How To Spend My Money? - Page 2 - Business - Contractor Talk

How To Spend My Money?

 
Thread Tools Search this Thread Display Modes
Old 08-22-2019, 07:36 AM   #21
Pro
 
Big Johnson's Avatar
 
Trade: Contractor Grunt
Join Date: Jun 2017
Location: Michigan
Posts: 4,551
Rewards Points: 886

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.
That gets my vote. When youíre making that kind of money you have to have some fun. The Trump economy wonít last forever.
Big Johnson is offline  

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 08-22-2019, 10:18 AM   #22
Pro
 
Fishindude's Avatar
 
Trade: Industrial
Join Date: Aug 2017
Location: Indiana
Posts: 521
Rewards Points: 1,116

Re: How To Spend My Money?


My philosophy always was; keep 1/3 for yourself, invest 1/3 in the business and give 1/3 to the employees. Some ideas:

Take a hard look at your benefit programs and consider things like; setting up a 401k plan, employee health insurance, paid holidays and vacations, uniforms, etc.

Pre-purchase consumable things you know you are always going to need; office supplies, supplies, bits, blades, fasteners, safety supplies, etc.

Might be timely to invest a little into marketing and advertising; truck graphics, job signs, business cards, website, etc.

It's also, never a bad idea to have excess cash on hand for when times get hard or when you have a slow paying customer.
Fishindude is offline  
Old 08-22-2019, 10:55 AM   #23
Goin' Down in Flames....
 
Seven-Delta-FortyOne's Avatar
 
Trade: Highwayman
Join Date: Mar 2011
Location: Somewhere Between Heaven And Hell
Posts: 4,327
Rewards Points: 1,016

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.
Yea, but...

At least he now has an excavator and skid-steer, instead of the government having his money to finance some wingbat chopping his whacker off, or some other asinine thing they'd find to do with it.
Seven-Delta-FortyOne is offline  
The Following 4 Users Say Thank You to Seven-Delta-FortyOne For This Useful Post:
Calidecks (10-24-2019), CScalf (08-22-2019), Golden view (08-22-2019), griz (08-22-2019)
Sponsored Links
Advertisement
 
Old 08-22-2019, 12:13 PM   #24
back doors to hell put in
 
Irishslave's Avatar
 
Trade: Carpenter
Join Date: Jun 2010
Location: Google knows
Posts: 4,411
Rewards Points: 506

Re: How To Spend My Money?


Quote:
Originally Posted by hdavis View Post
What, you take no deductions?
You can't read? I said if it shows up as profit or income

This is what keeps accountants in business...most Americans don't understand how to fill out tax forms. Only recently has it been simplified.

Look at the tables. Line 43 this is income after deductions if line 43 is at least $5 but less than $ 15 you owe $1 tax

Proceeding further if you have "tax credits" then the $1 disappears. If you do not you owe uncle sam $1
Irishslave is offline  
Old 08-22-2019, 05:15 PM   #25
diplomat
 
Golden view's Avatar
 
Trade: Yeah, well, that's just, like, your opinion, man
Join Date: Feb 2012
Location: PDX
Posts: 4,930
Rewards Points: 706

Re: How To Spend My Money?


Quote:
Originally Posted by Irishslave View Post
You can't read? I said if it shows up as profit or income

This is what keeps accountants in business...most Americans don't understand how to fill out tax forms. Only recently has it been simplified.

Look at the tables. Line 43 this is income after deductions if line 43 is at least $5 but less than $ 15 you owe $1 tax

Proceeding further if you have "tax credits" then the $1 disappears. If you do not you owe uncle sam $1
Calm down there. We just missed what you were saying. Most of us don't care what the IRS calls income. We call a dollar earned income. So we missed the point you were making.

My point remains the same. My first $10,000 isn't taxed.
__________________
You make something idiot proof and the world invents a better idiot.
Golden view is offline  
Old 10-20-2019, 08:18 PM   #26
Pro
 
EricBrancard's Avatar
 
Trade: Builder/Renovator
Join Date: Jun 2012
Location: Connecticut
Posts: 7,344
Rewards Points: 944

Re: How To Spend My Money?


Sometimes it’s smarter just to pay the taxes. You realize how much you’d have to spend to avoid paying $60k in taxes? And once you buy these things, if they aren’t making you money, they will be costing you money.
EricBrancard is online now  
The Following User Says Thank You to EricBrancard For This Useful Post:
hdavis (10-21-2019)
Old 10-21-2019, 08:19 AM   #27
Pro
 
Windycity's Avatar
 
Trade: Masonry
Join Date: Oct 2015
Location: chicago
Posts: 2,109
Rewards Points: 8,436

Re: How To Spend My Money?


Quote:
Originally Posted by EricBrancard View Post
Sometimes itís smarter just to pay the taxes. You realize how much youíd have to spend to avoid paying $60k in taxes? And once you buy these things, if they arenít making you money, they will be costing you money.


I agree with this, I see no value in purchasing stuff you truly donít need just to save a few bucks in taxes

And it also falls in line with the people that donít want to pay their house off because they will lose the deduction on the interest payments.... although with the new tax law that isnít as effective anymore but i dont understand the philosophy of spending a dollar to save $.25 in taxes

Talk to your accountant and start dumping more money into an IRA for yourself or make contributions for your employees, this will lead to more loyalty and happiness with your employees while saving you money


Sent from my iPhone using Tapatalk
Windycity is offline  
The Following 4 Users Say Thank You to Windycity For This Useful Post:
EricBrancard (10-21-2019), Golden view (10-21-2019), Jay hole (10-22-2019), TxElectrician (10-21-2019)
Old 10-21-2019, 04:09 PM   #28
Pro
 
builditguy's Avatar
 
Trade: Carpentry
Join Date: Nov 2013
Location: Missouri
Posts: 2,295
Rewards Points: 1,958

Re: How To Spend My Money?


At 600,000 gross sales, you don't have a $60,000 tax bill. Save every penny you can. You appear to be doing good. Give it 20 more years and you won't have this question.

Save your money, pay your taxes. Nowhere near $60,000
builditguy is offline  
Old 10-21-2019, 06:54 PM   #29
Pro
 
KAP's Avatar
 
Trade: Custom
Join Date: Feb 2011
Posts: 11,678
Rewards Points: 36,962

Re: How To Spend My Money?


Quote:
Originally Posted by griz View Post
my accountant would be on par with one of them attorneys...

she is incredibly knowledgeable & intelligent...
Yup... you get what you pay for...

And removal of tax liability is what you're paying for...


Assets that provide tax shelter, income and deductible operating expenses are the best use of excess capital...
KAP is offline  
Old 10-21-2019, 07:51 PM   #30
diplomat
 
Golden view's Avatar
 
Trade: Yeah, well, that's just, like, your opinion, man
Join Date: Feb 2012
Location: PDX
Posts: 4,930
Rewards Points: 706

Re: How To Spend My Money?


Quote:
Originally Posted by builditguy View Post
At 600,000 gross sales, you don't have a $60,000 tax bill. Save every penny you can. You appear to be doing good. Give it 20 more years and you won't have this question.

Save your money, pay your taxes. Nowhere near $60,000
Unless I missed something we don't know his profit margin so we don't know his tax bill.
__________________
You make something idiot proof and the world invents a better idiot.
Golden view is offline  
The Following 2 Users Say Thank You to Golden view For This Useful Post:
EricBrancard (10-21-2019), mrcat (10-21-2019)
Old 10-24-2019, 04:25 PM   #31
Pro
 
builditguy's Avatar
 
Trade: Carpentry
Join Date: Nov 2013
Location: Missouri
Posts: 2,295
Rewards Points: 1,958

Re: How To Spend My Money?


Quote:
Originally Posted by Golden view View Post
Unless I missed something we don't know his profit margin so we don't know his tax bill.
That is true, we do not. But, honestly, I don't even know if that's possible.
Just basing my opinion on paying taxes a long time and I always feel like I pay more than I should.
builditguy is offline  
Old 10-24-2019, 11:37 PM   #32
GC/carpenter
 
Calidecks's Avatar
 
Trade: Decking, Railing, Carpenter/General Contractor
Join Date: Nov 2011
Location: Anaheim Hills, California (OC)
Posts: 38,565
Rewards Points: 4,066

Re: How To Spend My Money?


Quote:
Originally Posted by Irishslave View Post
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


Tax attorneys are better than an accountant because what you say to an accountant is going to be exhibit "A" in a courtroom. There is no 'Taxman client privilege' like you have with a lawyer.

That's why you always speak in hypotheticals with your accountant when asking about iffy things. Emphasize the hypotheticals too. Lol


Mike.
_______________
Calidecks is offline  
Old 10-25-2019, 04:51 PM   #33
back doors to hell put in
 
Irishslave's Avatar
 
Trade: Carpenter
Join Date: Jun 2010
Location: Google knows
Posts: 4,411
Rewards Points: 506

Re: How To Spend My Money?


Quote:
Originally Posted by Calidecks View Post
Tax attorneys are better than an accountant because what you say to an accountant is going to be exhibit "A" in a courtroom. There is no 'Taxman client privilege' like you have with a lawyer.

That's why you always speak in hypotheticals with your accountant when asking about iffy things. Emphasize the hypotheticals too. Lol


Mike.
_______________
We had one here in St. Louis back in the 60's I guess it was. Morris Schenker. Look him up. Interesting guy. Mob lawyer mostly. Involved with the Teamsters, Jimmy Hoffa and the old Sands hotel in Las Vegas.

Anyhow the IRS tried to nail him to the wall for most of his career. Took him to federal court several times. Schenker never lost. Why? He knew the tax code better than the people that worked for the IRS.

Word was he slept on a sofa in his office and worked and researched up to 20 hrs a day.

Morris however was not stingy with his fortune and gave back. He was one of the first in StL to open halfway houses for convicts who had done their time and needed help transitioning back into the community complete with job training programs. I think he wanted to make the government look like an ass as recidivism dropped after that
Irishslave is offline  
The Following User Says Thank You to Irishslave For This Useful Post:
Calidecks (10-25-2019)
Old 11-17-2019, 10:42 AM   #34
Pro
 
SearchforSignal's Avatar
 
Trade: Low voltage
Join Date: Aug 2016
Posts: 435
Rewards Points: 712

Re: How To Spend My Money?


Am I the only one who doesn't care about gross sales? In my business I focus on net profit. ( how much I want to earn.) If you sell $600k but you are paying out 550k to accomplish that then really you are making $50k. I would focus on saving your $ and having a real nice bank account balance when the market takes a turn down. Then you can afford to invest when prices are crazy low and wait for the market to come back up. Just my 2 cents.

Sent from my SM-N975U using Tapatalk
SearchforSignal is offline  
The Following 2 Users Say Thank You to SearchforSignal For This Useful Post:
Fouthgeneration (11-18-2019), KAP (11-17-2019)
Old 11-17-2019, 12:01 PM   #35
Pro
 
WBailey1041's Avatar
 
Trade: Gutters
Join Date: Jan 2014
Location: Chicago, IL
Posts: 881
Rewards Points: 1,673

Re: How To Spend My Money?


My net income is a consistent percentage of my gross. If I keep up my average cost per foot the rest takes care of itself. This is because my expenses and production are extremely consistent.

With rain gutters it’s extremely easy. I know how many feet we average a day per man and how much that foot of materials costs, on average.

Here’s the thing, it’s a lot easier to track my gross than my net. I track the gross daily and the net monthly when I reconcile my bank account to QuickBooks. If I tracked the net income daily or even weekly I’d pull my hair out. Too much work and too much stress from micro managing every penny.

If you bid jobs as 1/3 labor, 1/3 materials and 1/3 profit you can figure your net almost on the fly.
WBailey1041 is offline  
The Following User Says Thank You to WBailey1041 For This Useful Post:
NYgutterguy (11-17-2019)
Old 11-17-2019, 04:08 PM   #36
Pro
 
Dirtywhiteboy's Avatar
 
Trade: Home Framing- Roof Stacking
Join Date: Oct 2010
Location: Honolulu Oahu,Hawaii
Posts: 16,022
Rewards Points: 13,090

Re: How To Spend My Money?


A nice Rolex doesn't go down in value! The owners husband at the door taking the money last night was wearing a 250,000 watch
__________________
I Have Done So Much With So Little For So Long, I Can Do Almost Anything With Nothing Now
Dirtywhiteboy is offline  
Old 11-19-2019, 03:17 AM   #37
Pro
 
Mordekyle's Avatar
 
Join Date: May 2014
Posts: 2,635
Rewards Points: 5,594

Re: How To Spend My Money?


Quote:
Originally Posted by SearchforSignal View Post
Am I the only one who doesn't care about gross sales? In my business I focus on net profit. ( how much I want to earn.) If you sell $600k but you are paying out 550k to accomplish that then really you are making $50k. I would focus on saving your $ and having a real nice bank account balance when the market takes a turn down. Then you can afford to invest when prices are crazy low and wait for the market to come back up. Just my 2 cents.

Sent from my SM-N975U using Tapatalk


Interesting concept Iíd like to hear more about.

I also tend to focus on net. I perform most all of the labor and tend to net nearly half of annual gross sales for labor/profit.

I agree that $1M of sales is a stupid goal if you net $50 grand for your troubles and risk.

I would rather sell 250 for 150.


Sent from my iPhone using Tapatalk
Mordekyle is offline  
Old 11-19-2019, 08:43 PM   #38
Pro
 
SearchforSignal's Avatar
 
Trade: Low voltage
Join Date: Aug 2016
Posts: 435
Rewards Points: 712

Re: How To Spend My Money?


Quote:
Originally Posted by Mordekyle View Post
Interesting concept Iíd like to hear more about.

I also tend to focus on net. I perform most all of the labor and tend to net nearly half of annual gross sales for labor/profit.

I agree that $1M of sales is a stupid goal if you net $50 grand for your troubles and risk.

I would rather sell 250 for 150.


Sent from my iPhone using Tapatalk
It gets me that a lot of guys focus on gross sales. I sub to a few contractors who say they have $500k in yearly work but when they are working on my jobsites they ask for more $ because they need to pay their guys and they are running low. ....

Like you, I focus on net profit. Goal is to have 70% gross profit on jobs I do the majority of the work on and 40% profit on jobs I sub out. It's easy to hit the 70% number but a bit more difficult to hit the 40% number. Definitely doable on jobs..

Sent from my SM-N975U using Tapatalk
SearchforSignal is offline  
Old 11-19-2019, 10:20 PM   #39
Pro
 
Mordekyle's Avatar
 
Join Date: May 2014
Posts: 2,635
Rewards Points: 5,594

Re: How To Spend My Money?


Quote:
Originally Posted by SearchforSignal View Post
It gets me that a lot of guys focus on gross sales. I sub to a few contractors who say they have $500k in yearly work but when they are working on my jobsites they ask for more $ because they need to pay their guys and they are running low. ....

Like you, I focus on net profit. Goal is to have 70% gross profit on jobs I do the majority of the work on and 40% profit on jobs I sub out. It's easy to hit the 70% number but a bit more difficult to hit the 40% number. Definitely doable on jobs..

Sent from my SM-N975U using Tapatalk


What do you mean gross profit?
Profit after paying yourself?
Do you take a salary regardless of hours worked?


I donít break it down too much:

I shoot for a daily goal of $X.

X is everything above materials. The most material/job cost for jobs I regularly perform is roofing, which runs nearly 30% of the price. Many of my jobs materialsí cost is less than 10% of the price. A few trim boards, a roll of poly for vapor barrier, or a tube of caulk to caulk butt joints on Hardie siding. Most of the income goes to X.

X covers my overhead, profit, and my labor.

For me, instead of Price = L + O + P + M,

Price = M + X

Itís not exact, but it pays satisfactorily.


Sent from my iPhone using Tapatalk
Mordekyle is offline  
Old 11-19-2019, 10:31 PM   #40
Pro
 
SearchforSignal's Avatar
 
Trade: Low voltage
Join Date: Aug 2016
Posts: 435
Rewards Points: 712

Re: How To Spend My Money?


Quote:
Originally Posted by Mordekyle View Post
What do you mean gross profit?
Profit after paying yourself?
Do you take a salary regardless of hours worked?


I donít break it down too much:

I shoot for a daily goal of $X.

X is everything above materials. The most material/job cost for jobs I regularly perform is roofing, which runs nearly 30% of the price. Many of my jobs materialsí cost is less than 10% of the price. A few trim boards, a roll of poly for vapor barrier, or a tube of caulk to caulk butt joints on Hardie siding. Most of the income goes to X.

X covers my overhead, profit, and my labor.

For me, instead of Price = L + O + P + M,

Price = M + X

Itís not exact, but it pays satisfactorily.


Sent from my iPhone using Tapatalk
For me gross profit is my profit after all expenses except taxes. All my materials, fees, daily overhead, owners profit, subcontractor payments ect. So all is left is paying taxes and putting the rest in my net profit account.

Sent from my SM-N975U using Tapatalk

Advertisement

SearchforSignal is offline  


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?