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How To Spend My Money?

 
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Old 08-21-2019, 06:49 PM   #1
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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.
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Old 08-21-2019, 06:53 PM   #2
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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....

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Old 08-21-2019, 07:02 PM   #3
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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.
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Old 08-21-2019, 07:24 PM   #4
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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.
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Old 08-21-2019, 08:09 PM   #5
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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.
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Old 08-21-2019, 08:29 PM   #6
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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
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Old 08-21-2019, 08:57 PM   #7
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Re: How To Spend My Money?


Send me a few checks keep them both just under 10k, I will help you out
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Old 08-21-2019, 09:22 PM   #8
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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?
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Old 08-21-2019, 09:39 PM   #9
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Re: How To Spend My Money?


You know there is a reason contractors have LOTS of toys....
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Old 08-21-2019, 09:55 PM   #10
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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.
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Old 08-21-2019, 10:00 PM   #11
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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
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Old 08-21-2019, 10:00 PM   #12
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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 ....
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Old 08-21-2019, 10:02 PM   #13
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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.
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Old 08-21-2019, 10:05 PM   #14
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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...
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Old 08-21-2019, 10:18 PM   #15
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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
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Old 08-21-2019, 10:24 PM   #16
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Re: How To Spend My Money?


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

she is incredibly knowledgeable & intelligent...
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Old 08-21-2019, 10:47 PM   #17
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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.
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Old 08-22-2019, 12:53 AM   #18
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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
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Old 08-22-2019, 01:43 AM   #19
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Re: How To Spend My Money?


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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?
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Old 08-22-2019, 07:34 AM   #20
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Re: How To Spend My Money?


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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.

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