$80,000 + a Year

[retire@40]

Back when I was running my little manufacturing company, it never made any money
partly because my ex. and I were living the good life and thus taking a lot out
of the business.

If it never made money, how were you taking a lot out of the business?

 

[Nords]

Hey, don't worry about it. Nords has called me "Blissfully Ignorant" also.
I think he likes us.

I thought Nords calling me "blissfully ignorant" was a compliment, sort of a recognition of my unenlightened state of existence.

Yes, there are many states of blissful ignorance and those were compliments.

For example I'm blissfully ignorant of the finer luxuries in life just as REW is blissfully ignorant of having to sweat out a couple hours in anti-Cs. But I'll never complain about that to Jarhead because he's all too familiar with living in field conditions that make my anti-Cs look like a five-star resort hotel. Although I'm sure many would debate the multiple redundancies inherent in the concepts of "Marine" and "blissfully ignorant", I'm just not gonna go there.

So I do like you guys.

Hopefully not in a "Brokeback Mountain" sort of way. JG

But not that way. Not that there's anything wrong with that, I never asked, no one ever told me, blah blah blah.

If it never made money, how were you taking a lot out of the business?

Ah, therein lie the multiple complexities & contradictions that form the incredibly complicated and impossibly unbelievable finances of the JohnGalt Company. For someone who claims to run his financial analysis on the back of an envelope, along with his hiring, employee training, & negotiations skills, he makes Jack Welch look like Pee-Wee Herman.

So while Scoop's math may work for JohnGalt, or John's may work for Scoop, I wouldn't advise anyone else to try either of their methods at home. It's the sort of situation where I definitely prefer to remain blissfully ignorant.

 

[scoopsteve]

Thank you guys for all of your suggestions. It appears that maybe I was thinking about a little better returns that what I can probably expect however, by placing 80K + into these accounts each year, I feel pretty confident that we would be able to retire in the time frame set forth. I have read accounts of those that have retired at an early age with 500K in the bank, and have been fine.

The key is staying out of debt! I have asked the question of many people that live in 250K-300K homes, "Would you rather live in a 250K-300K home and stress about how you were going to make the mortgage payment each month, or live in a 100K home and do what you want? For me, I will take the 100K all day long. I feel like we are retired now as we only have a $900 a month house payment. We had been in debt for several years car payments, mortgage, credit cards etc. And once all of this debt was retired, what a feeling it is. Thanks for all of the suggestions. God Bless

 

[retire@40]

...I have read accounts of those that have retired at an early age with 500K in the bank, and have been fine...

And they would be fine with that if they can earn about 7% a year and could live on about $20K a year income adjusted for inflation for the rest of their lives. Most people can't.

 

[cute fuzzy bunny]

If it never made money, how were you taking a lot out of the business?

Made it up on the volume, then invested it in zero percent credit cards.

 

[eriter]

I have a very LARGE customer that I have been doing business with for 7+ years and is very loyal. I have worked hard to establish trust, quality products, and on-time delivery.

This sounds like a very risky business to me for two reasons: 1) you are not there to oversee the day-to-day operations--and nobody will take care of it like you would; 2) if I am reading your post correctly, you apparently only have one large customer; the rule of thumb is not to let one customer be more than 50% of your business, otherwise you are risking ruin if he leaves.

Why not do this:  take over the day-to-day operations and try to increase your client base so you won't have all your eggs in one basket, and you will make more money.  Also, pay off your house so you will be totally debt free.  That $900 a month would then be free for additional investment and you would have the security of being completely debt-free.

 

[Mr._johngalt]

If it never made money, how were you taking a lot out of the business?

You may have missed the point. The corp. didn't make money before I shut down the manufacturing because
we were taking so much out of it. Generally in smaller
closely held (family type) businesses, the owners will
either (A) Live off the business, or (B) Leave as much as possible in the business in order to pump up the
financials for future sale.

JG

 

[retire@40]

You may have missed the point.  The corp. didn't make money before I shut down the manufacturing because
we were taking so much out of it.  Generally in smaller
closely held (family type) businesses, the owners will
either (A) Live off the business, or (B) Leave as much as possible in the business in order to pump up the
financials for future sale.

In either case, the business makes money. You either take the profits or leave them in the business.

I guess you were trying to say your business made money and you disbursed the profits to yourself instead of keeping it in the business as working capital. OK.

 

[cute fuzzy bunny]

Its quite possible it never made money.