Sometimes You’re Smarter Than you Think

I bought my Kubota diesel mower because I just plain felt like it. I like diesels. I like diesel everything.

But I my heart felt like it because my brain, not to mention my hands and sore back, had dealt with all sorts of problems with engines running on ethanol gas in my unusual climate. It rusts parts. It clogs carburetors unless you watch it carefully and fool with the machines no less often than once a month. It goes bad and makes engines run poorly. Electric ignition is also a likely source of aggravation. A diesel has no spark plugs.

I have suffered and spent a lot because of gas problems. I can’t count the number of times I have been unable to do an important, urgent job until I did something about an engine crippled by gasoline. I gladly paid a hundred dollars for a single gallon of gas treatment. I have probably spent $2,000 on electric yard tools in order to have options in time of need. That should show how miserable gas made me.

My brain also knew diesels lasted longer. Diesel pickup engines often go 600,000 miles before being rebuilt, and then you start the clock over.

My heart didn’t like the fact that gas engines had to run hard in order to get anything done. It just felt like an inferior way to do things. A gas mower runs at about 3,600, and a diesel runs at around 3,000. I thought the difference was bigger, but in any case, a gas engine has to spin faster to generate torque.

When I was mower shopping, I was offered a very good commercial gas mower, new, with a 35-horsepower motor, for around $13,000. I almost bought it. But I kept thinking. If a used diesel mower costs thousands less and will run the rest of my life without big problems, and it won’t have the gasoline curse, why should I buy gas?

I wasn’t sure what to think.

One of the reasons I was perplexed was that I knew professional landscapers bought a lot of gas mowers. And people on the web throw this up as proof that diesels aren’t better and don’t save money. I wondered why pros used gas when it seemed undeniable that diesel had to be better.

And if diesel wasn’t better, how did any company ever manage to sell a diesel mower, given the big cost difference?

One day in the recent past, a thought came to me. Maybe the reason pros used gas machines wasn’t because they made economic sense. Maybe they used them, and I am sorry to put it this way, because the kind of people who end up mowing yards for a living are not all clever about money.

If you’re good with money, you could very well end up in the yard business. You could end up owning 50 mowers and commanding 25 crews while you sit behind a desk in a comfortable office drinking XO brandy, but you’re not likely to end up owning one or two mowers and a trailer and doing a big part of the work yourself. And this is what most landscaping companies look like. In fact, I can’t think of a single landscaping company that has a fleet. I can’t recall hearing of any.

The issue kept bouncing around in my head, and I checked around. It turns out I was right.

Most yard guys either can’t or won’t put up $20,000 for a diesel mower when they can get similar speed and cut quality from a gas mower for $13,000. They also tend to trade mowers in, which is a bad economic move, at 1,000 or 1,500 hours.

When you trade something in to a dealer, you’re giving it to someone who has to make a profit. He will never give you full retail value because he can’t. He can’t swap mowers even. He would go out of business.

You never trade anything in unless you have no choice or you’re so rich you don’t care. You sell.

A commercial gas mower is pretty nearly the same thing as a commercial diesel mower, except for the engine and maybe different pulleys to accommodate higher engine speeds. A good gas mower will be just as sturdy, apart from the motor.

When your gas mower starts acting up at 1,500 hours, it has to be because it has a gas engine, not because the other parts are worn. If the engine lasted as long as a diesel, you would probably be able to run the mower for 3,000 hours without risking breakdowns and shop time that would hurt your business.

I think pros who get rid of low-hour gas mowers (low for the bodies, not the engines) do it because they don’t want their machines to die suddenly on the job and require new motors. This is highly likely after 1,000 hours. If your gas mower croaks when you need it, and you decide to put a new engine on it, you will be out of business until it’s fixed, and that will take days. You will lose income. You could lose customers.

On the other hand, a pro who buys diesel in the first place should be very confident until at least 3,000 hours, and at that point, he should be able to get over $5,000 for it. A retired $1,000-hour gas mower will bring around $3,000 in a private sale (less if traded), and the landscaper will miss out on 2,000 valuable hours of use he would have gotten from a diesel.

On top of that, diesels save their owners on fuel because they burn less. And they have to be filled up less often.

Most yard men are not in a position to buy mowers with cash. It’s a lot easier to finance a $13,000 mower than a $20,000 mower. Even if it costs more in the long run, you can only buy as much mower as your cash or credit will allow.

I think gas mowers are much worse investments for professionals, but I believe they buy them anyway because they generally lack judgment and/or capital. I think a lot of them are buying things like bass boats, cruise and Disney World tickets, bar drinks, restaurant meals, and other lifestyle items they really can’t afford, and this makes the capital problem worse.

This is normal for working Americans in jobs that draw people who haven’t done much to train themselves for good careers. I think most of them have big debt loads, and a big percentage have negative net worths.

My mother taught me that the rich pay less for everything, and as a generalization, it’s true. The rich don’t rent-to-own $400 couches and end up paying $800 after interest and fees. The rich buy stuff that costs more up front but ends up costing less. The rich don’t live on credit card debt. They don’t get student loans. They can pay cash for things and get cash discounts.

They don’t buy cigarettes one at a time outside Korean groceries.

My mother was a realtor, and she told me Jewish parents with kids at the University of Miami got their kids free housing. They were buying their kids condos instead of paying rent. The condos appreciated, and they could, of course, rent rooms to roommates. After college, they had accumulated wealth while everyone else had paid rent, paying off their landlords’ mortgages and increasing their wealth. Free housing, plus equity other people paid for.

Back in law school, I knew a student who paid his tuition with American Express. It didn’t cost him any more than using cash, and he got a lot of points at $11,000 per semester. I do the same thing with my medical insurance. They don’t give cash discounts, so American Express is better.

I pay my bill in full every month, so I don’t pay interest. There are people out there paying 18% annually to credit card companies on top of their premiums because they have no choice.

I knew another student who bought a convertible Camaro with student loan money. His friends called it “the Ferrari,” because they figured it would end up costing him as much as one. I remember hearing students talk about loans. They would say it was a bad idea to order pizza, because it would end up costing $40.

The main lawyer I clerked for in law school owned his office because he could pay for it. He rented it to himself, and this reduced his taxes, in addition to making him richer through appreciation. This is what my dad planned to do back when we had hopes of having a firm in our own building. I knew other lawyers who paid rent and didn’t get anything but tax deductions. My boss died with a net worth somewhere north of $10 million (after a divorce) that he admitted to, and knowing him, he probably hid a lot. He had a huge motorsailer and a twin-engine plane, he drove a Jag, and he did not deprive himself of much of anything.

My grandfather owned a huge amount of real estate because people knew he had money, and they went to him when they needed to sell property in a hurry. He was able to give them cash and get good prices, and they were happy to do business with him. If he had been in a worse position, he would not have been able to buy distressed properties fast.

When I had nothing, I bought a car at 11% interest. That’s how poor people get things. At 11% per year, the interest alone was 55% of the principal. To a person with a net worth, it was a $13,000 car. To a person with nothing, a car like that could cost over $20,000, depending on how much was financed.

It’s seems odd that people with less pay more, but it does make sense.

I am not good with money because I don’t study it, and I have wasted a lot, but I’m not completely hopeless. I can tell the difference between a $6,000 lifetime lawnmower and a $13,000 lawnmower that loses over $1,500 in value as it leaves the dealership and may end up costing $19,000 because it has a motor that won’t last.

I don’t know why I didn’t pay attention to my own common sense. In this world, it’s very important not to assume other people know what they’re talking about.

Like I always say, Oprah Winfrey gives people dieting, marriage, and parenting advice. Enough said.