Owner Operator

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PackRat's Comment
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What difference does it's value of resale make? It's bought to make money. At the end of it's life, that could be in the millions of miles. I took the depreciation off over the first three years of taxes. The less it's worth to the IRS, the less it costs in taxes each year. If it hasn't paid for itself in the first six years, something's wrong. I am not making a plug for anyone to go O/O, and I would never, ever recommend doing a lease/purchase scam that some folks fall into.

Patrick C.'s Comment
member avatar

Pack Rat, I think you just gave reason as to why be a company driver. I can bring home $700 a week easily AFTER taxes and health insurance. You bring home that and STILL have taxes to look forward to.

Bless you brother. You are stronger man than I to endure that headache for nothing more than to say that pretty rig is yours.

Drive Safe and God Speed

DAC:

Drive-A-Check Report

A truck drivers DAC report will contain detailed information about their job history of the last 10 years as a CDL driver (as required by the DOT).

It may also contain your criminal history, drug test results, DOT infractions and accident history. The program is strictly voluntary from a company standpoint, but most of the medium-to-large carriers will participate.

Most trucking companies use DAC reports as part of their hiring and background check process. It is extremely important that drivers verify that the information contained in it is correct, and have it fixed if it's not.

Patrick C.'s Comment
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TBH, if I wanted to pay my own taxes, I would go back to barbering. At least I can bring home close to $6k a month with almost no overhead, and only working 16 days a month. Just saying.

Brett Aquila's Comment
member avatar
What difference does it's value of resale make? It's bought to make money. At the end of it's life, that could be in the millions of miles.

Have you ever wondered why the largest, most successful carriers all have trucks that are less than 3 years old but most owner operators keep their trucks until they're chugging black smoke and finally break in half?

A business has to be sustainable. The idea that you're going to make a living long term using old, worn out equipment isn't a very good strategy. Of course, trying to make a living owning one truck (or even a few trucks) isn't a very good strategy either.

So I guess that's why resale value matters to me. I think about the long term sustainability of any business model.

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

Old School's Comment
member avatar
I think about the long term sustainability of any business model.

Brett and I agree on this business strategy. I use the same idea when investing in the market. I would never be a good day trader because it goes against every principle that I think makes investing worthwhile, profitable, and sustainable.

The reason the whole idea of being an owner operator doesn't compute for me is that most people who do it end up living off of revenues which really should not be counted as personal income. In so doing, they are stealing from themselves in the long run. The problem is that most of them never realize how much they're losing.

Now think about this question...

What difference does it's value of resale make? It's bought to make money. At the end of it's life, that could be in the millions of miles.

in terms of a long term investment like commercial real estate. It is purchased for the same reason as the truck - bought to make money. Yet after twenty years of making excellent returns on your investment it is usually worth more than the purchase price.

With the truck, after twenty years you just lost roughly 100,000 dollars of value,yet you've been counting certain revenue as income without accounting for that loss. Suddenly someone tells you that you've actually been paying taxes on more than you were actually making over the last twenty years, and you don't want to believe them because that means your whole business model was losing money without you ever knowing it.

I've yet to meet an accountant who can show me an independent operator who's actually making something happen extraordinary on their balance sheet.

People don't have to agree with us, but they do have to face the analytics and facts about being a small fish in the ocean of a commodities business. Those facts and figures do not look appetizing unless you are a Whale, or a Great White Shark.

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.

OWI:

Operating While Intoxicated

Rainy D.'s Comment
member avatar

Everytime i see a newly solo driver spruce up his new leased truck i think about this guy who picked up his first solo load with his brand new lease...decked out with a $600 satellite dome, xbox, Sirius, a huge TV and fridge, $500 shiny tool box, expensive wheel and lug covers...then drove 2 miles to the yard to scale. he never made it. he went around a corner, dropped a trailer tire in a ditch and rolled the truck.

Lost his job, owed the $1000 weekly payment for the truck, insurance premium, $2000 deductibles, the fuel probably $500 , the tow (God knows how.much), all his upgrades ....i know it came to at least $5000. at least...and he never made a dime. Plus, he was not going to drive anytime soon I'm sure.

so my answer to anyone who doesn't know what they are doing...don't do it.

Mr. Smith's Comment
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Two guys running together making really good money. The accountant said you should buy another truck. So they did. A couple months later the accountant says. What in the world happened? You aren’t making any more money than you did before?!

We drive that truck on Monday’s Wednesday’s and Friday’s we take Saturdays off and run the other truck Sunday’s Tuesday’s and Thursday’s. 🤔

I’m one of those guys that too wouldn’t mind finding a nitch.

Lot of dudes running owner op with transfer trucks here. And they really do net healthy. But they don’t go home and eat dinner and sleep. They go home and find more loads and work on the trucks. They go home (to the office) and handle business while eating dinner on the toilet type thing. No commas on purpose.

They say on average the most successful business men are horrible dads and husbands. Not because they are jerks right horrible people. They just seem to be invisible...

Some guys run drayage out here and they too rake in some good money (Net) but it’s the same story... Running around like a chicken with it’s head cut off...

My current boss said he made good money before he bought a second truck. He said what’s getting him the worst is insurance.

The sand and gravel guys running transfers though... their rigs aren’t the only thing they have that’s nice. Homes on land in so-cal. Toys (60s Chevys, Boats, Vacation homes at the lakes and rivers, F-250s for personal vehicles and wifey driving kids around in a masarati with the windows having finger prints and chocolate all over them and not even worried about it.) It’s not one of those things they have to talk about or brag about. It’s just there and everyone knows. I asked one of them “Wilcox” about the idea. He said “Do it!”

Another one told me yes do it but don’t use the loan sharks for purchasing your truck. He used a loan shark for his first truck. He said don’t do that. Although he thinks if he used a bank for his first truck he’d be in a different business now. he grosses between 10,000 and 15,000 per month per truck. He has 5 trucks. I do not know what he nets. He is either in a lot of debt (probably) or is doing good (probably also)

Over the Road... I have no clue. You’ll need that Nitch. Huss found their nitch here with Alta Dena.

If you have a friend somewhere at a small big place that can guarantee you the same load everyday... Buy some trucks.

No one wants to see you fail. Of course others are successful. Are you willing to sacrifice?

Maybe you can buy trailers and be a freight broker instead?

Over The Road:

Over The Road

OTR driving normally means you'll be hauling freight to various customers throughout your company's hauling region. It often entails being gone from home for two to three weeks at a time.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
Old School's Comment
member avatar

OMG Mr. Smith, I've never seen so much B.S. in my entire history of following along in this forum!

Just so others are not mislead, I am gonna have to take a shot at this post.

Lot of dudes running owner op with transfer trucks here. And they really do net healthy. But they don’t go home and eat dinner and sleep. They go home and find more loads and work on the trucks. They go home (to the office) and handle business while eating dinner on the toilet type thing. No commas on purpose.

Okay, we all get the fact that they work all the time - that is common with almost any type of small business owner. But how in the world can you claim "they really do net healthy?" Have you seen their tax returns? I'll provide the answer for those who are wondering, it is NO. If he had, he wouldn't have given all the following reasons why he thinks they are doing so great:

their rigs aren’t the only thing they have that’s nice. Homes on land in so-cal. Toys (60s Chevys, Boats, Vacation homes at the lakes and rivers, F-250s for personal vehicles and wifey driving kids around in a masarati with the windows having finger prints and chocolate all over them and not even worried about it.) It’s not one of those things they have to talk about or brag about. It’s just there and everyone knows.

I was in a pretty tough custom manufacturing business for a long time. I was careful, managed my money and kept on top of it all with good accounting practices. Everytime I noticed one of my competitors starting to do the kind of things that you just gave us as the reasons why you thought the owner ops in your area were so successful, I would say something to my wife like this. It looks like "so and so' is going to be declaring bankruptcy pretty soon. she'd ask how I knew that? I can just tell, I'd say, and I would almost always be right. The reasons you give for why you want to be the big boss raking in all that dough, and consequently how you have carelessly led others following along in here to believe your illusions are so bogus that it is laughable.

I've seen so many people fail at business and most of them thought they were making money when they didn't even have a clue as to how you go about measuring the effect of all your efforts. They were living on borrowed time, and they thought their revenues were actually their personal income, so they would spend it on stupid stuff like a Maserati because it supported their delusions and pacified their fears that they weren't really doing all that great after all. To put in that much effort and realize they were chasing their proverbial tail was really frustrating, so they would buy houses, lands, and fancy cars to pacify their fears and keep themselves in this unrealistic state of reverence with their acquaintances. In other words they were fooling themselves and poor people like Mr. Smith here.

My current boss said he made good money before he bought a second truck.

Does that statement make sense to any body in here reading this? It does to me. Here's what it says:

"I thought I was doing well, at least it seemed like I was doing well, so I decided to grow my business and double up on my revenues. That should fix a few of the little annoying problems that keep popping up. WTH? Once I doubled up on everything it just keeps getting worse!"

Mr. Smith, if you are really doing well at a business then your growth should improve how well you are doing, not reverse that trend - Your boss' statement should really make you think twice about your assessment of how people are doing as owner operators. You like to measure people's success by the things that you see, but it is the things that you don't see that are telling the true story, and your boss just let you in on one of those little dark secrets. Unfortunately, you didn't even catch the irony in what he said.

Continued...

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

TWIC:

Transportation Worker Identification Credential

Truck drivers who regularly pick up from or deliver to the shipping ports will often be required to carry a TWIC card.

Your TWIC is a tamper-resistant biometric card which acts as both your identification in secure areas, as well as an indicator of you having passed the necessary security clearance. TWIC cards are valid for five years. The issuance of TWIC cards is overseen by the Transportation Security Administration and the Department of Homeland Security.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.

OWI:

Operating While Intoxicated

Old School's Comment
member avatar

Speaking of all this money that the owner operators are making, Mr. Smith has this to say...

It’s just there and everyone knows.

That is curious! Again he goes by things that he has seen, and doesn't really have a clue at all about how things are really shaping up at the accountant's office. People, you cannot do this when considering putting yourself into a business. It is the ultimate recipe for disaster. When investing in business there are facts and analytics that you have to know. Mr. Smith has given you zero evidence of any of those things that are vitally important information that will either support either success or failure at being an owner operator.

He realizes he is on thin ice here with his argument so he adds some weight to it by telling us this:

I asked one of them “Wilcox” about the idea. He said “Do it!”

Oh, now that was a nice touch! I have only met a few owner operators or lease operators who don't say the same thing. Some of them will try to tell me how great they are doing while they are broke down at a truck stop, trying like crazy to figure out how to coax their dilapidated rig into finishing just one more run so they can make that payment that is three months late! C'mon Mr. Smith! Most of these owner ops are in so deep that they are ashamed to admit their own problems to themselves, much less to an eager eyed greenhorn who wants to hear from them how great it is going over there on the other side of the fence. Also, why would anyone who is doing so great in a business actively be out there recruiting others to jump in there and become one more competitor for them to deal with? Does anyone ever wonder about things like that? I sure do. It makes no sense!

Maybe Mr. Smith realizes that, so he takes the argument a step further with this convincing bit of information:

Another one told me yes do it but don’t use the loan sharks for purchasing your truck. He used a loan shark for his first truck. He said don’t do that. Although he thinks if he used a bank for his first truck he’d be in a different business now. he grosses between 10,000 and 15,000 per month per truck. He has 5 trucks. I do not know what he nets. He is either in a lot of debt (probably) or is doing good (probably also)

In other words, the trick to this is all in how you finance this operation. Well, I think a third grader could figure out you don't want to go to a loan shark, and he could also figure out that the reason so many people end up resorting to that is because the real bankers already know how this is going to play out. They have studied the facts and analytics. They are neither distracted nor impressed by people who drive a Maserati with chocolate finger prints on the windows. They are impressed by historical evidence of past performance. In other words, they loan money to people who are most likely to be able to pay it back!

I could go on and on with this stuff, but I have got work to do.

Here's one redeeming thing that Mr. Smith said, and it is certainly true...

No one wants to see you fail.

That is precisely why I took the time out of my busy day to refute some of this nonsense.

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

Dm:

Dispatcher, Fleet Manager, Driver Manager

The primary person a driver communicates with at his/her company. A dispatcher can play many roles, depending on the company's structure. Dispatchers may assign freight, file requests for home time, relay messages between the driver and management, inform customer service of any delays, change appointment times, and report information to the load planners.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
Old School's Comment
member avatar

I'm convinced when a person wants to be the "Big Boss" in this business, they might as well get accustomed to the idea that they will be just...

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