Any reason not to use my investment fund to buy a gun?

[.cheese.]

So, I've got a nice mutual fund along with some stocks in a consolidated account going, and I just took advantage of the check writing ability.

What I've been wanting to do is put as much money in the fund and keep my bank account low. The problem of course is that with the bank account low, some bigger purchases require moving funds over.

What I'm wondering though, now that I have check writing ability, is would there be a problem with writing a check from the investment account to a gun store for a purchase, instead of just transferring funds to the bank account and then using cash or whatnot.

The earnings in the account get reported already as income, so it wouldn't affect taxes at all, or be considered some sort of fraud.

I'm just wondering if there is something I hadn't thought of. The LGS I trust and I don't think they'd do anything fishy with my checks..... so ruling that aside for the moment, anything else I'm not thinking of?

Either legal or otherwise?

 

[Sven]

It's up to you.

If I were your financial advisor I would probably ask you about your long term goals, and then probably try to stop you from buying a gun with your "investment fund", instead helping you to change your savings plan so your "regular" checking has more left over for toys....

 

[Intrepid Dad]

It sounds like you have a Money Market fund. With check writing priviledges there should be no problem using it to buy a gun. There may, however, be a minimum check amount, although almost any gun you buy would probably be above the minimum.

As Sven mentioned, it's more about your long-term goals. My wife and I use a Money Market account as a Cash Accumulation account, meaning we use it for larger purchases. Sadly, guns are not designated to be paid for from that account. Just useless things like new appliances and home repairs.

If buying a gun is what you've been saving for, then I think you're good to go. Just make sure you're covering other periodic expenses like car repairs and household purchases. Without a cash cushion, you're likely to go into debt when a large, unexpected expense comes up.

 

[10-Ring]

I wouldn't look at a firearm as an investment anymore than I would look at a new car My question to you is -- 'how much do you need this gun?'

 

[helpless]

Buy more guns. Pretty soon the dollar will be worthless and your guns will not.

 

[.cheese.]

no no.... I think some of you misunderstood.

Basically I take all of my incoming money and put it in the investment fund.... I keep the bank account so I can have a checking card should I need it, but I keep it very low (as in under $2k). The idea is that even money stored short term in a fund earns more interest than the none that comes from a checking account.

I'm not saying that I'm cashing out my investments to buy a gun - I routinely move money back and forth to pay bills. I use the account as most people use a bank account because my portfolio is conservative enough that I don't really worry about losing money in it....

My question was simply about whether there would be any legal or other problems with having the money go directly from the fund to the LGS (now that I have that ability), or whether I should do what I normally do and transfer it to the bank account and then use cash or something from it.

Most people take their income and put it in the bank account with only some in investments.... I put it all in investment.

as for the fund - it's not a money market fund. It's a conservative mutual fund that invests in stocks, bonds, and more, and the same account also manages my stocks directly, but it's all lumped together as a single account. I get to specify everything...

 

[deadin]

As long as the fund manager doesn't care if you are constantly shifting money around and you don't mind paying any fees involved, it's your money.
(Most funds either allow only a limited number of transactiions per month and/or charge a fee for each withdrawal).
Do with it as you please. If there's one thing that's not illegal, it's spending your own money.

 

[talldean]

If you're very concerned, give the company holding your funds a call. My bet would be they'd be awfully confused, and that you're fine to do what you want with the checks, as long as you're spending the money on something legal anyways.

 

[tmajors]

Buy more guns. Pretty soon the dollar will be worthless and your guns will not.

+1. Not to turn this to a SHTF thread but mutual funds will be worthless. Guns, smokes, and alcohol will be the currency of choice. Which interestingly enough all those are controlled by the BATF....

Okay taking off my tinfoil hat now.

Can't think of any reason you couldn't purchase guns out of an investment account if you can purchase anything else from it. Might get into problems if you're purchasing guns on margin instead of your cash balance though .

 

[CTPistol]

Why would you write any checks from a large account?

Its just more chances for fraud.

Why not just use a credit card with some protection, then pay them directly from your money market account. Id rather my cc # get stolen than my brokerage or money market acct #.

If you are one who has a harder time controlling revolving debt (I have in the past) - go with an AMEX card. When the bill comes in, epay it from your bank. DONE.

I dont write ANY checks anymore. I dont need my large account #s floating around all over.

 

[Alphazulu6]

Money market or mutual fund account. Seriously if the dollar is worthless tomorrow... well anyway I am not even going to touch that. Save your money in good solid investments.

 

[crankshop1000]

Quality firearms are always a sound investment. They rarely go down in value.

 

[30 cal slob]

guns don't generate any positive cash flow to the owner, unless they are rented out.

most guns don't really appreciate in a meaningful way vs. the stock market and inflation.

so buying a gun and "financial return" don't really belong in the same sentence.

use your investment fund for what it was intended for - investing.

buy a gun if you really need it.

 

[CTPistol]

Id like to think firearms are a good investment, but we all know that nothing but justification logic!..

they are not as bad as cars, etc....but certainly lag most investments

they are, however, much more fun!

 

[Blackbeard]

Obviously he's not asking if a gun is a good investment, or if it's wise to buy one. He's only asking if it's wise to buy one with a check from his big investment account. I'm assuming it's not a tax-advantaged account such as an IRA or 401(k).

To me, money is money. Doesn't matter how you get the funds for the purchase. Personally, I would use a credit card and pay that with the funds from the account, because of the fraud and purchase protection it affords me.

 

[.cheese.]

Blackbeard - that's exactly it. You're right - it's not a tax-advantaged account. Also I don't get charged fees for transactions (I think because I have over X dollars in the account)

Anyways, I ended up paying cash. It was for an AR. The bugger arrived at the LGS sooner than I expected.

Thanks guys.

 

[Alphazulu6]

Invest X DOLLARS into a good Mutual fund. Is your Roth maxxed out this year? Do you have any of the high growth large cap stocks?

Positive cash flow is important. Guns are great recreational peices and they are just that. Everyone here is preparing for the dooms-day as I believe we all are. But the fact is you have to take care of your finances in a reasonable manner with a good solid annual ROI of 5-7%. Thats not hard if you have a good investment broker and plan.

Thats where your need to put your hard earned cash for investment. Past that place your disposable income into whatever you feel you need/want

 

[Glock22]

Instead of spending it you need to save, in this case time and interest is your friend. Let that interest compound and add money. You will not regret it in the long run.

 

[Blackbeard]

Anyways, I ended up paying cash. It was for an AR. The bugger arrived at the LGS sooner than I expected.

Ok, now I'm jealous.

 

[Dgindlesperger]

never have enough guns and we all die someday enjoy while you can.

 

[.cheese.]

Well, here's what I do.

Most of my money is saved long term. I put all of my incoming money into the account. Whatever I need to pay bills or use as disposable income just comes back out of the same account. I do this instead of just keeping disposable income in a bank account because at least I can earn some interest on that money.

However I'd say about 70%-80% of what comes in gets saved long-term.

I can get away with it because I don't get charged transaction fees for putting money in or taking it out because the balance of my account is high enough.

I appreciate the financial advice guys, but trust me when I say I have that whole thing taken care of.

I just was concerned about whether or not checks from my investment account could be safely used at the LGS so I avoided the standard transferring of money back and forth.

 

[Atticus_1354]

The only reason I can think of is compound interest. Using this money now will affect the value of your savings more at a later date.

 

[MAKster]

only for a money market fund

Only use the check writing feature if it is a money market mutual fund. If you start writing checks from a stock mutual fund each transaction is a taxable event and any capital gain or loss must be included on your IRS Schedule D. This could become a paperwork nightmare at tax time. Also, most stock mutual funds restrict the number of withdrawls per month because high turnover negatively affects all investors in the fund not just you.

 

[brickeyee]

MAKster has the problem right.

Every withdrawal will have capital gains and the tax will be due come April 15th.
You pay tax on dividends year by year, but capital gains only when the gain is realized (the shares are redeemed).