A.Record all your downtime and the profit loss B. Compute all repair cost C. Project fuel consumption difference Buy if buying new equipment is greater than A+B+C
Bought a $5000 work truck and put $10,000 repairs into it over a few months and it’s been soiled. Made at least a million bucks off that truck after a couple years now…. It would have been very very uncomfortable trying to finance a new one. I would have lost it form dry spells at work…
I'd like to hear Dave unpack the "minimal functional" a little bit more. Does future capability ever come into play in that decision (e.g. "I think we're going to be at X next year, and I don't want to have to upgrade the equipment to be there)?
Because of Dave’s wisdom I still edit video on a 2010 Apple MacPro computer. And I own every piece of equipment I use weather for video or music; no cc used.
The problem with driving older equipment/cars, is locating replacement parts for it. Also, when one thing goes and you replace it, all the other parts are still old and have a higher probability to fail. Buying a car piece by piece can get very expensive, very quickly. If you have the knowledge to do the work yourself, that would be the most beneficial way to do it. So, what I probably would do, if I had a company (and I dont) is find a "close to retirement" mechanic and hire them as a consultant for a day or two a week, and have them train my workers basic common place repairs. Also, keep a small stock of things that most likely wear out. Again, I am not a business owner, but this seems to make sense to me.
yep, dedicate 1 employee to be the handyman mechanic doing tune-ups/repairs back at the yard every week on equipment not being used. have him watch hours of youtube videos on repairs and maintenance.
Love the MF reference. Those new shiny machines with fancy high-tech bells and whistles are very enticing! But is it better to invest in an exceptional mechanic department that can make repairs in-house? Growing the team with maintenance/repair experts may be a good approach.
dedicate 1, maybe 2 employee to be the handyman mechanic doing tune-ups/repairs back at the yard every week on equipment not being used. have him watch hours of youtube videos on repairs and maintenance.
Aint that the truth..part of Daves problem is he views things from a multi millionaire perspective.. 100k in college loan? Ha pay it off in 13 months on your 80k income ! But to Ag...i farmed for 30 yrs..its impossible to farm without debt unless you're a silverspoon 5th gen guy..He has no idea about costs ..he said rebuild a car 3 times for 5k? LoL...couldn't put tires on one side of a combine for that ..some debt is good, some bad, Dave lumps it all together.
@jimroscovius poorly managed debt...fixed it for you. Business debt if properly managed can be very beneficial to a business, helping it grow and prosper. WALMART which very profitable would never survive without debt...
Dave is forgetting the cost of things. I have a $2-3,000 car that won't stay running and we just paid $1400 for 2 sensors because my husband has already tried replacing other things and it still doesn't work.
@@godsdozer it was a dealer, my husband purposed the parts because that is what the codes said. My husband is a mechanic. You start with the lower cost parts and move up if that didn't solve the problem. The dealer wasn't clear on what parts the were replacing when we said yes to them replacing the parts. They said sensors, but they didn't say O2 sensors.
@@musicalatv yes I agree with most of what you wrote, but, I said "competent" repair shop. A competent repair man knows what to look for with or without codes and knows how to test each part to see if it is working or not prior to replacing the part. In many cases a dealership is usually not the one to use unless its warranty work.
Sorry but the analogy with cars is faulty. Industrial equipment makes you money and business owners sometimes shoot themselves in the foot buying cheap, old cobbled together equipment. You want your clients to see you as reliable with proper tools to do the job. Not delaying work because your equipment is broken down again.
If I spend $5000 to repair a $1000 car and get 5 more years out of it, that is $1000 per year. If I buy a $10,000 car and have no repairs for 5 years, that is $2000 per year. I only consider the cost of operating the machine, not it's value.
He hasn't paid for car repairs lately. You can spend $2000 to $3000 on just a transmission. I was quoted $1400 for a brake job not long ago. If a $2000 car quits it can easily cost more than it's worth to fix it and you still have a $2000 car.
@@abepenner7497 At some point it makes sense to use the money to buy a better car. I have been driving low priced cars for years. My present transport is a $900 2005 Chevy Impala. I've had it for 4 years. I do maintain and repair it but if it ever needs a major repair I will replace it with a better used car.
Getting a better used car sometimes makes sense if repairs are more than car value. Research vehicle reliability records, have it inspected by a trusted mechanic and be sure the vehicle was properly maintained. However, I still remember the buyer's remorse from a caller who took a multi-year loan for an exorbitant amount on a NEW vehicle because he didn't want to pay for a repair that cost much less. I have a personal rule of thumb that I ask myself, "does the repair cost more than a few months of typical payments?" If trading up is much more expensive than doing a repair, that puts things in perspective. If I do decide to buy, I still choose a purchase price which I can pay-in-full with cash. Never create a debt to carry that's more than a repair cost on a fully paid for vehicle.
It's not just what you know, it can Also be WHO you know. Or get your toolbox out and use them.. Parts can be expensive, but labour, esp w raised minimum wage, is the horrendous bit.. When you cold call on a garage or workshop, we just call them mechanics, they plug into the brain of the car and are able to decide whether it's simple or very time consuming to do the job. Rebuilding a transmission is probably the most complex part of the car, but a fault that develops can also be fixed by replacing a sensor, 1/2 hr labour and a $100 replacement part. Thier job can be easy, or very time heavy and fiddly, or awkward access etc. A transmission is WAY more involved than replacing your fluid and filter regularly. Also, a 2nd 👋 reconditioned trans is cheaper than rebuilding one that's only good for parts, basically, and bolting a reconditioned one in. Usually there's a warrantee of 3mths that is a good shakedown to be sure it's doing what it says on the label. Then if regular maintenance iss adhered to, issues like that can be drastically reduced.
No you don't. You have a need to move on and tell a wrecker to come and get it, as you replace like with like, or fix it yourself, OR get a costly loan to replace it with, as he says, an unnecessary upgrade that makes little sense financially inn rhe long run. Peas and spuds
dedicate 1, maybe 2 employee to be the handyman mechanic doing tune-ups/repairs back at the yard every week on equipment not being used. have him watch hours of youtube videos on repairs and maintenance.
I don’t know exactly the ins and outs of your business, but for me it boils down to math. 1. How much are you spending total on repairs? 2. How much would you spend total on a payment for a new piece of equipment? I know that Dave Ramsey may not agree with paying payments, but mathematically if you are spending more on repairs than you would on a payment I would buy new. If you’re not spending more on repairs, then you would on a new piece of equipment then I would keep repairing. You’re gonna learn a lot more value when you repair and no one can take advantage of you.
I think dave may have forgotten to factor in the cost of down time in lost revenue for this caller. When hes talking about the cost of repairing a car vs buying a better or brand new car he is correct, but if your jobsite is charging thousands of dollars an hour to the customer and it gets shut down for 3 days waiting on the mechanic to fix the machine then you have to factor that into the cost of keeping that old machine running instead of buying a newer or less worn out machine.
Dave is forgetting the part that the newer stuff will be worth more in the future than the old equipment. I have seen a lot of times where the cost old equipment plus the cost to repair gets you half the way to the cost of a newer piece of equipment and the old piece still is not worth near half the value of a newer piece of equipment.
A.Record all your downtime and the profit loss
B. Compute all repair cost
C. Project fuel consumption difference
Buy if buying new equipment is greater than A+B+C
Bought a $5000 work truck and put $10,000 repairs into it over a few months and it’s been soiled. Made at least a million bucks off that truck after a couple years now…. It would have been very very uncomfortable trying to finance a new one. I would have lost it form dry spells at work…
Yep
I'd like to hear Dave unpack the "minimal functional" a little bit more. Does future capability ever come into play in that decision (e.g. "I think we're going to be at X next year, and I don't want to have to upgrade the equipment to be there)?
Because of Dave’s wisdom I still edit video on a 2010 Apple MacPro computer.
And I own every piece of equipment I use weather for video or music; no cc used.
Lol imagine running a 2020 computer. Your production will go way up
The problem with driving older equipment/cars, is locating replacement parts for it.
Also, when one thing goes and you replace it, all the other parts are still old and have a higher probability to fail.
Buying a car piece by piece can get very expensive, very quickly. If you have the knowledge to do the work yourself, that would be the most beneficial way to do it.
So, what I probably would do, if I had a company (and I dont) is find a "close to retirement" mechanic and hire them as a consultant for a day or two a week, and have them train my workers basic common place repairs. Also, keep a small stock of things that most likely wear out.
Again, I am not a business owner, but this seems to make sense to me.
yep, dedicate 1 employee to be the handyman mechanic doing tune-ups/repairs back at the yard every week on equipment not being used. have him watch hours of youtube videos on repairs and maintenance.
3+ years in business, and i'm here to say that is excellent advice!
Love the MF reference. Those new shiny machines with fancy high-tech bells and whistles are very enticing! But is it better to invest in an exceptional mechanic department that can make repairs in-house? Growing the team with maintenance/repair experts may be a good approach.
dedicate 1, maybe 2 employee to be the handyman mechanic doing tune-ups/repairs back at the yard every week on equipment not being used. have him watch hours of youtube videos on repairs and maintenance.
Dave is so full of knowledge that isn’t taught in todays world. 👏
because people need to be spoon fed now adays
The minimum functional principle is what I use for home repairs.
Love to hear how this applies to farming. When a tractor can be $500,000 and a combine is $750,000, I'd wonder what Dave would say.
Aint that the truth..part of Daves problem is he views things from a multi millionaire perspective.. 100k in college loan? Ha pay it off in 13 months on your 80k income ! But to Ag...i farmed for 30 yrs..its impossible to farm without debt unless you're a silverspoon 5th gen guy..He has no idea about costs ..he said rebuild a car 3 times for 5k? LoL...couldn't put tires on one side of a combine for that ..some debt is good, some bad, Dave lumps it all together.
@@dirtdevil70 All debt is bad. Buy used, with cash, or don't farm.
@jimroscovius i wholeheartedly disagree..consumer debt is bad , well managed debt can be beneficial for businesses. You clearly dont understand ag
@@dirtdevil70 You clearly don't understand watching tons of businesses go under because of debt.
@jimroscovius poorly managed debt...fixed it for you. Business debt if properly managed can be very beneficial to a business, helping it grow and prosper. WALMART which very profitable would never survive without debt...
Dave is forgetting the cost of things. I have a $2-3,000 car that won't stay running and we just paid $1400 for 2 sensors because my husband has already tried replacing other things and it still doesn't work.
Take it to a competent repair shop the first time, dont be a parts changer unless you know it will fix the problem.
@@godsdozer it was a dealer, my husband purposed the parts because that is what the codes said. My husband is a mechanic. You start with the lower cost parts and move up if that didn't solve the problem. The dealer wasn't clear on what parts the were replacing when we said yes to them replacing the parts. They said sensors, but they didn't say O2 sensors.
@@musicalatv yes I agree with most of what you wrote, but, I said "competent" repair shop. A competent repair man knows what to look for with or without codes and knows how to test each part to see if it is working or not prior to replacing the part. In many cases a dealership is usually not the one to use unless its warranty work.
@@musicalatvmaybe he is a bad mechanic...😕
Sorry but the analogy with cars is faulty. Industrial equipment makes you money and business owners sometimes shoot themselves in the foot buying cheap, old cobbled together equipment. You want your clients to see you as reliable with proper tools to do the job. Not delaying work because your equipment is broken down again.
The three principles are at 6:47 😂
If I spend $5000 to repair a $1000 car and get 5 more years out of it, that is $1000 per year. If I buy a $10,000 car and have no repairs for 5 years, that is $2000 per year. I only consider the cost of operating the machine, not it's value.
You have to figure in residual value after 5 years also.
And down time when it’s being repaired!
He hasn't paid for car repairs lately. You can spend $2000 to $3000 on just a transmission. I was quoted $1400 for a brake job not long ago. If a $2000 car quits it can easily cost more than it's worth to fix it and you still have a $2000 car.
As compared to spending $2000 on a $2000 car?
@@abepenner7497 At some point it makes sense to use the money to buy a better car. I have been driving low priced cars for years. My present transport is a $900 2005 Chevy Impala. I've had it for 4 years. I do maintain and repair it but if it ever needs a major repair I will replace it with a better used car.
Getting a better used car sometimes makes sense if repairs are more than car value. Research vehicle reliability records, have it inspected by a trusted mechanic and be sure the vehicle was properly maintained. However, I still remember the buyer's remorse from a caller who took a multi-year loan for an exorbitant amount on a NEW vehicle because he didn't want to pay for a repair that cost much less. I have a personal rule of thumb that I ask myself, "does the repair cost more than a few months of typical payments?" If trading up is much more expensive than doing a repair, that puts things in perspective. If I do decide to buy, I still choose a purchase price which I can pay-in-full with cash. Never create a debt to carry that's more than a repair cost on a fully paid for vehicle.
It's not just what you know, it can
Also be WHO you know.
Or get your toolbox out and use them..
Parts can be expensive, but labour, esp w raised minimum wage, is the horrendous bit.. When you cold call on a garage or workshop, we just call them mechanics, they plug into the brain of the car and are able to decide whether it's simple or very time consuming to do the job. Rebuilding a transmission is probably the most complex part of the car, but a fault that develops can also be fixed by replacing a sensor, 1/2 hr labour and a $100 replacement part.
Thier job can be easy, or very time heavy and fiddly, or awkward access etc. A transmission is WAY
more involved than replacing your fluid and filter regularly.
Also, a 2nd 👋
reconditioned trans is cheaper than rebuilding one that's only good for parts, basically, and bolting a reconditioned one in. Usually there's a warrantee of 3mths that is a good shakedown to be sure it's doing what it says on the label.
Then if regular maintenance iss adhered to, issues like that can be drastically reduced.
No you don't. You have a need to move on and tell a wrecker to come and get it, as you replace like with like, or fix it yourself,
OR get a costly loan to replace it with, as he says, an unnecessary upgrade that makes little sense financially inn rhe long run.
Peas and spuds
You can buy another older unit as a back up. When one goes in for repair you have the extra one.
You can easier put 80 of work into a 2k beater.
Cat parts are getting tough to find. Most older cat stuff is being shipped over seas.
dedicate 1, maybe 2 employee to be the handyman mechanic doing tune-ups/repairs back at the yard every week on equipment not being used. have him watch hours of youtube videos on repairs and maintenance.
I don’t know exactly the ins and outs of your business, but for me it boils down to math.
1. How much are you spending total on repairs?
2. How much would you spend total on a payment for a new piece of equipment?
I know that Dave Ramsey may not agree with paying payments, but mathematically if you are spending more on repairs than you would on a payment I would buy new. If you’re not spending more on repairs, then you would on a new piece of equipment then I would keep repairing. You’re gonna learn a lot more value when you repair and no one can take advantage of you.
This talked me off a ledge
somewhere in all that rambling is some good advice
I think dave may have forgotten to factor in the cost of down time in lost revenue for this caller. When hes talking about the cost of repairing a car vs buying a better or brand new car he is correct, but if your jobsite is charging thousands of dollars an hour to the customer and it gets shut down for 3 days waiting on the mechanic to fix the machine then you have to factor that into the cost of keeping that old machine running instead of buying a newer or less worn out machine.
I run old equipment.ya allways some n 2 fix
But I can fix it.dont forgot lots guys have n big trouble with new environmental bs on
Buy one new every year
In five years all equipment is new🤷🏻♂️
One word: Maintenance....
Dave is forgetting the part that the newer stuff will be worth more in the future than the old equipment. I have seen a lot of times where the cost old equipment plus the cost to repair gets you half the way to the cost of a newer piece of equipment and the old piece still is not worth near half the value of a newer piece of equipment.
gregs devalued cash
matt fitzpatricks moms who hash
jacqueline grahams eye lash