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Old 02-09-2008, 05:25 PM   #21
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Originally Posted by TickTock View Post
Interesting. Checking MMND's website, the links to her net worth are gone.
Must have been a bad week in the market...

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Old 02-09-2008, 05:28 PM   #22
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I also found it interesting that the link to her "investing strategy revealed" now gives a 404 page not found. Frankly, I didn't have the patience to wade through all those posts to see if there was an explanation somewhere here on the boards for why that was taken down, but it's still in Google's cache so I was able to take a look. Nothing particularly provocative.

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Old 02-09-2008, 05:35 PM   #23
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Originally Posted by TickTock View Post
Anyone have experience with running a small, independent plumbing operation? Are these numbers reasonable? In particular, is never working more than 40 hours a week reasonable?
When's the last time you remember seeing a happy plumber?

Seriously, I'd read Rex Cauldwell's "Plumbing A House" for the stories about his family's plumbing business and his physical condition. He pulls no punches.

A guy at our dojang is a finish carpenter who's been working 60-80 hour weeks for over three years. He's exhausted (he adds 25%-30% to every bid just to see if the customer's serious) and he still has more work than he can handle. (While his kid's kicking butt, he's napping in his truck.) The reason he's been working so hard is to pile up cash for the lean years which he knows are a part of every boom-bust cycle.

I think a lot of prospective owners of trade businesses back off when they start pricing liability insurance & workmen's comp, and that's before they learn about project bidding & kickbacks.

Even in a perfect world the profit margins go to the contractor who's perfected the balance of speed vs expense of special tools, their craftsmanship, and being able to find all the surprises & gotchas before making the bid. Think about all the things that go wrong when we're fixing a leaky faucet and multiply that by 40 hours/week... or a 200-home new-construction subdivision.

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Old 02-10-2008, 03:06 PM   #24
Thinks s/he gets paid by the post
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Originally Posted by TickTock View Post
So, piecing info from her blog, posts here, and the link MNeumes provided, DH charged $65-$85/hr, worked an average of 30 billable hours/week, and profit from material accounted for the rest. Gross was $250k / year.

$75/hr * 30 hours / week * 50 weeks / year (allowing for two weeks vacation) = $112,500 / year.

That leaves $137,500 in material profits. That's $2,750 in profit from materials per week.

OTOH, they also had an apprentice, and I assume they made some profit off of him or they would not have kept him.

Anyone have experience with running a small, independent plumbing operation? Are these numbers reasonable? In particular, is never working more than 40 hours a week reasonable?
My father's a plumbing contractor (and my former employer). While it's only in commercial construction, I know enough about the cost side of things to comment:

First of all, the apprentice thing is suspicious. Times must be pretty tough for an apprentice to agree to work just 30 hours/week (unless he's experienced enough to work on his own).

Also, he'd probably charge the same rate for his apprentice as himself - but even if he cut the rate down, that would mean $125k in revenue from his work, and (?) $100k in revenue from the apprentice (assuming the apprentice works just 30 hours a week - again, suspicious).

That leaves a minimal amount of revenue from materials.

So the biggest question is: was there an apprentice or not? If there wasn't, then the materials amounts - while high - might be justifiable - but it'd still be a big stretch (but then why mention him?). If there is an apprentice, the materials might be reasonable, but almost at the point of possibly being too low.

But the other problem I have with this whole thing is what his exact work is (again, I think she evaded specifics....) Did MMND say he was in service work, or just say that he's involved in plumbing? It can be pretty hit-or-miss in the service industry if you are a one-man reliably average just 30 hours/week in work would require either turning a lot of people away, or just happening to roll the dice right and getting the right number of calls. If he does small 'jobs' - even that would be tough (presumably) to reliably have enough work (on average) per week to say he pulls in $X/year. Also, I'd never expect to see two plumbers work together consistently in "service work" (for the same job, since service plumbing jobs are typically handled by one person), so (again) the question of the apprentice comes up. If he does small jobs where he works up a firm quote to someone, it sounds odd that he wouldn't have a lot of dead/unpaid time of driving to peoples' homes to give them a quote before doing the work.

However, with the materials, don't forget to avoid confusing GROSS with NET. Plumbers pad the materials like any other industry (I was quoted $350 by Midas to replace my Explorer ECR valve - material cost if I bought the valve on-line is about $75. Labor they quoted was about 1.5 hours @ $60/hr. Talk about material mark-up!). A plumber could easily have a 100% to a 200% markup on SOME materials (pipe, fittings, washers, toilet parts), but not others (complete toilets, water heaters). But even then, if he truly has $125k in material revenue, that comes to $83/hr in material revenue. For a service plumber to average that day-in and day-out, that seems suspiciously high - unless he's the fastest plumber in the world.

To give you a comparison, the entire Busch Stadium plumbing system ended up at roughly $34/hr in material costs (total material divided by total plumber hours) - and that includes everything from 16" storm drainage pipe to 8" steel water pipes, all of the toilets/urinals/sinks/floor drains, the hangers supporting the pipes, etc. Sure, I did one hell of a buyout on it and material costs at today's rates would be roughly $70/hr in material costs - but it just seems difficult for me to see how a service plumber would bring in that much material revenue. And if he does small jobs, there's almost no way his materials would be that high (even if he had a 100% - or more - markup on his materials).
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Old 02-10-2008, 03:51 PM   #25
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Personally, I wouldn't exactly be upset if we never saw MMND. The h05uc vibes are overwhelming.
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Old 02-10-2008, 06:34 PM   #26
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Originally Posted by brewer12345 View Post
Personally, I wouldn't exactly be upset if we never saw MMND. The h05uc vibes are overwhelming.
Hey Brewer, Hope this doesn't sound too dumb, but what are h05uc vibes?
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Old 02-10-2008, 06:41 PM   #27
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Originally Posted by Purron View Post
Hey Brewer, Hope this doesn't sound too dumb, but what are h05uc vibes?
My favorite is, "Hocomania is the general term used by the Retire Early community to describe Rob Bennett's five-year long jihad against arithmetic and generally-accepted financial planning principles."

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Old 02-10-2008, 07:25 PM   #28
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H0cus was before my time.

Based on the above two links, I don't think it's fair put MMND and h0cus in the same boat. Her family still has a worker making as much as they spend, they're in their early 40s with a NW of $1.6 million as of last November, and many of the links, quotes, and posts on her blog are in general agreement with math and generally-accepted financial principles.


Sorry about hijacking your intro thread. We should probably move further MMND discussion elsewhere.

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