What would be more cost effective?…

[Vikingreed]

This hobby makes people goofy.

 

I bet this scenario has happened thousands of times.

Last year alone.

[makeminemego]

I'd personally be freaked out to do it, but I don't think-if a somewhat foolproof plan is in place-that it is as crazy as it sounds.

 

Probably has as much to do with what kind of access you have to available credit as much as anything. If you've got a bunch of cards with high credit limits that are always offering 0% on balance transfers, I could see making big payments every month for a couple of years to pay it down and transferring the balance remaining every 18 months. The trade off would have to be that the book appreciates at a greater rate than the 3% interest rate that you would be paying on the transfer, otherwise, you'd be losing a bit of money.

 

A better idea, which is one that I did a few years ago on a large non-comic book related purchase, was to put up about half of the money with cash in hand and finance the other half. I felt better about the purchase that way rather than financing the whole thing. I guess I felt that at least I had equity in the item in case I had to sell it for whatever reason. I also didn't feel "over my head" at any point. FWIW, the purchase was over $10K, so it may be comparable to an AF 15.

 

Good luck with the decision. Just don't over extend yourself, I guess.

[slym2none]

As someone who can't even afford a $1K+ book, this all sounds crazy to me. No way I'd ever "go into debt" to buy such a book.

 

 

 

-slym

[jimbo_707]

Now...In four years, your $30k comic might be worth $60k...or in a big slump maybe it will be worth $32k.

-Terry

 

A big slump is an environment in which an asset goes up only 6%? I think it is this mentality that leads to threads like this. Asset prices don't grow straight the to the moon.

 

My thoughts exactly. In a big slump, that book could easily go from $30K down to $15K or lower.

[shadroch]

This thread is a reminder that most Americans are clueless when it comes to money, and live paycheck to paycheck.

[Jeffro.]

I once put a $400+ charge on my card to buy a piece of OA and was quite worried about doing that. Max out a CC to buy an AF 15??

 

[chrisco37]

I wouldn't max out a card to buy a comic book. That's just crazy. If you do that, it's inevitable that something will come up where you really "need" that card and you won't be able to use it.

 

The only scenario I'd ever advise doing it is if you already had the money/cash to pay for it and you were just charging it for the miles/rewards.

[CAHokie]

This thread is a reminder that most Americans are clueless when it comes to money, and live paycheck to paycheck.

 

[paperheart]

This thread is a reminder that most Americans are clueless when it comes to money, and live paycheck to paycheck.

 

[Firespitter]

This thread is a reminder that most Americans are clueless when it comes to money, and live paycheck to paycheck.

 

 

I resemble that comment!

Now shut up and give me my welfare check so I can buy more bomics!

-T

[Buzzetta]

Groucho

 

 

One of, if not, the best.

[W16227]

What about borrowing from your 401k. The interest rate is lik 4%

 

I really really hope this one was tongue in cheek.

 

Borrowing from one's retirement system for a comic book would be

 

It's not entirely unreasonable. Significantly lower interest than a CC. Plus, if you're still in your younger years of saving for retirement & not maxing out your 401k contributions, it's not entirely unreasonable.

 

I still don't recommend it. But it has its merits. The repayment to your 401k goes back pre-tax, so even the interest isn't coming out of your net income, but your gross, which means you're going to feel the hit in your paycheck even less than you would paying the same % on CC interest.

 

Make sure to check specific terms of your 401K - what I show here is general and your specific one may have more restrictions.....

 

 

You may lose investment income on the money on loan - so that 4% now becomes 4% + whatever rate of return you are seeing.......

 

Repayment - not necessarily tax free - interest payments are not delectable. If your company has a match - you cannot use the match to repay...so if you get 2% from the company if you put in 6%, you better be able to put in that 6% + your loan payment or you lose even more....

 

You have to pay it back in under 5 years

 

You lose your job? - you get 60 days to pay back or it is treated as a disbursement (so you have to pay taxes on the money AND lose 10% in penalties).

 

 

Maybe a better way to think in general - you should not finance (pay interest on) an investment- unless you can actually make the investment on your own. You are betting on the investment outpacing the loan and putting you underwater.

 

If you can cover it anyway - then you could put it on a card and pay off quickly (miles and points add up quick if you make larger purchases)- but not take a big cash hit all at once.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Firespitter]

Sell a kidney!

Diversify your investments. You already have 1 good kidney which is more than you need (if you stop drinking alcohol). The other is just untapped resources. I'll gladly sell you my kidney for an AF15 today!

-Terry

 

[W16227]

Groucho

 

 

One of, if not, the best.

 

Groucho and ME -

 

great book -

 

and probably a good read for anyone looking to finance a comic using credit cards or loans - Julius goes in detail about the 29 crash and how it affected his family.......

 

 

 

[jaeldubyoo]

Going into debt for something that you don't absolutely need? Food, clothing, shelter: basic needs, I can understand. A comic book? Where are your priorities?

 

If you have a family, don't even think about it. That would border on the criminal.

[Doktor]

What about borrowing from your 401k. The interest rate is lik 4%

 

I really really hope this one was tongue in cheek.

 

Borrowing from one's retirement system for a comic book would be

 

It's not entirely unreasonable. Significantly lower interest than a CC. Plus, if you're still in your younger years of saving for retirement & not maxing out your 401k contributions, it's not entirely unreasonable.

 

I still don't recommend it. But it has its merits. The repayment to your 401k goes back pre-tax, so even the interest isn't coming out of your net income, but your gross, which means you're going to feel the hit in your paycheck even less than you would paying the same % on CC interest.

 

Make sure to check specific terms of your 401K - what I show here is general and your specific one may have more restrictions.....

 

 

You may lose investment income on the money on loan - so that 4% now becomes 4% + whatever rate of return you are seeing.......

 

Repayment - not necessarily tax free - interest payments are not delectable. If your company has a match - you cannot use the match to repay...so if you get 2% from the company if you put in 6%, you better be able to put in that 6% + your loan payment or you lose even more....

 

You have to pay it back in under 5 years

 

You lose your job? - you get 60 days to pay back or it is treated as a disbursement (so you have to pay taxes on the money AND lose 10% in penalties).

 

 

Maybe a better way to think in general - you should not finance (pay interest on) an investment- unless you can actually make the investment on your own. You are betting on the investment outpacing the loan and putting you underwater.

 

If you can cover it anyway - then you could put it on a card and pay off quickly (miles and points add up quick if you make larger purchases)- but not take a big cash hit all at once.

 

 

Well, with mine, I keep earning on my investments as though the loan was never taken. The 4% goes to my 401k management firm to offset the loss of capital from holding the investments in my name without the funds to back it.

 

And the repayment is treated as a 2nd disbursement to my 401k and the total between my standard 401k deduction & the loan repayment, as long as it remains below my cap (28% of my income, I believe), is all counted as a pre-tax contribution.

 

But you're right. As long as you have the cash on hand to repay it all (which I do, but didn't want to take that big of a cash hit) in the event of a lost job within the repayment window, it doesn't really hurt. However, if you don't, you could be screwed with the penalties for early withdrawal & non-repayment.

 

In general, I don't think anyone should use credit or financing if they don't have the cash to pay it back immediately if necessary.

[Hamlet]

This thread reminds me that I once paid my college tuition by taking cash advances on my credit card. This was back in the days when you couldn't pay tuition with a credit card. Tuition was also a much more manageable expense in those days.

 

I needed to pay my outstanding balance for spring quarter (about $600) before I could register for the next fall. I took out cash advances for three days because I was limited to $200/day and walked over with the cash to pay my bill.

 

I got registered and got the credit card paid off a couple of months into summer.

[COI]

This is the thread where collectors act like they never leverage their purchases with credit cards.

[ChrisInBaltimore]

On the 401k idea: I have a pension and haven't started putting money into an additional 401k. I have one with a very small amount from a job a few years back.

 

I can't pull from my pension, I don't believe. If I can, it might be when I've vested for like 10 years.

 

This thread is a reminder that most Americans are clueless when it comes to money, and live paycheck to paycheck.

 

I love how my hypothetical is really bothering you. I actually KNEW you'd chime in as such. I'm surprised you haven't suggested that I should work part time as a pizza delivery driver yet.

 

I'd also add, by a chance of very fortunate events, my wife and I are no longer living paycheck to paycheck for the first time in our lives.

 

Oh and this will really bother you, still haven't started making payments on my student loans

[jaeldubyoo]

On the 401k idea: I have a pension and haven't started putting money into an additional 401k. I have one with a very small amount from a job a few years back.

 

I can't pull from my pension, I don't believe. If I can, it might be when I've vested for like 10 years.

 

This thread is a reminder that most Americans are clueless when it comes to money, and live paycheck to paycheck.

 

I love how my hypothetical is really bothering you. I actually KNEW you'd chime in as such. I'm surprised you haven't suggested that I should work part time as a pizza delivery driver yet.

 

I'd also add, by a chance of very fortunate events, my wife and I are no longer living paycheck to paycheck for the first time in our lives.

 

Oh and this will really bother you, still haven't started making payments on my student loans

 

I'm really surprised so many people don't start saving for retirement. It's not like you can live comfortably off of Social Security without any type of supplemental income. It's never too early to start a retirement fund of some type.

 

BTW, there nothing wrong with working part-time as a pizza delivery driver. I have a friend who did that while working several jobs. He's a millionaire because he saved his money and brought property. He's retired comfortably now.