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So I have a 76 kz750 twin and I have been working on it off and on for many years now. I think I got it in like 2016 or something and it was mostly just boxes of parts, I've done a lot of work to it but I haven't changed much of anything from stock. I am almost to the point where its time to do some road testing, and honestly thats a little frightening for me. The idea of riding a motorcycle has always been scary to me, which is why I got one that was needing so much work. That may sound counterintuitive but I find the more I understand about a thing the less scary it becomes and putting this whole thing together helps me better understand just how everything works. A problem I have encountered that I find unnerving is that I am not tall enough to put my feet on the ground, and I'd like to be able to do that. I've done a fair bit of reading on the subject and made some changes to the seat and that has gotten me pretty close to where I want to be. I've read a lot about people lowering the suspension and the general consensus seems to be thats a bad idea. So my next thought was what if I took the height I wanted off the top instead? That would involve cutting the top part of the frame off, the part the seat mounts to, then shortening the bits in the middle and welding the top back on. I am curious to know how bad an idea people think that is, and if there are other possibly better suggestions for lowering the seat height without adversely affecting ground clearance and whatnot.

Don't cut the frame, it'll never be as strong. 
Reduce seat height by removing foam - fine.
Shorten fork length by lowering the yokes - fine. 
Shorter rear shocks / soften rear shocks - fine. 
Cutting the frame - bike is worthless. 

Only downside to to lowering the total height is reduced ground Clearance. Upside is lower centre of gravity. 

Thats interesting, I am curious though why you say it'll never be as strong?

You would be changing the structural geometry of the frame. 
If you reduced the height of a triangle by cutting a slice out 2 sides (which is essentially what your suggesting) you would need to change the corner angles so that the sides remain straight. 
An equilateral triangle is the strongest structural shape. 

The 80's 750 CSR  twin frame was a shorter frame 30.3in compared to the early frame at 32.3in , CSR  has a dip in the subframe, out side of that im fairly sure the rest just bolts up or need a non structural modification. 2 inches makes a big difference...so iv be told.

if you've never ridden a motorcycle, then get a small one to learn on, something you can manhandle.  even a small dirt bike or sm dual sport. 

That makes perfect sense warren3200gt, in my head it was much simpler, but I see why you say its a bad idea.

As for getting a smaller one to learn on, I had initially intended to get something smaller when I first thought about this and then this deal landed in my lap. Seems like in my area even small older dirt bikes come with a hefty price tag. Its not exactly the same but I do ride a 150cc scooter around the farm. The part about riding a motorcycle that scares me isnt really the operation of the bike itself which seems pretty straight forward. Its the empty headed nutjobs and whack-a-doos roaming the streets in ton and a half steel boxes that give me pause. Its not so bad when Im in a steel box too, but all exposed like a motorcycle is can be kinda cringey to think about. On the up side, I do live a bit in the middle of nowhere so there is plenty of safe areas to practice and even driving around I can take circuitous routes to most of the places I need to go to avoid people. 

kzstreetfigher - that is interesting to know, and I will look deeper into that. 2 inches without the need for significant modification would be great and its entirely possible I may be able to find one of those bikes in a junk yard around here. It boggles the mind how easily people give up on automotive things. The bike I have now had been given up on as a project by at least 4 other people before it came to me. After I got it all back together the only thing I found wrong with it was a bad ignition coil. Time of course had taken its toll on a lot of other little things, like the start button and the chain and the spokes, stuff like that. The last registration sticker that was on it was from the mid 80s. Its been a pretty neat project so far.

I'd recommend taking some safe riding classes. I honestly got some useful habits out of it, and combined with some riding experience, the fear has mostly become awareness/respect. Better to know that we're one mistake from sliding on the world's biggest cheese grater than to assume that we're ever safe. 

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I definitely plan to take one of those classes. Last time i looked into it passing one of those classes here can take the place of the driving test to get the license endorsement so that'll be a two birds one stone kind of thing. Driving in general though has always been a stressful thing for me, trusting all those other people to do what they're suppose to do, makes my brain itch. I mean I know mostly its an irrational fear, its just the way my brain seems to work. rebuilding the bike will help, I did the same thing when I started driving cars too. I was fortunate enough to be able to pick up one of my all time favorite cars, a pontiac firebird, and built an engine and transmission for it. They were my first engine and transmission build which was pretty exciting, but it seems like being that familiar with the machine helps alleviate some of the stresses. 

Following the principle if "Kaizen" ( the sum of many small changes) if you have spoked wheels you could have them re-built with 17 inch rims, should give you back 30mm or so depending on tyre size 

Right now only one of them is a spoked wheel. Originally they both were, but after putting new spokes on one of them I never wanted to do that again lol so I got a mag wheel for the front.

I hear you, I think that is one of the few jobs I would farm out if I needed it doing