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FORUMS Photography Talk by Genre General Photography Talk 
Thread started 18 Aug 2013 (Sunday) 16:14
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How much debt are you in because of photography?

 
Paulstw
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Aug 18, 2013 16:14 |  #1

We all know how expensive this hobby/job can be, however, for most of us its just simply a hobby, and we want the best of gear as much as anyone.

I just wondered how much debt photographers get into to fund their G.A.S or hobby so to speak.

Only asking because I'm about to fire a 70-200 2.8 IS II onto my credit card and its making feel a little ill lol.

Paul




  
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JeffreyG
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Aug 18, 2013 16:21 |  #2

As a general rule, I do not use unsecured loans as the costs are exorbitant. I also don't take on loans for things I don't need, meaning I will borrow on a secured mortgage at 4% for a house, but I won't borrow on an unsecured credit at 15% or more for a lens that's just for fun.

The way I think of it is, if I have to borrow for the purchase and it is a want and not a need, then I can't afford it.

That isn't to say that you need to live your life in sackcloth while living on beans. It just means you should be making sure you are not damaging your financial health for your hobby. You should be able to save enough money for a lens like the 70-200/II in a matter of a few months. If it takes a lot longer than that, then perhaps the cost is out of line for your income.

Don't take all that as a lecture, just how I tend to think about it.


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Paulstw
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Aug 18, 2013 16:26 |  #3

JeffreyG wrote in post #16219126 (external link)
As a general rule, I do not use unsecured loans as the costs are exorbitant. I also don't take on loans for things I don't need, meaning I will borrow on a secured mortgage at 4% for a house, but I won't borrow on an unsecured credit at 15% or more for a lens that's just for fun.

The way I think of it is, if I have to borrow for the purchase and it is a want and not a need, then I can't afford it.

That isn't to say that you need to live your life in sackcloth while living on beans. It just means you should be making sure you are not damaging your financial health for your hobby. You should be able to save enough money for a lens like the 70-200/II in a matter of a few months. If it takes a lot longer than that, then perhaps the cost is out of line for your income.

Don't take all that as a lecture, just how I tend to think about it.

Appreciate the reply, and I see what you mean. I could pay the credit card off pretty quick, however saving over 3 months might be tight.

I'm on a 6 month interest free deal for now, so doesn't really worry me too much :)




  
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ssim
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Aug 18, 2013 16:27 as a reply to  @ JeffreyG's post |  #4

It's always been my policy that if I don't have the cash then I don't buy it. I think that buying gear on credit can be a dangerous thing. I've seen many people get so far into debt (not particularly photo related) that personal bankruptcy was the only way out. Everything that I have is 100% mine.


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Higgs ­ Boson
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Aug 18, 2013 16:27 |  #5

none. my cars, motorcycles, and photo gear are all paid in cash. when I couldn't pay cash for these items, I did not own these items. plain and simple.


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Chet
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Aug 18, 2013 16:30 |  #6

Probably $18k. I really need to switch to full frame as the xti isn't much cutting it anymore.




  
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mike_d
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Aug 18, 2013 16:47 |  #7

None. I'd paid for it as I went along over a period of years. I've also purchased most of my stuff used from this site to save money.




  
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Luckless
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Aug 18, 2013 17:05 |  #8

I put most of my gear on the credit card as I order online, but I always have the balance in savings to pay it off at the end of the month for most things.

I've stretched things and let a few hundred ride a month on the card to get a new lens a few months earlier than the budget would normally have allowed, but only a few times when getting gear to use for special events.

In general, unless you in business and already have the client and contract lined up, going into debt for gear is rather foolish for the most part. Gear can wait in the vast majority of cases.


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phantelope
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Aug 18, 2013 17:14 |  #9

only reason for me to have a credit card is I don't need to carry cash and the bank does free accounting for me (I use two cards, one for fun, one for living expenses). I always pay them off at due date though, even with some interest free grace period I'd be afraid to go over and pay crazy money for nothing. Unless you need the lens now (summer, kid's games, travel) I'd put the money away and buy it when I have it. Or at least make absolutely sure to put it away over the 6 months (and don't buy other stuff) while you're in that grace period.

Only reason I'd go into debt would be for setting up a studio, then I'd get a business loan or similar. And make sure to pay it off. No need to feed the greed (of banks) for toys :-)


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sandpiper
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Aug 18, 2013 17:26 as a reply to  @ mike_d's post |  #10

How much debt am I in because of photography? None whatsoever.

How much debt have I been in because of photography? I hate to think, my debts got pretty high at one point, but photography was only a part of it.

Having been there, but paid it all off now, I can say that the consensus above about "don't do it" is probably good advice, particularly if you tend to keep acquiring stuff.

However, there are times it makes sense. I bought my 300 f/2.8L on credit, it was from a store which offered interest free "buy now, pay in 12 months" credit on all large purchases. I didn't have the money to hand but figured I could come up with it in 12 months time. Of course, that was the critical point, as the deal comes with an option at that point of pay it off in full, no interest charged, or pay it off over 36 months. The catch being that they hope you can't pay it and spread it over the 36 months as the interest is then horrendous and backdated to the purchase date 12 months previously. Take that option and you will end up paying over double the original price. However, I never intended to take option 2 (yeah, I know, nobody ever does) my plan, if I didn't have the money, was to simply sell the lens and top up the money that raised to pay the bill. Sure, I would probably lose £500 or so when I sold it, but it would cost that much to rent one for a month, so I was happy to do that as a years "rental" if it came down to that. Fortunately, it didn't, I had the money available when the due date came and made sure I got it paid off just before the 12 months were up. I have now had the lens for about 6 years and still love it, I am crap at saving as I always end up spending the money on something else, so I probably would never have got the lens that way.

So, in that case, using credit was a big plus. I got the lens I lusted after 12 months sooner than would have been possible and paid no extra for it (actually I paid less, as the price had gone up by the time I paid it off).

I suspect that the OP has a similar situation (kind of) with the 6 months interest free on his card. If you are fairly sure that you can pay it off in 6 months, why not go for it, it won't cost anything in interest. Just bear in mind that if you don't pay it off then it will start costing you interest. Of course, that may only be on a small part of the cost and just for a month or two.

I would go for it, get the lens and enjoy it for the next 6 months and get shots that I would miss if I was still saving for it. Just don't let the debt still all be on your card when the interest kicks in, and definitely don't buy anything else major until this one is paid off.

It is very tempting to allow debt to build, thinking that the repayments are still affordable and you are living within your means. But, it is very easy to end up paying large amounts of interest every month and find that, whilst you can still manage the monthly repayments without too much trouble, your actual debt isn't going down very quickly as so much of the payment goes on the interest. You could increase your payments each month, but that means putting most of your disposable income towards it and the sort of spendthrift personality that gets into that situation in the first place will have big issues having nothing to spend.

How bad did I let it get? About £35k (about US$:55k) at the peak, and there was no mortgage in there. All paid off now, thank goodness, and I would now only use credit when it makes sense.




  
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KirkS518
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Aug 18, 2013 17:33 |  #11

Less than zero. Everything was paid for with expendable cash. The only debt we have is our mortgage. Cars and boat were bought with cash, as with everything else. We have one credit card that we use for day-to-day expenses, and it gets paid off in full every month. The only reason we even have it/use it is for the cash back.

Every piece of photography equipment has been paid for with the profits of selling one lens. From that one lens, I parlayed that into a room full of photo equipment for resale, and all my personal gear, and a decent fun-time savings account.


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Jensgt
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Aug 18, 2013 18:17 |  #12

Zero! Took me long enough to pay off cc debt from when buying car parts was my hobby...won't put myself through that ever again.

Like others I pay for most gear with a credit card...but it's paid off before interest accrues. We use our credit cards for most purchases because its convenient and using it and paying off every month seems to benefit the credit score.


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Snafoo
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Aug 18, 2013 18:34 |  #13

No photo debt for me, ever. As was said before, only borrow for things you absolutely need, not want. So my home and my car are the only things that are ever purchased on loan. And I usually own my cars LONG after the loan is paid off, so that justifies it even more. A credit union is a good place to save money for your hobby, if one is available to you. Build up a modest savings account over a year or two, then use it to buy stuff, but make sure to "loan" it back via payroll deduction so it returns to its former amount. I used this tactic to buy my 70-200mm II and it was virtually painless (well, other than the $200/month out of my payroll, but I knew I wasn't really in debt, which helped my peace of mind immeasurably.) Above all, you don't want to geta sick feeling in your stomach every time you reach for your new lens/camera/whatever because you know you're in debt because of it. Totally defeats the purpose of a hobby, IMO.


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itzcryptic
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Aug 18, 2013 18:36 |  #14

I use a credit card, but pay it off every month. I don't make a lot of money, but I don't like debt.




  
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digirebelva
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Aug 18, 2013 18:40 |  #15

If you cant pay it off shortly, the interest you are going to accrue on the outstanding balance is going to make the lens more expensive than it already is...if that is the case do you REALLY need it this moment, or is it a WANT?


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How much debt are you in because of photography?
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