Buying gear with end of the year funds – Thought process

We are nearing the end of Q3 and that means the end of the year is right around the corner. If there is money left over in the bank it’s called profit! The end of the year is also a time for buying gear! Lets plan now!

I hate the budgeting saying, ‘if we don’t spend it, we won’t have the budget for it next year.’

That’s not to say you shouldn’t plan on expenditures! Cameras, seminars, and of course paying yourself should be planned. Last year I planned on buying the URSA mini 4.6k with ‘end of the year money.’ It got delayed well into the next calendar year. So, there was a $10,000 chunk of the budget set aside for buying gear that I did not use.

It’s 2016 now and guess what, even though I didn’t use the buying gear money, I’m allowing myself to set the cash aside! Yay self-employed awesomeness!

*tips on how to deal with a windfall of surplus cash at the end of the year later to come! I’d love it if you sign up to get a notification when the podcast launches! You’ll get occasional tips as well.

 

With the release of the 5D Mark IV all my fellow gear hounds are salivating. I’m no exception but wanted to re-evaluate my needs and more importantly; what will move the needle!!

Business tips for creative professionals how to buying gear

First option is go into easy mode. Give it to myself. What does this look like? For my personal life, I’m not buying anything big or have any big debt to pay down so I would likely split the money into two paths.

Path one- I’d issue a profit distribution from my company to my 401k account. This money then grows tax free and shouldn’t be touched until retirement.

Path two- would go into my pocket, assuming a 25% tax, that means realistically $3,250 is ready to party with!

Business tips for creative professionals how to buying gear

The URSA Mini doesn’t look to be in my future. The Sony FS7 on the other hand just might be! After hanging out with a local cinematographer who owns one, I’m extremely interested.

The Sony FS7 would be a massive upgrade from my Cannon C100. Not to mention I would have a few bucks left over to buy a bunch of ice cream to handle the emotional toll of spending $8,338.

Of these two outcomes, which moves the needle?

Business tips for creative professionals how to buying gear

Comparing the end result of:
  • $5k in retirement
  • a little over $3k in my pocket
Or buying gear:
  • a FRICKIN’ FS7
  • and still some change in my pocket

Business tips for creative professionals how to buying gear

Then I apply the ‘so what’ test. If I take the pay myself route, so what? Do I need the money? If I had $8,000 of high interest debt or a medical bill to pay ABSOLUTLY pay myself. Maybe I need a new car or a down payment for a house. These are situations that for sure would have me taking this path. My salary is intact, my personal monthly cash flow is fine and I contribute regularly to my 401k (so low priority for a $5k boost).

Business tips for creative professionals how to buying gear

On the flip side. If I choose the dark side…  “quicker, easier, more seductive” (I know I know, I hear you Master Yoda) what will be the delta. 4k footage, fantastic slow motion, 14 stops of dynamic range, 4:2:2 10-bit color over 4:2:0 8-bit. Sorry for the geek talk, let’s just say THIS MOVES THE NEEDLE!

Assuming the footage comes back with low noise in low light, I will be adding a new tool to the toolbox.

And one last plug for the newsletter 🙂

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