Can You Run a Capital-Intensive Business Debt-Free?

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[@bradzeigler]

I generally agree with Dave but I think he oversimplifies the issue of agricultural equipment. And the industry of farming. There are certain pieces of equipment that are so crucial to the operation of the farm that downtime is a huge factor. Harvest time is very short and the risk of equipment failure is huge. A manufacturing line can go down for a day and loose 1/365th of a year’s productivity. A combine goes down during harvest and looses 1/10th of a year’s productivity.

[@fuse911]

Im so glad dave is doing this show. Its for people like me

[@AlexSmith-eb4ck]

Great video! We’re new farmers and only pay cash for equipment. Never going to go into debt again. Also, have to say we have the fanciest/high tech equipment you can buy from the early 80s/90s 😝 JD 9500 s and 4440 s age like a fine wine

[@peterparkerlovesmj]

Farming is much more complicated than stated and IS different than other capital intensive industries. Farmers do not have control of the prices that they receive for their crops. Farmers are price takers. Costs are rising at a faster rate than prices are. The only thing that farmers can do to increase revenue is try to increase yields (which most often costs the farmer more) or increase quality (which most often costs the farmer more) which do not always increase profit. That said, I’m not saying farms cannot be run debt free. I’m merely saying that farming is very different than stated and is a very difficult business model.

[@donvirts4608]

The one thing he didn't cover was that farmers buy retail and sell at wholesale and they cannot set their own prices. Those prices are forced on by others.

[@saulgoodman2018]

No you can't.

[@georgewelker853]

I will say that AC in a tractor cab is pretty important for it to be a workable environment for a guy for any length of time. But it’s still an option fans help too

[@cutenobi]

Great question.

[@Magnatros]

I bought my first truck, a 99 dodge dakota, to start my plumbing company later this year. It cost me $800 with another $800 put into it to get it up and going. It'll get the job done until I can buy a better one with cash as well.

[@djg4653]

As someone who is doing it with almost half a million in annual sales mine and my wifes retail business is debt free!

[@paulstrojan947]

Around here, it’s lifted pickup trucks, mansions, and hunting trips.

[@jamisonmunn9215]

Daves first comment was the best. He said there is a lot of capital intensive businesses. Any CEO could argue that any business is capital intensive. A farmer could always go old school let a bunch of fields fallow which lowers the cost of fertilizer and wear and tear on equipment.

[@KevinSamuelsKid]

People run their business the same way they run their personal lives

[@danielakin7638]

Here is the part Dave Ramsey does not understand or maybe he just doesn’t think about it in this way. I am a small farmer I cannot buy my inputs for cash because the inputs went up two or three times what they should be. Has nothing to do with equipment. The other thing is I have no control over what I earn for the product I produce. Dave Ramsey does he can control what he charges for his services if you had a factory you could control what you can produce the product for. Everything with farming is done with an open market which we have no control over. So about three years ago I could buy my inputs for cash. Now because they went up two or three times what they were can’t. I’m not gonna quit farming because I have a big capital investment in everything I bought up to this point . That’s the part he doesn’t get do I wish I had that no I wish I could buy everything for cash but I am not sitting here with 1 million bucks in the bank really no farmer is

[@farmermatt7880]

Myself I hope to only have to borrow money for purchasing land

[@saulgoodman2018]

The building is worth 4 million. Not 400 million.

[@christinah9954]

I think the farmer thing is complicated by the government interference in farming and agriculture. I’m sure the government would love it if you couldn’t succeed without being in immense debt, especially something that is so important to society.

[@charliejones974]

Dave, once again, is talking out of his ass about an industry he has no clue about. Equating his studio to farm machinery is ridiculous. He can set his prices for his services, farmers don't, often time breaking even is a good year. Also farming is a kind of an all or nothing endeavor, you really can't stair step your way up. In addition cheap equipment is cheap for a reason, it's more than likely junk, that will cost you more in down time than it'll ever save you in up front costs.

[@thomask8298]

Dave just isn't making much sense anymore...