aaron111533 0 #1 May 8, 2007 Which one wins? Unfortunately I don't have several thousand dollars laying around...Well, in the 401k I do...Hmmm.... I already know what my financial advisor thinks and was wanting a few other opinions! Quote Share this post Link to post Share on other sites
mnealtx 0 #2 May 8, 2007 QuoteWhich one wins? Unfortunately I don't have several thousand dollars laying around...Well, in the 401k I do...Hmmm.... I already know what my financial advisor thinks and was wanting a few other opinions! Keep the 401k and save for the rig...Mike I love you, Shannon and Jim. POPS 9708 , SCR 14706 Quote Share this post Link to post Share on other sites
Jayruss 0 #3 May 8, 2007 QuoteWhich one wins? Unfortunately I don't have several thousand dollars laying around...Well, in the 401k I do...Hmmm.... I already know what my financial advisor thinks and was wanting a few other opinions! As a CPA I suggest keeping the 401k, the price of the taxes you will pay will double the cost of your rig let a lone rob your retirement. Think used riggs . . . __________________________________________________ "Beware how you take away hope from another human being." -Oliver Wendell Holmes Quote Share this post Link to post Share on other sites
freeflyimpaired 0 #4 May 8, 2007 If you are in the 25% tax bracket and you pull out 4K for a new rig your going to pay 1000 bucks in taxes along with a 10% penalty for early withdraw. Your going to fork over 1500 dollars to the gov just to spend your money. I'm not recommending that you use a credit card but you would be better off paying 18% interest on a 1 1/2 year loan for your rig. My actual advice, save your money and definitely buy a USED rig. Especially if your new to the sport, in a few months your going to want different equipment anyway. Good luck. "Human beings, who are almost unique in having the ability to learn from the experience of others, are also remarkable for their apparent disinclination to do so." Quote Share this post Link to post Share on other sites
BoilingMidnight 0 #5 May 8, 2007 I agree with mnealtx and the detailed advice of freeflyimpaired — don't do it."Iþ ik qiþa izwis, ni andstandan allis þamma unseljin." Quote Share this post Link to post Share on other sites
aaron111533 0 #6 May 8, 2007 Wow I never knew skydivers were such a conservative group! Good advice, thanks... Quote Share this post Link to post Share on other sites
AFFI 0 #7 May 8, 2007 close out your 401k, sell everything you own, buy a truck and a camper and live at DZ's while you pilfer off your savings, pack and jump your ass off until you have enough experience to get a tandem, then AFF rating. 10 years later you will be broke and needing to return to the real world so you can start over again. Why wait until you are old and grey to retire, take part of it now while you are still young and can have good times without viagra. ride em hard, put em up wet and use em again before they dry out (whatever "they" are). And what ever you do, most importantly, don't take my advice ... - Mykel AFF-I10 Skydiving Priorities: 1) Open Canopy. 2) Land Safely. 3) Don’t hurt anyone. 4) Repeat… Quote Share this post Link to post Share on other sites
aaron111533 0 #8 May 8, 2007 Yeah - That's more of what I'm wanting to do, but am trying to hold myself back from doing.... Quote Share this post Link to post Share on other sites
laughn_gas 0 #9 May 8, 2007 What about borrowing the $ from your 401k? My 401k allows me to borrow the money and pay myself back, within 60 mo. I know that there is a $50 processing fee, but I'm not sure if I have to pay taxes on that money that gets withdrawn. Anyhow thats what I plan on doing......Comments? good/bad idea?See ya in a minute. Peace out! Quote Share this post Link to post Share on other sites
wmw999 2,122 #10 May 8, 2007 Go used. You'll probably change your opinion on "the rig of your dreams" a couple of times in the next couple hundred jumps. Unless you're a unique body type, or really, really large, you won't have a lot of trouble putting together a perfectly reasonable used rig. Get someone to help you with the choices. And buy the rig first, so that if you want to match, you can order the jumpsuit later. Let someone else drive that rig off the lot and lose the first 50% of the value . And yes, keep the money in your 401K. Even if you do the "quit your job and live in a camper" thing, you'll still have that money collecting interest on your behalf for when you DO want to retire. And you won't be starting to save at 45. Wendy W. There is nothing more dangerous than breaking a basic safety rule and getting away with it. It removes fear of the consequences and builds false confidence. (tbrown) Quote Share this post Link to post Share on other sites
mktoson 0 #11 May 8, 2007 Just buy used. Don't fall into the fashion trap at the dropzone. So far, this is the oldest I've ever been. Quote Share this post Link to post Share on other sites
DrewEckhardt 0 #12 May 8, 2007 QuoteWhich one wins? Unfortunately I don't have several thousand dollars laying around...Well, in the 401k I do...Hmmm.... Assuming you're not yet 59 1/2, the Feds get 10% of whatever you take out as a penalty. If your credit isn't bad you'd be better off taking out a personal loan for a year or using a reasonable rate credit card. Or if your plan allows (note that 401K loans are due when you leave your job) take out a loan with the interest going to yourself. Federal, state, and local taxes are also due on any withdrawl. You'd be likely to have less than 60% of what's in there. Quote Share this post Link to post Share on other sites
peregrinerose 0 #13 May 8, 2007 Get a job as a packer, in a very short amount of time, you'll have enough money for a decent used rig. Keep the 401K so you can retire at 59.5 and be a DZ bum in a trailer, living off of your retirement and jumping all you want to Do or do not, there is no try -Yoda Quote Share this post Link to post Share on other sites
Mostly_Harmless 0 #14 May 8, 2007 Borrow agaisnt your 401k. Then you pay yourself back plus interest._________________________________________ www.myspace.com/termvelocity Quote Share this post Link to post Share on other sites
RB_Hammer 0 #15 May 8, 2007 You do not have to pay taxes on the money you borrow. Not a bad plan as long as you pay it off."I'm not lost. I don't know where I'm going, but there's no sense in being late." Mathew Quigley Quote Share this post Link to post Share on other sites
JeepDiver 0 #16 May 8, 2007 QuoteBorrow agaisnt your 401k. Then you pay yourself back plus interest. the repayment is a pretax deduction from your payroll also. Quote Share this post Link to post Share on other sites
cderham 0 #17 May 8, 2007 QuoteQuoteBorrow agaisnt your 401k. Then you pay yourself back plus interest. the repayment is a pretax deduction from your payroll also. it is not a pre-tax payment for mine. might want to chwck into that just to make sure. Chris It's Jimmy Time!! http://www.facebook.com/pages/Team-Fast-As-Fuck/6099474213 Quote Share this post Link to post Share on other sites
kelpdiver 2 #18 May 8, 2007 It's not pretax on mine either, and I suspect that is by law. We're not that conservative, but financially, taking a withdrawl from your 401k to pay for this rig is stupid. For me in California, that would cost me 50% in taxes (including the penalty) If you're positive you're not changing jobs or getting fired/laid off, then the loan isn't a horrible idea. But I wouldn't do it if you plan to spend more than a year to pay it back. Find a cheaper new or used rig to get it under a year. I used a 0% balance transfer from a credit card to do a short term loan. Again an option if you will be disciplined about it. Otherwise, from a financial perspective you're better off renting for a while. While it costs money, it will make you a more informed customer. also, if buying the rig means you're not making new 401k contributions, think it over. Every year of retirement savings in your 20s is equal to 4 or 5 in your 50s. Strike some sort of balance between then and now. Quote Share this post Link to post Share on other sites
Foggy 0 #19 May 8, 2007 Quote You do not have to pay taxes on the money you borrow. Not a bad plan as long as you pay it off. Therein lies the snag. I borrowed off my 401k about 5 years ago and got "laid off" about a year afterwards from a job that I had been in for ten years so felt secure (no severance package). The outstanding balance of the loan all became due but I was not able to pay it so it became a withdrawal with all associated penalties, taxes etc. My ass still hurts Do some research into the benefits of compund interest on pre-tax dollars over 40 years vs 20 years. See what $2k a year brings ya at 12%. Might put you off high performance turns as well Then save and buy used. You know the deal, used once, never opened, small stain, will separate etc. Foggy D21109 Quote Share this post Link to post Share on other sites
aaron111533 0 #20 May 8, 2007 Yeah I know I shouldn't do it. Obviously. But then those thoughts of I might not live until 59 1/2 or what about living great now while I'm young enough to enjoy it creep in. I will definitely buy used but even then some used rigs are pretty steep. It seems like wasting money on renting rigs - At least if you buy something you have an asset right? I know the compound interest is impressive over 30 years - but something has to be said for immediate happiness as well and living for today, etc... Quote Share this post Link to post Share on other sites
DrewEckhardt 0 #21 May 8, 2007 QuoteYeah I know I shouldn't do it. Obviously. But then those thoughts of I might not live until 59 1/2 or what about living great now while I'm young enough to enjoy it creep in. I will definitely buy used but even then some used rigs are pretty steep. I paid $700 for my last Javelin + Raven Reserve (both big, but that's what I was looking for on rig #3), have sold ZP mains with life left on the lines for $350, and you should be able to find an original Cypres which has been in for its eight-year for $80 trade-in value + $70/year left - $85 * time on batteries / 2 years. If you want an inexpensive air-worthy freefly friendly rig you can find one although it's not going to be just a few years old with a few hundred jumps. Quote It seems like wasting money on renting rigs - At least if you buy something you have an asset right? I know the compound interest is impressive over 30 years - but something has to be said for immediate happiness as well and living for today, etc... Drive a less expensive car. If you're unmarried have room mates pay your mortgage or rent. There are lots of trade-offs you can make so you can stop working later and spend money on the important things (like skydiving and beer) now. Some people pack parachutes for $60/hour. I'd tell the IRS that I was working as a professional skydiver and that my jumps were required to earn the next rating, thus leaving me with zero net taxable income from the activity. Quote Share this post Link to post Share on other sites
Martini 0 #22 May 9, 2007 Some men spend all their money on wine, women, song and skydiving. Other men just waste it.Sometimes you eat the bear.............. Quote Share this post Link to post Share on other sites
Ironmanjay 0 #23 May 9, 2007 Quote ride em hard, put em up wet and use em again before they dry out (whatever "they" are). And what ever you do, most importantly, don't take my advice ... - To add to that: SPILT'EM WIDE CUT'EM DEEEPPP Quote Share this post Link to post Share on other sites
LloydDobbler 2 #24 May 9, 2007 Quote And yes, keep the money in your 401K. Even if you do the "quit your job and live in a camper" thing, you'll still have that money collecting interest on your behalf for when you DO want to retire. And you won't be starting to save at 45. Wendy W. Not to mention that if you do the "quit your job and live in a camper at the DZ" thing, you're gonna really NEED that 401k a lot more one day than you do now. Like most have said, I dunno how many jumps you have, where you are in progression in the sport (fill out your prifle, if you feel like it)...but I'll echo what everyone else is saying: a) go used. For the love of God. Wait until you're making "big bucks" to grab the shiny new rig (the one that'll get dirty on the first jump, and will have lost half its value even before that). Not to mention that you'll be keeping your first canopies for shorter than you will later on, so you might find yourself needing to sell that shiny new container for a smaller one. b) Save up for it. In the meantime, rent. Yes, it'll suck sometimes, and you'll be jumping less. But ultimately, it'll pay off (and you'll become famous as the person at the Chicks Rock boogie with the homeless sign that reads "Will work for rig"). This is experience talking. I started jumping a year and a half ago, and I'm just now finally putting together my first rig. It's been AGONY waiting, but financial circumstances dictated the way I went about it. Because of my patience, I was able to snag a kickass container that would give me room to downsize...then a bit later bought a reserve that was a great deal...and am now demoing some mains to see which of the two canopies I have my eye on I'll like better. Unexpected things happen, too - a friend of a friend had a second rig that fit me perfectly, and offered to let me use it, just so I could get in the air...so I got a few months of jumping with free gear. Anyway, my point is, if you save up for it, you'll probably be able to find a much better deal (and get something that you want - I wanted an almost-new Vector 3 w/Skyhook for a decent price, and I found one). & it'll be that much sweeter when you finally get it all together. Good luck, KCSignatures are the new black. Quote Share this post Link to post Share on other sites
freeflyimpaired 0 #25 May 9, 2007 QuoteBut then those thoughts of I might not live until 59 1/2 or what about living great now while I'm young enough to enjoy it creep in........but something has to be said for immediate happiness as well and living for today, etc... In the long run, nothing but regret will come from listening to those thoughts. I would rather die at 58 and leave my kids a million bucks then wake up completely broke at 75 living off of my resentful children. And as far as "immediate happiness" and "living for today", I think those things are highly overrated and usually just end people with STD's and Drug addictions. There is much more to be said for making responsible decisions, you'll be much happier in the long run. Look around you at the DZ. This is a sport that appeals to ALL age groups. You may have just as much desire to be skydiving at 60 as you do now. If you truly enjoy the sport you'll still be jumping late in life, as long as you don't ruin your finacial picture while your in your twenties. Spending your 401k now could easily force you to quit the sport in your thirties or forties when you realize that you have no retirement plan and you need to get serious. Where as saving just a little throughout your twenties might mean you can quit saving in your forties and spend more on other things. When I started skydiving I was really concerned with the amount of money that I was spending on it. I made a pact with myself that for every dollar I spent on skydiving I would justify it by putting a dollar in the stock market. That was 9 years, 3 rigs and 1100 jumps ago. I've stopped adhearing strictly to those rules and probably spend more on skydiving than I save now, but I have enough money in that one account that I should have nearly a mil at 63 if I were to completely stop saving today. I didn't get to go to as many boogies, I didn't own the newest gear, I didn't make as many jumps each year as I wanted/could afford to, but I don't regret any of that in the slightest, and when I'm 50 I hope to be the guy at the DZ every weekend flying circles around the 20somethings with newer gear than me. Thats my story hope it helps. "Human beings, who are almost unique in having the ability to learn from the experience of others, are also remarkable for their apparent disinclination to do so." Quote Share this post Link to post Share on other sites
