My wife just found out how much I spent on the 1DsII...

SLR_Jockey · May 13, 2005

Well my wife and i have the 1K rule, if either one of us want anything that is under a grand there is no need to discuss the purchase. Now when i told my wife that i wanted to buy a lens that cost 5K she was hesitant about it, but we agreed under circumstances, which was i was not to make another large purchase until this was paid off, i said fine. See i understand money, and consider myself pretty good when it comes to managing it, stock market and so on, anyway it amazes me on how many people who have no clue, and this is not to insult anyone either. Let me try to give some of you a quick lesson in spending money to make money!

This is for all you people who have a 401K plan, as mentioned above i had to pay for lens before i could make another gig purchase rite! Well what i did was take a loan against my 401K, for 11 months, the beauty is that now i have to pay my self back 6.5% interest on the 5K i borrowed, and that is just more money that i get to put into my 401K, but i know some of you that are a little money savvy are saying yes, this is true, but when your 59 1/2 and you with draw on it you still have to pay taxes on it, and yes that is true as well, but how many of you ever thought of doing this..

Every year i borrow the maximum that is allowed to be funded into a Roth IRA from my 401K Plan, so i am taking as much out of that taxable account every year that is allowed by law and putting it in to a tax differed account, the Roth IRA, so when i am 59 1/2 and lets say i have 1 Million in the Roth, well it is all mine TAX FREE.! When i switched accountants this year my new accountant said that he has been in the business for 30 years and never thought once of doing that, he asked me if i minded if he showed a few of his top clients about it i said sure, he also offered me his services for free for life.! Back to the post, if your wife and you are struggling to make ends meet every week and you bought a 7,500.00 camera well i think she is entitled to being angry at you, and not so much as about the camera but the fact that you tried to be sneaky about it. If you have a 401K plan do what i said explain it to her that you are actually making money not just spending it and you will go from the fool to the hero fast, good luck.

Also every year from March 31st to November 1st put all your money in your 401K into a money market fund, granted you will only make .05% on it, but your not losing it, and from Nov1 to March31 put your money into and aggressive fund, my 10 year average on my 401K is now @ 37% while i have seen others lose all their 401k's. It's your retirement money pay attention to it.!
--
Pardon me, but does your doggy bite?

brianz112832 · May 13, 2005

You're forgetting one important aspect about borrowing from your 401k: although you are paying yourself interest, you are paying yourself back with AFTER TAX money which will be TAXED AGAIN when you withdraw it.

Example: you borrow $10,000 from your 401k that was a tax-deferred contribution. To pay it back, you need $15,000 in pretax earnings to pay back $10,000 after tax. Then, at retirement when you withdraw it, it is taxed again, so you get $7,000.

You just increased your tax rate on that chunk from 30% to nearly 60%.

SLR_Jockey said:
Well my wife and i have the 1K rule, if either one of us want
anything that is under a grand there is no need to discuss the
purchase. Now when i told my wife that i wanted to buy a lens that
cost 5K she was hesitant about it, but we agreed under
circumstances, which was i was not to make another large purchase
until this was paid off, i said fine. See i understand money, and
consider myself pretty good when it comes to managing it, stock
market and so on, anyway it amazes me on how many people who have
no clue, and this is not to insult anyone either. Let me try to
give some of you a quick lesson in spending money to make money!
This is for all you people who have a 401K plan, as mentioned above
i had to pay for lens before i could make another gig purchase
rite! Well what i did was take a loan against my 401K, for 11
months, the beauty is that now i have to pay my self back 6.5%
interest on the 5K i borrowed, and that is just more money that i
get to put into my 401K, but i know some of you that are a little
money savvy are saying yes, this is true, but when your 59 1/2 and
you with draw on it you still have to pay taxes on it, and yes that
is true as well, but how many of you ever thought of doing this..
Every year i borrow the maximum that is allowed to be funded into a
Roth IRA from my 401K Plan, so i am taking as much out of that
taxable account every year that is allowed by law and putting it in
to a tax differed account, the Roth IRA, so when i am 59 1/2 and
lets say i have 1 Million in the Roth, well it is all mine TAX
FREE.! When i switched accountants this year my new accountant said
that he has been in the business for 30 years and never thought
once of doing that, he asked me if i minded if he showed a few of
his top clients about it i said sure, he also offered me his
services for free for life.! Back to the post, if your wife and you
are struggling to make ends meet every week and you bought a
7,500.00 camera well i think she is entitled to being angry at you,
and not so much as about the camera but the fact that you tried to
be sneaky about it. If you have a 401K plan do what i said explain
it to her that you are actually making money not just spending it
and you will go from the fool to the hero fast, good luck.
Also every year from March 31st to November 1st put all your money
in your 401K into a money market fund, granted you will only make
.05% on it, but your not losing it, and from Nov1 to March31 put
your money into and aggressive fund, my 10 year average on my 401K
is now @ 37% while i have seen others lose all their 401k's. It's
your retirement money pay attention to it.!
--
Pardon me, but does your doggy bite?

--
Wildlife galleries
http://www.pbase.com/zeiler/

GPB · May 13, 2005

Why don't you just have a savings account you dip into when you want to buy something like this? Put it on a gold/platinum card (for additional year warranty) and then pay the bill at the end of the period. Then, use a credit card that pays you a 1% (or so) dividend. Then replenish that savings.

Do you really know a money market that pays .05%? Do you know what .05% really is? Not five percent...not half of a percent...but one twentieth of a percent. Typo...or not so savvy?

Personally...I don't like your idea...retirement savings in my book should NOT be used like this. Buy it when you have the cash. IMO.

Enjoy.

-- Greg

Seaclam · May 13, 2005

This is funny! First off, I'm single, so I don't have these problems. But it occurs to me that if you've been in photography before you met your wife and she married you knowing that you had this expensive hobby/profession, then she should just accept it and understand the costs. Maybe that's just to simple of an answer, but I'm glad I'm not married. From everything thing I've heard by those here and coworkers, it's a royal pain in the ass. Then again, you guys who are married, you did after all make that choice. You fell into a trap, the spiders web. Sorry.

blankj · May 13, 2005

The way I see it, earning and spending is to marriage what a lens is to the making of good photographic art. Important? Yes ! But its just a smallish though important part of the greater whole.

-John

SLR_Jockey · May 13, 2005

It will not be taxed again because it is going into a Roth IRA..And to the other chap yes 1/2 percent on the plus side is always better than negative any percent.!

brianz said:
Example: you borrow $10,000 from your 401k that was a tax-deferred
contribution. To pay it back, you need $15,000 in pretax earnings
to pay back $10,000 after tax. Then, at retirement when you
withdraw it, it is taxed again, so you get $7,000.

You just increased your tax rate on that chunk from 30% to nearly 60%.

SLR_Jockey said:

Well my wife and i have the 1K rule, if either one of us want
anything that is under a grand there is no need to discuss the
purchase. Now when i told my wife that i wanted to buy a lens that
cost 5K she was hesitant about it, but we agreed under
circumstances, which was i was not to make another large purchase
until this was paid off, i said fine. See i understand money, and
consider myself pretty good when it comes to managing it, stock
market and so on, anyway it amazes me on how many people who have
no clue, and this is not to insult anyone either. Let me try to
give some of you a quick lesson in spending money to make money!
This is for all you people who have a 401K plan, as mentioned above
i had to pay for lens before i could make another gig purchase
rite! Well what i did was take a loan against my 401K, for 11
months, the beauty is that now i have to pay my self back 6.5%
interest on the 5K i borrowed, and that is just more money that i
get to put into my 401K, but i know some of you that are a little
money savvy are saying yes, this is true, but when your 59 1/2 and
you with draw on it you still have to pay taxes on it, and yes that
is true as well, but how many of you ever thought of doing this..
Every year i borrow the maximum that is allowed to be funded into a
Roth IRA from my 401K Plan, so i am taking as much out of that
taxable account every year that is allowed by law and putting it in
to a tax differed account, the Roth IRA, so when i am 59 1/2 and
lets say i have 1 Million in the Roth, well it is all mine TAX
FREE.! When i switched accountants this year my new accountant said
that he has been in the business for 30 years and never thought
once of doing that, he asked me if i minded if he showed a few of
his top clients about it i said sure, he also offered me his
services for free for life.! Back to the post, if your wife and you
are struggling to make ends meet every week and you bought a
7,500.00 camera well i think she is entitled to being angry at you,
and not so much as about the camera but the fact that you tried to
be sneaky about it. If you have a 401K plan do what i said explain
it to her that you are actually making money not just spending it
and you will go from the fool to the hero fast, good luck.
Also every year from March 31st to November 1st put all your money
in your 401K into a money market fund, granted you will only make
.05% on it, but your not losing it, and from Nov1 to March31 put
your money into and aggressive fund, my 10 year average on my 401K
is now @ 37% while i have seen others lose all their 401k's. It's
your retirement money pay attention to it.!
--
Pardon me, but does your doggy bite?

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--
Wildlife galleries
http://www.pbase.com/zeiler/

--
Pardon me, but does your doggy bite?

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My wife just found out how much I spent on the 1DsII...

SLR_Jockey

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brianz112832

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GPB

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Seaclam

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blankj

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SLR_Jockey

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