Debt-free or cash poor?

[Wayne Miller]

Brian wants to know what you think.

Would you rather have Money in the bank and be in a loan, or

Would you rather be completely debt free with NO money in the bank at all?

 

[floorguy]

Hows about neither

got debt, but no cash lol

 

[Brian R]

I am curious to see how this one turns out. I may have already posted my view in another thread but I will wait to post it here.

Thanks for posting this for me Wayne.

I'm not sure enough people surf this room to get a good result but maybe I will mention it elsewhere.

 

[Jeremy]

Is there a middle ground option that allows for ops & advertising funding?

Debt free for me... My business has about 5k in debt including credit card and vehicle debt. Eventually, I'll have some cash & nothing that "I HAVE TO" spend it on.

Hey Mikey you wanna starta a pay off Jeremy's Van Fund? LOL I'll even kick in the first $40!

 

[Nate The Great]

They way I live my life right now is debt free with no money in the bank. I know it maybe stupid from a business stand point, but I've never took out a loan and honestly don't care to. I have ways of getting what I need anytime I need it. I don't feel the pressure to produce money every month for xxx loan.

 

[daniel@procarpet]

This is kind of a no brainer depending on the debt amount and how much cash you could have in the bank. A hundred thousand in the bank with a 20,000 dollar loan is going to get a different response than debt free and broke. You need to be more specific with your figures. I selected the first option simply because having cash allows you to have some breathing room. Who cares if you have a loan. Just work hard and pay it off fast. If you have no money in the bank, then making money becomes much more difficult.

 

[Kevin. McCreary]

Rule #1 CASH IS KING!

 

[Ken Snow]

It is pretty scary that almost half voted for the second option.

 

[Desk Jockey]

Debt doesn't bother me as long as it's managed. It's all I've ever known, as we pay off something we are always buying or leasing something else.

I would rather have the liquid cash than owe nothing and have nothing in hand.

 

[ACE]

Not everyone has the option of credit anymore. I just got another rejection letter for a small biz loan yesterday. So, cash it is. I’ll be damned if I’m going to pay the sharks 20 points.

 

[Brian R]

This is kind of a no brainer depending on the debt amount and how much cash you could have in the bank. A hundred thousand in the bank with a 20,000 dollar loan is going to get a different response than debt free and broke. You need to be more specific with your figures. I selected the first option simply because having cash allows you to have some breathing room. Who cares if you have a loan. Just work hard and pay it off fast. If you have no money in the bank, then making money becomes much more difficult.

There are different scenerios but I wanted to make it extreme in both directions to make eveyone make a decision.

I chose money in the bank and would everytime.
That money is yours...you can default on debt...even if it IS a dirtbag thing to do.

 

[Guest]

It is pretty scary that almost half voted for the second option.

Ken I have to disagree with you,I own all my equipment and van and I buy everything I need,I have done both,it just now does'nt cost me anywhere near most people just to get to the job.The difference is,I can easily be in your position,but you can't easily be in mine.

 

[Ken Snow]

Then you m ust have cash Kevin. The 2 options were no cash and no debt vs debt and cash. If you are buying things for cash then I think you are a diff scenerio, which I would also agree with.

It really was a silly either or scenerio of not much liklihood in the real world.

 

[Brian R]

Yes,
It was an extreme comparison because I wanted to get the mindset of everyone.

Obviously I would rather have no debt AND money in the bank...who wouldn't?

 

[joey895]

My single biggest mistake since starting this business was spending EVERY dime I had paying cash for my van, tm, accessories and leaving ZERO dollars for marketing and just surviving in general.

I'm still paying for that mistake to this day. I only wish that I would have put half down and kept half for operating expenses to last at least the first 6 months, preferably 1 year.

Granted there is upside because no one is going to come repo my crap but it still sucks barely scrapping by and knowing I need to advertise more but just don't have the flow to do it.

 

[DevilDog]

As others have mentioned this is a pretty black and white question and in many cases there are many shades of grey in real life.

I voted for the first one. I would much rather have money in the bank than be debt free and no cash on hand.

By the way, I have been in both positions (like most of you have) and the having some debt but cash in the bank is a much better feeling than not having any reserves to fall back on.

I do not have a lot of cash right now and not much debt...the one thing I wish I had is my credit rating from a year ago. God, my love would be much easier right now.

 

[Guest]

Then you m ust have cash Kevin. The 2 options were no cash and no debt vs debt and cash. If you are buying things for cash then I think you are a diff scenerio, which I would also agree with.

It really was a silly either or scenerio of not much liklihood in the real world.

Hey Ken,that was just my opinion

 

[Ken Snow]

No prob Kevin- have said as have other's that debt is not inherantly good or bad. It is how it is used and managed by the business or individual that can make it ultimately be a good or bad move.

Ken