Talk Some Sense Into Me

[jb83]

I'm graduating from college in December and have got a great job lined up at a public accounting firm. I'll be making $50,000 annually (pre-tax) not including year-end travel bonuses, so probably around $53,000 pre-tax income. I have minimal student loans and the cost of living will be very reasonable (rent will be around $400.00/month). I also will have a car payment of ~$220.00. Basically, it would be great if all you other young, single professionals starting out could convince me that I will still NOT BE ABLE TO AFFORD the boutique gear that I lust after. This will be my first time making real money, and I want to try to keep the unrealistic purchases to a minimum. Also, how much were most of you making before you realized that you could actually afford $3,000 plus gear?

[newking70]

that's why you get an advanced degree, so you can get the nice stuff.:drink

[rhinocaster]

Probably the best way to keep things in check is to put money aside for the gear you want. Don't fall into the habit of charging up a ton of stuff simply because you'll eventually be able to pay for it all. You'll end up way VAST amounts of money for the same gear.

Save up the money first. Buy when you can afford to pay cash.

It's nice only paying for gear once!

[rob2001]

Money has little to do with great tone. Sure, get yourself some good gear but don't go in thinking more money spent equals better tone.

[dgood]

I wouldn't buy anything that you have to pay for over time with added interest. That 3,000 dollar item will end up costing you a lot more than 3 grand. A 50 thousand dollar annual salary is not a lot of money these days. Wait and save and get some promotions first, especially in this ecconomy. And don't count your money and bonuses until you have them for a while.

[rhp52]

Don't forget 401K contributions.... and save. Pay yourself first w/ a deposit into your savings accout.
Get yourself a small affordable rig and be happy with that for awhile.

[Midnight Lady]

Well this isn't going to be popular, but I'll say it anyway:

B U D G E T

Yep, figure out what you'll be making/spending each month or pay period, deduct the absolutely necessary expenses (as you have above), other stuff like gas and entertainment etc, and then divide the rest. Invest 1/2 in something long-term - I don't care where, your choice - and put the other 1/2 into a nice daily interest account.

After six months, you'll have a great start - to buy buy buy. If you continue to do this (until such time as you have more responsibility), you'll have accumulated a nice bunch of gear and you'll have a safety net of investment too.

Have FUN!!!!!!!

[twinrider1]

Cash is king. Save. Save. Save. Max out you 401k contributuions.

From there, how about this. Reward yourself with either the guitar or amp of your dreams. You deserve a graduation gift.

What kind of gear do you have now?

[XKnight]

Also, how much were most of you making before you realized that you could actually afford $3,000 plus gear?

It's not really a matter of how much you're making as it is how much you're saving. As others have stated, save up enough cash to buy what you want. If you don't have the cash, then don't buy it. This simple philosophy has resulted in no debt for me other than a relatively small mortgage.

[Lawn Jockey]

I'd go through that coin like a dose of salts through a widow woman.

[lcjc800]

pop bottle money, or whatever else it takes. Work on a budget to fund all facets of your life.

[scottlr]

Now is a great time to buy stocks low :) Start planning your retirement NOW. It'll creep up on you before you know it. And, if you are lucky, maybe you can retire early! As others have said, save up the cash for gear.

[VCuomo]

I'll chime in with the others - take it from an old fart, max out your 401K contributions. Don't put it off - if I could go back in time and do it over, my very first paycheck (and all subsequent ones) would have the highest 401K contribution that I could afford.

And - don't buy any gear on credit (in fact, try to buy everything with cash).

[epluribus]

Don't be such a slave to the time clock at work that you don't have time to play with your toys...that's what I'd say. Put in enough time to pay the bills and have bang-for-the-buck stuff, then take the rest of your time to enjoy it. And don't forget...time for the people you love.

Money works for you--you don't work for it.

--Ray

[davess23]

Take it from one who knows, it's more fun to have a pretty good rig and no credit card debt than to have a great guitar and lose sleep over how you're gonna pay your bills. Nothing, and I do mean nothing, is more important than peace of mind.

[wahfreak]

A 50 thousand dollar annual salary is not a lot of money these days.

No wonder why everyone complains they are poor!

If you don't have all the extra CC debt, you can get by pretty good on 50k if your rent is only $400/month.

[guitarstan]

I assume your not married?

First thing to do is marry a rich girl. You basically have two choices. Marry a poor girl or marry a rich girl. I chose the latter and was buying high end gear, cars and housing very quickly.

My father used to say to me....."...son, you can work hard or you can work smart....what's it going to be for you?" I said "I want to work smart".

So there, peace of cake. Marry rich, a no brainer.

[tonedaddy]

Here's my $.03:

Forget focusing on how much you make before you can afford boutique-priced gear.

Furthermore, forget looking at price tags when it comes to gear.
Instead, find great sounding gear that gets you your tones at the very best price.
Shop hard and be patient until you find that gear at the best prices.
In almost all cases, being patient and buying used will save you 30% or more over new.
Sometimes much more.

Boutique-priced gear may not do a single thing for your tone above reasonably priced gear, so don't even consider it until you've exhausted lower-priced alternatives. I have several people that have literally begged me to sell them my favorite amp/cab combo, a Cage 18/00 head and an early Matchless 112 cab that I have less than $1000 invested in. Some folks might consider those boutique gear, but they sure aren't boutique prices. I have amps I've spent far more on, but don't help me get my tones any better.

A $300 effect pedal will not make you a better guitarist. It might inspire you to practice, but it's the practice that makes you better, not the pedal. It won't help your picking technique, it won't help you play in the pocket, won't help you be a better rhythm player, and it won't help your knowledge of music theory.

When it comes to upgrading to any piece of gear, use these rules before you buy:

Will anyone hear the difference once the drummer kicks in?
Will someone who's had 2 beers hear the difference?
If the answer is no to either question, skip it and move on.
;)

I understand you're working for an accounting firm, but find a fee-based certified financial planner to get you started in the right direction with a plan you can execute. They'll receive no commissions on any products they recommend. Good financial advice can make you lots of money and avoid costly financial mistakes over your lifetime. Do annual checkups with them to make sure you're on track to meet your financial goals.

At your age, you'll likely get advice to build a cash (or equivalents) position of 3-6 months of expenses, at a minimum. You'll get advice on whether it's wise to pay off your student loans early or on schedule. You'll get advice on how to maximize your 401k plan and any other tax-advantaged savings available to you (and with your income and low expenses, if you're financial planner has you saving less than 20% of your income, I'd be shocked). Personally, I'd be saving more than that.

Personally, with real estate at its lows I'd also build up savings to buy a duplex/triplex/fourplex to live in, and rent out the other units. Live there free (or at a greatly reduce price) and have your tenants pay your rent/mortage. When it's time to buy a house, keep the income property and continue to build an investment real estate portfolio over your lifetime. If you do that you'll eventually be able to duplicate your job's income giving you additional savings/retirement income, a hedge against economic downturns or layoff, or even the option of retiring early. Don't ever buy into the "you need to buy a bigger house for the tax break" myth. You don't need a bigger tax break as your income increases, you need a home that doesn't have a mortgage. Meaning, get your home paid off, and you may not need to have a job someday.

I'm sure you could find $400/mo in your budget for boutique gear. At the end of the year you'd have ~$5k of gear. OTOH, if you save up for a fourplex, in a few years it could be kicking off $400/mo free cash flow. Would you rather own a room full of boutique gear or own an apartment building that kicks off enough cash to buy you boutique gear every year for the rest of your life?

If you don't know anything about investment real estate, check to see if your city has a local real estate investors group. If it doesn't, talk to your financial advisors/friends/business contacts and ask them if they know very successful RE investors. Contact these folks, buy them lunch, pick their brains and get their advice on how to learn and get started.

This doesn't mean that following a financial plan means you can't have fun. To the contrary, if you're doing everything your supposed to do in your plan, extra income above and beyond that can be used to do whatever you want. But if your learning the real value of money, at least you'll know the benefits/costs of using that money for pleasure or for investment.


At your age and your income potential, you have a golden opportunity to get to financial independence. Don't trade it away at an early age for shiny gear. Be patient, and buy gear that gets your tones, and fits in your budget after you take care of all your other financial plans.


The best financial advice I ever received:

Poor people have to work for their money.
Rich people have their money work for them.

A high income doesn't make you rich.
There are people earning > $100k/yr that live paycheck to paycheck.
And there are other people with taxable income half of what you'll make in your job and have investments and/or income property > $ 1 million.
Which group is rich?

[tonedaddy]

I assume your not married?

First thing to do is marry a rich girl. You basically have two choices. Marry a poor girl or marry a rich girl. I chose the latter and was buying high end gear, cars and housing very quickly.

My father used to say to me....."...son, you can work hard or you can work smart....what's it going to be for you?" I said "I want to work smart".

So there, peace of cake. Marry rich, a no brainer.

This really is great advice.
Besides, someday you'll get divorced anyway and have to split everything 50-50.
Do you want her to get 50% of everything you worked hard for,
or do you want to get 50% of everything she has?
;) :D

[shihanderek]

Don't forget 401K contributions.... and save. Pay yourself first w/ a deposit into your savings accout.
Get yourself a small affordable rig and be happy with that for awhile.

Best advice I have read. I only wish I had started doing this at an earlier age. With compounding interest, it isn't about how much you save, but how long you save. At 47, I feel woefully behind in saving for retirement, and regret not putting at least $20 aside each month.

Spending more than we make and putting so much on credit really started in earnest in the 80's and is mainly responsible for where we are as a country/economy today, imo. My wife and I are working on becoming debt free, and only buy stuff by saving now.

[mouldynudger]

I`m not sure I understand.
From the figures supplied, it looks like you could afford almost anything.

Remember, you are a long time dead

Damian.

[eBay]

I'm graduating from college in December and have got a great job lined up at a public accounting firm. I'll be making $50,000 annually (pre-tax) not including year-end travel bonuses, so probably around $53,000 pre-tax income. I have minimal student loans and the cost of living will be very reasonable (rent will be around $400.00/month). I also will have a car payment of ~$220.00. Basically, it would be great if all you other young, single professionals starting out could convince me that I will still NOT BE ABLE TO AFFORD the boutique gear that I lust after. This will be my first time making real money, and I want to try to keep the unrealistic purchases to a minimum. Also, how much were most of you making before you realized that you could actually afford $3,000 plus gear?

$53K isn't that much money if you live in any larger city. You are going to be able to afford a few nice things though until one thing happens--you're going to find the right woman and then suddenly you will be running very tight as you try to get into a house and eventually, having kids. If you can skip those items, you'll always have plenty of money to do anything you want to do. In fact, time will the be the restricting factor in outside activities not money.

BTW, travel is rougher on the body than most people realize. Getting good food on the road is very difficult. If you're smart you'll walk into restaurants with your daily cash allowance and spend it all on fresh vegetables and wholesome food. If you choose the fast food route, you'll run your health into the ground within a year.

You talked about 400 for rent. Here's the typical stuff you'll need to add car payment, insurance, dry cleaning, food, clothes. Clothes turned out to be a lot for me. I was buying $1500 suits and even the accesories are spendy. It's fun but if you're going to be handling high dollar accounts, the lower priced suits aren't going to cut it. You'll learn the difference when you get into that world and your clients know it too.

[chrisgraff]

in this economy, no job is safe. If I were you, I'd save like I was about to lose the gig.

You just might.

[bleomonkey]

If you seriously want to get better tone/playing, invest some time in your hands (specifically the right hand). You can improve your tone much more by working with your hands than some boutique gear. A good amp, good guitar, and maybe one cheap pedal is all it takes. ;)

A cheaper alternative to boutique gear is to buy your favorite artist's hands and brains.:D

[dgood]

No wonder why everyone complains they are poor!

If you don't have all the extra CC debt, you can get by pretty good on 50k if your rent is only $400/month.

I mostly agree, but money is tight these days. It's best not to squander it. Taxes and inflation are about to go UP.

in this economy, no job is safe. If I were you, I'd save like I was about to lose the gig.

You just might.

I totally agree. "Last in, first out," is a reality.

[rickd]

Why do you want a 3k guitar? That's the first question I'd ask myself. I'm guessing you're younger than 25. If it's for tone, then forget it. You can get tone for nothing these days.

Most of the guys with extensive guitar collections make WAY more than 50k or they've lived long enough to save to really reward themselves. Rewarding yourself a 3k guitar right out of college doesn't seem very wise in this economy.

Another thing to consider is, if you buy new or have it built for you, it's not necessarily going to be worth what you have in it if you try to sell it. And don't fall for the "it's my dream guitar, i'll never sell it" crap. If you haven't played it, you *might* not like it. I had what I thought was my dream guitar built by a favorite luthier on the board. Spent over 4k on it, waited almost two years, got it----hated it. Sold it for a huge loss. Fun to look at, not fun to play. Never felt right in my hands even though I went through every painstaking detail with the builder to make sure it was perfect. It was not.

Off the shelf gear sounds JUST as good. And feels better in your wallet.

Food for thought.

[stratocat63]

Before you spend much on gear, save up at least three months of salary, put that in one cookie jar. Then for every dollar you spend on gear, put an equal amount in another cookie jar. And you do not pay living expenses from either jar, btw, as long as you are working.

[semore butts]

I'll just add,

For every raise you get, put half of it into your investements as time goes on.

In 1995 I was flying UH-60 Blackhawks in the 6th Cav.

I had a young soldier that was just about 30 years old.

I remarked to him one day "Fred, you always have such a bounce in your step, whats youre deal"?

He said sir, when I joined the army at 17, I took 1/2 of every raise I got and invested it.

Well, turns out Fred had about 378,000.00 in his portfolio at the time.

Plus, you are wise enough to be here asking your "elders" for advice.

The future "love of your life" may not be so wise?

Executing what you have been told here will easily set you up to be asking about retiring early as discussed in another thread here!

Then again, the disipline to execute the advice you have been given here is what really counts.

As we say in my military unit "Deeds, not words". Thats what counts! Talking sh!t is easy!

[Jahn]

Your rent is 400 bucks a month? That's excellently low, so with $50k a month you should still be able to pack away $4k in your Roth IRA and any matching 401K (max to the matching limit) and come out with a thousand bucks to play with every year. So soldier on and treat yourself to a used EJ Strat or Silverface Fender amp every bonus season!

[jcground]

Don't forget 401K contributions.... and save. Pay yourself first w/ a deposit into your savings accout.

I totally agree with that - make sure you save. In this day and age, the person who is going to be looking out for your retirement is you. The earlier you are in a position to set money aside for the long term, the better off you'll be. It sounds like you're off to a great start with your job.

Also, it's never too early to start thinking about buying a house, but save money for a down payment. Don't fall prey to the crazy loans that have gotten so many people, and our economy in general, into a tight spot.

Bottom line - there are lots of good reasons to take as much of your money as you can and set it aside in savings. One thing you might want to save for is gear, but in the grand scheme of things I'd put it pretty low on my priority list.

[jb83]

Lot of great advice here, guys/gals. I think I'm going to just try and get as much satisfaction as I can out of watching my money grow as opposed to lusting after gear that, in the end, really only looks and feels nicer than most of the reasonably priced stuff out there. Discipline, discipline, discipline...:)

[lhallam]

Do yourself a favor. Look at the current economy. This is from people buying stuff they can't afford.

This isn't rocket science, use some discipline. Save for your retirement (the sooner the better), have some cash available in case you lose your job and don't buy what you can't payoff within a month.

[HEY!YOU!]

Work is over-rated.
Be a starving musician, freedom man, that's what it's all about.
You'll have no regrets.

[Rock Johnson]

Use the Dave Ramsey plan.

1. Make minimum payments on all your bills. Squeeze your budget until you've accumulated $1,000 cash. This is your beginner Emergency Fund.

2. Pay off your debts in order of smallest balance to largest. "Snowball" the payments as you go.

3. Create a full-fledged Emergency Fund containing 3 to 6 months' worth of expenses.

4. Direct 15% of your annual pre-tax income into your retirement plans. Utilize tax-advantaged accounts such as 401ks and Roth IRAs, if eligible.

5. Take care of college funding. Fully fund Educational Savings Accounts and/or utilize 529 plans.

6. Become financially "ultrafit" and 100% debt-free: Pay off your home early.

7. Get to the point where your money works harder than you do: Build wealth (mutual funds, real estate, etc.), have fun, and give!

[Flyin' Brian]

I'm graduating from college in December and have got a great job lined up at a public accounting firm. I'll be making $50,000 annually (pre-tax) not including year-end travel bonuses, so probably around $53,000 pre-tax income. I have minimal student loans and the cost of living will be very reasonable (rent will be around $400.00/month). I also will have a car payment of ~$220.00. Basically, it would be great if all you other young, single professionals starting out could convince me that I will still NOT BE ABLE TO AFFORD the boutique gear that I lust after. This will be my first time making real money, and I want to try to keep the unrealistic purchases to a minimum. Also, how much were most of you making before you realized that you could actually afford $3,000 plus gear?

You'll know you can afford it when you've:

Made the appropriate contributions to your retirement fund
Are up to date and out of debt except for maybe a car and a mortgage
Can pay cash for it.

[Dr. Tweedbucket]

Don't go crazy or anything, just buy what you can afford to pay cash for.

Most importantly, buy a decent guitar and amp that you'll like, and just enjoy playing them!!!


Play


Play


Play


You can get to the point of buying so much crap that you end up fiddling with gear and not playing as nearly much. :mob Playing is where it's at!!