Paying House Off Early

pattersonj11

Old Mossy Horns
I’ll give you the simplest explanation I can imagine.

After labor and all costs, you turn a profit of $1 on a sale.

That’s a positive sale. You can make 10 of these a day.

How long will you be in business?
You will be in business as long as you are turning a profit. With all costs accounted for, then having an extra dollar off the sell is nice. Are you hinting that not all costs may be accounted for and surprise expenses will sink you?

If you have all of your costs accounted for, you can stay in business indefinitely and never turn a positive dime. As long as you aren’t turning negative, you can stay in. Even turning a negative margin, most businesses can be run for years if cash flow is monitored. It’s a losing game, but the money is there.
 

pattersonj11

Old Mossy Horns
No one except the business owner knows what net profit is. Say I pay $10,000 for a car and sell it for 12,000 thats a 2k gross profit. Now I have to pay a salesman a manager the power bill advertising taxes rent water phone .... they all have to get paid. Oh yeah and at some point the guy who owns the business would also like to get paid. Sometimes making money is not really making money.


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So...shooting in the dark.

I’ve never tried to sell something without having a pretty good idea of what the overhead was.

I consider overhead in my cost for the item. When I consider profit, I am speaking of selling price minus the costs.
 

woodmoose

Administrator
Staff member
Contributor
dang gazillionaires on here,,,,,

what does cars have to do with a fellow paying off his house?

where's that popcorn?
 

DBCooper

Old Mossy Horns
Contributor
You will be in business as long as you are turning a profit. With all costs accounted for, then having an extra dollar off the sell is nice. Are you hinting that not all costs may be accounted for and surprise expenses will sink you?

If you have all of your costs accounted for, you can stay in business indefinitely and never turn a positive dime. As long as you aren’t turning negative, you can stay in. Even turning a negative margin, most businesses can be run for years if cash flow is monitored. It’s a losing game, but the money is there.
Well, in my example, you’re making $10/day.

If you can stay in business, perpetually, doing that...... Rock on.
 

double

Twelve Pointer
So...shooting in the dark.

I’ve never tried to sell something without having a pretty good idea of what the overhead was.

I consider overhead in my cost for the item. When I consider profit, I am speaking of selling price minus the costs.
Fixed vs variable expenses.


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pattersonj11

Old Mossy Horns
Well, in my example, you’re making $10/day.

If you can stay in business, perpetually, doing that...... Rock on.
You are profiting $10 per day. This can be a good deal. “$1/unit after all costs.”

Pay a guy a salary to sell those things. He makes you $10 a day in profit. He makes $100k a year, owner makes $500k a year and has 19 more sales guys knocking down that $10 a day profit. Everyone is happy. Business clears $1,000 a week in profit. $50,000 year in profit.
 

Mr.Gadget

Old Mossy Horns
Well, in my example, you’re making $10/day.

If you can stay in business, perpetually, doing that...... Rock on.
Why not?
If you pay all the bills, pay all the insurance, taxes, employees. .......
And still have 1$ in the bank you can make it just fine.
Lots have lasted years breaking even up a few even down a few.

Been a part of some. Breaking even at the end of the day works fine.
 

UpATree

Four Pointer
Contributor
Why not?
If you pay all the bills, pay all the insurance, taxes, employees. .......
And still have 1$ in the bank you can make it just fine.
Lots have lasted years breaking even up a few even down a few.

Been a part of some. Breaking even at the end of the day works fine.
Opportunity cost--you have money tied up in a building, inventory, tools, a truck, etc. Sell it all and put the money somewhere else that makes more. I knew a guy who had a garage on a corner for decades. After the town grew around him, the corner was worth more than he could ever make as a mechanic, so he got out.
 

Mr.Gadget

Old Mossy Horns
Opportunity cost--you have money tied up in a building, inventory, tools, a truck, etc. Sell it all and put the money somewhere else that makes more. I knew a guy who had a garage on a corner for decades. After the town grew around him, the corner was worth more than he could ever make as a mechanic, so he got out.
Yep
It is all timing.
My family had a few business that really never made much money.
Everyone got a pay check, all.bills and taxes paid. It was like a job, they made a good paycheck every week and many others made a living from them. Hell I made a lot of money in the day for working there. When they were ready they sold the business, building and made more than enough money to do what they want the rest of there lives.
They are happy with owning a few places now one in town, one at the lake and keep a place in FL for 5 months out of the year.
All done with breaking about even at the end of the day.

Nothing wrong with it.
 

Homebrewale

Old Mossy Horns
The fiscal advantage is the $500 to $1,000 rebate off the purchase price for financing through the manufacturer's finance company. Take the rebate and the 5% financing, pay off the loan and incur no interest...
At 5% interest rate, I'd do the same thing. At 0% interest rate, there is no incentive to pay it off early.
 

Homebrewale

Old Mossy Horns
dang gazillionaires on here,,,,,

what does cars have to do with a fellow paying off his house?

where's that popcorn?
I think the OP already has an answer on that. The stock market is too volatile in that short of time frame to invest. Now if we talking about extra payments versus investing over a 10 or 15 year period, the advice based on the numbers alone would be different.
 

Mr.Gadget

Old Mossy Horns
Agreed, but no auto manufacturer will give you a rebate on the cost of a vehicle to take their 0% APR financing...
That is what I found.
Just checked Chevy site.
They have 0% for 72 months or 10k off if you are Financing with GM Financial
Reading the fine print it looks like the option 1 and 2 are separated and you can not get the x% off with 0% apr.

When I got the last 3 trucks the cash deal was better other than the short term 0% from toyota on the best deal I could find but it was a fight.
 

double

Twelve Pointer
Is there fine print on the financing that discourages early payoff?
No. If you pay 6 payments we get all our money. If you pay it off when you get your first bill they take our funds but it does not affect the buyer. I politely ask my clients to make 6 payments. If they choose not to I totally understand. Lots of stores will lie to people and tell them you have to make a certain number of payments but once you get that first bill in the mail your transaction with the dealer is over and done with


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DBCooper

Old Mossy Horns
Contributor
That is what I found.
Just checked Chevy site.
They have 0% for 72 months or 10k off if you are Financing with GM Financial
Reading the fine print it looks like the option 1 and 2 are separated and you can not get the x% off with 0% apr.

When I got the last 3 trucks the cash deal was better other than the short term 0% from toyota on the best deal I could find but it was a fight.
If you’re just dealing with what the mfr or distributor is offering, you’re missing out on some great deals.
 

KTMan

Twelve Pointer
I know,,,just messing on the thread divergence,,,,

carry on
At least we have a thread going if anyone trying to figure best options on paying on a car.

Jk. Got my answer that I pretty much already knew. Just like to hear other people’s thoughts.
 

Homebrewale

Old Mossy Horns
Agreed, but no auto manufacturer will give you a rebate on the cost of a vehicle to take their 0% APR financing...
Sure, you have to figure in the loss of a rebate but then it really isn't 0% financing. You have to amortize the lose of the rebate to figure out the true interest rate instead of the nominal 0% that is being offerred.

That said, I took a 0% car loan years ago on a car because there was no rebate being offered. Since there wasn't a choice, the decision was easy.
 

took

Ten Pointer
Contributor
I did not get through all 5 pages of this; but my simple comment -

If you can pay it off early; do it! I cannot tell you the peace of mind knowing my wife and I own the house and about 30 acres that we are sitting on. Even makes me think about other career options with less stress and time commitment. Paying the house off is what gave me the freedom to think about that.
 
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