What is the whole point to all of this? Why does this business exist? Is there an underlying purpose or goal? If you’ve read my brief profile on the home page, you might be left with the question of why I would walk away from life as a Financial Advisor to ultra-high net worth individuals, one that afforded a more than comfortable income in return, to start from scratch with a completely unrelated business? Rule #1 of marketing is to be compellingly concise. So there is no venue other than this blog to actually lay out the answer to those questions. So here it goes.
My educational foundation is in finance. When I became a Certified Financial Planner I got exposure to how countless families earn their living, their understanding of how money works, and their strategies for leveraging the value of every dollar. What many don’t understand is that $1 in one person’s pocket is not necessarily worth the same as $1 in somebody else’s pocket. It looks the same. It feels the same. It spits out the same four quarters in a change machine. But it’s not the same. I’ll try to explain how this is while ultimately bringing it back to Cheronimo.
Products and services can have wildly different values. Look up the cost of a watch. Something that tells you what time it is and that you wear on your wrist. Believe it or not you can find one that satisfies these criteria for under $4. And then there’s the $440,000 Rolex. Now, this is an extreme example, but what’s the market value of the $4 watch after two years? $1 maybe? I’m sure there’s somebody out there that will pay you something for it, but most people don’t buy a $4 watch as an investment with the expectation of resale value. Contrast that with the Rolex. What’s the value of the $440,000 Rolex after two years? Possibly less, but it could easily be worth more. With the exception of the occasional pretentious douchebag, those that buy a Rolex do so because they recognize its investment value. Instead of being a depreciating asset guaranteed to lose value immediately after purchase, a Rolex can be resold for considerable value at a later date. So instead of being viewed as an “expense”, a Rolex purchaser views this cash outlay as an “investment.”
Expense versus Investment
This is perhaps the greatest differentiator between the financially independent or those on their way to becoming so, and those working their asses off but coming up short. The financially independent, contrary to what some may believe, scrutinize the expenditure of every $1. But they do so with an eye toward all of the other costs of ownership, with the largest secondary cost being time. And time is money. The time to use it, maintain it, clean it, or repair it all adds up. After factoring in these costs, what is the value of this item after a year, two years, five years, etc.? Now how does that compare against non-ownership options, whether that’s renting, leasing, or outsourcing whatever it is that requires the item?
The value that non-ownership provides is in keeping your hard-earned money in your bank account longer. The more money that you keep in your possession, the greater access that you have to higher interest-earning outlets for the cash. And the power of cash earning interest, and then that interest earning interest (compound interest), is powerful beyond the scope of this blog post. It is at the core of what distinguishes an expense from an investment. An expense strips you of the potential for compound interest. So unless the item is like a Rolex that maintains or grows in value organically, it is not an investment. And the goal should be to maximize investments and minimize expenses. Which brings us to Cheronimo.
I lost interest in helping the already financially independent increase their wealth. It is an admirable profession, but not one that fulfilled my desire to have a broader impact on this world. I want to put people on the path to financial independence, not cater to those already on it. I want to do that in a more tangible way. And I want to do that in a more responsible way than it’s currently being done.
Homeownership is the single greatest investment most people will make in their lives, and it is approached by many as a source of countless expenses. A lawn requires maintaining, which requires spending money on special equipment. Clearing snow so that you can get to work in the morning requires spending money on special equipment. Keeping carpets clean requires spending money on special equipment. Washing the exterior of the house, or a fence, or a deck, or the driveway requires spending money on special equipment. Cleaning out the gutters. Building a new deck. Trimming a tree or some hedges. Fixing a light or a ceiling fan on a vaulted ceiling. Tilling a garden. Winterizing the sprinkler system. So many homeowners buy all of the equipment needed to carry out these chores without realizing that there is a more financially strategic option. Many others avoid buying a home altogether because they know that they can’t afford to buy all of the equipment they think is needed to go along with the home.
With Cheronimo I want to change this whole dynamic. By and large, none of the equipment available through Cheronimo should ever be purchased, except by those using it for professional purposes. The average homeowner will use the equipment so infrequently throughout the year, and none of them are Rolexes or fine wine. They are all depreciating assets with not insignificant secondary time costs from cleaning, maintaining, repairing, etc. Renting this equipment when needed is a much more appropriate financial decision. Even lawn care equipment. Think about it. The average homeowner only spends 15 hours out of the entire year maintaining their lawn. That is less than 0.2% of the year. Cheronimo’s average do-it-yourself lawn mowing customer spends less than $8 to rent the equipment when needed (lawn mower, string trimmer, leaf blower). Instead of spending a bunch of money purchasing all of that equipment, that $8 or so only leaves their bank account when the cost is incurred. Money not spent to purchase the equipment is allowed to remain in their bank or investment account earning interest upon interest. And there are no secondary costs.
Where the current equipment rental industry falls short, however, is in making non-ownership convenient. If you’re a small car kind of person, how do you transport a table saw on a rolling stand, or a 17’ a-frame ladder, or scaffolding, or a snow blower? If you can’t quite manipulate a 100+ pound miter saw and stand or ladder into and out of the vehicle, what do you do? And if you only need the item for 30 minutes (like with lawn mowing equipment or a snow blower), spending that same amount of time driving to pick it up and return it is a bit annoying. Cheronimo solves this by providing free delivery and pickup. How exactly we are going to do this at enough of a profit to be able to stay in business will be our little secret. I’ll just say that it’ll largely be by not being greedy. And being very creative.
What I’ve left out in this long blog post thus far is the larger goal beyond helping individuals: helping communities. It is easy to underappreciate the impact gas-powered versions of all of this equipment has on our environment. Most people don’t realize that gas-powered lawn mowers, by themselves, account for roughly 5% of our air pollution. Layer on top of that gas-powered snow blowers, string trimmers, leaf blowers, edgers, pressure washers, chain saws, etc. It is not enough to ask individual homeowners to carry the burden of addressing that problem. It also appears too much to ask of our government to do anything about it. So I’ll give it a try. I can wake up every day proud of at least trying. As best as I can, where there is a non-gas-powered equipment option that will perform up to our customer’s expectations, I will choose that as Cheronimo’s representative in the equipment lineup. Technology is not quite there yet in some categories (like with the Tiller), but as soon as it is I will be the first to welcome it.
So…..there’s the long story of why Cheronimo came to be and what fuels our drive to deliver service to our customers. I love the challenge of gaining each customer one at a time, and maintaining those relationships forever. It is rewarding beyond words, and I appreciate every customer that has joined me on this journey.
Do-it-Yourself (7 days/week)
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