# Do you set a budget for new tools each year?



## Stevarino (Sep 28, 2013)

Two fold question. Do you set a budget each year for what you plan to spend on new tools and equipment?

I have mine for 2017 set at $1600

Second question. What is on your new tool wish list?

Mine is simple to start this year

- new shop vac
- franklin precision stud finder
- cordless 18g nailer for quick trim re-installs


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## overanalyze (Dec 28, 2010)

My budget usually is dictated after my 3rd qtr meeting with our accountant.

How did you come up with that number? Percentage of expected sales? Do you plan for tool replacement as the older tools wear?


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## tjbnwi (Feb 24, 2009)

I could blow that budget in seconds.

Tom


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## blacktop (Oct 28, 2012)

I have $20 set back this week for sanding pads .. For sand day on Friday!


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## 480sparky (Feb 1, 2009)

I'm well tooled-up. I only need to budget for replacements for broken / lost / stolen.


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## EricBrancard (Jun 8, 2012)

No, because the number would scare the sh*t out of me.


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## Peter_C (Nov 26, 2014)

Stevarino said:


> Two fold question. Do you set a budget each year for what you plan to spend on new tools and equipment?
> 
> I have mine for 2017 set at $1600


Never a budget. I buy what I need to get the jobs done, and often the cool new tools I find to buy in the TBA thread. There are weeks I spend $1,600 on tools. I am sure when I go to do my taxes this year I will be like :thumbup1: Yup a little higher than I thought. 

Probably less this year than past years, as I have purchased a majority of the essentials.


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## Tinstaafl (Jan 6, 2008)

Never a budget. I buy tools as I need them, and that's pretty much dependent on whether I take on a type of job I haven't done before.

Been at it long enough that I'm pretty well stocked.


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## Metro M & L (Jun 3, 2009)

I spent 13k or 14k this last year.

I prefer to look at large tools in terms of repayment period and/or tax deduction. You should read about section 179 if you haven't already.

Generally, I find a profitable tool will pay for itself in one or two jobs. If it doesn't make that kind of revenue I rent it if necessary to do a job. 

When you specialize and have job specific equipment that few other operators possess the return on investment goes way up.


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## hdavis (Feb 14, 2012)

Stevarino said:


> Do you set a budget each year for what you plan to spend on new tools and equipment?


Theoretically as tools depreciate, you put aside money in an account for replacing them. OTOH, if something new comes out that will make you more money than it costs, you buy it. I know what I've spent in past years to cover all that.

If you're doing something new to you, you obviously have to buy any additional tools and pay for them out of the new project. If it's an unforseen opportunity, then it isn't planned for to begin with, so it isn't budgeted for.


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## pinwheel (Dec 7, 2009)

EricBrancard said:


> No, because the number would scare the sh*t out of me.



Ain't that the truth. Spent about $15k in 2016. Already have plans for a wide belt sander, forklift & shop addition in the first half of 2017.$15k won't cover the shop addition & concrete. Gearing up a cabinet shop is not cheap.


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## NYgutterguy (Mar 3, 2014)

Last year just bought a couple of drills and some cheap hand tools.Try not to spend too much . Soon I will need to possibly buy 3 trucks to replace my aging mini fleet. 2 are 17 years old and other has 200,000 miles cant wait. 


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## Xtrememtnbiker (Jun 9, 2013)

You're a GC and your budget is $1,600? I call Dad and ask if I can spend that on a tool he may not have known existed and he says yeah. We spend more than 10 times that a year on tools. If it's a tool that increases your profitability and efficiency, it's probably going to be a good purchase.


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## sparehair (Nov 21, 2008)

An 18 or 16 gauge battery nail will definitely make you money.

Mine is always in the truck.

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## mrcat (Jun 27, 2015)

I tried a tool budget. Ha, what a joke. I spent a hair over 10k this year, probably be more next year since will probably be getting another truck.

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## Calidecks (Nov 19, 2011)

I just buy what I want. It used to be whatever made the job faster and made me more money. Now's it more, "whatever makes the job easier".


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## JonM (Nov 1, 2007)

How do you budget an addiction? :blink:


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## pinwheel (Dec 7, 2009)

Californiadecks said:


> I just buy what I want. It used to be whatever made the job faster and made me more money. Now's it more, "whatever makes the job easier".


To me, easier equates to more efficient.


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## Spencer (Jul 6, 2005)

I spent $45,000 on tools last year, not including the van I bought. 

My opinion is that when you're in the growth stage you just go all out and buy the tools you need as the money becomes available. After a while you're either going to plateue or keep buying due to growing needs of more employees.

Personally, I'll be in year three in february. I'm getting to the point that I'm setup pretty good and will be cutting back significantly on tool purchases this year. I'll look to pay off my transit and then plan to build a modest shop which will take me out of our three car garage.

Looking at ROI is important. As the tool arsenal grows the ROI on what you buy tends to become less and less. Easy to get sucked into the "I wants" and convenience tools that don't produce a good ROI. That's where establishing a budget can be a life saver.


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## SouthonBeach (Oct 18, 2012)

Never have made a budget for tools. There's been times when I have had to watch what I spent. 
A couple things that make a tool purchase decision easy is, 
will it make a job go quicker. 
Will the job pay for the specialty tool and still make money.


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## DaVinciRemodel (Oct 7, 2009)

We budget for new tools and tool maintenance. 1.1 percent of gross sales goes to this line item in our financials. There have been years we didn’t spend much (2016 we only spent about $3,200) and there have been years we borrowed from other accounts to pay for what we spent (2014 we spent about $22,000). Note: Vehicles have a separate account.

One of the accounts we rob - I mean borrow - from occasionally is “warranty work”. In 2014 I pulled $15,000 out of it to put towards tools. That account has about $12k in it now (2016 warranty work accounted for all of $659 and 2015 was $0). We have no significant tool purchases planned, so we’ll probably pay out as a distribution at the end of 2017.

We have a line item budget for everything.


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## tjbnwi (Feb 24, 2009)

DaVinciRemodel said:


> We budget for new tools and tool maintenance. 1.1 percent of gross sales goes to this line item in our financials. There have been years we didn’t spend much (2016 we only spent about $3,200) and there have been years we borrowed from other accounts to pay for what we spent (2014 we spent about $22,000). Note: Vehicles have a separate account.
> 
> One of the accounts we rob - I mean borrow - from occasionally is “warranty work”. In 2014 I pulled $15,000 out of it to put towards tools. That account has about $12k in it now (2016 warranty work accounted for all of $659 and 2015 was $0). We have no significant tool purchases planned, so we’ll probably pay out as a distribution at the end of 2017.
> 
> We have a line item budget for everything.


Good thing you have money in the budget for the Graco hand held low pressure sprayer:whistling

Tom


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## Designed2Fail (Apr 10, 2013)

Californiadecks said:


> Kinda. Easier and faster are not necessarily the same. Some may argue the fastest way is the smartest way. Some may argue the easiest way is the smartest way. It's an added bonus when the easiest way is the fastest way. That just my take.
> 
> _________


Touche. I get what your saying. :thumbsup:


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## hdavis (Feb 14, 2012)

DaVinciRemodel said:


> We have a line item budget for everything.


That would be the formal way to do it.:thumbsup:


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## DaVinciRemodel (Oct 7, 2009)

tjbnwi said:


> Good thing you have money in the budget for the Graco hand held low pressure sprayer:whistling
> 
> Tom


I’ll get that with the change that accumulates in the truck console :laughing:


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## Ohio painter (Dec 4, 2011)

Each year I plan to make one big (to me) purchase, either a new piece of equipment or to replace an older piece of equipment. Last year I planned to buy a gas powered paint sprayer. It cost me 5 1/2 grand and it replaced my old sprayer that was about 15 years old. i paid for it in 6 months interest free. In addition to that I spent about another $5000 in various tools and equipment that was needed throughout the year.

This year I am considering replacing / upgrading my power washer. My current washer is almost 20 years old and has been a true work horse, but last year I had to put a new pump on it and it hasn't been the same since. I would rather not wait until we are in the middle of a job when it fails and I pay top dollar for a new one to keep the job moving. 
Finally, I too only have three employees but I want them to work safe and not have junk equipment. A piece of equipment that is unsafe is a risk I don't want. A piece if equipment that breaks down is a time waster. 
An ounce of prevention is worth a pound of cure.


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## Irishslave (Jun 20, 2010)

Varies if I need it....I buy it...nothing frivolous, well maybe there's some stuff that only gets used once a year....it could be thousands or only a few hundred just depends on what I'm doing...I already have 3 of most everything and nowhere to put the 2 I don't use


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## woodworkbykirk (Sep 17, 2008)

i dont really set a budget... i just dont buy anything big when cash flow is scarce... i buy it when its a necceissity.. 

smaller stuff i buy as needed or if its something new and catches my interest.. mind you i do get quite a bit of stuff from bosch as one of their tool testers so im not spending as much as i used to, not to mention reviewing for toolbox buzz


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## bcook19791 (Aug 24, 2016)

woodworkbykirk said:


> i dont really set a budget... i just dont buy anything big when cash flow is scarce... i buy it when its a necceissity..
> 
> smaller stuff i buy as needed or if its something new and catches my interest.. mind you i do get quite a bit of stuff from bosch as one of their tool testers so im not spending as much as i used to, not to mention reviewing for toolbox buzz


How does on become a tool tester or a reviewer. Sounds like it could be a sweet gig.:thumbup:


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## SMdCarpenter (Jul 14, 2016)

I spent a few days in the shop recently and was kind of depressed by the waste in my tool slending the past few years. Things get so rushed with multiple projects and jobsites I often ended up purchasing duplicates of things or things I thought I might need that were sitting around brand new. Blades, bits, etc.. were the main things but also drills and cordless tools. 

I've been selling off a lot of excess tooling and really trying to focus on organizing and using what i have this year. 

The novelty of buying the newest tools has kind of worn off, the jobs aren't that different (i dont work with the constantly changing decking/exterior trim materials).


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## woodworkbykirk (Sep 17, 2008)

bcook19791 said:


> How does on become a tool tester or a reviewer. Sounds like it could be a sweet gig.:thumbup:


i was directly contacted by bosch and tbb, i have done several full reviews and articles on btp of tools i have bought.. they liked what they saw in the reviews. many other reviewers become high profile via youtube and instagram. writing skills are essential and you have to be unbiased. 

a fanboy who loves orange or green or blue tools only will always say "x" tool is amazing but in fact htere might be a few things that are really wrong with it that need to be addressed,, where another manufacturers tool might blow it out of the water but the only flaw is the location of a led light on it


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## griz (Nov 26, 2009)

i bought what ever i needed...

never rented nothing....

well when i was 20 there was this young filly.....:whistling


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## woodworkbykirk (Sep 17, 2008)

yah rental wise the only tools weve ever rented have been the large jackhammers or power tampers..


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## VinylHanger (Jul 14, 2011)

Man, some of you buy a ton of stuff. I think last year I bought a 20v. multi-tool.

I don't count blades or paint supplies, as I buy new brushes rollers etc, for most jobs. Other than that not much. I've been trying to organize and realize I need less to do more.

This year I do plan on going more cordless, so will spend a bit more. 

I don't know what tools I could buy that were 45,000. I'd rather put it towards a house or retirement. Then again, seeing Spencer's work, it must be needed.

Oh, I did buy a router as well this year. 35 bucks used. But I'm too cheap to buy bits for it yet.

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## sparehair (Nov 21, 2008)

griz said:


> i bought what ever i needed...
> 
> never rented nothing....
> 
> well when i was 20 there was this young filly.....:whistling


If its fast and good looking its cheaper to rent it.

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## Spencer (Jul 6, 2005)

VinylHanger said:


> I don't know what tools I could buy that were 45,000. I'd rather put it towards a house or retirement. Then again, seeing Spencer's work, it must be needed.


A large portion of that was setting up my shop. I don't plan to continue spending money like that annually. I was very unsure at the time as to whether I was foolishly spending the money or not. But it has proven to be one of the best moves I've made.

Built-ins make up around 15-35% of my trim labor on the houses I'm doing. Being able to do the built ins in the shop has been huge. I'm usually clearing $100/hr on built ins. All because of the investment in the shop.

I've bought a lot of dumb stuff that I don't need though. I'm getting better about that. :laughing::laughing:


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## overanalyze (Dec 28, 2010)

Generally we try to buy to fulfill a need or to speed things up. We are to the point of buying to replace old tools or get upgraded versions. Also shop organization and upgrades are something we tweak a little each year. Our budget is always a moving target. 

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## SMdCarpenter (Jul 14, 2016)

Spencer,

You had done a few interesting posts of built ins you did on site. Lots of pocket screw construction stood out . Any changes to methods with the shop? Are you building cabinets now as well? Pre-assembling trim such as pediments off site? 

Just curious to hear as most trim guys are stuck on the do everything on the jobsite model and seem to pride themselves on how many tools they can haul in.


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## aquakbd (Aug 19, 2016)

We are well tooled up but we add something new to our assortment each year. The budget is differently dictated each year and it really depends on different factors like is there something that we actually need to acquire to perform better work or we want to modernize and update our equipment.


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## Spencer (Jul 6, 2005)

SMdCarpenter said:


> Spencer,
> 
> You had done a few interesting posts of built ins you did on site. Lots of pocket screw construction stood out . Any changes to methods with the shop? Are you building cabinets now as well? Pre-assembling trim such as pediments off site?
> 
> Just curious to hear as most trim guys are stuck on the do everything on the jobsite model and seem to pride themselves on how many tools they can haul in.


Mostly built ins and mantles. Typical houses will have two units on each side of the fireplace, entry lockers, wall niches, egress bench, office cabinetry, etc

And yes, i still use very simple construction methods. Lots of pocket holes.


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## Jaws (Dec 20, 2010)

We used to do like DaVinci with line items for everything, and should do it again, but just leave a good amount in operating account, continue building it up, and discuss if it's a big purchase. Business plan still has line items for what we pay our selfs for the shop and trucks, and all business expenses other than stuff like company trips or tools. 

Our philosophy is if we need it or want it and we are at or above acceptable profit margins get it. Life's too short to not have a tool you want or need if your making enough money and are OK with spending on it. 

One thing is for sure, when your blowing and going and the jingle is stacking up it is what it is, recession time lifestyle (purchasing) needs to be accounted for in a previous planned budget for sure. 


When we first got started it was like Spencer or worse, added a total 3300 sq ft to the 1500 sq ft shop over 6 years, remodeled an office and bought trucks and tools for a large crew, cash. Didn't take a real distribution for 6.5 years, have lived in a cheap house and other than 2 cheap other rentals (my current will be a nice rental also) and a few cheap lots, have only spent money on my company in the last 8 until I started our new house. God knows my wife deserves it. 

I don't want to be spending a bunch of money on my company in my 40s -50s, I want to be buying rentals, murdering animals, paying for college weddings vacations ect.... Just knock it out and not dick around with it the was the plan and glad we did it. 

Now we have a very small crew and we sub a lot more out, so tools aren't as big an expense. Although I did buy an tractor w/backhoe and grapple because I'm tired of dragging trees to the burn pile lol.


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## Spencer (Jul 6, 2005)

Gotta hustle and grind in the early years. Get that income potential up there.


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## SectorSecurity (Nov 26, 2013)

Been trying to do like jaws and Spenser

Put as much money as possible back into the company to build up tools and assets purchase demo kits, build advertising and so on.

My girlfriend doesn't quite understand it and thinks I'm just wasting money.

I'm 26 and trying to be in great shape by the time I am 30 so I will have minimal cost

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## MechanicalDVR (Jun 23, 2007)

SectorSecurity said:


> Been trying to do like jaws and Spenser
> 
> *Put as much money as possible back into the company to build up tools and assets purchase demo kits, build advertising and so on.*
> 
> ...


Good philosophy to have. Depreciation can also be a good thing on a tax return.


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## FrankSmith (Feb 21, 2013)

SectorSecurity said:


> Been trying to do like jaws and Spenser
> 
> Put as much money as possible back into the company to build up tools and assets purchase demo kits, build advertising and so on.
> 
> ...


I try to operate somewhere in the middle ground. Build up the buisness as much as I can while recognizing what allows me to spend without catching flack when I get home is leaving enough to take a paycheck equal to or greater than if I took a job running jobs somewhere else.


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## hdavis (Feb 14, 2012)

SectorSecurity said:


> My girlfriend doesn't quite understand it and thinks I'm just wasting money.


She doesn't have to understand, and you don't have to explain. She doesn't own your business or your money.


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## Jaws (Dec 20, 2010)

hdavis said:


> She doesn't have to understand, and you don't have to explain. She doesn't own your business or your money.


I agree, I don't share Financials with my wife from my company other than my salary. The few times I couldn't draw a check because we had a lot of capital out I drew from savings and paid her :laughing: 

The one time this became a major issue (I posted here regarding it ) I bought a rent house at auction without telling her until I bought it...... then I told her it really wasn't her concern unless she was now going to be the major contributor  I felt this was really stupid as I was saying it :laughing::no: Needless to say she tripped :laughing:


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## Jaws (Dec 20, 2010)

She said "are you f'>ng retarded????" :laughing::laughing::thumbup:

Funny thinking back now but it was a lonely cold few weeks there.....


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## overanalyze (Dec 28, 2010)

Jaws said:


> She said "are you f'>ng retarded????" :laughing::laughing:
> 
> Funny thinking back now but it was a lonely cold few weeks there.....


Lmao!! Yep those things always sound macho and right in your mind just until you speak them aloud...then you think differently. 

Same boat here..wifey hasn't a clue what the company financials are. I don't think she even knows what I make. Bills are paid by me. If she wants something big she asks, small stuff she knows it is all good. As far as big purchases like a rental or investment property I do get her input on it. She knows if I am bringing it up it must make some kind of sense.


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## Jaws (Dec 20, 2010)

overanalyze said:


> Lmao!! Yep those things always sound macho and right in your mind just until you speak them aloud...then you think differently.
> 
> Same boat here..wifey hasn't a clue what the company financials are. I don't think she even knows what I make. Bills are paid by me. If she wants something big she asks, small stuff she knows it is all good. As far as big purchases like a rental or investment property I do get her input on it. She knows if I am bringing it up it must make some kind of sense.


When I was trying to pry my way back in my own damn bedroom I brought up how great a deal it was and right next to my shop..... she said yeah it sounds great but you should find out what I think..........

Ugh, I didn't realize you were so up on real estate investments honey, next time I'll run I'll try past you....... 

"It's just nice to feel included and to be asked" 

I'm thinking wtf would I ask you if your just going to say yes...... Hut I didn't. Because I'm actually really smart :laughing: I just seem retarded to most people :laughing::laughing:


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## avenge (Sep 25, 2008)

SectorSecurity said:


> My girlfriend doesn't quite understand it and thinks I'm just wasting money.Sent from my XP7700 using Tapatalk


Best advice I could give is don't marry this one.


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## smpcarpentry (Aug 13, 2014)

Last year i spent about $10,000 on tools this year im hoping i will send a less but you never know i might just have to have it and blow lol some stores i walk in and  i was on the build a ram site and im liking the 2017 4500 crew cab extended wheel base for 12 foot box :whistling


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## Designed2Fail (Apr 10, 2013)

avenge said:


> Best advice I could give is don't marry this one.


Some times you need a woman's craziness, to make you a better man.

it helps to make the crazy things in your head sound sane again.


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## tjbnwi (Feb 24, 2009)

Jaws said:


> I agree, I don't share Financials with my wife from my company other than my salary. The few times I couldn't draw a check because we had a lot of capital out I drew from savings and paid her :laughing:
> 
> The one time this became a major issue (I posted here regarding it ) I bought a rent house at auction without telling her until I bought it...... then I told her it really wasn't her concern unless she was now going to be the major contributor  I felt this was really stupid as I was saying it :laughing::no: Needless to say she tripped :laughing:


I'm working on our house, my wife asked me if she could pick the light---she got a dead pan no. Oh well, she'll get over it. 

The other thing I have in the works I made the mistake of telling her--she's terrified, she not cut out for risk. She did calm down a little when I told her our daughters are working on structuring the financials for the endeavor. 

Tom


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## FrankSmith (Feb 21, 2013)

I can see why she could be skeptical. There are more people with big ideas and little fallow through than there are people with good business sense. Unless you have a successful business running when you meat a women, I think you have to earn the trust. As they see you making decisions that pan out they will quickly back off. A key to this is not venting to them, and following through when you tell them you are going to do something.


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## Jaws (Dec 20, 2010)

FrankSmith said:


> I can see why she could be skeptical. There are more people with big ideas and little fallow through than there are people with good business sense. Unless you have a successful business running when you meat a women, I think you have to earn the trust. As they see you making decisions that pan out they will quickly back off. A key to this is not venting to them, and following through when you tell them you are going to do something.


Following through is the key to everything - especially with a woman. :thumbsup:


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## tjbnwi (Feb 24, 2009)

FrankSmith said:


> I can see why she could be skeptical. There are more people with big ideas and little fallow through than there are people with good business sense. Unless you have a successful business running when you meat a women, I think you have to earn the trust. As they see you making decisions that pan out they will quickly back off. A key to this is not venting to them, and following through when you tell them you are going to do something.


After 38 years, my wife should know better. 

Tom


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## Jaws (Dec 20, 2010)

Let her make the light choice Tom!


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## tjbnwi (Feb 24, 2009)

Jaws said:


> Let her make the light choice Tom!


She has no concept on how to put items together to make them compliment or contrast each other. 

I did let her pick her new car, color and all...also let her write the check for it to make her feel good. 

Tom


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## Jaws (Dec 20, 2010)

if I wasn't married my house would be 600 sq ft and whatever colors I had left over from jobs! Lol


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