Spending 10% of earning for Audio Hardware, is it sensible?

I was cost conscious in the sense that I knew how much was coming in, but I was fairly extravagant in my purchases- not needlessly in my estimation at the time, but I was always able to trade up. And I don't think any of it was a dumb expenditure. I didn't do it by any sort of % of earned income, and at the point where I was probably earning the most, wasn't even paying attention to the stereo. When I got back into it in 2006-7, I did what I had to in order to assemble a system that would please me and it has been augmented over the years, by subs, by a costly isolation platform for the turntable, and a modest entry into digital and computer audio.
To me, the amount of pleasure I've gotten both from the equipment and the vast number of records I bought during my earning years don't amount to any significant expenditure as far as I'm concerned. I glad I did what I did, when I did it. Now, and for the past several years, I've been discovering or re-discovering all the records I have accumulated, and the money I've spent on "gear" has been cartridges (stone bodied Koetsus) and records (from cheap to cray-cray, mostly obscure jazz, some early proto-metal and other things that cross over into collector territory). Was it worth it? I wouldn't have had it another way. That's what happened. Now, I'm enjoying it. So there's light at the end of the tunnel.

 

Anything is possible
That is why I asked

how about 'how to clean fingerprint smudges off CD's '
or
'do cables need break-in'
or
'favorite brand of snake oil'

 

I have never run the numbers for expense on housing on a rental-only basis versus a fully-loaded expense on homeownership. “Fully-loaded” to mean all expense outlays such as mortgage, upkeep and taxes but exclusive of taxation treatments and other accounting considerations. Purely by SWAG, owning a home seems very unlikely to be less expensive than renting housing as primary domicile.

There are many reasons one can choose to rent as opposed to own their home. Personal choice if one is financially capable of owning a home but chooses not to do so.

Irrespective of personal view, a home is an asset and treated as such legally and in the tax code. And it shall be subject to changes on its valuation as inherent to that of any capital good. But you get to live in it and do things to it that make it better for you. So maybe the expense is higher than renting but quality of life is potentially better in the living of home ownership. That’s pretty good.

Paying rent will always and forever be an expense.

Never run the numbers to calculate fully-loaded ownership inclusive of taxation and accounting treatments. I dunno, I never looked at home ownership as things like cap gains or losses that would dissuade from owning a home. If I gotta pay the taxman then I’ll pay the taxman when it happens the least amount I am required. Welcome to adult responsibilities.

This topic of home ownership is relevant to the OP because whether anyone is wants to spend 10% on audio gear or is able to do so is wholly contingent on the overall structure and financial health of the person or household contemplating the spending of 10%. It is not just how much you make but also how you manage what you’ve got. The “manage what you’ve got” part is as complicated as figuring out how to make it. But you can’t be successful if you have one without the other. Do both correctly and if you wanna spend 10% then it is just becomes another number on the household balance sheet. I don’t think 10% is quite the big deal it has been fluffed up in this thread to be.

 

"Money doesn't talk. It swears."

 

This thread, so far, has been pretty entertaining. It seems to me there is something sort of like a bell curve. If you make $50,000 a year and live in a pricey urban area, you would be challenged to cover the basics if you spent $5,000 in one year on your system. If you lived in that same market with a spouse, two young kids, a mortgage, etc., you would probably need an income of a couple hundred thousand a year to have enough disposable income to spend ten percent or more of your income after paying for home, cars, insurance, utilities, child care, college savings, etc., but it would be an option. On the low end of that income, spending that much on your system might mean trade-offs like less fancy vacations, cars, boats, etc. If you were a top partner at Goldman Sachs or ran a very lucrative hedge fund, if you spent ten percent of your income on your system you would be in such an ultra rarified world you would probably be struggling to find ways to get up to that ten percent number. The middle of that curve sounds like the sweet spot, but most of us have a short window where our earnings max out and sadly audiophilia is a chronic condition that will continue even in retirement.

 

Isn't it all disposable?

Beyond basic needs, I think most people spend money on things we really don’t need.

If it brings you enjoyment that’s the most important thing, you can’t take it with you in the end.

 

When I've looked at it it usually works out as a nicer place for lower rent. Recovering the difference when you sell.

I said investment, not asset, obviously it is an asset.An asset may not be an investment...legally. A car is an asset, but seldom considered a traditional investment, although you do invest your assets or debt (-asset) into it.

Per tax code your primary residence is treated differently than an investment or rental property designed to generate revenue (or in some cases losses).

 

If you weren’t talking about your home but rather you were referring to investment vehicles, then I misunderstood.

Good grief, investment portfolios are a completely different kettle of fish entirely. I say we both duck falling into a black hole of a discussion like that completely.

Heck, living anywhere these days is expensive. Some just more expensive than others. But audio gear is always worth it.

 

no grief required.
It was being posited that your primary residence was some sort of 'investment'.
imo it is not, it may be an appreciating asset.

I understand paper investment for profit is different than investing in, or incurring debt over, your primary residence. The IRS agrees.

 

But your math has been wrong this whole thread.
The OP said they spend 10% of their income every year for 20 years.
You're doing the math, saying that 10% of one year earnings and then divide the one year over 20 years.

 

Clearly I'm not spending enough on gear and media.

 

It was also a rite of passage, at least for my generation (born 1955). We like houses and had a few very cool places, all in and around NYC. At the time we left, the market was still moribund, post 2008 crash (and that was before the SALT cap).
I don't think we ever bought a house as an "investment" but because we liked the particular house/property. And we were able (until the last NY house) to sell for more than we paid, turn around and apply the funds to the next house.
We are now at the downsized stage of our lives and bought a small-ish (2400-2500 sq ft) Victorian in the midst of Austin. I'm not in downtown, as such, but just south of it, across the river. A few minutes walk to town, and even less to the "strip" of South Congress. We were fortunate to buy before prices went completely off the charts here.
I dunno if this will be my last house--I do like the privacy of single family dwellings, and never really liked apartment living. (Well, there's the Dakota and some primo buildings in NYC that are a few tens of millions out of my price range). But, for most people, the "buy a house" thing was not only a logical step but the beginning of a progression to take advantage of rising real estate prices; I'm not sure if that still applies due in part to the economy and partly, perhaps due to people's perspective. I have a younger friend who is of the age where home ownership is important-- and they simply cannot afford Austin at this point. I think in some ways, our generation was lucky. I hope the same holds for those who are still coming up. (And yes, with all the stuff associated with home ownership and maintenance, it is costly).

 

I spend more than 10% on music and records each year.

I built my system to a point that it's good enough for me, and if something pops up now and then I might buy it. But the thing is I don't need to spend all that much on equipment anymore, nor that much year over year. It's a tool to listen to music, once I have a good tool that gets the job done there really isn't a need for me to keep spending money on it.

What the OP is talking about is a compulsion on buying audio equipment, chasing the dragon. Never being happy with your system, or just a habit formed that there is something better that has to be had is another thing. For some people it's the gadgets, the equipment they really love and that's a hobby for them looking for new or new to them equipment.

 

Yes, somewhat true, to realize what brings satisfaction the funds are utilized may be not wisely, but it is not that I am not satisfied but pursing the best adds up the cost and it is not that I haven't kept the components for long enough, some of the components I have brought 18 years ago, still there with me, on my part it is not sensible what I have spend when I Look back.

 

Many folks don't have any disposable income after paying monthly expenses, dept's. ( mortgage, car payments, utility bills, cel phone, credit cards payments, gasoline, food etc. )

 

So, are you saying you didn't enjoy those 20 years of doing what you're doing? I think not!!

Let's take one year, divide that into 356 days, what was spent for each day of enjoyment?

$3.00? $5.00, $10.00?

Just paying for cable TV & Internet service in my house cost me about $7.00 a day and that's not even owning it, but it's there for my enjoyment.

Some people go out to a nice dinner once a week, spending $150
Or a sports game once a month for $300

Break these numbers down to days you enjoy your equipment that you own and you'll start to see how you're not spending that much. You can enjoy something you own anytime you want, then there is the fact you can resell it and regain money for it.

 

It was not clear, that is why I asked.
I do not see 'every'

have spend 10% of my earning on Audio products ... for last 20 years

10% of annual salary EACH year?
10% of 1 years 'earning' over 20 years?

If he is saying 20 x 10% = 200%, 2 years salary that is a lot imo.

I have spent 1% on CATV/internet
Audio, over 20 years, 0.5% or less of 20 years income (excluding wifey).
1/2 in the last 2 years.
10% of 1 years salary

That is another reason I asked.
2 years vs. 1.2 months of total earnings over 20 years.

 

The components what was brought back then(2003) was within my fund limitations however there were better components then, can't say that didn't enjoy, but back my mind things kept bugging me to get the better component whenever the funds are available.

 

20 years ago naturally salary was less than what I am drawing today, to put in perspective, I could spend USD 1-2K then with all bills paid in a year, today I can afford 3 times of then.

 

But you'll need it until the end.

 

“Just Living For Today = Sorrow Tomorrow.”

Specially when you’re young. Financial panning can make an unbelievable difference in your life.

 

Absolutely not! Unless you have so disposable income. And I mean a lot. One ages quickly. And you will need a nice nest egg for the future.

 

I picked these DLK 1 1/2's for $5 at a garage sale last weekend. Some elbow grease, and $10 for the missing DLK badges and that comes out to $15 for a pair of speakers that could rival may speakers, even those of today. There are alternatives.





'ner

 

I don't think he was trying to convey that he spent 0.5% a year. I think he was saying he spent an average of 10% per year.

OP can correct me if I'm mistaken.