View Full Version here: : Would you take out a loan
TrevorW
11-10-2009, 03:14 PM
Guys we are always borrowing for this or that whether it be cars, boats, you name it but how many of us would borrow a significant amount to set up our ideal observatory
$10k, 20K or even more remember I'm talking about equipment that could last a lifetime
Be honest with yourself I've pondered the idea but never have
Davros
11-10-2009, 03:39 PM
I suppose astro gear holds its value well and improvements to your house / yard are a good thing. Gotta make better economical sense that a car that looses half of its value when it drives out of the yard.
Omaroo
11-10-2009, 03:42 PM
A bit like a swimming pool I think - you either want one or not. If you don't, you won't buy a house with one. As far as "adding" value, I suspect that an observatory in the yard would turn off potential buyers rather than attract them and certainly wouldn't add to the house value. It'd more likely be seen as "something to get rid of".... unless you sell to another astronomer of course, or a gardener who might want it as a shed.
supernova1965
11-10-2009, 03:48 PM
The way things are in the world at the moment I think anyone who is debt free are in a good position. I would have to be dragged kicking and screaming into the bank.:rofl:;)
dpastern
11-10-2009, 04:19 PM
Since I had a bad credit rating (probably still do), I doubt the bank would lend me that much money. I basically was working contract a few years back, got sick, took time off work without pay, had to pay bills somehow, maxed both my credit cards out (and also bought a few silly things on impulse that I know I shouldn't have). I became unemployed, took a while to get employed again, and couldn't afford the mininum repayments to keep the bank happy. Despite trying to negotiate with them, and seeing the Centrelink FIS and also an independant financial advisor, the bank told me where to go and didn't agree to a temporary repayment plan until I became employed again. The financial advisor in question had NEVER been knocked back on a repayment plan before, she was gobsmacked. Obviously the bank had it in for me (I'd had a biatch at the credit card department very rudely have a go at me over the phone and I told her to **** off).
Anyways, all debts paid off now, some money in the bank, regular job etc. Bank has given me another credit card with a 1k limit and a 2nd chance. I'm working on building up my credit rating again and keeping out of debt.
If I had a better credit rating, and a higher income job, I'd consider a loan on a AP1200, deepsky 10" RC and throw in a QHY9 CCD imaging setup with filter holder and filters, as well as a permanent pier with some basic cover from the weather. I don't want much do I!!!
Dave
There's no way I'd go into serious debt over a telescope or observatory - unless it could make me money somehow. That's the general rule of borrowing money - it must, in turn, make money. For example, buying a house: properties generally increase in value at a higher rate than the mortgage. Therefore, a property is making money. Another example is a vehicle. If you use a vehicle to get you to work, which allows you to earn money, then that is a positive investment.
If you use your telescope gear to make money, whether it be through astrophotography which you sell to a magazine, or through paid scientific research, then yes, it is a worthwhile loan.
Just my ten cents :)
supernova1965
11-10-2009, 04:42 PM
Good on you for getting on top of things not an easy thing to do don't let em get you back into their trap again of easy money our bank is constantly trying to get us to up our credit limit but we have our balance at zero and intend to keep it there. The only money we owe is to a friend for our car we pay him a good interest rate and we look after each other.
starlooker
11-10-2009, 04:50 PM
A loan for a house or car make sense.
A loan for a hobby makes less sense. ;)
Starkler
11-10-2009, 04:57 PM
I dont. Only thing I have ever taken a loan from a financial insto for is the house mortgage. Cars or any other big ticket items I have always bought from savings. Personal debt is toxic to wealth and should only ever be taken as leverage on productive assets. If you have to a take a loan (and dont already have the savings) it probably means you cant afford it.
AdrianF
11-10-2009, 04:59 PM
As far as I am concerned when it comes to a hobby if I cant afford it I dont need it.
Adrian
PeterM
11-10-2009, 05:00 PM
15 years or so ago a good astro friend and I went Astro busking for a while in the mall at Surfers Paradise right in between Hungry Jacks and Maccas near the famous Surfers beach sign. The Moon, Saturn, Jupiter and for a while the impacts of Shoemaker - Levi were all we had to show and we timed it well. We became a very a good attraction with many lining up to look through the 'scopes for a $2 coin. Suffice to say we made enough for me to purchase a Galaxy Optics 14inch set and a rebuild of my Dob at the time. Haven't done this for years now but I know of someoene who set up Astro busking at Southbank with his 12inch Dob on Friday and Saturday nights, nearly always coming home with $200-$400 per night, he very quickly paid himself back the money he put into the hobby. So if you want to upgrade your gear etc it can be as simple as that, no loan required. I also know of a lady who does well selling her prints of the Moon at one of the big markets, not pretty nebula etc, just phases of the Moon, in great demand it seems.
I did worry at first about louts and possible damage etc but quickly realised even they are interested in having a look. We never charged anyone who didn't have any money, everyone got a look and we came home smiling.
Make your gear work for you and you can have anything you want.
PeterM.
dpastern
11-10-2009, 05:04 PM
Don't worry Warren - I've been burnt once. Not again. I have a lot more self control with money these days and I'm also living at home, which reduces a lot of financial stress. I know some on these forums have criticised me for electing to live at home, but my parents like me at home, it's cheaper for me too. I'm single, not really looking for a girlfriend, and I'm not the type to go out and pick girls up and bring them home just for a shag, so I don't have to really worry about "privacy". My parents live upstairs, I live downstairs, and we usually don't get in each others hair. I'm glad I moved back home, especially considering my dad's failing health.
Dave
AlexN
11-10-2009, 05:24 PM
I plan to add 40k onto my house loan that I'm applying for in the next few months to add an observatory with a bit of special gear in it.. Whats the harm?? I'm looking at buying a 22 acre property 300km out of the city for a single purpose, Astrophotography. This purpose can not be properly achieved without a permanent setup, a fairly substantial mount and a rather large telescope...
Just recently I refinanced my car loan to encompass my credit card debt, when I did that I got an extra $6000 thrown on top for astro gear.. It all depends on how badly you want the gear.. doing it on top of a car loan is the wrong way to do it.. with interest, you end up paying quite a lot more for your gear than if you'd bought it with your own money, the advantage being that you get it NOW..
On a home loan, I see absolutely no reason why you shouldn't extend the loan amount to encompass some new gear and an observatory.. Is the new gear and the observatory going to make you happy? happier than if you didnt have it? if the answer is yes, and you can afford the difference in the loan repayments, I say go for it... I am..
Alex.
PeterM
11-10-2009, 05:37 PM
Far better than laying on your bed in your last days thinking to yourself I really wish I had of bought that astro/imaging gear when I could of.
PeterM.
pmrid
11-10-2009, 05:41 PM
Hmmm! Don't really agree. The value of anything is not what it costs but what someone else would be willing to pay to buy it from you. Not many non-astronomers want an observatory in their yard. In some ways, the presence of a permanent observatory (as opposed to something that can either be disassembled or used for another non-astronomy purpose) may significantly limit potential buyers - particularly all those many, many poor souls out there who are not hooked on the joys of staying up half the night with icycles hanging off their ears.
BUT, if, as Alex is doing, the property he's talking about is ALL observatory and not much else, then resale is not his objective and as he's a young man, he'll probably expect to get plenty of years of use out of it. So he's doing this for resale.
Peter
AlexN
11-10-2009, 05:53 PM
Just a bit more interjection on my part..
Personal debt is toxic to wealth, but wealth does not mean happiness. Who wants to be wealthy, but unhappy.. Yes, it would be great to live in an ideal world where nobody is in debt.. That would be great. That said, how many of us would have a 12.5" RC or a 180mm APO on an AP1200 GTO with a big fancy CCD camera on it if we could... When you're talking about getting a 300~350k (minimum these days really) home loan, whats an extra $50k on top going to hurt? It might cost you an extra $100 a month, and if being very happy is not worth $100 a month to you then I feel utterly depressed for you.. If hoarding wealth is your goal in life, it must be a sad existence. You can not take your money with you when you die, you SHOULD not let your children inherit large amounts of wealth from you as if you do they will not learn the value of a dollar and grow up expecting that everything should be made easy for them.. All you have in this life in a brief period of time with which you can choose what to do. You could choose to save all your money for a rainy day and not have and experience the things you want, or you could just say to yourself well, debt, its here today, it'll be here tomorrow, and if all you get for it is a roof over your head, well that will do, but if you can afford a little extra a month, why wouldnt you get a roof over your head, and a sliding roof over your shiny new telescope/mount/camera...
I vote happiness over money. Money isn't important, Its not even real in a sense, we're just made to believe that it is.
supernova1965
11-10-2009, 06:10 PM
That's assuming that all people have large amounts of money to pass on some of us through no fault of our own are just getting by and are still happy in spite the fact. You can be happy no matter if you live in rental or your own home if you own the biggest and brightest of everything you can still be depressed. Don't get me wrong I love things too but I also believe that if you get things it's because you have been generous to others in the past. Like with my astronomy gear I went to our local recycling center and there it all was and I got it for $58 I know that I enjoy using it but if it were gone I could get over it I look at it like a gift but I also know that it is not going to last for ever so attachment to anything is going to cause pain in the future.
OzRob
11-10-2009, 06:11 PM
I know people who have borrowed money for holidays. Some of them are currently paying of their credit cards to pay for the last one and planning the next one...lol
IMO if it gets a lot of use and makes you happy then there is no harm borrowing money if it is within your capacity to make the repayments.
No offence, Alex...but you do sound like a lot of people around your age.
I'm not saying your 'attitude' toward debt/credit and instant gratification is right or wrong, by the way:) It's just interesting.
Kevnool
11-10-2009, 06:15 PM
Bit of a personal question best answered by a financial adviser.
Cheers Kev.
AlexN
11-10-2009, 06:26 PM
Because at my age I still have at least 50 years with which to use whatever I get into debt for..
I wouldn't get into debt for a holiday, a car, a big television or anything like that, these things dont really interest me enough to warrant borrowing money I dont have to do it. If I have the money, sure a holiday is always nice... But I wouldnt borrow to do it... I have a lot of friends who would or have done... I do not have any friends who would go into debt for astronomy equipment.. Way I look at it, if I get into debt for a 23 acre block of land under dark skies, it would be a waste of my time not to have an observatory, and a serious imaging system.. Because that's what Im buying the property for..
You wouldnt go on a holiday without buying whatever currency you need to spend there?
I know, I sound young, maybe even stupid to some people, and frankly, I am young, im not the best with money, I love money, because i love to spend money. And should the property i mentioned earlier end up mine, you can bet your bottom dollar there will be a paramount and either a whooping big RC or a serious APO with a large format CCD planted in the back yard... :)
DavidU
11-10-2009, 06:32 PM
If I owned a home then yes I would. But I rent so no.
sheeny
11-10-2009, 06:37 PM
No.
It's a hobby. I limit any expenditure to what I can afford now. If I had no money, I'd do naked eye astronomy and read whatever I could get my hands on.
Al.
I wouldn't call you stupid. I don't have enough evidence to support that:P:lol:
But too much spending and debt can't be a good thing...if/when everyone's accruing it at the same rate, particularly Gen Y who are huuuuuge credit spenders.
supernova1965
11-10-2009, 06:43 PM
I think that getting into debt within reason can be a good thing when times are good but I think that the current world economic situation is a bit dodgy and it may be time to be prudent for a while and see where the chips fall I am not sure we are through the worst of the GEC I may be over cautious but I think the world could use a little more caution at the moment. We need time to learn from the lessons of the past Decade.
xelasnave
11-10-2009, 06:55 PM
I have lived in debt and out of debt, borrowed for good reasons and not so good, but as a generalisation I found it annoying to be paying off something that became outdated and had dropped its value to the point where the loan balance was three fold what the item could reasonably sell for.
I think the thing to remember is our take home pay is one thing but our disposalble income different again... I hear folk talking about borrowing for another car etc using big numbers and at a later stage complain that they have no cash for another round whatever and so I feel they are living in a phony world presented to them by those who offer credit...credit suppliers are not charities and you pay well for the loan... and often its the little add ons that make the loan very expensive (insurance comes to mind).
I find I am now the happiest I have ever been... rather than buy a house and a mortgage I have 200 acres with no mortgage, the house is not flash nor is the observatory or the gear but the sky is near perfect and so I enjoy the resources I can afford ... AND with no outgoings whatsoever I find that things I want I can save for and usually by the time I have saved the desire for that item has vanished. I had saved cash for new gear but found a boat instead.
I am not wealthy but I always have cash in my pocket and I am never chased for cash that I owe here or there.
Also I think these days although we all want bigger and better the fact is astronomy gear is more affordable than ever ..enjoy that reality... and push your current gear (or the gear you can afford) to the limit... it is after all a hobby and I find little reason to become obsessed to the point that one needs to service extra debt.
Even when I borrowed money it was only via a 1st mortgage which saw better terms than straight personal loans so my car and bike and boat loans were in effect "house" loans.
Also I feel that interest rates may go higher than we expect.
I have lived at a time when house finance went to 18% if you could get it...I know, I know that will never happen again in the rest of time...but it could.... as they say if you ignore history you will repeat it.
alex
AlexN
11-10-2009, 07:01 PM
Caution and concern for the current economic crisis is what caused the economic crisis in the first place... Money does not go up and down in value unless people do exactly what you're saying, get cautious and stop spending. This is a general flow that we see in the market.. people get spend happy, they spend and spend and spend, interest rates go up, and up and up then all of a sudden, everyone craps their pants, stops spending, and the economy freezes... if they hold out long enough, the slowed economy turns to a recession, if they hold out longer, you get yourself GEC, even longer and look out its the modern day depression... Spending is my "Global Economic Crisis Buster!" I figure, if everyone stops being cautious and flooded the market with cash, wouldn't this recession turn into an economic boom? Maybe im just a dumb 24 year old.. what would I know. But my way of seeing it is that if I can afford to make the repayments, there is nothing wrong with borrowing money to do something that I love doing.. Especially if im going to get into debt anyway to buy this property... Then I figure a little more debt for a lot more enjoyment out of my money is a good thing.. Granted, I wouldnt go doing it if I couldn't afford to service the debt.
And, for what its worth, Credit cards will be the downfall of Gen Y... They love their credit cards and use them for everything from petrol to a packet of cigarettes, car rego to televisions. This, is the type of debt i steer well clear of. I pay all my bills, I buy all my food, and pay all my general living expenses out of my savings... I reserve borrowing money for things like a good reliable car, which one needs to get to work and get paid, and for a home, complete with observatory..
I think I've said what I have to say.. Whether you do what I do or not is completely your decision, I choose my ways you choose yours.. Its the way of the world, everyone's different, I'm happy with my choices, if you're happy with yours, then we are all happy and thats the end of that.
marki
11-10-2009, 07:17 PM
Alex, what you are saying makes good sense. If you were going to borrow a truckload of money just for astro goodies then..... Buying land and taking a little extra makes sense as long as you are able to service the loans and still live.
Mark
I would buy astro toys with my hubbys credit card without even thinking twice about it :lol::lol::lol::lol:
But i would be paying the consequences later on he would kill me LMAO :D
supernova1965
11-10-2009, 07:31 PM
I just really hope that your situation does not change drastically and that everything keeps going the way you want. But I have to be honest it was not caution that caused the GEC it was that too many risks were taken how else can you explain all the huge companies that were supposedly to big to fail collapsed and the tax payers had to bail them out in America this is where it came from when I say cautious I don't mean not spending but Sub Prime loans and dodgy dealing were behind the GEC not cautious spending. A friend of mine who was trading shares kept telling me that it was going to just keep going up up up and for the last 5 years I had been warning him about what was to come now he is always complaining about how much money he has lost. I am not a real expert on things economic but I believe that this was a obvious outcome of the way things have been going. Any way I wish all the best for you.
Starkler
11-10-2009, 07:32 PM
Interesting to see a different viewpoint, even if it does come with a few loaded assumptions such as accumulating shiny "things" being necessary for happiness.
Also that preservation/building of wealth makes for a sad existance. No, what it brings is security and freedom of choice.
If I want something I buy it. If I dont have the cash or cant justify it I dont buy it.
Im currently out of work and I dont have to worry too much because the house is paid off and theres cash in the bank. Nobody can turf me out onto the street or repossess my car. I have security and freedom of choice in that im not forced to take a "anything i can get job" due to being a debt slave.
If I had debts to service I would be screwed.
dpastern
11-10-2009, 07:39 PM
No - greedy & irresponsible spending by those in power of these large businesses caused it.
I've long been anti capitalist in my thoughts (and I'm not saying that communism is the answer, which is the retort that most people try and use to belittle my comments). Current capitalistic beliefs lead to an unbalanced society, and is the major cause of our entire social problems (drugs, alcoholism, violence, poor education, so on, and so forth). I find it morally reprehensible that 99% of the world's wealth is owned by 1% of the population. The wealthy are no better than lice that attack your pets imho - bloodsuckers.
Dave
Starkler
11-10-2009, 07:44 PM
Actually economic growth over the last 20-30 years has been built almost entirely on an ever expanding credit bubble, borrowing from the future. The limits have been hit and the only credit growth is from governments whilst everyone else is deleveraging.
This guy tells it how it is.
http://market-ticker.denninger.net/archives/1422-The-Consumer-Credit-Game-Is-OVER.html
Or, a picture is as good as a 1000 words
sheeny
11-10-2009, 07:49 PM
I agree entirely, but happiness is a state of mind and not necessarily even influenced by money or material possessions... but a lot of people in marketing make their living out of making you think that happiness comes exactly from these things.;)
Learn to be happy without the possessions and the debt before you spend... and only borrow what you need to stay in the game.:thumbsup:
You don't have to take any notice of me :) obviously, but I've learned the above the hard way and it works for me:).
Al.
AlexN
11-10-2009, 08:00 PM
Accumulating shiny "things" is not necessary for happiness.. However Astro-imaging in dark skies makes me very happy... I will never save enough money to buy the property where I plan to live without debt. and if I must go into debt to buy the property with the dark skies I see no harm in a little more debt to turn a very nice property with a modest astronomy setup into a very nice property with a full scale observatory, which will in turn, make my astro-photography more enjoyable, as I'll have the ability to do exactly what I want to do..
I agree, Its not for everyone. My choices in life are very different to most people, im fairly unconventional in a lot of ways.. however its the differences in people that make this world enjoyable...
There is a lot to be said for your viewpoint too.. Not being in debt, and having freedom and choice are great... not to mention in your situation, I would not like to be in debt either... Perhaps its short sighted of me to think that I could not be in your position without a job and with debt over my head.. however as I mentioned before, I need to buy a house eventually, Even if I tacked on a 12.5" RCOS, STL-11K, Paramount ME and an FSQ106 onto the property I intend to buy, my debt would still be half that of a person looking to buy a nice house within 20km of brisbane city (which is what most people my age want to buy) I figure, If I want to live out in the country with a whooping big telescope, and if that will make me happy, then thats what I'll do... And if I can do it for half the cost that most people incur to buy their house in the suburbs, then good on me I say...
Not saying those people are wrong for wanting their house in the suburbs, like I said, its out differences that make this world interesting and enjoyable. City life is just not for me... I can get what I want for less than half the amount of money (read: debt) than what I could get what I don't want... Then it all seems like a simple decision doesn't it?
g__day
11-10-2009, 08:05 PM
My view to the original question - definite no.
To me its one of many calls on our family's finances - so I treat it as opportunistic, conflict spend.
If I see something that's an absolute bargain, when I'm cashed up and haven't spent on astro in a while - I pursue it. Else I just shrug and think - this is a long term game - I'll get it when I can afford it (versus everything else we want that would improve family life).
I'd love a better camera, a mid sized neo-apo a motorised dome - one day I might get them or not. Life is full of opportunities - doesn't pay to fixiate on just one - that tends to close the door on all the others.
TrevorW
11-10-2009, 08:27 PM
I guy loves fishing it's his hobby he goes and borrows for a decent boat why not do the same for a hobby you love
You go out a spend $30000 on a car which in 10 years will be worth virtually nothing I say buy a cheaper a car and in 10 years it'll still be worth nothing
Often we procrastinate because we feel guilty spending large amounts while our wife's or husbands do not share our passion
My point is that a lot of people will get into debt for frivolous things yet won't for a hobby, which to many of us is a lifelong passion unlike many other hobbies that do fade over time
I haven't needed too yet but when I make my final move into my last house (the one before the nursing home) I'll be tempted
kustard
11-10-2009, 08:28 PM
I spent the first 20 years of my life with no debt. I worked but found I could not save, mainly because when I did save I became impatient. I then got a small loan of $3k for helping me through my education and found it very useful. I knew I had repayments and made them without fail. After the loan was paid I continued to pay the repayments into a savings account and used that money to help me buy a much needed new car along with another small loan.
When I got married we had two good incomes coming in and so we borrowed to get a house and just recently I have borrowed to upgrade my car.
If I didn't have the car loan I would borrow for a scope. Luckily I've been able to get a new scope without having to borrow. I get enjoyment from my car and my scope. We can easily afford the repayments at the moment and foreseeable future so I see no harm in taking a loan to get something sooner than later.
I've been on both sides of the fence and I see borrowing as a tool to improve my life by "betting" on my future financial viability. Now I'm not a Gen-Y or iGen, nor am I a baby boomer, I'm Gen-X. I've grown up during prosperous times but I have come from a not so wealthy background and have seen friends who've had everything and lost it so I always make sure I "sleep on it" for every decision.
Without sound tripe you have to go with what you feel but I also think that what Alex has said about happiness vs money is probably more how I think and I've seen some people with money lead what seems to me to be absolutely miserable lives.
To a lot of people, borrowing always seems like a great idea at the time, but less so when they have to pay it back - and can't pay it back. Unfortunately humans have very short memories and seldom learn from mistakes, so the same idiotic mistakes get made over and over again. Yet somehow they manage to claim that it's always the fault of others.
AlexN
11-10-2009, 08:59 PM
Trevor - Couldnt agree more... I have the advantage of not having to worry about what a wife would think, As I'm not married... I don't have to support a family, as I don't have one...
Simon - Good to see another Gen-X fella on the block... :)
Zapz - Whilst I agree.. A lot of people do think borrowing is a great idea until they have to pay it back... That said, Last time I borrowed money, I was very happy.. I've been paying that loan for the past couple of years, and still think it was the best course of action at the time.. And im pretty sure that land appreciates, so in 30 years time, my property out in the bush should be worth more than I pay for it, and perhaps even more than I paid for it and the observatory + equipment.. yeah, I know, stupid human making an idiotic mistake... What can I say, I'm only human..
Starkler
11-10-2009, 09:03 PM
Trevor it sounds like your mind is made up and you just want people to agree with you ;)
Each to their own. I wont go into debt for a car or "frivolous things" so I certainly wont for a hobby.
To AlexN: Your plan sounds like the fulfilling of a dream. I wish you luck with it :)
space oddity
11-10-2009, 09:38 PM
Another vote for no way to borrowing for an observatory.Hobby type things I always pay for with any surplus cash- usually second hand and I build things myself whenever I can . Saved I reckon 35k doing the finishing touches for our house extention several years ago. Some tradesmen try to rip you off. No way I would borrow money to be ripped off. If you can do it yourself, you will save 90% of the cost and have the satisfaction of doing it yourself - if you are a scrounger like myself,you can save 95% and so get your observatory for probably 5k + scope + elbow grease.
I wouldnt borrow money for a hobby, I just make do and enjoy the things I can afford. If you tie it into your house though I dont really see a prob with that. Going into the country to do it though and having grand plans about what that property will be worth or how it will make you money is crap planning and too much dreaming imho. Make sure you cover all your bases and think of all scenarios. Did you say the property is out bush about 300km's out, will there be work there and will you be able to live out there long term, and also if you want out are you going to be able to sell the property easily or are you going to be stuck with something that takes 10 years to sell. Its kinda one thing to get all dreamy about living in the bush and just doing your thing but you should really do a try before you buy scenario and just rent a place out there for a good 6 months before you commit to buying anything. Also not having a wife and children now - things can change real fast if you meet someone spesh so you should leave room for random happenings in your planning.
TrevorW
11-10-2009, 11:35 PM
Hey Geoff I'm not actually but would consider it depending on the circumstances
However what I'm saying is in comparison to others who pursue their hobbies we as a group appear to be quiet stoic in our approach
Ian Robinson
12-10-2009, 12:46 AM
No.
Telescope gear or camera gear are things I wont borrow money or use the plastic fantastic nevernever card to buy. It simply doesn't have priority for me .
I save for it , and if I don't have the money or means to buy it, I don't, simple as that.
I am debt free now and plan on staying that way unless an real emergency happens.
wavelandscott
12-10-2009, 01:36 AM
An interesting question...
I took a loan for the purchase of my house but otherwise avoid debt...cars I pay for in cash and while I regularly use credit cards for convienence (beats carrying a wad of grrenbacks) I do pay the balance off in full each month.
While I understand the comments on wealth versus happiness and agree that they are not the same thing...I think the big issue for me in this is that money borrowed t buy things always makes the price of things much bigger due to the interest payments...
Depending on the interest rate on the loan you might find that the actual cost of the item might be a lot higher than you think. As I pay back my house loan I try and understand how much of my monthly payment goes to pay back prinicpal and how much goes to interest...it can be scary to realize how much more money I pay over the life of the loan.
Debt used properly can be a useful tool for accumulating assets but I would not go into debt for my hobby (astro or otherwise)...
multiweb
12-10-2009, 07:12 AM
It's your money, your decision. If you are that keen in astronomy and you can afford it then go for it by any mean. Enjoy. :thumbsup: Personaly, I wouldn't because to me it's a hobby and I only spend very little in it and do with what I've got. I have other interests. But that's me, everybody's different.
Omaroo
12-10-2009, 07:26 AM
I think that Marc just hit on something in his reply. "I have other interests".
I, probably like you Alex, consider astronomy one of my main interests in life. In this regard we are different, in a way, to those here who have stated that it's not as important to them which is one of the reasons why they don't or won't borrow on their hobbies. With all due respect to them, their priorities are undoubtedly different. I don't think for a minute that they're saying "don't" to you, they're just saying that they themselves wouldn't. One "priority" that a friend of mine has is improving their back yard. They spend thousands on the right pergola, lawns and garden. They also spend huge amounts on interior decoration. To me - what a complete waste of money, time and effort. They can't understand why I'd spend $20k on a mount.
I am usually willing to stretch both the budget and borrowings a fair bit to pursue this stuff. My hobbies (several) are incredibly important to me. They keep me sane and provide me with enormous enjoyment and release. I see absolutely nothing wrong with it if you can comfortably afford the repayments without compromising your living standards. I recently lost a wife - you've never had one. It's a great time to do it if you ever are. I have no family so I don't have to provide for them now or in the future. Would I rather the family? Yes, I would, but that didn't happen. I'm lucky to have a pretty reasonable salary, so maybe my situation is different to yours... although you never know what's around the corner tomorrow. Until I sort out my own finances, after the breakup, I'm on hold for a little while. It won't last forever. It's a bit of a lottery, so be willing to accept what comes if it all goes end up.
You can tie yourself down to a safety net for just so much of your life. How damn boring. Enjoy it while you have it and can afford it. You can't be living if you're scared of consequence. Just don't bank on being able to turn it all into liquid assets when required. If you can live with that then it's up to you - entirely. As far as borrowings on your "astro" house go, remember you're paying off your mortgage for 25 years or so. Maybe separate the loans and pay off the house and obs via a mortgage and instruments as quickly as you can on another. A low interest rate per annum on a mortgage is great, so just remember that there are a lot of "annums" and your gear will constantly devalue over time.
Barrykgerdes
12-10-2009, 08:05 AM
Perhaps I am lucky but I have never had to borrow to support my hobbies, other than the short term of the no interest period of a credit card.
The cost of my hobby equipment which to date I have spent something like $600000, adjusted current cost of the items, over 60 years on equipment that would be classed to most as "toys" is about $10000 per year, the amount spent by many on beer and cigarettes.
As for the realisable value I keep an inventory of all assets and write them off over 10 years so if I could get $10000 for all these items I would be very surprised.
Barry
I'm an X-er too, Alex:) There are plenty of us here at IIS.
At 24....I'm fairly certain you fall into the Y category.
At least according to Wiki and a few other sources I've taken a look at.
They tend to agree that Gen X extended from the early-to-mid 1960s to the late 1970s.
So...young man...grab that credit card and spend...spend...spend!!!!!!!!!!
White Rabbit
12-10-2009, 11:48 AM
Not uless I wanted to be single....very very quickly.
I have toyed with the idea but unless my wife wins the jackpot lottery it will remain a pipe dream.
The more likely option is that I will take a small loan to buy the materials to build my own roll off roof observatory. I'd reckon around $2000 would see a posh setup running on solar power.
Cheers
This is an interesting thread.
I have a few hobbies on the go... photography, guitar, RC helicopters, alcohol appreciation, etc... but astronomy is by far the most potentially expensive of them all. Which is why I'll have to wait for a Lotto win before I'll buy my perfect observatory setup. Or at least pay off my house first (which won't be for another 15-20 years).
But I can understand the urge to spend up big on a good setup. When I was 24 years old, I spent $35k (with a loan) on a near-new Ford XR8. Mate, it looked gorgeous and put a smile on my face every time I drove it. But then the legendary reliability problems of the Aussie V8s started to occur. A transmission rebuild, failed warrants of fitness (the car was only three years old), etc. The financial burden forced me to sell it after 12 months. I only got $25k for it, but still owed $28k on the loan, so I then had to pay back the extra $3k by getting a cash advance from my credit card!
It was the worst financial mistake of my life. But I lived to tell the story... and I'll always have the memory of driving that 5 litre beast around town. :)
Never, - not if I live to be a million. I am a capitalist so-and-so, and am happy to admit it.
I recognise that there are three forms of debt. Bad debt - money borrowed for holidays, cars and assorted 'wants'. A very silly plan imho. Then there's OK debt which is money borrowed to purchase your house. Everybody has to have somewhere to live, so this is acceptable. And then there's good debt. To me, good debt means money borrowed to buy appreciating assets. That's what I consider to be a sound financial strategy.
There will be those who say - "you can't tell what the future holds". This is very true, and I admit I can only talk generally. Let's face it, all our plans fall a bit flat if the world goes to war or some other major catastrophy looms. However, I prefer to plan for a long life and the means to live it with choices.
Cheers :thumbsup:
Debt is just debt. The aim is to avoid it where possible, and eliminate it as soon as possible when being in debt is unavoidable. Debt used to be considered shameful.
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