12 Week Numbers on New Lease

Yea that's like costing me like .81 cent per mile for fuel normal is .56 per mile and I can it get it down bro. 41 per mile

 

Sorry

 

How many miles did you have to run to gross that $10,300? And how many days did it take?

 

Sorry it’s lengthy but I think it’s important that anyone considering an LP deal understand that the take home cpm number can be misleading and carriers pushing these LP deals count on that. This OP put out real numbers so I can show you the math what this example of take home pay really means.

While his delivery isn’t the greatest, Oldfart is right in this example. If the guy is happy and making what he needs, good, but people shouldn’t look at that .75cpm number and be swayed to try lease purchase.
I commented in his other thread that out of that .75cpm you have to pay yourself. If you paid yourself .50 cpm, you’re left with .25 cpm. If you’re not cutting yourself a W2, you’re paying tax on that .75cpm number and being a lease operator you don’t have depreciation helping you out. You also pay self employment tax at 15%, as an example, that’s .115cpm in tax. Now you’ve only got .135 cpm in profit. When you’re self employed you also have to pay income tax on that .75cpm number which would be .165 cpm, resulting in a loss of .03 cpm. And, depending what State you live in, you have State tax too. So, at the end of the year, you either need deductions to reduce your tax burden or you need to pay yourself less in order to stay in business. I didn’t go into so much detail in the other thread.
I’d recommend getting incorporated and be taxed as a sole proprietor, in your case, and pay yourself on a W2 to generate tax savings, most notably, per diem. A good accountant can walk you through that.
Being classified as simply self employed and taking draws from your net revenue is too expensive. If you incorporated as a sole proprietor you would be in a safer position. Not much profit but I believe strongly, as the math above suggests, you will slowly be out of money and not know it until it’s too late.
I’m not saying this particular guy will fail, it’s just an opinion without knowing much about his particular operation, and again, if he’s happy and paying his bills, good for him, but many guys get put in the poor house by these lease purchase deals because they see the big .7x or .8x cpm they’re getting in the bank but if you factor in how much tax needs to come out of that, that .7x or .8x number, it doesn’t leave anything left in profit or is even a loss.
The rates themselves in his example are good for being leased on to someone, especially if that is on ALL miles, I’m not sure if he clarified that or not.
I was a dispatcher for a little over 8 years and each place I worked had lease purchase. Even the guys that did everything right either went under due to an unexpected maintenance event or got buried at tax time. Others would finish a lease and, because there’s not enough profit in it, either had to just lease another truck or are left with a higher mileage truck, very little money in the bank, and hope it keeps up to save money from what would have been truck payments to buy their own or put the truck to other uses.
If at the end of the lease, you’re only option is to continue leasing a truck from the carrier and pulling their loads, is it really worth it for only a few pennies a mile in profit? I wish the OP luck but lease purchase is such a dishonest system and the carriers doing it know the profit isn’t there to allow full independence and the guys will keep leasing their trucks and paying their bills.
I’m not bashing the OP or anything, I just want him and anyone else considering this path to be fully aware of what you’re getting yourself into. I’m focused on his thread because he actually gave real numbers and I can show you the math when someone shows real numbers.

 

Repairs was egr cooler egr valve dpf filter doc filter that ran close to 15,000.

 

3817 miles all miles loaded miles was like 3107 and it took 7.5 days

 

So I was not burning up the miles but the rates where right

 

If I stayed out longer and ran harder I could make more ,but I am 61 years old I have run for over 41 years ,started in coal hauling .
Urs all about trying to bank the benjamins for retirement have some on a couple 401 k but how much do you need to retirement comfortable ,i do not know but i plan on driving for another 10 years . My uncle did it till he was 82

 

Ok and would you identify the type of expense that each of these expenses are. You are netting $2760 on over $10k in gross. Also can you explain what your yearly (or even monthly if you like) expenses are on all fixed costs (permits, licensing, insurance, CPA fees, and any other fixed costs)

 

174 .98 was for a road call truck lost electrical power
The 1459 was for a tow and garage bill for the electrical problem the 1399 was for a tire rack and 4 rows of e trac ih trailer and a step put on icc bumper on trailer and the 616 was some of the egr crap that was done.
Permits lice run 2200 a year insurance run 510 a month including occupational accidental 2290 run 550 a year cpa runs 100 a month.
I know you want this all done in a speed sheet , and I would if I new how to on my phone ,teach me and i will always willing to learn.

As far as gross last year I slack off too much and only made about 235,000
I am not on track even hit t jbhat this year unless rates keep getting higher , I have one buddy with his own authority made 285,000 last year and another was happy with his 185,000.
So I would think if I was more younger and hungry I would think 325,000 would not be out of question