The Payoff

[kevin_standlee]

The SFSFC Board of Directors held its regular three-times-a-year meeting this morning in Fremont. Some of the discussions we held there reminded me of a particular milestone I personally reached recently that I forgot to mention here.

ConJosé, the 2012 Worldcon, had an operating surplus. On a gross of around $961,000 (including the Art Show gross, nearly all of which went back out to the various artists), the convention had sufficient surplus to refund over $100,000 of memberships of program participants, volunteers, staff, and committee, and also enough after that to pass along $30,000 split between the next three Worldcon committees. So do not let anything I say here lead you to think that the convention lost money.

But bidding for and chairing a Worldcon can be an expensive hobby. While I didn't keep completely extensive records (except for the couple of years where there were enough to justify itemizing deductions, wherein I got a few hundred dollars of tax relief because of it), but roughly speaking, I spent around $50,000 of my own money traveling around promoting the 2002 bid and then ConJosé after that. That's not expenses reimbursed by the bid and convention; that's money out of my pocket spent on travel (airfare, hotels, meals, etc.) to support my hobby of conrunning leading up to ConJosé.

I put myself in a pretty deep financial hole; so deep a hole that I simply couldn't get out of it and started digging deeper. A few years ago, I concluded that drastic action was needed, and I borrowed $50,000 from my 401(k) retirement account. As it happens, it looks like that might have been a pretty good investment, given performance of the market at times, since the loan repayment went back into my account; also, the 5% interest I was paying was a lot better than the >20% consumer-grade credit-card interest I paid off (and cancelled credit cards) with that loan. That doesn't kill all of my debt (besides my mortgage, I had other consumer-grade debt as well), but it was the most expensive and most-worrisome portion of it.

Two weeks ago, right after Westercon 66, I made the final payment on the $50,000 401(k) loan. From my point of view, my own personal expenses associated with the 2002 Worldcon were paid off as of July 12, 2013. Whew!

Comments

[billroper]

Congratulations!

[gerisullivan.livejournal.com]

Congratulations. That's a great accomplishment!

I'm still working my way through and out of Great Big Debt amassed through years of spending more than I was making, so I know just what it's like living in that hole. Fortunately, my interest rates are a lot lower than yours were when you turned to that 401(k) loan. But it's still a heavy load. I'm glad you're well rid of it!

[kevin-standlee.livejournal.com]

There's still the mortgage, and other debt to be repaid, but the curve seems to be pointing the correct direction now. And it's a great load off my mind that if I had to do so, I could now pay off the entire house out of 401(k) resources; either a hardship withdrawal or another loan. Also, when Lisa's father's estate settles, some of the money that has been draining away on house issues can be handled by capital improvements funded by the estate settlement, and that will also be a relief. (Gas and electricity aren't cheap, but firewood costs more; however, we've not been able to afford the $7K for a replacement for the Furnace of Death, so it's been firewood for the living room and you-can't-use-the-south-end-of-the-house in the winter.)

[a-cubed.livejournal.com]

You mentioned this about six months back when your boss was being unreasonable, in that it would be almost impossible for you to change jobs. Now, it seems like work has improved somewhat, but it's good to know that you're no longer an indentured servant to the current company, in case things get worse again.

[kevin-standlee.livejournal.com]

Yeah, I actually have a second, far smaller loan that will pay off in a couple of months — it seemed like a better idea than cashing the last of my savings bonds for a short-term cash-flow issue related to Lisa's father's death and expenses we incurred going to and from Oregon afterwards — but knowing that I'm no longer tied to the company that way helps. The work has even settled down to more of a dull roar than a constant let's work you 24/7. We'll see how happy they are when I take two weeks for Worldcon, though. They already looked at the three days I took for Westercon and talk of it like I was gone for a month, even though i did answer work e-mail while on vacation and it was a holiday weekend to boot.

I'm looking forward to having $235/week more (post tax, since the 401(k) loan repayment was from what would otherwise be my net pay) in my paycheck. OTOH, it would be wise for me to put as much of it as I can bear back into the 401(k) as normal contributions, since I cut the normal contribution to make the repayment bearable back when I took the original loan. It's still twenty years until I reach retirement age, but the sooner I can can pump up the balance of what will be my primary retirement resource, the better.

[jcfiala.livejournal.com]

That's great!

[redneckotaku.livejournal.com]

Congrats on this front. I am working on this front on debt also.

[fla-sunshine.livejournal.com]

Congratulations! I had a much smaller 401(K) loan years ago, and was VERY nervous about it until I got it paid off. OTOH, it was much better than credit card debt or (at the time of the "credit crunch") even mortgage debt (when I had to refinance a balloon mortgage at approximately 15% APR).

[lindadee.livejournal.com]

When I bought my condo in 1999, I took $50K out of my 401(k). That was the year of the dot-com explosion (not bubble) and I made the money back in a year. This past December I made the final payment on my condo. These days I'm putting about 21% of my pay into my 401(k), but my retirement is a lot closer than yours.

[petrea-mitchell.livejournal.com]

Congratulations.