SIX MONTHS OF GROSS INCOME..........
- Thread starter wallytrucker1
- Start date
I will say this again one way to get into the savings habit is make a deposit to your savings every month. When you write your budget (we all do budgets right?) have a line item where you pay yourself. As a business owner the unexpected always happens and the worse off your finances are the more often Murphy visits. Your truck is depreciating by leaps and bounds how are you going to replace the truck or purchase the first truck if you have nothing to put down? How easy would it be to fall off a dock and hurt your driving leg? You have to look at the future and you need an emergency fund that if you use you will not now be making payments on and paying that high interest.
Yes 3 to six months is a great place to start but you sure do not want to quit there keep making that payment to yourself.
Yes 3 to six months is a great place to start but you sure do not want to quit there keep making that payment to yourself.
Budget? You've gotta be kidding me? right? Thats a rentacar right?*LOL*
Everyones correct but it's been said very many different ways..
The general consenus is: Have a rainy day fund of some kind, whatever you can put away the better.
Everyones correct but it's been said very many different ways..
The general consenus is: Have a rainy day fund of some kind, whatever you can put away the better.
Let me reply to several posts at once. (Long post. Six pages printed. Stop reading now if you do not like long posts).
The "I WANT TO PICK YOUR BRAIN" thread began with a report about a team that chose to take a well-paying load west when they would have also liked to be east for the holidays. They chose to make money and take a load west, instead of declining the load and staying closer to home. See: http://www.expeditersonline.com/dcforum/DCForumID1/6748.html
I admire what they did. They set their priorities, acted accordingly, and were willing to live with the decision they made.
In response to my SUGGESTION that building a reserve fund of three to six months of gross income is a WORTHY GOAL, a new thread was started (this thread) in which some rose to say or imply that few expediters do that, or that it cannot be done, and that proof of that view is demonstrated by the fact that very few expediters build that kind of savings.
While I agree that a certain percentage, perhaps a majority, of expediters are not savers, I part company with those who offer that as proof that it is impossible for expediters to save money.
If you are not an expediter who builds savings over time, finding comfort in the numbers of other non-savers only perpetuates the same result. If making money and building wealth is one of your reasons for being an expediter, justifying your own non-savings with the non-savings of others is counterproductive.
That raises the question, what are you trying to be right about? Are you trying to be right about saving money? Or, are you trying to be right about fitting in, conforming to the norm, and doing no better or worse than the peer group you identify with?
More to the point, why is it that some expediters save money and others do not?
Building savings has nothing to do with being solo or team, the carrier you lease to, running under your own authority or someone else's. Building savings also has nothing to do with general economic or industry conditions. Savers and non-savers can be found in all styles of expediting, all carrier affiliations, all phases of the business cycle, and in all types of industry conditions.
I believe some expediters save money while others do not because some expediters have set their priorities to save money while others have not. Saving money is not a matter of circumstance, it is a matter of choice.
Like the team that chose to take a good-paying load west and gave up Christmas at home to do so, expediters who save money make choices and take actions to get what they want. More than this team wanted to be home for Christmas, they wanted to make money, and went on to do so. In the same way, more than they want to spend money, expediters who save do exactly that...they save money.
Such decisions require self-discipline and long term vision to back them up. Savers have those character traits. Their reasons for saving may be positive or negative. Saving may be powered by a desire to leave an estate to the kids, a desire for financial independence (freedom, security), the fear of poverty, the desire for a certain retirement lifestyle, or any one of a thousand other desires or needs. Whatever the reason, savings is an act done today with a future result very much in mind.
Money that could be given away or spent on entertainment or desirable goods today is instead saved to make something else possible tomorrow. Or, on the income side, money that can be made today is made, and not foregone in favor of taking time off.
While virtually all expediters encounter short-term circumstances that make savings impossible in a given week, month or year; over the long term, those who have a set priority to build their savings tend to do so. For these people, savings is not an accidental act. Money does not find its way into their bank accounts by itself. They put it there.
No one is born into the expediting business. We all made the decision to enter it at one time or another. At that point, and at thousands of points thereafter, choices are made that affect our income, expenses or both. When savers make their choices, they do so with their savings priorities in mind. Their priorities inform their choices in ways many non-savers do not grasp or care about.
In other words, some people "get it" about saving and others do not. For non-savers who want to be savers, the good news is that the mindset and character traits savers have are not a product of birth. Financial mindsets and character traits are learned.
If you are a non-saver and want to become a saver, you can change your mind about who you are, what you do, and why you do it. In the realm of saving money, you can decide to become a saver, choose a new route and make the personal and business turns required to get you where you want to be.
There are those in the business who genuinely do not care to save money and are content with a hand-to-mouth existence. Using their rig as shelter and truck stops to meet their food, hygiene and social needs, they live a transient loner's life that they are happy with. Prosperity is not a concern for them. They are satisfied with their life and have what they want. In my book, such people are successful expediters because they are accomplishing what they set out to do.
Diane and I are not cut from that cloth. While we are meeting a number of personal and lifestyle goals as expediters, we are first and foremost in this business for the money. It would never enter our mind to decline a load because we have already made enough money to cover fuel and smokes this week, or because there is a good show on TV that we do not want to miss. But like certain transient loners, we too are successful expediters, because we are getting what we want out of the expedite business.
When I said building savings of three to six months of gross income is a worthy goal for all expediters, it was with all expediters in mind; including the transient loners. Even they have the need to keep a functioning truck under them. Having money in reserve helps them do so and helps them maintain their lifestyle of choice.
The three to six months of gross income is an arbitrary figure. Dreamer mentioned six months of expenses. Three months of gross? Six months of expense? There is no need to quibble about specific amounts. The point is about saving money, not about the precise amount. Whether you index your savings to gross income, actual expenses, or a specific dollar amount, the point is the same. Building a financial reserve is a worthy goal.
How large is too large? In my mind, there is not such thing as too much savings. While it would be unwise to keep all savings in cash, it is wise to keep enough cash in easy reach to cover things like an engine rebuild or six months of unplanned down time. Amounts over that can be invested for better returns than cash accounts provide.
For us, there is no such thing as too much savings because we have goals beyond expediting that will require money to achieve. The more money we make and save today, the easier it will be to achieve our non-expediting goals in the future.
Now, on to more specific replies to the posts made above.
Doggie Daddie suggested that Diane and I have six months gross income of ready cash saved up. We do not (if you do not count retirement savings, and we don't, retirement savings are for retirement).
When we bought our truck, we made a down payment. But instead of making a larger down payment, we kept some money back as a financial reserve. Hating debt like we do, we have been making extra truck payments to pay off the truck as soon as possible. When the truck is paid off, we will continue to drive it for several years and build savings at an increased rate. That will be for three reasons; (1) to pay cash for our next truck, (2) to cover increasing repair costs as the truck ages, and (3) to help fund our life after expediting.
Leo talked about people who spend money on things they seldom use or things that are not needed. While I do not want to get into a debate about who "needs" how much of what and why, he makes a valid point.
Savers save first and spend second. I have no sympathy for the expediter who complains about not making enough money but habitually buys non-essentials on credit, or spends every last dime he or she has on non-essentials. In cases like that, the problem is not on the income side, it is on the spending side. The problem is not with the business, it is with the business person.
In other words, it is not about how much you should be paid or should be making. It is about living within your means and making sacrifices, if necessary, to achieve your desired results. That includes thinking twice before buying a non-essential good and buying no more truck than your income and expenses can support.
Packmule said, "Would you began a 5 day trek across the dessert with 2 days of water?" That is an EXCELLENT analogy.
When you begin a career as an expediter, it is not a trip through a jungle where food and water are easily found, and the weather will not kill you. It is very much like a desert where the only resources you will have are those you bring along.
For those who begin with the water and supplies they need, a trek through he desert can be genuine fun. For those who don't, the same journey may be the end of them.
While prepared expediters may camp out with others, enjoy a feast and social time with each other; others in the very same desert may find themselves with fading hopes, parched mouths, and no one to keep them company but eager vultures circling above.
What is the difference between happy campers and vulture bait? In a word, the difference is savings.
Packmule also said, "Many have taken a leap of faith and been successful operating on a shoe string and through hard work and good luck or the grace of God have been the exception to the rule. BUT if we only knew the real #'s of those who tried and failed we would be really surprised."
While I have written a fair amount about the importance of business planning, I am forced by the facts to grant that there are some who have jumped into expedting unprepared, lived initially on a shoe string, and gone on to succeed. But how long should one be willing to live on a shoe string before success comes?
While you may be willing to live hand-to-mouth for a while, how many months or years is it wise to do so before accepting the fact that you do not have what it takes to succeed as an expediter (assuming success means something other than living hand-to-mouth)? If you have been living as a hand-to-mouth expediter for a number of months or years, and if you want to make and keep more money than that, it should be obvious that the business itself is not going to change in your favor. How long are you willing to live hand-to-mouth before you decide to do something different?
Packmule also said, "I really believe that Phil and Dianne worked hard and built their Capitol before jumping into a truck of their own.
(which is contra to some of Phil's early writings as for newbies getting into this business.)
I am even confident that Phil has access to six months expenses if needed, but ask him just how comfortable that makes him feel this day and time. I would bet he'd rather have 12 months or more in reserves to be certain of survival."
I'll unpack that a bit and respond to each point.
Packmule said, "I really believe that Phil and Dianne worked hard and built their Capitol before jumping into a truck of their own."
That is true.
Packmule said, "(which is contra to some of Phil's early writings as for newbies getting into this business.)"
That is not true (if I take Packmule's meaning correctly). I am open to correction if quotes can be found, but I know of no time or place where I have encouraged newbies to get into this business unprepareed or to buy a truck unprepared. Nor have I ever said that we bought a truck of our own with less money on hand than would be prudent.
wallytrucker1 said, "I do enjoy reading your posts and really get a kick out of how everyone( well not everyone)is beating up on you, BUT, I would hate to think someone might read your post and think they were not successful because they don't have a large bank acct. You did not say that, but someone might read that into it"
Thank you for noticing what I did not say and pointing out that people sometimes read things into what others write that are not there at all. Such are the hazards of posting on an internet forum, or writing anywhere in public for that matter.
jaminjim said, " If you don't think you will ever have six months gross income saved up, what are you doing in this line of work? What will you retire on?"
He makes a good point. With the exception of the happy transient loners that can be found in this business, I think it is fair to say that most other expediters are expediters because they want a better life today than they had yesterday, and a better life tomorrow than they have today. Exactly what "better" means is up to each expediter to decide. But in every case, a certain amount of money will be required to provide it.
If you are not making and saving the amount of money you want and need to make as an expediter, how long are you willing to live on hope and a shoe-string? If you do so for too long, you are destined to join the ranks of those expediters who have been at it for many years but are as broke today as they were when they first began.
Let me close by saying this is a good thread. People are sharing in a dignified way their views on savings. For people considering the expediting business, it is a thread worth thinking deeply about and discussing with your codriver and/or family.
The "I WANT TO PICK YOUR BRAIN" thread began with a report about a team that chose to take a well-paying load west when they would have also liked to be east for the holidays. They chose to make money and take a load west, instead of declining the load and staying closer to home. See: http://www.expeditersonline.com/dcforum/DCForumID1/6748.html
I admire what they did. They set their priorities, acted accordingly, and were willing to live with the decision they made.
In response to my SUGGESTION that building a reserve fund of three to six months of gross income is a WORTHY GOAL, a new thread was started (this thread) in which some rose to say or imply that few expediters do that, or that it cannot be done, and that proof of that view is demonstrated by the fact that very few expediters build that kind of savings.
While I agree that a certain percentage, perhaps a majority, of expediters are not savers, I part company with those who offer that as proof that it is impossible for expediters to save money.
If you are not an expediter who builds savings over time, finding comfort in the numbers of other non-savers only perpetuates the same result. If making money and building wealth is one of your reasons for being an expediter, justifying your own non-savings with the non-savings of others is counterproductive.
That raises the question, what are you trying to be right about? Are you trying to be right about saving money? Or, are you trying to be right about fitting in, conforming to the norm, and doing no better or worse than the peer group you identify with?
More to the point, why is it that some expediters save money and others do not?
Building savings has nothing to do with being solo or team, the carrier you lease to, running under your own authority or someone else's. Building savings also has nothing to do with general economic or industry conditions. Savers and non-savers can be found in all styles of expediting, all carrier affiliations, all phases of the business cycle, and in all types of industry conditions.
I believe some expediters save money while others do not because some expediters have set their priorities to save money while others have not. Saving money is not a matter of circumstance, it is a matter of choice.
Like the team that chose to take a good-paying load west and gave up Christmas at home to do so, expediters who save money make choices and take actions to get what they want. More than this team wanted to be home for Christmas, they wanted to make money, and went on to do so. In the same way, more than they want to spend money, expediters who save do exactly that...they save money.
Such decisions require self-discipline and long term vision to back them up. Savers have those character traits. Their reasons for saving may be positive or negative. Saving may be powered by a desire to leave an estate to the kids, a desire for financial independence (freedom, security), the fear of poverty, the desire for a certain retirement lifestyle, or any one of a thousand other desires or needs. Whatever the reason, savings is an act done today with a future result very much in mind.
Money that could be given away or spent on entertainment or desirable goods today is instead saved to make something else possible tomorrow. Or, on the income side, money that can be made today is made, and not foregone in favor of taking time off.
While virtually all expediters encounter short-term circumstances that make savings impossible in a given week, month or year; over the long term, those who have a set priority to build their savings tend to do so. For these people, savings is not an accidental act. Money does not find its way into their bank accounts by itself. They put it there.
No one is born into the expediting business. We all made the decision to enter it at one time or another. At that point, and at thousands of points thereafter, choices are made that affect our income, expenses or both. When savers make their choices, they do so with their savings priorities in mind. Their priorities inform their choices in ways many non-savers do not grasp or care about.
In other words, some people "get it" about saving and others do not. For non-savers who want to be savers, the good news is that the mindset and character traits savers have are not a product of birth. Financial mindsets and character traits are learned.
If you are a non-saver and want to become a saver, you can change your mind about who you are, what you do, and why you do it. In the realm of saving money, you can decide to become a saver, choose a new route and make the personal and business turns required to get you where you want to be.
There are those in the business who genuinely do not care to save money and are content with a hand-to-mouth existence. Using their rig as shelter and truck stops to meet their food, hygiene and social needs, they live a transient loner's life that they are happy with. Prosperity is not a concern for them. They are satisfied with their life and have what they want. In my book, such people are successful expediters because they are accomplishing what they set out to do.
Diane and I are not cut from that cloth. While we are meeting a number of personal and lifestyle goals as expediters, we are first and foremost in this business for the money. It would never enter our mind to decline a load because we have already made enough money to cover fuel and smokes this week, or because there is a good show on TV that we do not want to miss. But like certain transient loners, we too are successful expediters, because we are getting what we want out of the expedite business.
When I said building savings of three to six months of gross income is a worthy goal for all expediters, it was with all expediters in mind; including the transient loners. Even they have the need to keep a functioning truck under them. Having money in reserve helps them do so and helps them maintain their lifestyle of choice.
The three to six months of gross income is an arbitrary figure. Dreamer mentioned six months of expenses. Three months of gross? Six months of expense? There is no need to quibble about specific amounts. The point is about saving money, not about the precise amount. Whether you index your savings to gross income, actual expenses, or a specific dollar amount, the point is the same. Building a financial reserve is a worthy goal.
How large is too large? In my mind, there is not such thing as too much savings. While it would be unwise to keep all savings in cash, it is wise to keep enough cash in easy reach to cover things like an engine rebuild or six months of unplanned down time. Amounts over that can be invested for better returns than cash accounts provide.
For us, there is no such thing as too much savings because we have goals beyond expediting that will require money to achieve. The more money we make and save today, the easier it will be to achieve our non-expediting goals in the future.
Now, on to more specific replies to the posts made above.
Doggie Daddie suggested that Diane and I have six months gross income of ready cash saved up. We do not (if you do not count retirement savings, and we don't, retirement savings are for retirement).
When we bought our truck, we made a down payment. But instead of making a larger down payment, we kept some money back as a financial reserve. Hating debt like we do, we have been making extra truck payments to pay off the truck as soon as possible. When the truck is paid off, we will continue to drive it for several years and build savings at an increased rate. That will be for three reasons; (1) to pay cash for our next truck, (2) to cover increasing repair costs as the truck ages, and (3) to help fund our life after expediting.
Leo talked about people who spend money on things they seldom use or things that are not needed. While I do not want to get into a debate about who "needs" how much of what and why, he makes a valid point.
Savers save first and spend second. I have no sympathy for the expediter who complains about not making enough money but habitually buys non-essentials on credit, or spends every last dime he or she has on non-essentials. In cases like that, the problem is not on the income side, it is on the spending side. The problem is not with the business, it is with the business person.
In other words, it is not about how much you should be paid or should be making. It is about living within your means and making sacrifices, if necessary, to achieve your desired results. That includes thinking twice before buying a non-essential good and buying no more truck than your income and expenses can support.
Packmule said, "Would you began a 5 day trek across the dessert with 2 days of water?" That is an EXCELLENT analogy.
When you begin a career as an expediter, it is not a trip through a jungle where food and water are easily found, and the weather will not kill you. It is very much like a desert where the only resources you will have are those you bring along.
For those who begin with the water and supplies they need, a trek through he desert can be genuine fun. For those who don't, the same journey may be the end of them.
While prepared expediters may camp out with others, enjoy a feast and social time with each other; others in the very same desert may find themselves with fading hopes, parched mouths, and no one to keep them company but eager vultures circling above.
What is the difference between happy campers and vulture bait? In a word, the difference is savings.
Packmule also said, "Many have taken a leap of faith and been successful operating on a shoe string and through hard work and good luck or the grace of God have been the exception to the rule. BUT if we only knew the real #'s of those who tried and failed we would be really surprised."
While I have written a fair amount about the importance of business planning, I am forced by the facts to grant that there are some who have jumped into expedting unprepared, lived initially on a shoe string, and gone on to succeed. But how long should one be willing to live on a shoe string before success comes?
While you may be willing to live hand-to-mouth for a while, how many months or years is it wise to do so before accepting the fact that you do not have what it takes to succeed as an expediter (assuming success means something other than living hand-to-mouth)? If you have been living as a hand-to-mouth expediter for a number of months or years, and if you want to make and keep more money than that, it should be obvious that the business itself is not going to change in your favor. How long are you willing to live hand-to-mouth before you decide to do something different?
Packmule also said, "I really believe that Phil and Dianne worked hard and built their Capitol before jumping into a truck of their own.
(which is contra to some of Phil's early writings as for newbies getting into this business.)
I am even confident that Phil has access to six months expenses if needed, but ask him just how comfortable that makes him feel this day and time. I would bet he'd rather have 12 months or more in reserves to be certain of survival."
I'll unpack that a bit and respond to each point.
Packmule said, "I really believe that Phil and Dianne worked hard and built their Capitol before jumping into a truck of their own."
That is true.
Packmule said, "(which is contra to some of Phil's early writings as for newbies getting into this business.)"
That is not true (if I take Packmule's meaning correctly). I am open to correction if quotes can be found, but I know of no time or place where I have encouraged newbies to get into this business unprepareed or to buy a truck unprepared. Nor have I ever said that we bought a truck of our own with less money on hand than would be prudent.
wallytrucker1 said, "I do enjoy reading your posts and really get a kick out of how everyone( well not everyone)is beating up on you, BUT, I would hate to think someone might read your post and think they were not successful because they don't have a large bank acct. You did not say that, but someone might read that into it"
Thank you for noticing what I did not say and pointing out that people sometimes read things into what others write that are not there at all. Such are the hazards of posting on an internet forum, or writing anywhere in public for that matter.
jaminjim said, " If you don't think you will ever have six months gross income saved up, what are you doing in this line of work? What will you retire on?"
He makes a good point. With the exception of the happy transient loners that can be found in this business, I think it is fair to say that most other expediters are expediters because they want a better life today than they had yesterday, and a better life tomorrow than they have today. Exactly what "better" means is up to each expediter to decide. But in every case, a certain amount of money will be required to provide it.
If you are not making and saving the amount of money you want and need to make as an expediter, how long are you willing to live on hope and a shoe-string? If you do so for too long, you are destined to join the ranks of those expediters who have been at it for many years but are as broke today as they were when they first began.
Let me close by saying this is a good thread. People are sharing in a dignified way their views on savings. For people considering the expediting business, it is a thread worth thinking deeply about and discussing with your codriver and/or family.
Packmule
Expert Expediter
Phil said:
-I know of no time or place where I have encouraged newbies to get into this business unprepareed or to buy a truck unprepared.-
Phil, I was referring to some of the early debates you had with Tom Robinson and Dave KC in which your comments were more directed to the fact that someone with a good business attitude and a devotion to hard work could become an owner/operator and be successful on a low budget. Having the reserve funds to support hard times was not mentioned at that time. The definition of Prepared was not the topic of conversation at that time.
I state this only from memory from several years ago and have no quotes in hand to support this. This too could have been my own interpretation of what you said and not at all what you meant to say.
I don't think, or did not mean to insinuate that you bought your truck without adaquent funds to support your business. I did state that you would (or anyone ) would certainly be more comfortable with 12 months reserves rather than six months this day and time due to the volatility of the economy today.
Danny
Not looking for a debate here, just voicing my opinion!
-I know of no time or place where I have encouraged newbies to get into this business unprepareed or to buy a truck unprepared.-
Phil, I was referring to some of the early debates you had with Tom Robinson and Dave KC in which your comments were more directed to the fact that someone with a good business attitude and a devotion to hard work could become an owner/operator and be successful on a low budget. Having the reserve funds to support hard times was not mentioned at that time. The definition of Prepared was not the topic of conversation at that time.
I state this only from memory from several years ago and have no quotes in hand to support this. This too could have been my own interpretation of what you said and not at all what you meant to say.
I don't think, or did not mean to insinuate that you bought your truck without adaquent funds to support your business. I did state that you would (or anyone ) would certainly be more comfortable with 12 months reserves rather than six months this day and time due to the volatility of the economy today.
Danny
Not looking for a debate here, just voicing my opinion!
Tennesseahawk
Veteran Expediter
Looks like Phil broke a record there.
Greg... ya gonna let that stand?
-A bore is a person who opens his mouth and puts his feats in it. - Henry Ford
Greg... ya gonna let that stand?
-A bore is a person who opens his mouth and puts his feats in it. - Henry Ford
Doggie Daddy
Veteran Expediter
To the Caffee's,just curious,wich one is your driving leg?DD.
Ateam wrote
Let me reply to several posts at once. (Long post. Six pages printed. Stop reading now if you do not like long posts).
================================================
Thanks for the warning!
I do agree savings is a key factor in determining long term success. Some try to save as they go, but the deck is stacked against them in a unstable economy. In a lot of cases, the carrier is controlling the purse strings. Working hard and all those other items may pay off, and maybe they won't.
I don't buy into the notion that one can save regardless of circumstances. Some obstacles may too large to overcome.
I think another big issue is people jump in under capitalized or enter with a employee mindset, rather than a business owner or contractor.
It seems that many just haven't thought about what they will need financially in the event of a accident (whether your fault or not), illness, major truck breakdown etc.
It's never too late until it happens, but one needs to know those numbers.
All too often people fall for the tourist stories and everything else, and have no realization of the capital needed to do this business.
I'm certainly not "preaching to the choir" as I nearly went bankrupt in the mid 80's because I simply "assumed" too much.
You know what they say about that word "assume"
I wish EO had been around then. I probably wouldn't have done half the stupid stuff that I did.
Remember
"Businessman first, driver second"
Davekc
owner
23 years
PantherII
EO moderator
Let me reply to several posts at once. (Long post. Six pages printed. Stop reading now if you do not like long posts).
================================================
Thanks for the warning!
I do agree savings is a key factor in determining long term success. Some try to save as they go, but the deck is stacked against them in a unstable economy. In a lot of cases, the carrier is controlling the purse strings. Working hard and all those other items may pay off, and maybe they won't.
I don't buy into the notion that one can save regardless of circumstances. Some obstacles may too large to overcome.
I think another big issue is people jump in under capitalized or enter with a employee mindset, rather than a business owner or contractor.
It seems that many just haven't thought about what they will need financially in the event of a accident (whether your fault or not), illness, major truck breakdown etc.
It's never too late until it happens, but one needs to know those numbers.
All too often people fall for the tourist stories and everything else, and have no realization of the capital needed to do this business.
I'm certainly not "preaching to the choir" as I nearly went bankrupt in the mid 80's because I simply "assumed" too much.
You know what they say about that word "assume"
I wish EO had been around then. I probably wouldn't have done half the stupid stuff that I did.
Remember
"Businessman first, driver second"
Davekc
owner
23 years
PantherII
EO moderator
DaveKC wrote: "I think another big issue is people jump in under capitalized or enter with a employee mindset, rather than a business owner or contractor."
Dave, I think you hit it on the head right there. To many people Expediting is a job and not a small business. It doesn't matter if you own a truck or car lot, or furniture store, if you do not have reserves you will fail. That's just a fact. I know many small business owners, including my family.. and I can tell you from experience, that many of those who ran their business without reserves lost that business at the first sign of trouble.
Dreamer
Forums Administrator
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"And she brought forth her firstborn son, and wrapped him in swaddling clothes, and laid him in a manger; because there was no room for them in the inn." Luke 2: 7
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Dave, I think you hit it on the head right there. To many people Expediting is a job and not a small business. It doesn't matter if you own a truck or car lot, or furniture store, if you do not have reserves you will fail. That's just a fact. I know many small business owners, including my family.. and I can tell you from experience, that many of those who ran their business without reserves lost that business at the first sign of trouble.
Dreamer
Forums Administrator
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"And she brought forth her firstborn son, and wrapped him in swaddling clothes, and laid him in a manger; because there was no room for them in the inn." Luke 2: 7
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>Phil, I was referring to some of the early debates you had
>with Tom Robinson and Dave KC in which your comments were
>more directed to the fact that someone with a good business
>attitude and a devotion to hard work could become an
>owner/operator and be successful on a low budget. Having the
>reserve funds to support hard times was not mentioned at
>that time. The definition of Prepared was not the topic of
>conversation at that time.
>I state this only from memory from several years ago and
>have no quotes in hand to support this. This too could have
>been my own interpretation of what you said and not at all
>what you meant to say.
Since we are both operating from memory and with no quotes from years ago, I can only say that it is not likely that I would have said something I did not believe. As one who practices what he preaches and walks his talk, I may well have said it is possible for someone to enter the business with few resources and be successful on a low budget (though Diane and I had reserve funds available when we entered the business). I would have been talking about doing so by beginning in a fleet owner's truck, working hard and being zealous in money management. I would say the same thing today.
>I don't think, or did not mean to insinuate that you bought
>your truck without adaquent funds to support your business.
>I did state that you would (or anyone ) would certainly be
>more comfortable with 12 months reserves rather than six
>months this day and time due to the volatility of the
>economy today.
Absolutely correct. We would love to have 12 months of reserves on hand and one day will.
>with Tom Robinson and Dave KC in which your comments were
>more directed to the fact that someone with a good business
>attitude and a devotion to hard work could become an
>owner/operator and be successful on a low budget. Having the
>reserve funds to support hard times was not mentioned at
>that time. The definition of Prepared was not the topic of
>conversation at that time.
>I state this only from memory from several years ago and
>have no quotes in hand to support this. This too could have
>been my own interpretation of what you said and not at all
>what you meant to say.
Since we are both operating from memory and with no quotes from years ago, I can only say that it is not likely that I would have said something I did not believe. As one who practices what he preaches and walks his talk, I may well have said it is possible for someone to enter the business with few resources and be successful on a low budget (though Diane and I had reserve funds available when we entered the business). I would have been talking about doing so by beginning in a fleet owner's truck, working hard and being zealous in money management. I would say the same thing today.
>I don't think, or did not mean to insinuate that you bought
>your truck without adaquent funds to support your business.
>I did state that you would (or anyone ) would certainly be
>more comfortable with 12 months reserves rather than six
>months this day and time due to the volatility of the
>economy today.
Absolutely correct. We would love to have 12 months of reserves on hand and one day will.
One can debate almost unendingly the need for savings and the proper amount. There isn't a correct number, at least that I know of. I do feel comfortable in saying larger is better and no matter how much you have it's a good idea to continue increasing it. Now, if you've got your non-retirement, fully liquid, cash equivalent savings built to the point it will allow you to pay cash for a new truck as well as cover 3-4 months of gross revenue while the new truck is prepped to go out on the road and still leave 3-4 months of gross revenue in reserve when you do go out I'd say you needn't build that account anymore and should convert additional funds into retirement account funds rather than continue funding the everyday fund. A large number, probably the majority, could put 2 or 3 thousand dollars a year into their account if they quit smoking and for some it would be much more than that. There are other things that take fairly significant annual expenditures that people choose rather than choosing savings. Some would be very difficult to give up, like smoking, but would become a huge financial windfall if given up.
Leo Bricker, 73's K5LDB
OOIDA Life Member 677319, JOIN NOW
Owner, Panther trucks 5508, 5509, 5641
EO Forum Moderator
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Support the entire Constitution, not just the parts you like.
Leo Bricker, 73's K5LDB
OOIDA Life Member 677319, JOIN NOW
Owner, Panther trucks 5508, 5509, 5641
EO Forum Moderator
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Support the entire Constitution, not just the parts you like.
greg334
Veteran Expediter
This is too d*nm funny. I had to call someone to make sure I read this all right so not to look like I missed something.
Savings or better put reserve capital is a good idea in any business but in many businesses, they run on thin margins and can’t build up more than a few weeks of capital to maintain the business. We are lucky in where our margins can be big in comparison, so building up 3 to 6 month of expenses is something that is easier to grasp for some.
But onto other things
“Building savings has nothing to do with being solo or team, the carrier you lease to, running under your own authority or someone else's. Building savings also has nothing to do with general economic or industry conditions.â€
So pretty much as you repeated throughout the post, circumstances outside of your planning, discipline and execution of the plan has nothing – not a thing to do with your ability to save, right?
Sorry Phil to be so to the point and raw, this seems to be the most uninformed business statement I have ever read.
How did you formulate this?
I have to say Phil, it looks like you have not hit hard times by making this statement.
In business, like in real life, circumstances have absolutely everything to do with how revenue is generated, how much disposable income you have and how much savings you are left with – you can’t ever say otherwise. The facts of a business still haven’t changed; you can’t save without money.
The same goes for luck, many have it, others don’t and still others are special and don’t need it. For those who can’t still comprehend the idea that you need to be in the right place at the right time, that is part of the circumstance that you have to deal with.
If you can prove that there is no relation between the circumstances and savings, then the people who I saw in pictures from the 30’s that were on the bread lines and in the soup kitchens must have been actors portraying poor people for FDR’s propaganda and that thing that was called the great depression was just made up for the history books.
Savings or better put reserve capital is a good idea in any business but in many businesses, they run on thin margins and can’t build up more than a few weeks of capital to maintain the business. We are lucky in where our margins can be big in comparison, so building up 3 to 6 month of expenses is something that is easier to grasp for some.
But onto other things
“Building savings has nothing to do with being solo or team, the carrier you lease to, running under your own authority or someone else's. Building savings also has nothing to do with general economic or industry conditions.â€
So pretty much as you repeated throughout the post, circumstances outside of your planning, discipline and execution of the plan has nothing – not a thing to do with your ability to save, right?
Sorry Phil to be so to the point and raw, this seems to be the most uninformed business statement I have ever read.
How did you formulate this?
I have to say Phil, it looks like you have not hit hard times by making this statement.
In business, like in real life, circumstances have absolutely everything to do with how revenue is generated, how much disposable income you have and how much savings you are left with – you can’t ever say otherwise. The facts of a business still haven’t changed; you can’t save without money.
The same goes for luck, many have it, others don’t and still others are special and don’t need it. For those who can’t still comprehend the idea that you need to be in the right place at the right time, that is part of the circumstance that you have to deal with.
If you can prove that there is no relation between the circumstances and savings, then the people who I saw in pictures from the 30’s that were on the bread lines and in the soup kitchens must have been actors portraying poor people for FDR’s propaganda and that thing that was called the great depression was just made up for the history books.
Ok Leo,
That is the second post for the anti-smoking crusade. The reality is that a carton sells for $25 to 30 bucks.
If that $25 to $30 is going to make or break someone in expediting, then they are in the wrong business.
Even at 40 dollars a carton, the same.
Again, starting out way under capitalized.
It would take several years for that savings to have any significant impact.
I smoke and drink, and in the grand scheme of things financially, its impact doesn't even show up on the radar.
It doesn't mean that I endorse it, but I wouldn't use as a catalyst for determining an ability to save.
I have seen multiple trips to the buffet and eating three squares in a truck stop do more damage.
Want to make sure you look at ALL of the picture, rather than part of it.
Davekc
owner
23 years
PantherII
EO moderator
That is the second post for the anti-smoking crusade. The reality is that a carton sells for $25 to 30 bucks.
If that $25 to $30 is going to make or break someone in expediting, then they are in the wrong business.
Even at 40 dollars a carton, the same.
Again, starting out way under capitalized.
It would take several years for that savings to have any significant impact.
I smoke and drink, and in the grand scheme of things financially, its impact doesn't even show up on the radar.
It doesn't mean that I endorse it, but I wouldn't use as a catalyst for determining an ability to save.
I have seen multiple trips to the buffet and eating three squares in a truck stop do more damage.
Want to make sure you look at ALL of the picture, rather than part of it.
Davekc
owner
23 years
PantherII
EO moderator
Doggie Daddy
Veteran Expediter
YEAH,what Dave said.DD.
arkjarhead
Veteran Expediter
It seems to me before you ever sign the papers on your first truck you would want to have a rainy day fund saved up. I was always told by my mentors who were o/o to have enough cash in the back before you buy your first truck to replace a blown motor.
Nobody will become a millionaire, at least without numerous other things, but at $40 a week smoking is $2k per year. Put somewhere with compound interest and in 5 years it's an engine overhaul. Combine that with eating no more than once a day outside the truck, playing games on your own system in the truck instead of feeding endless quarters into machines inside the truckstop, canceling the cable/dish when they're the only ones home and are only home about 20% of the time etc. and it's an overhaul in only a couple of years.
Greg, you're right, many work on shoestrings and even those are somewhat frayed and raveling. At least some are probably in a position where they are making choices that don't make the best use of the finances they have, similar to eating out every meal and endless game machines. Some, even with the best of intentions and perfect execution, will never be able to build major reserves. Even those should still set that as a goal, even if unattainable, and work towards it as best they can. Every little bit helps.
Leo Bricker, 73's K5LDB
OOIDA Life Member 677319, JOIN NOW
Owner, Panther trucks 5508, 5509, 5641
EO Forum Moderator
----------
Support the entire Constitution, not just the parts you like.
Greg, you're right, many work on shoestrings and even those are somewhat frayed and raveling. At least some are probably in a position where they are making choices that don't make the best use of the finances they have, similar to eating out every meal and endless game machines. Some, even with the best of intentions and perfect execution, will never be able to build major reserves. Even those should still set that as a goal, even if unattainable, and work towards it as best they can. Every little bit helps.
Leo Bricker, 73's K5LDB
OOIDA Life Member 677319, JOIN NOW
Owner, Panther trucks 5508, 5509, 5641
EO Forum Moderator
----------
Support the entire Constitution, not just the parts you like.
I agree. I thought for a moment we were getting hung up on one specific habit, realizing there are many of those and other personal fetishes that are destructive to ones financial health.
Anything can make a difference depending on ones indulgence.
Davekc
owner
23 years
PantherII
EO moderator
Anything can make a difference depending on ones indulgence.
Davekc
owner
23 years
PantherII
EO moderator