We all love nice things. We enjoy the excitement of new vehicles breaking up our mundane lives. However, when the excitement wears off, we are left with substantial loan notes that can take years to pay off. In “Taxes 102: The Business Mindset,” I covered some ways to offset this financial burden by having our LLCs purchase the vehicle. Today, I want to expand upon this concept.
Our whole lives, we are taught that working hard will reward us by buying luxurious things. And to some extent, I believe that hard work does pay off- however, smart work pays off even more. By using our business knowledge, we can avoid the biggest problem of owning a luxury vehicle; they can be huge liabilities.
A liability is something that takes money from your pocket, and an asset is something that puts money into your pocket. “Rich Dad Poor Dad” explains the difference between these two valuable lessons. So the question then becomes, “How do we turn our taste for luxury vehicles into an asset?”
Start a Home Business
The hardest part to accept for most folks will be sharing their new toys. Yes, to start a luxury vehicle business, you will have to let others rent your vehicles. I never understood how people become attached to cars. Then again, I was never a “vehicle guy.” I have collected many video games over the years, and I see how an attachment can form. My best advice is to get over it. Paying a considerable loan note on a luxury vehicle is not something that will make us wealthy- but the opposite.
Before you buy a vehicle, create a business plan. I repeat, BEFORE you buy. I say this because you will want to have your business buy the vehicle. You should consult a tax professional as soon as this magical idea pops into your head. We always want to do everything by the book- it will save us lots of heartache in the end.
The tax benefits of running our vehicles through a business are substantial. We deduct almost everything related to the maintenance and operation of a vehicle as expenses. As we learned in Taxes 102, companies deduct expenses before they pay taxes. Thus, our gas, oil, maintenance, advertising, human capital, repairs, cleaning, etc., are all expenses that get subtracted before we figure out our actual profits.
My goal would be to break even on my business. Maybe earn a little profit. Remember, I intend to avoid buying a huge liability. If I broke even, I would be able to use a luxury vehicle throughout the year without paying out of pocket- that takes financial intelligence. What you decide to do is up to you, of course. You also can build your business as big as you would like. Once you find a solid business plan that works in your area, you can replicate it with more vehicles or more locations.
Create.
You will want to automate your business as well. We don’t want to create another job for ourselves. Ideally, we would be able to check when the vehicles had downtime and schedule ourselves to use them. Other than that, we want to automate everything else either through robots (automation), virtual assistants, or managers.
Now, let’s look at some of the vehicles we can buy for use in our businesses- this will be the exciting part for most of us. Remember the magic of an infinite return– we want to get our vehicle paid off as soon as possible and get into an infinite loop. An infinite return means all of our money is out of the asset, and it continues to make us money.
Pick A Niche: Health, Wealth, Relationships
Cars and Motorcycles. Who doesn’t want a badass supercar to drive around? How about a Harley Davison motorcycle? You can buy them through your business. Turo is the rental car program that I see most people using to get started in the luxury vehicle business. If Turo is not your thing, you can create your platform for your vehicles.
Starting your platform just for your vehicles can be more expensive because of insurance reasons; however, it may allow you more flexibility. Run the numbers side by side and continue to research as much as you can. If you start small, build a list of clients, and grow when appropriate, you should do fine.
Recreation Vehicles (RVs). RVs are usually more expensive than cars or motorcycles. You will need to do your homework on maintenance prices and see if you can squeeze a profitable business model out of an RV. Remember, my goal was just to break even. Trying to turn a massive profit is something different entirely.
I looked into the RV Share website, and it seems feasible. Also, you can rent your RV out on Airbnb when it is stationary. Another option is to rent it out like a room rental; this may not be flexible, but the money from this can help pay off your RV quickly, plus less wear and tear. Using a combination of these three business models may prove profitable for you.
7 Pre-Steps to Starting a Blog
Boats. Many business ideas stem from boats—deep sea fishing, guided tours, party boats, whale-watching, boat captain, para-gliding, etc. There are too many to list. I would recommend getting to understand the cost of owning a boat before you jump into business.
I did not grow up around boats, so I would need to link up with a boating expert to shadow. I would take a one or two-year detour around boats before I jumped into the business. However, you may be a boating expert. Take your time and create a business plan; remember to add some time on the schedule for yourself and your family to use the boat.
As you can see, starting a business is a fantastic way to avoid buying liabilities. Is it faster and easier to buy a luxury vehicle with our own money or a loan in our name? Yes. However, where is the fun and challenge in that. Being financially educated makes us envision the future first and then create a path to get there. Buying things “now” creates lots of problems for later. Delayed gratification is one of the practices that separate the rich from the poor.
Check out our Merchandise Shop on Redbubble: (here)
Follow us on our Facebook Page (here)
Join our Facebook group (here)
Follow us on Pinterest at:
Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
Leave a Reply