Sanity Check - Kioti

[prof fate]

A good example would be a backhoe attachment.

If I had it, would I use it? Of course. I'd get lots of use from it i'm sure.

BUT for my tractor it's $7500. I've needed hoe work 4 times in 20 years...I can hire that done for alot less than $7500. Or rent equipment.

Yes, the hoe will add to the resale price of the tractor, maybe $5k? 4K? So the REAL cost of owning it for a decade might be $3000, plus storage, maintenance, insurance, repairs. $300 a year isn't bad - BUT that's not what I have to actually PAY to get it...It would be $120/month (1400/year) for the 6 years of the loan.

it's not worth $1400 a year to me.

YMMV of course.

Good point I always get a chuckle on the resale portion, while its a consideration its a smoke and mirrors sales tactic. Like you said you can pay 30% more for brand X then brand Y, but brand X will only bring you 20% upon resale so you lost 10%. End of the day paint color may add to sell-ability which is worth something, but sell-ability and resale value are two different things. If you look at 5-10-15 years down the road at selling, sell-ability could be different but dont think youll be selling brand x for any more than brand y and least in comparing it to relative purchase price.

Another thing is people get to wrapped up into re-sale for a home purchase or private use, unless your running a business where depreciation, equipment maint, assets all play a part. For private use its way over thinking. While nobody wants to buy a 30k machine and have it worth 5k in two years, but in reality it doesnt matter. You buy that 30k machine, you ran it you maintained it, those are all sunk cost that you will never back, you just want. Its not going to matter 10 years down the line that you got 2k more in resale with one brand vs the next, as you lost money on it anyways, but even that doesnt matter as you bought machine to accomplish a task and it did it.

 

[nards444]

A good example would be a backhoe attachment.

If I had it, would I use it? Of course. I'd get lots of use from it i'm sure.

BUT for my tractor it's $7500. I've needed hoe work 4 times in 20 years...I can hire that done for alot less than $7500. Or rent equipment.

Yes, the hoe will add to the resale price of the tractor, maybe $5k? 4K? So the REAL cost of owning it for a decade might be $3000, plus storage, maintenance, insurance, repairs. $300 a year isn't bad - BUT that's not what I have to actually PAY to get it...It would be $120/month (1400/year) for the 6 years of the loan.

it's not worth $1400 a year to me.

YMMV of course.

kind of my point with some of this stuff and attachments, business or farm use is different or something you use monthly or more. I thought about the hoe as well but its 7k, i can rent an ex for a week for less than a grand, which ultimately will do the job better. In 12 years of home ownership I would have need that hoe once, thats pretty pricey. better yet I can get a guy to come out and work for a day on an ex for probably less than a 1000 bucks.

Everybody is different and has different needs. I just think there are those that use this stuff all the time think everybody else does, which simply isnt true.

My buddy has 100 acres, and they have the brush hog, finish mower, and brush hog, box blade, I mean your talking probably 20k worth of crap, sure they have used it but not all of the time, other people use it more than they do, which Im not complaining because I do too, lol.

 

[PEJ5]

As some of us get older we have money invested for future use in retirement. Most investments do well, others lose a little, even so, most of the initial capital is still there. In the case of a backhoe, it makes the rest of the tractor more valuable for resale and prices 10 years out will have increased so much that the 2029 used price will be close to the 2019 purchase price. Sounds like a good-enough return on investment. Works in theory except I would likely never sell!
I almost talked myself into buying one, except they are $10K in Canada.
Maybe we need to start a regional implement sharing Coop. Would someone like to take $1K off the cost of their backhoe for 6 months?

 

[rScotty]

I've bought a lot of tools over the years, and the ones that stayed on to become a part of our rural lifestyle are the tools we bought for quality, not price. I'd like to say that was a conscious decision, but it wasn't. It's only in looking back that I am finally realizing how true it is.

Several posters talk about the economics of investment. That hits home, because we keep good enough records so that I'm absolutely positive that for what I've spent in backhoes attachments alone over the past 50 years I could have saved substantial dollars by simply hiring the work done. No question about that. In fact, I refuse to look too closely because the same probably applies to a lot of our tractor work.....half of it at least.

All I would have missed would be the fun of planning these jobs followed by the enjoyment of doing them myself at my own convenience in my own way on my own land and being able to share these projects with friends and family.

When money is scarce we generally fix up used equipment to work. That's easy to do; anyone who has the need can do the same.
rScotty

 

[Monster5601]

dig a 10' x 8' x 8' area,

I'm not sure what you mean by this but a backhoe isn't ideal for digging out a hole (if that is what you are doing) because of the limited swing of a backhoe, think excavator.

 

[nards444]

As some of us get older we have money invested for future use in retirement. Most investments do well, others lose a little, even so, most of the initial capital is still there. In the case of a backhoe, it makes the rest of the tractor more valuable for resale and prices 10 years out will have increased so much that the 2029 used price will be close to the 2019 purchase price. Sounds like a good-enough return on investment. Works in theory except I would likely never sell!
I almost talked myself into buying one, except they are $10K in Canada.
Maybe we need to start a regional implement sharing Coop. Would someone like to take $1K off the cost of their backhoe for 6 months?

Not to get into the nuts and bolts. Inflation raising the price of something you bought 10 years ago is not an investment its actually a loss, need to read up on inflation and depreciation. For example if that hoe cost you 7k new, 10 years later its worth 4k and inflation amounted to 10%, so that hoe actually sold for $4400, you didn't make $400 you you lost 400, you actually lost 50% on the item. Bottom line is inflation or something being worth more in 10 years does not mean more money, only way inflation potentially benefits you is if you were to buy something new so under market. Equipment is not an investment unless you use it to make money. If you like the equipment and like to use it and its worth it to you that's all that matters, its just not investment of any kind.

 

[nards444]

I've bought a lot of tools over the years, and the ones that stayed on to become a part of our rural lifestyle are the tools we bought for quality, not price. I'd like to say that was a conscious decision, but it wasn't. It's only in looking back that I am finally realizing how true it is.

Several posters talk about the economics of investment. That hits home, because we keep good enough records so that I'm absolutely positive that for what I've spent in backhoes attachments alone over the past 50 years I could have saved substantial dollars by simply hiring the work done. No question about that. In fact, I refuse to look too closely because the same probably applies to a lot of our tractor work.....half of it at least.

All I would have missed would be the fun of planning these jobs followed by the enjoyment of doing them myself at my own convenience in my own way on my own land and being able to share these projects with friends and family.

When money is scarce we generally fix up used equipment to work. That's easy to do; anyone who has the need can do the same.
rScotty

We all do things because we want and because we enjoy it. Dont take me wrong in what I am saying, not saying people are dumb and stupid for what they buy etc etc. My point was to merely point out the financial implications that is all. Reality is a lot of people do things or buy things because they think they are saving money, and it is simply not true. Theyll buy equipment for 20k use it twice a year and think man I saved money because I didnt have to hire somebody, the problem is the reality is much different.

Most people dont like to hear it, but it is getting to the point renting everything is a much wiser choice at least financially. Actually had an argument with a buddy about buying a truck vs leasing, he said youll always have a payment I wont. I said I dont care Ill save money you wont, didn't believe me. So we laid it out, we both bought 50k trucks there abouts. He had a 6 year note and with interest would end up paying 55k for that one truck that he planned on keeping for ten years. Ive been averaging 450-500 per month for leases, over 10 years I paid or will pay around 60k. My 60k spent means no maint and i get three new trucks in that span, he gets one and has to pay maint, of which over ten years new tires, and breaks at least once, battery, and probably exhaust. Best case scenario is he breaks even with me, reality is he probably spends more.

We all buy what we want sometimes because this is America and we can, no issues with that. I just have a hard time with some comments where people actually believe things are investments or are saving money, when it simply isnt true.

 

[rScotty]

I'm not sure what you mean by this but a backhoe isn't ideal for digging out a hole (if that is what you are doing) because of the limited swing of a backhoe, think excavator.

Right, because backhoes only swing 180 degrees, I always have to plan out in advance how to do a backhoe project - but it can usually be made to work. Sometimes it's kind of awkward compared with an excavator - and backhoe projects often need to have the spill pile moved during the dig....but that's easy enough with the loader.

 

[Steve1300]

The use of a backhoe for what I have needed is a sure plus. From digging out a drain field, digging up tree stumps, and something as simply as using it with a hydraulic thumb to move some pieces of heavy concrete has paid dividends in what it has saved my back. Then, there have been friends who needed a little backhoe work, so I was able to provide it to them as no cost to them. Yeah, I'd buy it again just because it gives me freedom to plan and to do. I never got it to be a money-maker.

Would I rather have an excavator? Yep, when I am digging. Then I'd need a tractor for everything else I do.

 

[DK35vince]

Most people dont like to hear it, but it is getting to the point renting everything is a much wiser choice at least financially. Actually had an argument with a buddy about buying a truck vs leasing, he said youll always have a payment I wont. I said I dont care Ill save money you wont, didn't believe me. So we laid it out, we both bought 50k trucks there abouts. He had a 6 year note and with interest would end up paying 55k for that one truck that he planned on keeping for ten years. Ive been averaging 450-500 per month for leases, over 10 years I paid or will pay around 60k. My 60k spent means no maint and i get three new trucks in that span, he gets one and has to pay maint, of which over ten years new tires, and breaks at least once, battery, and probably exhaust. Best case scenario is he breaks even with me, reality is he probably spends more.

You seem to have left out your buddy's truck is still worth something for trade or sale towards his next vehicle.
I've owned my pickup for 23 years, and our cars a 2005. Haven't made a vehicle payment in years.