Author Topic: On carrying large loans after FIRE  (Read 2353 times)


  • 5 O'Clock Shadow
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  • Age: 77
  • Location: Long Beach, CA
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On carrying large loans after FIRE
« on: August 14, 2017, 05:26:25 PM »
I can see a place for carrying large loans after FIRE. If I can get my roof replaced with a zero percent loan, or even up to 3.5%, as long as my investments are piling up at even a slightly faster rate, the only problem I can see is that an emergency might necessitate another large loan which would begin to cut into capital. That's a calculated risk, and has to be judged on a case-by-case basis.

If I understand the Mustachian philosophy correctly, it's to live well, within your passive income.  Like the man said about yachts, if you have to ask about the mileage they get, you can't afford one.  Affordability being defined as an expense that does not cut into capital, thus requiring a diminishment in lifestyle.

So emergencies aside, a large loan with a small interest rate might in some cases improve the FIRE lifestyle.  Any comments?


  • 5 O'Clock Shadow
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Re: On carrying large loans after FIRE
« Reply #1 on: August 14, 2017, 06:13:57 PM »
Not sure what man you're referring to, but I like how Louis ck put it much better. Don't buy a boat unless you can afford to buy ten boats!


  • Stubble
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Re: On carrying large loans after FIRE
« Reply #2 on: August 14, 2017, 06:49:21 PM »
We are downsizing and taking out a mortgage on the new home.  It increases our after tax (non Retirement) investments giving us more after tax money to spend until we can withdraw funds from retirement accounts.  My wife and I are both 51.

The biggest risks is if the markets do poorly over the next 30 years and we end up losing money.  I'll take that risk.


  • Handlebar Stache
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Re: On carrying large loans after FIRE
« Reply #3 on: August 15, 2017, 06:55:05 AM »
My goal was to go into FIRE free and clear of any debt.  I don't like the idea of even having a mortgage post FIRE, although I understand many folks still carry one.
About the only thing I would go in debt for at this point is a business venture with expected strong returns.


  • Pencil Stache
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Re: On carrying large loans after FIRE
« Reply #4 on: August 15, 2017, 10:43:43 AM »
FIRE would reduce my risk tolerance, but not likely eliminate it.

I got a $7k used auto loan just because it was dirt cheap.  i suspect that not many people would bother.  They'd just pay the cash.  I'm comfortable with the tiny risk that I'll make less than 2% on my cash.

Some folks get freaked out over having any debt whatsoever.  In the end, its what makes you the most comfortable/happy.

Obviously, I'd take dirt low interest loans all day long in FIRE if someone wants to give them to me.