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Post by Blackdawg on Feb 15, 2019 11:21:21 GMT -6
Looking for insight into how some of the self employed folks here purchase gear. Particularly high end expensive pieces.
Do you finance? How so? Just your personal credit or through the dealer? Other options?
I right now am full time employed by an arts center with a studio setup. Very top tier gear and luckily world class classical musicians. I love it.
However I miss doing jazz and rock or other genres. I'm working on building my own setup at home to freelance mixing/mastering. I already have a long list of gear to get and have quite a lot of analog hardware already. But am now trying to move to New IO and monitors. I don't want to cheap out really and have a few options I want but all are high priced.
I don't officially have a business license. So can't write off anything officially right now. I don't have one as I don't have any clients at all and figured it would be bad to have a business that makes no money for the next couple of year while I build up my situation.
So just looking for some advice from some seasoned freelance pros. Keep in mind I'm not having to make a living from freelance. But I would like to do enough that if I had to I could maybe step into the freelance world.
Thanks!
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Post by svart on Feb 15, 2019 11:34:05 GMT -6
I financed some stuff back in the day, but now I only buy gear I can afford, so I either save up, or sell stuff I don't find myself using much, or buy with income from the studio itself.
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Post by notneeson on Feb 15, 2019 11:50:44 GMT -6
I left full time freelancing a few months ago. Still doing music as much as possible and some plum advertising work.
Scale the purchases to your side hustle income, would be my advice. (I am so relieved not to have to chase invoices to pay my property taxes/day care bills anymore... sheesh.)
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Post by brenta on Feb 15, 2019 12:20:37 GMT -6
Either try to get 0% financing or save up to buy the gear. In this music “business” I would be very wary about taking out an interest bearing loan in order to buy gear. Sweetwater has the best 0% financing I know of. A few times a year they offer 48 month 0% financing.
What country are you in? In the US you don’t need a business license to write off business expenses. You can open up a business as a sole proprietorship without registering anything. If you claim losses three years in a row you will likely be audited and the IRS will likely say your business is actually a hobby and make you pay the taxes you tried to deduct.
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Post by Tbone81 on Feb 15, 2019 12:30:00 GMT -6
My advice is don’t finance. If you do, 0% credit card or Sweetwater financing, but ONLY if you can for sure pay it off.
I’d save up your cash and wait till you see screaming good deals on the pieces you want, and get them slowly, one by one. Wait for Black Friday sales, used deals on eBay/reverb, 15% off sales from Front End Audio, or hot up JK and see what he can do. Either way you get the best deals when you have cash on hand to bounce on those once in lifetime deals that pop up from time to time.
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ericn
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Balance Engineer
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Post by ericn on Feb 15, 2019 12:31:45 GMT -6
Don’t finance, stay out of debt! Know what you want, have a gear fund and try to stay liquid. Know the new and used market so you know what’s a bargain, move quick when you see a deal.
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Post by drbill on Feb 15, 2019 12:41:52 GMT -6
Never. Ever. Cash only. If I can't afford it, it doesn't get bought. Try to buy used if at all possible. In the studio / music business, financing gear is not a good way to stay in business. Not sure of the laws in your state, but I've deducted gear off my bottom line before I had a business license.
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Post by Tbone81 on Feb 15, 2019 12:52:12 GMT -6
To add to Dr Bills point, in most states/cities a business permit or license is really a tax permit that simply tells the city that you’re in business so they know to tax you. Every city has exemptions and rules regarding weather or not you even need one, so you have to check your local laws.
A business license does not effect your fed tax return however, and it is possible to write off expenses before you’ve ever made a dime. Companies pour millions into Capitol expenditures and new buildings, and it takes them years before they even break even, so turning a profit or even generating income in your first year is not an absolute requirement. However, at some point the IRS is going to come knocking, asking if this is a hobby or business. Find a good CPA and developed a financial plan, it’s the best thing you can do!
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Post by nick8801 on Feb 15, 2019 13:35:54 GMT -6
One thing a year and usually not too too expensive. Something I can pay off in a few months. It's a fun way to do impulse purchases. Other than that I either save up or sell off stuff.
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Post by jtc111 on Feb 15, 2019 15:00:30 GMT -6
I'll sometimes do the 0% interest/XX months thing for expensive stuff and on items for which there's no wiggle room for price negotiation so long as I can set up an automatic payment online. But be warned; doing it that way limits how good a deal you can get since the interest you're not paying is being paid by the dealer. The more time you want to take to pay it off, the less of a price reduction you can expect. For example, when I bought my Flea, Vintage King was running a deal for 24 months interest free. To get that deal, you had to pay full price. I was able to get them down to a price I liked better but it had to be paid off in 6 months. I went for that option.
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Post by Blackdawg on Feb 15, 2019 15:50:22 GMT -6
Thank you all for your input! Really good stuff in here.
Right now I pay cash for everything, usually buy used or I'm very heavily invested in DIY gear. Most of my bigger analog purchases are diy kits.
I'll continue to ignore finance deals. Never been a fan of it or credit cards to begin with but was curious to see how others deal with it.
It also sounds like I really need to do some investigating on taxes and writing off gear purchases. Spent several thousand dollars last year on gear. I am in Montana so will need to see how that works in my state.
Thanks all!! Any other advice is appreciated.
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Post by jeromemason on Feb 15, 2019 16:52:44 GMT -6
I'll finance if it's something I need and don't have the cash...... Or, if there is something I've been wanting for a long time and they do like 4 years no interest I will do a big purchase. I usually try and pay it off asap though. If you can get accounts at Sweetwater and a place like WestLake Pro, they'll have promo financing all the time. Just make sure you have a plan to pay it off and stick to the plan. The way I usually do it, the money comes in, I give my contribution to the family, then a little savings and what ever is left over goes towards my accounts. I've nearly got my room whittled down to the point I won't need anything else. I also don't record, I just mix, so it's kind of different for me. The studios that are doing a lot of tracking need to always be in the practice of building up their mic lockers and preamps, as well as things for the mix buss, compressors, eq's converters, computers, monitors.......
Not a cheap business to be in and it's why no one should ever, ever do work for free, on top of that, everyone should be charging what's fair. This isn't like art and a painting, you can't just create a masterpiece with simple materials that cost little. Music is not cheap to make therefore it shouldn't be cheap to obtain!
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Post by indiehouse on Feb 15, 2019 18:31:59 GMT -6
I'll finance if it's something I need and don't have the cash...... Or, if there is something I've been wanting for a long time and they do like 4 years no interest I will do a big purchase. I usually try and pay it off asap though. If you can get accounts at Sweetwater and a place like WestLake Pro, they'll have promo financing all the time. Just make sure you have a plan to pay it off and stick to the plan. The way I usually do it, the money comes in, I give my contribution to the family, then a little savings and what ever is left over goes towards my accounts. I've nearly got my room whittled down to the point I won't need anything else. I also don't record, I just mix, so it's kind of different for me. The studios that are doing a lot of tracking need to always be in the practice of building up their mic lockers and preamps, as well as things for the mix buss, compressors, eq's converters, computers, monitors....... Not a cheap business to be in and it's why no one should ever, ever do work for free, on top of that, everyone should be charging what's fair. This isn't like art and a painting, you can't just create a masterpiece with simple materials that cost little. Music is not cheap to make therefore it shouldn't be cheap to obtain! Wait...I thought music was free?
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Post by M57 on Feb 15, 2019 20:11:32 GMT -6
It's not free to create - but even that is becoming a hell of a lot more affordable.
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Post by Vincent R. on Feb 15, 2019 23:50:03 GMT -6
I stay away from financing unless I can get 0% for 6 months to a year and know I can pay off the purchase in that time. Otherwise I stick to cash in hand.
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Post by jeremygillespie on Feb 16, 2019 0:08:04 GMT -6
Figure out what you want to buy. Make sure it’s a “need” and not a “want”. Take the cost of said piece of gear and triple it. When you have that amount saved up, take 1/3 of it and buy the gear. The other 2/3’s goes into your savings or retirement fund.
Enjoy your new gear and thank me in 40 years.
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Post by Blackdawg on Feb 16, 2019 2:03:39 GMT -6
Figure out what you want to buy. Make sure it’s a “need” and not a “want”. Take the cost of said piece of gear and triple it. When you have that amount saved up, take 1/3 of it and buy the gear. The other 2/3’s goes into your savings or retirement fund. Enjoy your new gear and thank me in 40 years. Great plan for a true freelancer! I'm salary for the moment so thankfully have a plan for retirement I'm following.
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Post by drsax on Feb 16, 2019 8:29:32 GMT -6
Never. Ever. Cash only. If I can't afford it, it doesn't get bought. Try to buy used if at all possible. In the studio / music business, financing gear is not a good way to stay in business. Not sure of the laws in your state, but I've deducted gear off my bottom line before I had a business license. Same here. No financing. Cash only... if I want something fairly expensive, I take on extra work to pay for it or sell something in the studio that is not seeing enough use. The music business is tough enough without carrying debt
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Post by jtc111 on Feb 16, 2019 10:53:27 GMT -6
Figure out what you want to buy. Make sure it’s a “need” and not a “want”. Take the cost of said piece of gear and triple it. When you have that amount saved up, take 1/3 of it and buy the gear. The other 2/3’s goes into your savings or retirement fund. Enjoy your new gear and thank me in 40 years. That's good advice. You don't want to be in a situation where you HAVE to work when you're 80. I was luckier than most in that my day job came with a great pension. I did my 30 years in the classroom and retired last June. But I know enough people who weren't so lucky and because they didn't plan well, will be working well into their 60s and maybe longer than that.
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Post by drbill on Feb 16, 2019 11:02:10 GMT -6
Then again....if your "job" is making music..... God willing, I'll be working well into my 80's.
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ericn
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Post by ericn on Feb 16, 2019 11:04:26 GMT -6
Then again....if your "job" is making music..... God willing, I'll be working well into my 80's. Secret to success in the music buisness, marry somebody with a real job and benefits.
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Post by drbill on Feb 16, 2019 12:25:30 GMT -6
Then again....if your "job" is making music..... God willing, I'll be working well into my 80's. Secret to success in the music buisness, marry somebody with a real job and benefits. Um..yeah, uh....... Good luck with that. Didn't work out that way here. I've had to carry the heavy load....
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Post by matt@IAA on Feb 16, 2019 15:22:47 GMT -6
I’ll play contrarian. If it’s really a business asset, there is no reason to be flatly opposed to financing the purchase. But I’d be sure that there was a case made for the cash flow that would support the purchase. If the gear won’t provide new cash flow, then it’s pretty hard to make the case for purchasing it. Just make sure you compare apples to apples on time value of money. You can also get clever with how you write down purchases as capital expenditures vs expenses with regard to taxes and profits.
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Post by drbill on Feb 16, 2019 16:48:43 GMT -6
Hey matt@IAA - Over the years, I can think of VERY few pieces that I've bought that I KNEW up front would cash flow. My JH24 was one. The 3/4" Video deck and it's synchronizers were a given as well. (Both purchased a couple decades ago when you could easily charge $80-100 an hour for studio time.) My Prophet V in 1981 was another. But - no mic, pre or compressor was EVER going to create cash flow. LOL I bought em cause I wanted em and they made me more creative. I could agree with you if a recording studio was a viable business option, but these days, it would be pretty difficult to make that jump. Still, there are situations where a purchase can / will increase your income, and if you don't have the cash, you'll lose out. In those circumstances, I might be willing to finance something. But it still goes against what I've learned over the years. Just my experiences and my (unfinanced) $0.02! Cheers,
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Post by Blackdawg on Feb 16, 2019 16:52:42 GMT -6
Hey matt@IAA - Over the years, I can think of VERY few pieces that I've bought that I KNEW up front would cash flow. My JH24 was one. The 3/4" Video deck and synchronizers were another. (Both purchased a couple decades ago when you could easily charge $80-100 an hour for studio time.) But - no mic, pre or compressor was EVER going to create cash flow. LOL I bought em cause I wanted em. I could agree with you if a recording studio was a viable business option, but these days, it would be pretty difficult to make that jump. Still, there are situations where a purchase can / will increase your income, and if you don't have the cash, you'll lose out. In those circumstances, I might be willing to finance something. But it still goes against what I've learned over the years. Just my experiences and my (unfinanced) $0.02! Cheers, Well on that note.. Thats kind of the problem I have now. I need new IO and want PT HD as I work in that at work all the time at my job and also want to use a lot of analog gear. I want 32ch IO to start of HD IO. To get that its a 2500-8500+ investment. But Im not doing anything without having it. So I can't make any money ever without IO. As I have none right now that is my own. I don't think I'll ever need to finance other gear like compressors/eqs/racks/cables and such. I can save up for those easy with my full time job. And hopefully once I start doing more freelance Id probably just put all that money into gear and making my space better as I don't need to depend on that money to support me. So in that case. Would you finance?
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