How long til you pay off current gear?

[FuzzMuff]

Who?

Dave Ramsey - he's an author, talk show host and has a youtube channel. He helps people become debt free by stopping doing stupid things and starting to do smart things.
Quite a few people on this forum have benefitted from him. Unfortunately there are probably far more that should take his advice but either won't or don't know better.

 

[SpudNuts]

...except that it is different, in one major way.

Buying with credit puts you on the hook every month to pay the nut, saving does not. If you're spending money you don't have, this is a big deal.

Let's say Goofus and Gallant go to Banjo Mart to buy a guitar. They get offered $1200/12 months same as cash- only $100/month! They can swing that! Goofus signs right up, but Gallant heeds the sage advice of his grandparents, and vows to put the $100 each month in a coffee can until he's saved enough to buy the guitar.

Six months later they both lose their jobs. Goofus is now unemployed and committed to the $100/month payment for six more months while Gallant isn't, and actually has $600 in a coffee can he can use to pay his bills.

Will that happen to you? Probably not. It does happen, though. Cars break down. People get sick. Life happens. If you're cash poor to begin with, you're REALLY gonna hate it when you need to scrape up $1200 to fix your car but you still have to pay that $100 each month on a damn guitar.

Have I used credit to buy gear? Of course- but not because it was the only way I could afford it, but because I was happy to use somebody else's credit for free and get my 5% Gear Rewards. I can pay off my GC account tomorrow, but why would I? It costs me nothing to let them carry it and let me keep my money in my pocket a little longer.

How about scenario 2:

In the time it took Gallant to save his $1200, supply chain issues and inflation made the price of that guitar $1400. Not only has Goofus been playing his for a year already, he paid less.

 

[Beyer260]

How about scenario 2:

In the time it took Gallant to save his $1200, supply chain issues and inflation made the price of that guitar $1400. Not only has Goofus been playing his for a year already, he paid less.

If Goofus was so cash poor that he needed to finance $1000, he absolutely didn't need to tie his money up in a guitar when gas prices, groceries and rent are soaring while wages are stagnant. That extra $200 he "saved" would be inconsequential compared to the extra $100 he's on the hook for every month while gas is $5 a gallon.

 

[ben777]

More like Gallant decides owning more guitars than the Beatles or Stones is stupid cause he just plays guitar in his basement or with friends every once in a while.

So he sticks with just a couple guitars or gasp a single guitar, woodsheds, saves tons of money and ends up a much stronger player than Goofus and ends up retiring early with lots of time to keep playing guitar. Goofus keeps flipping and acquiring guitars and is always in debt and can't figure out why he has no time to practice and never improves and is always stressed about money.

That's what's always dumb in these threads. It's like there's a lack of recognition that the group of people saying don't finance gear are probably buying a lot less gear to begin with.

Watching Get Back was been an interesting perspective.. it's the freaking Beatles and they have 3 guitar players and they had less gear for the 3 of them than half the people here.

 

[donnievaz]

Buying gear on credit is getto.
Yeah, it's nice to have expensive guitars and amps. But really a used well made offshore guitar is plenty good if it means not going into debt.

Spelling ghetto incorrectly is even more ghetto...

 

[Ry@n]

More like Gallant decides owning more guitars than the Beatles or Stones is stupid cause he just plays guitar in his basement or with friends every once in a while.

So he sticks with just a couple guitars or gasp a single guitar, woodsheds, saves tons of money and ends up a much stronger player than Goofus and ends up retiring early with lots of time to keep playing guitar. Goofus keeps flipping and acquiring guitars and is always in debt and can't figure out why he has no time to practice and never improves and is always stressed about money.

That's what's always dumb in these threads. It's like there's a lack of recognition that the group of people saying don't finance gear are probably buying a lot less gear to begin with.

Watching Get Back was been an interesting perspective.. it's the freaking Beatles and they have 3 guitar players and they had less gear for the 3 of them than half the people here.

If Goofus was so cash poor that he needed to finance $1000, he absolutely didn't need to tie his money up in a guitar when gas prices, groceries and rent are soaring while wages are stagnant. That extra $200 he "saved" would be inconsequential compared to the extra $100 he's on the hook for every month while gas is $5 a gallon.

Ah, but these posts are introducing additional variables into the scenario, which may or may not be the case for the individual involved. One seems to be assuming this is an additional guitar, when it may be Goofus’ only guitar. The other is assuming the price of gas, groceries, and rent are significant factors for him, when they may not really be hitting him that hard (maybe he owns his home with a fixed rate mortgage, eats inexpensively, and does not drive much or at all).

 

[small axe]

I have lucked out and never financed a piece of gear.

 

[kennslp]

Well, in a past life 15+ years or so ago, I had way too many guitars and an awful lot of debt. Mostly from the guitars and related purchases. I got tired of paying all that interest and not saving any $$, so I made the decision to sell as many guitars as I could, holding on to what was most important. Went from 36 axes to 14, which is STILL a lot. Took awhile after that to get to 0 debt but eventually got there. I won't ever make a music purchase on credit again, unless it's a non-local purchase then the card gets paid to zero right away.
What I have done in recent years is put aside a little bit of $$ every paycheck, after bills, 401k, savings etc, for gear purchases. Any new acquisitions come out of that savings or I simply don't buy. Honestly though, I am blessed with more than enough when it comes to music gear. Perhaps I'll take a vacation instead?

 

[iSeamas]

All paid for.
Very early on in owning a credit card I learned to pay off 100% of my bill every month.
If I ever have to make a purchase I cannot pay off within a month (or less) I research my financing options.

The only thing I have purchased that isn't completely paid for is our mortgage.
Prior to that is was a car (I opted for a loan because I got a better deal, paid it off early) and a college loan.

 

[SpudNuts]

To those who say cash is king, I say down with the monarchy.

Do you realise that on many credit cards you get free extended warranty on purchases? Years ago I bought a laptop with my cc, paid off before the interest kicked in, and 13 months later the motherboard quit on it, one month out of manufacturers warranty. My cc company replaced it at no cost to me.

There are benefits, whether the soap box clan in here want to admit it or not.

 

[Rubia Aragones]

Mortgage payments can be made in different ways - in equal or decreasing installments. A mortgage is the only way to get their own place for many people. Thanks to it, you don't have to spend years saving up and don't have to pay too much in rent. To avoid paying off my mortgage for a long time, I turned to Mortgage Advisor Sunderland for advice. They explained that some banks allow clients to choose their own payment schedule - differential or annuity. With an annuity, the mortgage is paid in equal installments - the down payment remains the same for the entire loan period. The payment comprises two parts - the principal and interest, which are charged by the bank. In this way, the repayment will be faster.

 

[Waldemar1]

Now we have banking systems, informations about customer ability to pay for loan etc. so i wonder how it worked in the 60's when Jimi Hendrix got a guitar on loan from guitar shop after army but before he got famous? Maybe it was just showing ID and sign a document. I've read that he returned it when he didn't had money for payment.

 

[Resonate01]

I have borrowed at times and I’ve purchased gear with cash. There’s almost this accomplished feeling when you buy with cash. Almost as if you worked hard to earn this.

When I take on a loan, it feels weird. Almost as a “should I do this” kind of thing. The only difference is that these payments are going into something tangible and something that usually retains its value. Even if it did have a la interest rate, you’re not owing tons on interest anyways. If you get to have the gear earlier to me that’s not a big deal. Gives you more liquidity right now.

Either way, I like not being in debt and I remember how difficult it was when I owed 5000$ as a 22 year old making minimum wage. Those were tough days. Now that I make an adult salary, I can afford to make payments at times but I prefer not to.

 

[dk_ace]

To those who say cash is king, I say down with the monarchy.

Do you realise that on many credit cards you get free extended warranty on purchases? Years ago I bought a laptop with my cc, paid off before the interest kicked in, and 13 months later the motherboard quit on it, one month out of manufacturers warranty. My cc company replaced it at no cost to me.

There are benefits, whether the soap box clan in here want to admit it or not.

Yep. I buy virtually everything on a card. I never carry a balance on it, but the perks of paying on a card are many. Every couple years, they send me on an awesome vacation for virtually nothing too. Paying cash is for people not good at math or with poor self control in many cases.

I finance gear when they offer me 0 interest for 6-12 months on something I was gonna buy anyway. I have the cash, but letting them eat the inflation cost - sure why not.

D

 

[Abandoned]

Ive never owed money on gear and I never will

Same

 

[WW2PT]

My golden rule: If I can’t pay for it in cash, I can’t afford it.

 

[Trem-o-lux]

They explained that some banks allow clients to choose their own payment schedule - differential or annuity.

Is that in England? I've never heard that language used for mortgages in Canada or the USA.

 

[BluesForDan]

pay off, as in like not owe anything? what fresh hell is this?

 

[Dana Rudd]

All my gear is paid for. I have a Gretsch on order that I will pay-off in 12 months with 0% interest as I have done in the past.

 

[PeddleGuy]

I would never charge up 10k in gear on a credit card, let it default.. then 6 months later settle with collections for 6k. That would be dishonest - and banks deserve our honesty.