I would like to buy a second-hand version of Photoshop as I am not ready for the $700 investment yet.
Is it possible? If it is, what is the process and were would be a safe place to buy a used version of Photoshop? I am looking for CS3 or CS4.
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Adobe allows you to transfer the license to another user. So you need to make sure that whomever you purchase it from properly transfers the license to you. The problem is everyone upgrades instead of buying the complete new version so I would imagine that it's pretty hard to find a legitimate used version.
Your best bet is to get the 30 day trial and if you want to use professional level software be prepared to pay the price or go with an open source product like Gimp which you can get the same end results from.
I'm not sure that purchasing a used version is even legal, unless the seller is completely transferring his/her license (i.e., isn't selling you a serial number they already used to upgrade with). Older versions are available unused though. Check Amazon, local retailers and craigslist or eBay (be cautious with those last two, especially eBay).
Adobe has recently announced a subscription edition of Photoshop CS5 Extended, though, which at $35/month for a year's subscription comes to $420 -- about what you'd expect to pay for a legitimate copy of CS4. Month-to-month, it's $49. If you intend to make money with the software, it's a good investment.
If you're just starting out, and aren't planning to use the program professionally, consider Elements. It's astoundingly powerful, and is a great way to get into Photoshop without laying out a lot of cash for stuff you won't need.
The other answers are a bit old.
In 2017 the cheapest option is the Photographer's package of Photoshop and Lightroom for less than $10 USD/month.
And of course Gimp is still a good option for free.