Topic Thread

1.  invest your excess cash?

Posted 11 days ago
I was once abused by a financial advisor, so I'll ask my fellow hvac people, whom I trust more.

When you have more money in your bank account than you need, do you let it sit or what do you do?

I normally exhaust the excess cash at the year end so i don't pay double taxation when i retire, but at times I have some decent chunks sitting around doing nothing.


Gary Wilson, Owner
Wilson Services, Inc.
Northampton, MA
413-584-3317
gary@wilsonph.com
www.wilsonph.com




2.  RE: invest your excess cash?

Posted 9 days ago
Gary,
Because of longevity and other factors we've been fortunate to not have any debt for many years and that's positioned us to have cash each year. Unfortunately interest paid on cash is very low especially in an interest bearing checking or savings account. We keep the majority of our cash in short term CD's at the bank to gain a slightly higher interest rate and to keep the cash protected.
 
Years ago when I had debt I would take every dollar I could to pay down principle on loans, including my buildings so if you have any debt your money would work for you at the interest rate of the loan, which would be a very good ROI. I believe very bad advice is to buy assets to get a "write-off". The only exception would be if you actually need the asset. Taxes only save the tax rate percentage, which could be as high as 35% but as low as 10%. I've seen guys buy a $40,000 truck on this bad advice and it did save them 20 cents but cost them 80 cents for something they didn't really need, that's not good money management.
 
Now there is more inflation than has been in the last 6-10 years you could buy some inventory that you know you'll be using in a short amount of time, but that requires available space and the risk of theft.
 
I'm very glad you have this cash problem instead of the absence of cash problem the majority of business people find themselves in.  
 
 
Gary's Heating And Air Conditioning, Inc.
Gary Ward
President
806-373-2537
 
2505 SW 7th Ave | Amarillo, TX 79106 | TACLB2620C | TACLA2832C
 
 
 
This message contains confidential information and is intended only for the individual named. If you are not the named addressee you should not disseminate, distribute or copy this e-mail. Please notify the sender immediately by e-mail if you have received this e-mail by mistake and delete this e-mail from your system. E-mail transmission cannot be guaranteed to be secure or error-free as information could be intercepted, corrupted, lost, destroyed, arrive late or incomplete, or contain viruses. The sender therefore does not accept liability for any errors or omissions in the contents of this message, which arise as a result of e-mail transmission. Your receipt of this communication is not intended to waive any applicable privilege. Gary's Heating and Air Conditioning, Inc. reserves the right to monitor all electronic communications transmitted to and from Gary's Heating and Air Conditioning, Inc.
 
 





3.  RE: invest your excess cash?

Posted 8 days ago
Thanks Mr Ward, it only took me 25 years of hard work to get to this stage, I'm on the fast track. I concur about the "go buy stuff" theory, although when I get new work vehicles it's generally at year end. 

In my early years I was living on borrowed money. I then got a line of credit at my bank. My suppliers began to love me and my bank loved me, that's what we all call a Win Win. 

The cash sits on a 7 day CD but rates are useless 

I'm trying to invest in real estate but I'm a bit too picky. I have one rental property now. I've thought about paying down the principal on my real estate but my rates are good and I'll lose agility if some attractive real estate opportunity arises. But your suggestion makes me think how many thousands I could save if I throw a chunk of cash at the loan. 

Thanks for your insights 

Gary 




--


Gary Wilson, Owner
Wilson Services, Inc.
Northampton, MA
413-584-3317
gary@wilsonph.com
www.wilsonph.com







4.  RE: invest your excess cash?

Posted 7 days ago
Gary,
Years ago I dabbled in residential real estate and because of my personality I hated it. sometime after I got out of all that property I bought a commercial property and enjoy it because the terms between leasees in commercial is so much different than terms with residential renters/leasees. Cash flow is much more predictable and there are no day-to-day worries/duties because that falls to the responsibility of the leasee.
Another very good IRS rule I learned this year is when you sell commercial property and carry the financing yourself you get to defer capital gain taxes on the principle paid each year instead of a onetime hit, which could raise your effective tax rate and be an unnecessary hit.
 
Good luck to you!
Gary
 
Gary's Heating And Air Conditioning, Inc.
Gary Ward
President
806-373-2537
 
2505 SW 7th Ave | Amarillo, TX 79106 | TACLB2620C | TACLA2832C
 
 
 
This message contains confidential information and is intended only for the individual named. If you are not the named addressee you should not disseminate, distribute or copy this e-mail. Please notify the sender immediately by e-mail if you have received this e-mail by mistake and delete this e-mail from your system. E-mail transmission cannot be guaranteed to be secure or error-free as information could be intercepted, corrupted, lost, destroyed, arrive late or incomplete, or contain viruses. The sender therefore does not accept liability for any errors or omissions in the contents of this message, which arise as a result of e-mail transmission. Your receipt of this communication is not intended to waive any applicable privilege. Gary's Heating and Air Conditioning, Inc. reserves the right to monitor all electronic communications transmitted to and from Gary's Heating and Air Conditioning, Inc.
 
 





5.  RE: invest your excess cash?

Posted 8 days ago
First, congratulations on having cash! You're clearly doing something very well, and figuring out where and how to invest your money is a fun problem to solve. However, if a financial advisor hired an HVAC contractor, and that contractor botched the job, would you advise the homeowner to give up and call one of his or her financial advisor buddies for HVAC advice? No, but you'd probably explain how to find a great contractor. So instead of asking unqualified people about a unique and unclear set of circumstances, I'd suggest asking instead about how to find a good financial advisor.

You may want to read about the Financial Industry Regulatory Authority, FINRA. If you go to FINRA's page, you can find a registered financial advisor or even file a complaint about your previous one. The professionals regulated by FINRA have a fiduciary responsibility to you, their client.

I use this firm, but this link is their 'how to find a good advisor' page: How to Choose a Financial Advisor: 18 Questions to Ask. They also have a lot of great educational content on their website, and they have a weekly podcast in various formats that I listen to regularly.

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Linda Couch
Chief Operating Officer
Parrish Services
Manassas VA
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6.  RE: invest your excess cash?

Posted 7 days ago
Thanks Linda, you're always making so much sense. A financial advisor telling me how to design a heating system----priceless!


Gary Wilson, Owner
Wilson Services, Inc.
Northampton, MA
413-584-3317
gary@wilsonph.com
www.wilsonph.com







7.  RE: invest your excess cash?

Posted 7 days ago
Hi Gary,
I fully understand where you are coming from. In my early years we invested our money heavily into real estate market. Low and behold the market dropped. Risk is heavy and maintenance can be troublesome. Although we did ok, I personally would not recommend being a landlord unless you want to devote a significant amount of your time to that industry. To some degree it is gambling. My financial advisor was able to put us into a fund called the Griffin Funds. What this did was to allow us to put our money into a guaranteed short term return fund. We receive 5.5-6% on our money of which we have access to every 3 months if we want to cash out. The cost to get into the fund is 5%, but that extra .5-1% is what we would have got at a bank anyway. Way better than a bank or CD. Plus we can get our money should we need it within the 3 month term. I agree with Gary Ward on paying off debt, but once you are free and clear this concept is wonderful and allows you to have that Emergency fund available in 3 month intervals while making a descent rate of return after 1 year. If better opportunities arise you can invest elsewhere.
Good Luck!

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John Christensen
Partner VP
Christensen & Wisnet, Inc.
Appleton WI
(920) 734-1436
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8.  RE: invest your excess cash?

Posted 7 days ago

Great point Linda,

 

I just recently had my meeting with my financial advisor and just like we cool software to help sell HVAC, they have much better software's now that can calculate what you need to do and explain in easy terms.  A few years back we had to go through the questionnaires on what we wanted in the future and for situations such as me not being around.  He types it all in and is able to show us how much life insurance we meet, how much we need to be putting in 529s for our children, and what we need to be putting in 401k and IRA to hit our retirement goals.  Great information that my wife and I can look at to see if we are really where we need to be as most of the time we are short of what we want. 

 

Cost of the consultation, nothing.  He will get my future money and that is what he is after. 

 

Hope this helps. 

 

 

Tyler B. Kime

General Manager

Standard Heating & Air Cond. Co. Inc.

205-322-2679

205-271-4332 direct

205-322-2913 fax

www.WeSetTheStandard.com

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