some rentals. I own 9 units. Unfortunately I can't write off the big down payment or purchase. Only what materials I put into them. I have looked for flips I can buy for low, fix, and resell or rent out. They are just hard to come by and we are so swamped I dont have time to fix them up. Thought about investing into a traditional IRA and Roth IRA.

Like I don't want to just drop 60k on a tractor to move snow in my driveway. Or spend 100k on a big piece of equipment for a business I'm not into. I really have to think outside of the box. I thought about buying a roll off truck and use it for dumpsters, and buy multiple dumpsters for hire and throw a guy with his Class B in it part time.
to write off or not to write off? which is it?

Do you own all the stuff you bought? or are you making payments on it?

eliminate debt, then add income producing properties, if you don't have debt and properties that make money, does it matter if you cant write off the expense?
Bull Trout is offline  
Old Yesterday, 09:39 PM   #9
Fire up the BBQ
 
griz's Avatar
 
Trade: GC
Join Date: Nov 2009
Location: CA
Posts: 21,897
Rewards Points: 2,666

Re: How To Spend My Money?


You know there is a reason contractors have LOTS of toys....
__________________
SOME JOBS JUST AREN'T WORTH DOING:
griz is online now  
The Following 2 Users Say Thank You to griz For This Useful Post:
Bull Trout (Yesterday), greg24k (Yesterday)
Old Yesterday, 09:55 PM   #10
Goin' Down in Flames....
 
Seven-Delta-FortyOne's Avatar
 
Trade: Highwayman
Join Date: Mar 2011
Location: Somewhere Between Heaven And Hell
Posts: 3,958
Rewards Points: 2,410

Re: How To Spend My Money?


There's always a yacht off the coast of San Marino, a bunch of strippers, and a Kilo of blow, if you can't come up with anything else.
__________________
Get Off My Lawn.

"There are no big projects. There are only small machines". - R. G. LeTourneau
Seven-Delta-FortyOne is online now  
The Following User Says Thank You to Seven-Delta-FortyOne For This Useful Post:
CScalf (Today)
Old Yesterday, 10:00 PM   #11
back doors to hell put in
 
Irishslave's Avatar
 
Trade: Carpenter
Join Date: Jun 2010
Location: Google knows
Posts: 3,941
Rewards Points: 426

Re: How To Spend My Money?


These kind of questions always puzzled me. "How do I spend my money?"

When you spend it then it's no longer your money....it's somebody elses money.

Spend what you have to. Save and invest the rest. How many spend $900 on some thing-a-majig they just had to have that now sits in a corner of the garage or shop collecting spider webs? Multipy that by how many times you've done it
__________________
Television is fake...The internet is real
Irishslave is online now  
The Following User Says Thank You to Irishslave For This Useful Post:
griz (Yesterday)
Old Yesterday, 10:00 PM   #12
Fire up the BBQ
 
griz's Avatar
 
Trade: GC
Join Date: Nov 2009
Location: CA
Posts: 21,897
Rewards Points: 2,666

Re: How To Spend My Money?


Quote:
Originally Posted by Seven-Delta-FortyOne View Post
There's always a yacht off the coast of San Marino, a bunch of strippers, and a Kilo of blow, if you can't come up with anything else.
so that's where your boat is ....
__________________
SOME JOBS JUST AREN'T WORTH DOING:
griz is online now  
The Following 3 Users Say Thank You to griz For This Useful Post:
CScalf (Today), greg24k (Today), Seven-Delta-FortyOne (Yesterday)
Old Yesterday, 10:02 PM   #13
Pro
 
hdavis's Avatar
 
Trade: remodeling
Join Date: Feb 2012
Location: CoastalME
Posts: 23,751
Rewards Points: 3,980

Re: How To Spend My Money?


Forget taxes for a minute, what is your take on sound business use of the money? What are the best options after tax considerations?

You make money, you pay taxes, that's pretty much how it works.
hdavis is online now  
Old Yesterday, 10:05 PM   #14
Fire up the BBQ
 
griz's Avatar
 
Trade: GC
Join Date: Nov 2009
Location: CA
Posts: 21,897
Rewards Points: 2,666

Re: How To Spend My Money?


Quote:
Originally Posted by hdavis View Post
Forget taxes for a minute, what is your take on sound business use of the money? What are the best options after tax considerations?

You make money, you pay taxes, that's pretty much how it works.
absolutely correct....

however a GREAT accountant can limit your tax liability...

legally...
__________________
SOME JOBS JUST AREN'T WORTH DOING:
griz is online now  
The Following 2 Users Say Thank You to griz For This Useful Post:
hdavis (Yesterday), KAP (Today)
Old Yesterday, 10:18 PM   #15
back doors to hell put in
 
Irishslave's Avatar
 
Trade: Carpenter
Join Date: Jun 2010
Location: Google knows
Posts: 3,941
Rewards Points: 426

Re: How To Spend My Money?


Quote:
Originally Posted by griz View Post
absolutely correct....

however a GREAT accountant can limit your tax liability...

legally...
Tax attorneys are even better if you can afford one. Mine literally saved me tons of grief and thousands of dollars when I made the big bucks. One slip with IRS can be devastating. He taught me stuff I didn't know you could do but that everyone who survives "the man" does
__________________
Television is fake...The internet is real
Irishslave is online now  
The Following User Says Thank You to Irishslave For This Useful Post:
griz (Yesterday)
Old Yesterday, 10:24 PM   #16
Fire up the BBQ
 
griz's Avatar
 
Trade: GC
Join Date: Nov 2009
Location: CA
Posts: 21,897
Rewards Points: 2,666

Re: How To Spend My Money?


my accountant would be on par with one of them attorneys...

she is incredibly knowledgeable & intelligent...
__________________
SOME JOBS JUST AREN'T WORTH DOING:
griz is online now  
The Following User Says Thank You to griz For This Useful Post:
hdavis (Yesterday)
Old Yesterday, 10:47 PM   #17
edward trowelhands
 
Golden view's Avatar
 
Trade: Diplomat
Join Date: Feb 2012
Location: PDX
Posts: 4,542
Rewards Points: 6,330

Re: How To Spend My Money?


I've seen way too many guys buy equipment they barely use to avoid a big tax bill. A buddy bought an excavator and a skid steer. He puts 100 hours a year on them.

To me, high taxes just means I made a lot of money. Even if the last $10,000 dollars I make is taxed at 33%, it's still $6700 for investments, fun, booze and women, etc.

The first $10,000 may not be taxed, but 100% of it goes to basic living costs.
__________________
You make something idiot proof and the world invents a better idiot.
Golden view is online now  
The Following 2 Users Say Thank You to Golden view For This Useful Post:
griz (Yesterday), hdavis (Yesterday)
Old Today, 12:53 AM   #18
back doors to hell put in
 
Irishslave's Avatar
 
Trade: Carpenter
Join Date: Jun 2010
Location: Google knows
Posts: 3,941
Rewards Points: 426

Re: How To Spend My Money?


Quote:
Originally Posted by Golden view View Post
I've seen way too many guys buy equipment they barely use to avoid a big tax bill. A buddy bought an excavator and a skid steer. He puts 100 hours a year on them.

To me, high taxes just means I made a lot of money. Even if the last $10,000 dollars I make is taxed at 33%, it's still $6700 for investments, fun, booze and women, etc.

The first $10,000 may not be taxed, but 100% of it goes to basic living costs.
I don't know how you read tax tables but if it shows up as profit or income it's taxed whether it's $5 or half a million
__________________
Television is fake...The internet is real
Irishslave is online now  
Old Today, 01:43 AM   #19
Pro
 
hdavis's Avatar
 
Trade: remodeling
Join Date: Feb 2012
Location: CoastalME
Posts: 23,751
Rewards Points: 3,980

Re: How To Spend My Money?


Quote:
Originally Posted by Irishslave View Post
I don't know how you read tax tables but if it shows up as profit or income it's taxed whether it's $5 or half a million
What, you take no deductions?
hdavis is online now  
The Following User Says Thank You to hdavis For This Useful Post:
Golden view (Today)
Old Today, 07:34 AM   #20
edward trowelhands
 
Golden view's Avatar
 
Trade: Diplomat
Join Date: Feb 2012
Location: PDX
Posts: 4,542
Rewards Points: 6,330

Re: How To Spend My Money?


Quote:
Originally Posted by Irishslave View Post
I don't know how you read tax tables but if it shows up as profit or income it's taxed whether it's $5 or half a million
Even if you didn't take a deduction, your first dollar is taxed less than your last dollar. I know some people have been confused about it, thinking that if they earn $1 more dollar it would put them into the next tax bracket, and everything they earn would be taxed at the new rate.

Advertisement

__________________
You make something idiot proof and the world invents a better idiot.
Golden view is online now  
The Following User Says Thank You to Golden view For This Useful Post:
Big Johnson (Today)


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes Rate This Thread
Rate This Thread:

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Join Now... It's Fast and FREE!

I am a professional contractor
I am a DIY Homeowner
Drywall Talk is for
PROFESSIONAL CONTRACTORS ONLY!

At DrywallTalk.com we cater exlusivly to professional contractors who make their living as a contractor. Knowing that many homeowners and DIYers are looking for a community to call home, we've created www.DIYChatroom.com DIY Chatroom is full of helpful advices and perfect for DIY homeowners.

Redirecing in 10 seconds
No Thanks
terms of service

Already Have an Account?