Maintaining Equity
New trucks are appealing because they have a warranty and they meet all of the latest regulations such as the C.A.R.B. regulations in California. Since they are new, they are less prone to failure due to simply being old. Older trucks' components wear out. The plastic and rubber dries out. The wiring becomes more corroded. As soon as the truck rolls of the assembly line it starts to age.
Used trucks can be a great deal if they're in good condition or have been maintained. Even if the used truck hasn't been maintained properly, a skilled mechanic or someone who is mechanically inclined can bring the equipment back up to speed.
The point here is that the value of the equipment should exceed the amount owed on it. The condition of the equipment is important because the more you keep up with the maintenance and keep records of the repairs, the more value there is when it comes time to sell. These days where the aerodynamics and fuel efficiency of the truck play a major role in the truck's value, it pays to know when to sell what you have and buy new.
There is also a strategy that is popular where you buy equipment and use it until its at its sell point, then sell it and pocket the money. Next you buy the equipment with financing to replace your sold equipment and make payments on it while the funds you brought in from your recently sold equipment collects interest in a retirement account.
You can buy and sell trucks, trailers, tools, and anything else your business needs keeping in mind that you should only own so long as there's value. As long as the value is there, your business will stay in the black. The best situation to be in is to have a piece of equipment that you can pay off quickly and use for years to come with small payments and little maintenance. In this scenario, you would buy a new truck at a discount or a used truck for a reasonable price.
You would either make the payments on the new truck or pay the used truck off quickly. The truck would then be used for several years past its payoff date and the maintenance would be a priority so as not to trump the equipment's former payment amount per month. It's important to keep on top of the maintenance. The older the truck, the more attention it needs.
Texting While Driving Is Now A Nationwide Epidemic
This video was shot by the non-driving co driver of the semi-truck. On this day approximately 30 other vehicle drivers where also witnessed texting behind the wheel of a moving vehicle from passenger cars to commuter bus drivers. It's everyone! Anyone with a cell phone can be doing this in any vehicle at any time. It's more dangerous than drunk driving.
A Lighter Ed
It’s very easy to pack on the pounds while at the wheel of a semi-truck. Amazingly though, there's a way to lose the weight almost as fast as you put it on. It depends on your bodily make-up, but for me it works. In the past I’d lose weight with exercise. I’d put on a few pounds and then start my running routine. In a couple of weeks, the weight would fall off.
The Investment Game
Who wants to invest money in this stock market? I know what you're thinking, "Ed? Are you seriously going to give investing advice?"
No, not really. I'm never giving anyone ANY advice when it comes to investing so don't start calling me E.F. Hutton. You weren't going to anyway? Right. I thought so.
The strategy I've been told works by the wealthy folks I've had the pleasure of meeting, is about compounding interest over time. It's interesting how things come together. As you start establishing yourself as a person who's able to wear many hats, you find yourself around like minded people.
The military is similar because as you advance in rank, you find yourself around veterans who have achieved success in their fields. Well actually, that's just life. It doesn't matter which path you choose, right? As you stick to it and become an expert or authority, you will find others who have pursued a similar path to find similar success.
The point of this post is to highlight that when you are working for yourself, you have to invest in your own retirement. You need to be thinking long term. When I started trucking at 21, retirement was a long way off. If you started at 21 like me, you're not going to be touching that money for 30, 40, or even 50 years. That's the beauty of compounding interest and mutual funds.
The earlier you start, the more you'll have when you aren't able to work anymore. In fact, if you start in your teens, you can put minimal money away every year and by the time you are 30, provided you've picked the right funds and management, you don't ever have to put in another dime. The money will grow throughout the long time period between when you started and retirement.
The earlier, the better, when it comes to mutual funds and IRAs. As an employee, you can contribute to a 401K, and you can also do so as a small business owner. You can contribute to an IRA, a SEP IRA, an HSA, and a solo 401K, and there are Roth versions of the IRA and the 401K so that you won't pay taxes on the money when you retire.
The good ole IRS has set up their system to allow you to pick how you set up a retirement plan. You should tailor your plan to maximize saving money both for yourself and your business. What most people don't understand is that the IRS wants US citizens to work in this country thereby generating revenue, paying taxes, and both taking and putting back into the system.
They don't want to tax you to death, because then people wont support the system. This system has flaws, and I'm not interested in getting into this here, but for the purpose of this blog, I'll just say that you should know what is taxed, and what is not taxed so that you can navigate the system with some success.
A good accountant can help you with the taxes, but unless you can afford a financial adviser, you'll be your own financial adviser. When you're investing in your retirement, it may be that you can't afford not to have a financial adviser, but the important thing is to put something away regardless of how you do it.