wallytrucker1
Expert Expediter
Did I read that right? Who out here has six months of income sitting in a cash account for easy access? May I see a show of hands? Hands anyone? Come on, just lift it on up.......:7
SIX MONTHS OF GROSS INCOME..........
- Thread starter wallytrucker1
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greg334
Veteran Expediter
yea you read right.
It seems to me, that if I remember right while running our auto parts business, at times we were lucky to have a weeks worth of money on hand to pay the bills, maintain the trucks and pay the people - but again, we were not in this business and had not been shown that special pixie dust to be a successful auto parts business so I would say, I never got around to finding out where I could find that special pixie dust to be a successful expediter.
All I know is I have $2000 in credit that I can use to get me home. If $2000 can't get me home, then there is a real problem for all of us.
It seems to me, that if I remember right while running our auto parts business, at times we were lucky to have a weeks worth of money on hand to pay the bills, maintain the trucks and pay the people - but again, we were not in this business and had not been shown that special pixie dust to be a successful auto parts business so I would say, I never got around to finding out where I could find that special pixie dust to be a successful expediter.
All I know is I have $2000 in credit that I can use to get me home. If $2000 can't get me home, then there is a real problem for all of us.
Doggie Daddy
Veteran Expediter
>Did I read that right? Who out here has six months of
>income sitting in a cash account for easy access? :7
Phil does of course.DD.
>income sitting in a cash account for easy access? :7
Phil does of course.DD.
Wingnut
Seasoned Expediter
We certainally don't have 6 or even 3 months income saved up but we do have enough on hand at all times to take care of any repairs and maintenance that our trucks need or for any "emergencies" that may come up. We just don't consider deadheading 2400 miles home for christmas an emergency.
Let's be careful to be true to what was said, and to not put words in someone else's mouth. The suggestion in question is posted at:
http://www.expeditersonline.com/dcforum/DCForumID1/6748.html#10
http://www.expeditersonline.com/dcforum/DCForumID1/6748.html#10
greg334
Veteran Expediter
You know Phil, it is a good excellent idea to have a savings of minimal operating expenses save but that is not what you said.
You said; “It is a wise practice for expediters to have three to six months of gross income saved up and within easy reach.â€
For most of the single truck owners out there, it is almost near impossible to have 3 to 6 months of gross income saved up and within any easy reach. For a few that amounts to over $25K and others almost $60K. I know a lot of truck owners; both team and single drivers don't have that kind of money and do what they have to do to keep the truck moving. Most people run marginally at best, not due to the lack of business knowledge but rather a lack of a company that can provide consistent offers at reasonable prices.
I think a lot of this stuff stems from a few who have had some relative success and thinks that this is the only way that this business can be run. If you think I am pointing the finger at you, you’re mistaken. You are not the only one who I think looks at it this way, there are a bunch, a couple offsite who are more vocal about the ‘right’ way to do this more than you ever imagined. Your advice is good and useful. The thing is, you are in the top 3% of the expediters out there (single truck owners that is), no doubt you have a worthy model but I think that many forget it is yours and it don’t work for them. I also think many fall for this fallacy that this is a paid vacation or what was the term.... paid tourist I think is the term used – well it is not. This is hard work (the driving is easy) and even harder when you compete with your own company.
You said; “It is a wise practice for expediters to have three to six months of gross income saved up and within easy reach.â€
For most of the single truck owners out there, it is almost near impossible to have 3 to 6 months of gross income saved up and within any easy reach. For a few that amounts to over $25K and others almost $60K. I know a lot of truck owners; both team and single drivers don't have that kind of money and do what they have to do to keep the truck moving. Most people run marginally at best, not due to the lack of business knowledge but rather a lack of a company that can provide consistent offers at reasonable prices.
I think a lot of this stuff stems from a few who have had some relative success and thinks that this is the only way that this business can be run. If you think I am pointing the finger at you, you’re mistaken. You are not the only one who I think looks at it this way, there are a bunch, a couple offsite who are more vocal about the ‘right’ way to do this more than you ever imagined. Your advice is good and useful. The thing is, you are in the top 3% of the expediters out there (single truck owners that is), no doubt you have a worthy model but I think that many forget it is yours and it don’t work for them. I also think many fall for this fallacy that this is a paid vacation or what was the term.... paid tourist I think is the term used – well it is not. This is hard work (the driving is easy) and even harder when you compete with your own company.
An awful lot depends on your living expenses. If you essentially live in the truck, have no mortgage or pay minimal rent if any,have no pov to pay for,no children to educate and raise etc, Yes you can accumulate 6 months gross income. But what percentage of expediters live in that world. I would say less then 5%. When certain individuals constantly boast and brag about their income,they should also be willing to share their lifestyle as too what their living expenses (if any) are.
Too many people are swayed by posts that say nothing but how great we have it and they sell the farm ,and in 6 months are struggling to make ends meet.
Too many people are swayed by posts that say nothing but how great we have it and they sell the farm ,and in 6 months are struggling to make ends meet.
If a new driver were entering expediting right now and facing the first quarter of 2008, what would be a realistic average earnings for a D Unit, in your opinion? And how would you figure a percentage of earnings per quarter on average so that one could try to budget their income as such to have the needed nestegg to prepare for 2009?
The advice I've always heard from financial advisors is to strive to have a reserve fund equal to six months of 'living expenses'. In other words, 6 months of house payments, utilities, car payments, etc.
This is advised for ANY job, not just expediting, so as to cover unforseen emergencies, sudden job loss, etc.
Either way you want to look at it, some kind of emergency fund is a necessity in this quick changing economy. Life can change in a second due to health issues, an accident, economic issues, etc.
It can be very hard to do, that's for sure, but it is a goal that needs to be on your list.
Dreamer
Forums Administrator
[font size="1"]Have a Sprinter van? Check out the forums at [A href="http://www.mysprintervan.com"]MySprinterVan.com[/A]
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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
[/font]
This is advised for ANY job, not just expediting, so as to cover unforseen emergencies, sudden job loss, etc.
Either way you want to look at it, some kind of emergency fund is a necessity in this quick changing economy. Life can change in a second due to health issues, an accident, economic issues, etc.
It can be very hard to do, that's for sure, but it is a goal that needs to be on your list.
Dreamer
Forums Administrator
[font size="1"]Have a Sprinter van? Check out the forums at [A href="http://www.mysprintervan.com"]MySprinterVan.com[/A]
OTR? Check out [A href="http://www.truckme.com"]Truckme.com [/A]
"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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greg334
Veteran Expediter
But Dreamer, the thing is we are approaching a time when many can't do that, even if they have a high paying 'career', they fail to do so.
If you look around and see what is happening with the industry and even this segment, the major players are squeezing things too tight because of competition and there is more of a move to use less resources to make more money.
Suggesting to put money aside as a goal is a good one, don't get me wrong but at what expense is my contention and for many who haven't been into this business long or at all, they follow some who portray some things with ease to reach these goals.
If you look around and see what is happening with the industry and even this segment, the major players are squeezing things too tight because of competition and there is more of a move to use less resources to make more money.
Suggesting to put money aside as a goal is a good one, don't get me wrong but at what expense is my contention and for many who haven't been into this business long or at all, they follow some who portray some things with ease to reach these goals.
To us saving is considered a bill and a very important bill. When you have a slow month this savings is what gets you through. To not even have a little cushion in a business that is as volatile as what we are in seems like a nightmare. If it is tight now how tight is it going to be say when you have to replace a set of tires with no operational money and you have to put them on a credit card that you cannot pay off that month. That sounds to me like a slow death spiral paying more and more interest.
I'm in my asbestos shorts so I'm not askeert to post this stuff. I know it will tweak and chap many but what the heck. Yes, it's a good idea to have 3 to 6 months of expenses set aside. Having 3 to 6 months of income set aside would be even better but for most being able to put away the monthly expenses would be an accomplishment.
One of the reasons many find it so difficult to accomplish is because they are spending all their money before saving any and don't believe they have any available to put away. The thing is, they've got big car payments on a car they can't drive 75% of the time because they're out on the road. They've got a big cable tv bill, a big high speed internet bill, and other bills at home which are 75% unused because they're out on the road. The vast majority have a BIG tobacco bill that's nothing but bad health, bad breath, bad odor everywhere and burned up money. In other words they aren't on the beans and rice, rice and beans plan. Many/most would be able to put away hundreds of dollars a month but would have to make significant painful changes to do so. That's the stopper. Giving up the things that are mostly unused expenses wouldn't be fun.
Leo Bricker, 73's K5LDB
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Owner, Panther trucks 5508, 5509, 5641
EO Forum Moderator
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Support the entire Constitution, not just the parts you like.
One of the reasons many find it so difficult to accomplish is because they are spending all their money before saving any and don't believe they have any available to put away. The thing is, they've got big car payments on a car they can't drive 75% of the time because they're out on the road. They've got a big cable tv bill, a big high speed internet bill, and other bills at home which are 75% unused because they're out on the road. The vast majority have a BIG tobacco bill that's nothing but bad health, bad breath, bad odor everywhere and burned up money. In other words they aren't on the beans and rice, rice and beans plan. Many/most would be able to put away hundreds of dollars a month but would have to make significant painful changes to do so. That's the stopper. Giving up the things that are mostly unused expenses wouldn't be fun.
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
Linda/Leo,
You need to understand one thing - this is about the GROSS of the income you produce, not the net or operation expenses or anything like that.
When you can save the 50% of your gross in any business in one business year that is d*mn good but that works out in many cases to be 80% of your net. To me and a bunch of others, that is unrealistic and impossible to achieve. Albeit the advice of a rainy day fund is a good one IF one can do it and there are not requirements to have one in this business.
I bet you a lot that about <20% of the people out in this industry who are single truck independent owners have a rainy day/emergency fund and the other >80% of them either have a very small line of credit to cover themselves (they are the minority) or nothing at all but luck.
And if you don't believe me, start researching the credit problems of small business owners and see what life is like now-a-days.
You need to understand one thing - this is about the GROSS of the income you produce, not the net or operation expenses or anything like that.
When you can save the 50% of your gross in any business in one business year that is d*mn good but that works out in many cases to be 80% of your net. To me and a bunch of others, that is unrealistic and impossible to achieve. Albeit the advice of a rainy day fund is a good one IF one can do it and there are not requirements to have one in this business.
I bet you a lot that about <20% of the people out in this industry who are single truck independent owners have a rainy day/emergency fund and the other >80% of them either have a very small line of credit to cover themselves (they are the minority) or nothing at all but luck.
And if you don't believe me, start researching the credit problems of small business owners and see what life is like now-a-days.
Packmule
Expert Expediter
Sorry, but I think the point is, If you are going to get into this business, or any business, before you leap you need to be prepared for the worst. Is six months expenses in savings or liquid-able assets out of the question before you jump into this business? Then maybe you are not really prepared to face and survive the hard times and castrophies that await you.
Would you began a 5 day trek across the dessert with 2 days of water?
Not if you are serious about survival. Same in this or any business, If you are not prepared (mentally and financially) to be a business owner, you will fare better to be an employee of someone else until you can build that 6 months security and have a fighting chance of being successful.
This sounds like a lot of funds until you have a major break down with your truck or yourself. You can easily go through what you thought was enough to carry you through six months in half that time.
And if not prepared at all will bring very negative results. ; loss of truck- loss of income- loss of credit ETC ETC.
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.
I may be wrong, but I don't think Phil started his career with a ton of money in his pocket, because with his confident attitude he would have jumped right into a truck of his own and bypassed this so called learning curve. BUT he didn't....Phil became a driver for owners who were in essence paying for his education and funding his future business. 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.
Do I have six months expenses "Cash on hand"?? NO I Don't!! But I am prepared with alternate avenues to cover my expenses and cost of living for six months or more. (Actually I'm going to buy MOOT's Chinchilla inventory).
Business plan,
Alternate plan of action (plan B)
Escape Plan
Call it what you will, but you better have one!!
Danny
Would you began a 5 day trek across the dessert with 2 days of water?
Not if you are serious about survival. Same in this or any business, If you are not prepared (mentally and financially) to be a business owner, you will fare better to be an employee of someone else until you can build that 6 months security and have a fighting chance of being successful.
This sounds like a lot of funds until you have a major break down with your truck or yourself. You can easily go through what you thought was enough to carry you through six months in half that time.
And if not prepared at all will bring very negative results. ; loss of truck- loss of income- loss of credit ETC ETC.
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.
I may be wrong, but I don't think Phil started his career with a ton of money in his pocket, because with his confident attitude he would have jumped right into a truck of his own and bypassed this so called learning curve. BUT he didn't....Phil became a driver for owners who were in essence paying for his education and funding his future business. 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.
Do I have six months expenses "Cash on hand"?? NO I Don't!! But I am prepared with alternate avenues to cover my expenses and cost of living for six months or more. (Actually I'm going to buy MOOT's Chinchilla inventory).
Business plan,
Alternate plan of action (plan B)
Escape Plan
Call it what you will, but you better have one!!
Danny
greg334
Veteran Expediter
Danny,
I agree BUT no one seems to get this, he was talking about GROSS revenue - the before expenses revenue, not net.
When you talk about gross, the figure is unobtainable unless you are making a lot of money to begin with and have no limitations and this business has it's limitations built in.
I agree BUT no one seems to get this, he was talking about GROSS revenue - the before expenses revenue, not net.
When you talk about gross, the figure is unobtainable unless you are making a lot of money to begin with and have no limitations and this business has it's limitations built in.
I was talking about expenses. You'll note I said having a few months of gross expenses put away would be even better but that it would be an accomplishment if most put away a few months worth of expenses, significantly because of so many optional expenses that are considered mandatory. It's a matter of choices.
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.
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.
Packmule
Expert Expediter
Greg,
It really doesn't matter how you tag it...Gross income, Net income, or % of annual earnings. It should not affect your income after you are in business. These funds should be established BEFORE you start your business. Fill your canteen before you go into the dessert, don't count on filling it along the way, because odds are when you need it ...it ain't gonna be there.
And you say...what if I don't have a place or time to fill my canteen before I go into the dessert?
I say "if your smart, you'll stay your a$$ out of that dessert, or catch a ride with someone who does have a little water to share!!"
Danny
It really doesn't matter how you tag it...Gross income, Net income, or % of annual earnings. It should not affect your income after you are in business. These funds should be established BEFORE you start your business. Fill your canteen before you go into the dessert, don't count on filling it along the way, because odds are when you need it ...it ain't gonna be there.
And you say...what if I don't have a place or time to fill my canteen before I go into the dessert?
I say "if your smart, you'll stay your a$$ out of that dessert, or catch a ride with someone who does have a little water to share!!"
Danny
wallytrucker1
Expert Expediter
Phil,sometimes I think you are bored and just want to stir the s#$% and rouse the drivers. Of course everyone should have that rainy day fund and I'm sure most do whether it be savings, a line of credit or a credit card.
However, remember a whole lot of drivers read these forums from all areas of expediting, wherther it be vans, D unit or t/t. We have all read about guys who can't buy a shower or eat much more than peanut butter out here. I actually saw a driver picking through the ashtray at the hook for a smokeable butt. We would all like to have a large cash reserve but I think for the majority of guys out here, being able to stay current on your bills is a major accomplisment. I agree we should all have a large sum when we start out, heck, you read the posts. ( jeeze i'm gonna quit wally world, put some e trk in my van and me an ole yellar are going truckin). Would it not be nice if these large companies required you to have verifiable assets before they signed on every tom , ##### etc.
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.
Sorry to ramble, bored in Reno..Merry Christmas all.:+ :+ :+
However, remember a whole lot of drivers read these forums from all areas of expediting, wherther it be vans, D unit or t/t. We have all read about guys who can't buy a shower or eat much more than peanut butter out here. I actually saw a driver picking through the ashtray at the hook for a smokeable butt. We would all like to have a large cash reserve but I think for the majority of guys out here, being able to stay current on your bills is a major accomplisment. I agree we should all have a large sum when we start out, heck, you read the posts. ( jeeze i'm gonna quit wally world, put some e trk in my van and me an ole yellar are going truckin). Would it not be nice if these large companies required you to have verifiable assets before they signed on every tom , ##### etc.
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.
Sorry to ramble, bored in Reno..Merry Christmas all.:+ :+ :+