Home Business Forums - Online Business Forums

Home Business Forums for small business owners to discuss online home business
It is currently Sat Jan 20, 2018 4:08 pm

A warm welcome to the forums!
We hope you will make this your home. Dave and Heidi, the founders of HomeBusinessOnline.com, are committed to helping you find all the information and resources you need to succeed in your home-based business. John is an excellent moderator of the forums and has an amazing amount of knowledge in small business.


-----> Hey, We Need Forum Moderators! <-----

Most Recent Forum Posts...

All times are UTC - 7 hours




Post new topic Reply to topic  [ 1 post ] 
Author Message
PostPosted: Wed Aug 10, 2016 10:02 pm 
Offline

Joined: Wed Aug 10, 2016 4:58 pm
Posts: 6
One of the biggest mistakes we made in our printing business was to get new equipment by rolling over our leases. Here's what those clever little sales reps did.

Us: We can't afford new equipment.
Rep: We can set up a new lease for you; where you pay less than you do every month. You just have to extend the total period of the lease.
Us: We pay less each month? That sounds great. Let's do that!

We thought that we'd have less stress in meeting the monthly payments by doing this. What a clever way to do things! So we did this each time we swapped our aging equipment for newer models.

Those of you in the know would be shaking their heads, thinking how stupid we were being. And you would be right. I wish you were there to tell us so.

For those of you who don't see the folly of this, let me explain (and hope you don't fall into the same trap). It all has to do with compound interest. Compound interest is great when it's working for you, but destructive when working against you. What we failed to see was that each time we rolled our leases over to incorporate the new amount, we were compounding the interest on previous lease amount on top of the new lease amounts. And we did this a few times. And lease interest rates are hefty. And the lease periods were stretching out.

The upshot of this, is that high interest rates that are compounded and applied over extended periods of time, lead to big debts.

Lesson learnt: consult your accountant before making decisions that involve major changes to leases or loans. Even if they seem like a good deal to you.

_________________
Mario Llige
UltraPRINT (Aust)
We’ll get you in front of more potential customers
http://www.ultraprintaust.com


Top
 Profile  
 
Display posts from previous:  Sort by  
Post new topic Reply to topic  [ 1 post ] 

All times are UTC - 7 hours


Who is online

Users browsing this forum: No registered users and 1 guest


You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum

Search for:
Jump to:  
cron
Powered by phpBB® Forum Software © phpBB Group