Page 4 of 4 FirstFirst 1234
Results 46 to 48 of 48

Thread: Finish Preference for 3D Work

  1. #46
    Join Date
    Nov 2013
    Location
    Leland, NC
    Posts
    430
    Mark, you still fail to understand the difference between:

    Cost, Earnings, and Potential Earnings.

    My statement was that a machine sitting in a hobbyists shop is not costing him anything. No one has been able to show where that hobbyist has to reach into his pocket to pay for the machine sitting there. I do not argue that he spent money purchasing it, that is a given. But after that? Sorry there is no cost involved if it is not operating.

    And this is where your thinking is skewed:

    "They are costing you money to procure and to own."

    That is only half right, it cost money to procure. After that? Show me the costs. Spare me the "the money could be invested . . .blah, blah, blah." Because the fact is that money invested that has the POTENTIAL to earn more money also has the POTENTIAL to lose the money you "invested". Just ask anyone who lost half of their 401K a few years back.

    Your accountant is correct about most of the things you listed, trucks, inventory etc. Trucks must have insurance, etc. Inventory is taxable. When a machine is sitting idle it is taking up floor space that could be used to earn money. But remember, that machine is still not COSTING you money, it is only preventing you from EARNING more money. Those are two different things. Ask your accountant to clarify that for you. Accountants will tell you that it is COSTING you money because that gets people's attention and helps them control their business better. But let's not forget, what I wrote was about a hobbyist, not a business. A hobbyists machine sitting there doing nothing does not COST him anything.

  2. #47
    Quote Originally Posted by Ted Reischl View Post
    A hobbyists machine sitting there doing nothing does not COST him anything.
    We can agree to disagree. And I would argue to tell the hobbyists wife that his machines sitting there dont cost him (them) anything. She may be even a bit more wise than the accountant. Your position is a very convenient one (we all try to stay in that place to justify our gee gaws).

    Enough is enough.
    Sometimes I just want to look at pretty pictures,... Thats when I go to the Turners Forum

  3. #48
    Join Date
    Nov 2013
    Location
    Leland, NC
    Posts
    430
    Quote Originally Posted by Mark Bolton View Post
    We can agree to disagree. And I would argue to tell the hobbyists wife that his machines sitting there dont cost him (them) anything. She may be even a bit more wise than the accountant. Your position is a very convenient one (we all try to stay in that place to justify our gee gaws).

    Enough is enough.
    We certainly can.

    I was thinking about this discussion a while ago. The premise by business owners seems to be that if money is tied up in a machine and that machine is not doing anything then it is costing them money.

    Where I disagree is using the term "cost" rather than "not earning". The same applies to a hobbyist and his machine. If a hobbyist's machine is sitting idle then he is not benefitting from it in the pursuit of his hobby. In other words the hobbyist is not "earning" the rewards of operating the machine.

    I would wholeheartedly agree that my machine is not earning anything when it is sitting idle, on the other hand I know that is also not costing me anything sitting there.

    Here is something to ponder relative to this subject which removes the machine from the equation:

    You have a pile of money sitting in your dresser drawer, let's say about 100K worth. Yea, I know, only really dumb people do that, but let's just go along with the premise so we can keep our eye on the money.

    First, someone will say that the money should be invested so that it can EARN interest. Investing is not depositing in a bank where the bank tells you they WILL pay you 1% on your principal. Depositing in a bank is called SAVING because the original amount is never at risk, supposedly. Investing is purchasing a financial interest in a company in the HOPES of getting a return on your investment. You may or may not get one depending on all sorts of factors. In fact, you could lose all of your investment.

    So, you decide not to "invest" your money because you do not want to risk it and you do not trust banks, because, well, they went belly up many years ago and stiffed their customers. So there sits your pile of $100K.

    The question is: Does that pile become smaller because you did not "invest" it so that it could earn money, maybe?

    What would cause that pile to become smaller? I know the amount of money in my wallet shrinks if I buy something because I have to pay the COST of that item. But we are not using that pile to buy things. So how is it that it is "costing" us?

    The simple answer to the questions above are that it does not get smaller. The only way that pile will get smaller is if you purchase something with it and have to pay the COST of the item.

    So what the heck is going on? We have all heard this "if your money is not working for you then it is COSTING you". We have heard it enough that it must be gospel. Nobody likes spending money if they do not have to. So smart sales/marketing types figured out that a good way to get people to give them their money to "invest" was to claim it was "costing" the customer if he didn't.

    Small shop owners have the attitude that if they have the POTENTIAL to earn X amount of dollars then they are entitled to that money and count it as already in their mental bank. Anything that reduces that amount therefore must be a COST because their pile of money got smaller. That is why it is common to hear shop owners say "That moron is always COSTING me money!" What he is usually talking about is an employee who does not live up to output the owner expects of him, therefore chiseling into his mental pile of money that he is entitled to. The employee is not COSTING him money unless he is a total slacker and working at a level below minimum requirements for the job.

    I wrote about small shop owners because this is not something you typically hear in large corporations. Instead you will hear: "That clown is cutting into our profits". Which is exactly correct.

    BTW, as I was writing this I recalled the scene in Casino where Joe Pesci "invests" and thinks that means he will automatically make money on his investment. There seems to be a lot of that going around these days, again. How fast we forget things like "the bubble" and the "dot.com" fiasco.
    Last edited by Ted Reischl; 06-13-2019 at 8:14 PM.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •