$$$ DEBT - in the name of audio

Wind Chaser · « **on:** 22 Nov 2007, 01:04 am »

So how passionate are you about your system?

How strong is the addiction?

Have you ever screwed yourself financially to make an audio related purchase?
(including a house for audio related reasons)

I'll admit I've gone into debt twice to make an audio purchase it, but I'd never do that again. If I had I kept either of those two purchases instead flogging them off for a fraction of what I paid, the regret might have been as bad.

John

satfrat · « **Reply #1 on:** 22 Nov 2007, 01:21 am »

How about $35,000 on 2 credit cards and I just got fired from a 35 year job? Would you consider that screwing myself? Well I did for the first 2-3 weeks.

Now 11 weeks later, I've never had so much time to sit back and enjoy the music. I catch myself wondering all the time now what's down side to being "retired" at 56?

So long as I can continue to make the monthly minimums on my cards, I've never enjoyed myself as much as I have lately. If i had to do it all over again??? i don't think about stuff like that any more than I would go into a bar and cry in my beer about how much life sucks. If i wanta make changes, it starts this very minute. What has happened,,, happened and you move on. Life's too short to be worrying about coulda/shoulda/woulda crap. I'd rather spend my time enjoying the moment,,,, even if it's just listening to music and eatin' the dog's food on him.

Cheeers,
Robin

Marbles · « **Reply #2 on:** 22 Nov 2007, 01:51 am »

Heck yeah I've gone into debt for audio. In my case it was (is) short term borrowing.

If you deal with an internet direct company, you give them a credit card.

I've paid them off when the bill came, but that's still (short term) debt.

Before I went hog wild on audio, I paid off my house and set my kids up with enough $$$ to get through 4 years of college.

Satfrat, $35K on plastic and no job would scare the crap out of me. Enjoy the music.

Bigfish · « **Reply #3 on:** 22 Nov 2007, 02:17 am »

I suspect the basis for the original post was made because this hobby is or can be very expensive. There always seems to be a new piece of audio jewelry or piece of gear that will make my system sound better (or at least I think it will). While I could have certainly spent the money on other things I don't think any materialistic stuff has ever given me as much pleasure as this system. However, I have and will continue to pay as I go, piece by piece. As Marbles indicated in his post I may use a credit card but pay for the item when the bill arrives.

Ken

TheChairGuy · « **Reply #4 on:** 22 Nov 2007, 02:28 am »

I'm with Rob - he's got all of his Marbles working on this one

John

satfrat · « **Reply #5 on:** 22 Nov 2007, 03:07 am »

Quote from: Marbles on 22 Nov 2007, 01:51 am

Heck yeah I've gone into debt for audio. In my case it was (is) short term borrowing.

If you deal with an internet direct company, you give them a credit card.

I've paid them off when the bill came, but that's still (short term) debt.

Before I went hog wild on audio, I paid off my house and set my kids up with enough $$$ to get through 4 years of college.

Satfrat, $35K on plastic and no job would scare the crap out of me. Enjoy the music.

OK,,, I'll come clean here and put all my marbles on the table.

I have the finances to take care of my CC's but it's all in a 401K. I have a little over 3 years before I can spend w/o that 10% penalty. Before I maxxed out my cards (I have more btw), I would go back and forth with balance transfers on the 2 cards, just to get the best APR. 40% of my balance is on a 3.9% APR for the life of the loan. The rest is @ 6.9%. My income from my savings last year was 12 times what I paid for interest on my cards.

So the bottomline is I'm spending my money w/o actually spending it and I've a high end system that i've always wanted,,,, or at least I was til I lost my job. That little fact threw a monkey wrench into my thought process. But not enough for me to go looking for another job,,,, maybe in the spring. For this winter, I'm kicking back and enjoying not working for the first time since I was 14.

And that's the rest of the story,,,,

Cheers,
Robin

JLM · « **Reply #6 on:** 22 Nov 2007, 12:19 pm »

50 years ago "Can you afford it?" used to mean, "Do you have the cash on hand?". Now it's a question of being able to finagle the monthly payments.

I'm quite satisfied with my current system as it has allowed me to enjoy the music more and get off the quest for "extreme" fidelity. Having a dedicated room is huge (listen when I want). Having it designed with proper proportions and isolated from the rest of the house is also huge. I've tweaked since with a few absorption panels, but with the right room/setup already in place, the advantages were rather minimal.

Being a KISS kind of audio guy helps with the appetite for jewelry. I invested time/thought into what was really important to me up front and had custom speakers commissioned. Since I've found synergistic amps, so most of the equipment is in place with no need to upgrade/replace.

Audio is low on my financial priority list (behind living expenses, retirement, and college for the kids). Sure I have a couple more pieces I'd like to flesh out my system with, but it will wait until I can afford them (I always pay off the credit card in full each month).

Upstateaudio · « **Reply #7 on:** 22 Nov 2007, 01:37 pm »

HI Satfrat. Since you are 56 and lost your job, I believe that you can withdraw from your 401K without the 10% penalty. You will have to fill out some paperwork for this. I would check with an accountant. Are there any accountants on this board?

twitch54 · « **Reply #8 on:** 22 Nov 2007, 02:33 pm »

Quote from: Upstateaudio on 22 Nov 2007, 01:37 pm

HI Satfrat. Since you are 56 and lost your job, I believe that you can withdraw from your 401K without the 10% penalty.

The logic behind that is not too smart though, for ones 401k was / is designed for "retirement", the prudent and wise choice would be alternative 'rainy day' investments, taxable or tax free.

I gotta say though for a guy in his mid-fifties (as am I) to admitt he's that carless with credit cards and come clean on a public forum, well I guess you've got a big set of 'caones' !!

My motto....... if you can't afford to BUY your toys, you simply can't afford them !

Wind Chaser · « **Reply #9 on:** 22 Nov 2007, 04:26 pm »

27 votes and over 280 views tells me this isn't something people want even think about.

We are a culture of debt. I believe 1984, the USA had a debt load of one trillion dollars. Now I understand the total combined debt is in excess of 50 trillion dollars. That ought to be enough for every man, woman and child on the planet to have a fairly nice 2 channel or HT system.

denjo · « **Reply #10 on:** 22 Nov 2007, 04:56 pm »

Given the relative ease of credit card facilities and loans, there is little wonder why it is so easy to finance audio purchases! Personally, I would also be very cautious to buy audio gear using a credit card (more appropriately called a debt card). If I do, the credit card bill is always settled within the month. Its a vicious cycle buying on credit! When one sells off the audio gear, he loses between 20 - 30% of the value he paid for the gear. He then sources for another audio gear, perhaps at a higher price, funded by what he has recouped from the previous sale and supplemented by further credit ... and it goes on, and on. Meanwhile, the debt gets bigger and bigger!! The rule is - if I can't afford it, don't buy! Be content with what you have, save up for what you want to buy! Remember the old adage - neither a lender nor a borrower be!

John151 · « **Reply #11 on:** 22 Nov 2007, 05:09 pm »

Now that I am in my mid 40's, I am very much anti-debt as I am focused on preparing for retirement. I am maxing out on my 401K contributions, and hope to have the house paid off in about 5 years (my only debt at the moment). Having said all of this, I seem to be spending more and more on audio. There also seems to be an inverse relationship between dollars spent and satisfaction. I got more enjoyment out of my first system, which was a 20WPC integrated amp, turntable, and bookshelf speakers.

Wind Chaser · « **Reply #12 on:** 22 Nov 2007, 05:35 pm »

Quote from: denjo on 22 Nov 2007, 04:56 pm

When one sells off the audio gear, he loses between 20 - 30% of the value he paid for the gear.

20 - 30% is rare. 40 - 60% is more common. I've taken a hit in excess of 80% on a very expensive purchase. That was over 20 years ago, had I invested that money I'd be in a different situation today.

John

SET Man · « **Reply #13 on:** 22 Nov 2007, 05:46 pm »

Quote from: denjo on 22 Nov 2007, 04:56 pm

... a credit card (more appropriately called a debt card)....

Hey!

Yup, that is what it should be call.

Well, it is not your money.

Anyway, as for going in to debt for audio. Yes, I've done that before with credit card... but in short term. I would use credit card buying knowing that I will be able to pay it off in a month or two for sure.

Usually my purchecs are not that very expensive.

Well I don't think I would go out and use my credit card to buy a pair of $10,000 speaker tomorrow.

Take care,
Buddy

satfrat · « **Reply #14 on:** 22 Nov 2007, 05:48 pm »

Quote from: Upstateaudio on 22 Nov 2007, 01:37 pm

HI Satfrat. Since you are 56 and lost your job, I believe that you can withdraw from your 401K without the 10% penalty. You will have to fill out some paperwork for this. I would check with an accountant. Are there any accountants on this board?

I hadn't really even thought of this, thanks for mentioning it.

i'll definitely be looking into this. Still,if I pay off my CC's, that's lost income frommoney that has been spent. I still think I'm better off making minimum payments with such low APR's and allow my money to grow. Things have changed a lot since the days of my father,,, options like this wasn't even possible. Hell, just saving money wasn't possible for my father back in the 50-60's. I've always said, best case scenario, I'll die owing thousands. It's a pleasent thought.

Happy Thanksgiving,
Robin

DaveC113 · « **Reply #15 on:** 22 Nov 2007, 06:04 pm »

Borrowing money is a good thing if it returns more than the interest you are paying. Sadly, audio equipment does not...

satfrat · « **Reply #16 on:** 22 Nov 2007, 06:19 pm »

Quote from: DaveC113 on 22 Nov 2007, 06:04 pm

Borrowing money is a good thing if it returns more than the interest you are paying. Sadly, audio equipment does not...

I don't know about you but what my system returns to me,,, well there are some things you don't put a price tag on,,,, and the emotional uplift my system gives to me is one of them. So long as I'm moved everytime I start her up, then I'm getting back all I could ask for. A system shouldn't be a financial investment, it should be an emotional investment that keeps giving back for a lifetime. What more could anyone ask for than that?

Happy Thankgiving,
Robin

DaveC113 · « **Reply #17 on:** 22 Nov 2007, 06:46 pm »

I agree, otherwise I'd have no toys!

(My last post wasn't directed at you, just in general)

Dave

satfrat · « **Reply #18 on:** 22 Nov 2007, 06:53 pm »

Quote from: DaveC113 on 22 Nov 2007, 06:46 pm

I agree, otherwise I'd have no toys! (My last post wasn't directed at you, just in general)

Dave

Yah, I know. I just felt the need to express,,,,, must be the holiday spirit in me.

ckoffend · « **Reply #19 on:** 29 Nov 2007, 10:09 pm »

Credit is justifyable for buying houses. Credit cards to finance virtually everything else in life is a mistake that the credit card company's work very hard to convince us is the approach that financially successful people pursue. The most financially successful people in this country are the least apt to use credit cards to make purchases, virtually all purchases, according to recent studies.

Thanks to the CC industry, the least well off and least capable of controlling their financial condition are the people most apt to use credit cards according to the most current studies.

You would be very surprised how much ones' disposable income increases when they no longer have financed purchases to pay for each month. My wife is a shopper (we probably donate 10 Coach purses a year to Goodwill), big time and used to have multiple credit cards, many of which I was not aware of. A while back, we decided (at my urging) that from that point forward, we would keep one credit card (for rental cars, etc. . .) and everything else would be paid with cash (check or debit card). We worked on paying off anything purchased through financing (cars, boat, cc, furniture, etc. . . and paid it off as fast as we could). We now have a mortgage, which we pay monthly along with an additional overage of the monthly mortgage amount (doing this cuts 3 years of the remaining 8 years left on our 15 yr. mortgage and saves us $40,000 in finance charges). We both now maximize our 401Ks, increased savings for our kids college funds and have so much money going into savings accounts that we now have a system with multiple accounts and an automatic transfer system when one account reaches a certain limit money gets transfered out to the other account, taking the first account back down to $5k. When the second account reaches a certain limit, money gets transferred into various investments (IRAs, additional funds in 529bs, etc. . . ).

My wife is now amazed at how much more money we have (and we are saving at a much, much higher rate) and we are freer to buy things we want, and we have both become more aware of what we really want vs. just impulse buying as it is being done with cash.

I will never finance another car, boat, trip, home improvement, etc. . . It is just too easy to save when so much money is not already spent before the month already starts. It also helps teach the kids a much better way to manage money.

If you can't afford to pay cash for those new speakers . . . . . you can't afford those new speakers!

Poll

Have or would you ever go into debt to make an audio purchase?

$$$ DEBT - in the name of audio