Author Topic: Do you have trouble securing (0%) financing after going FI/RE?  (Read 3283 times)

a_scanner_brightly

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Do you have trouble securing (0%) financing after going FI/RE?
« on: November 05, 2019, 11:26:03 AM »
So... I've got seven figures in index funds and live off of a meager $30k/year (family of 4) in dividends.   This comes to about tax free income, but just barely.  Any additional income is almost certainly taxed.

This has made me quite resistant to selling securities to fund projects.  For the tax reason, but also because so many businesses are waving 0% financing offers around.

My bias is that '0% financing' actually means 'cost of financing included in the purchase price', and that the supplier/vendor ought to offer me a sizable cash discount but... they never do.  Their cash discounts are miniscule.

Often, when I math this out, I'd often be better off taking the 0% financing over years and covering the repayments under my $30k/year tax-free threshold[1].  This is theoretical right now, I haven't gone ahead and asked anyone to check my credit (which is excellent).

My concern is my low income will price me out of all of these 0% financing offers.  Has this happened to you?

I would hope being able to show them my Mint net worth screenshot would convince them that I'm a low credit risk, but I feel like most vendors aren't set up to make exceptions like this.

What's your experience been as a low income FI/RE person on 0% financing dealies?

1. This works right now but may not work long-term if I pile up enough projects.  But I'd still like to take advantage of opportunities while I can.


EDIT: whoops, I accidentally posted this in the wrong sub-forum.  Can a mod move this to Post-FIRE?
« Last Edit: November 05, 2019, 11:28:22 AM by a_scanner_brightly »

Much Fishing to Do

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Re: Do you have trouble securing (0%) financing after going FI/RE?
« Reply #1 on: November 05, 2019, 01:52:25 PM »
It would seem like you have a TON of room before you hit income tax (assuming MFJ, and 2 kids, and any cap gains would be long term).

meatgrinder

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Re: Do you have trouble securing (0%) financing after going FI/RE?
« Reply #2 on: November 05, 2019, 03:07:50 PM »
It would seem like you have a TON of room before you hit income tax (assuming MFJ, and 2 kids, and any cap gains would be long term).

Yes. For 2019 married/filing jointly, there is 0% tax on long term capital gains up to $78,750 in income.


a_scanner_brightly

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Re: Do you have trouble securing (0%) financing after going FI/RE?
« Reply #3 on: November 05, 2019, 09:53:04 PM »
We're not married.

jim555

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Re: Do you have trouble securing (0%) financing after going FI/RE?
« Reply #4 on: November 07, 2019, 02:23:09 PM »
I get a lot of 0% things in my mail that I throw away.  I think they care more about your credit score than your income.

Mr. Green

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Re: Do you have trouble securing (0%) financing after going FI/RE?
« Reply #5 on: November 09, 2019, 06:02:46 AM »
0% financing options typically occur as a result of tour credit score. I would not expect to see much of an impact there. Mortgages get harder to come by though. Banks have to use a net worth formula that is a bit of a pain to deal with, and the result is typically a lower borrowing amount than if you were working.

soccerluvof4

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Re: Do you have trouble securing (0%) financing after going FI/RE?
« Reply #6 on: November 13, 2019, 04:26:36 AM »
0% financing options typically occur as a result of tour credit score. I would not expect to see much of an impact there. Mortgages get harder to come by though. Banks have to use a net worth formula that is a bit of a pain to deal with, and the result is typically a lower borrowing amount than if you were working.


This is what I have found to be the case as well.

Papa bear

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Re: Do you have trouble securing (0%) financing after going FI/RE?
« Reply #7 on: November 13, 2019, 06:44:03 AM »
Personally, yes, Iíve found securing financing more difficult. My brother and I both have issues since we longer work W2 jobs, especially for mortgages on rental properties.

And when I used to get 0% offers on credit cards and limits in the 20-30k range, Iím lucky to get 10k anymore.  That doesnít go very far on a remodel. 

And because my top end borrowing limit has decreased, the amount i have in 0% debt has increased by a greater proportion, dropping my credit score 150 points.

Got plenty of cash, plenty of assets. First world problems I guess.


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2Birds1Stone

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Re: Do you have trouble securing (0%) financing after going FI/RE?
« Reply #8 on: November 24, 2019, 09:52:20 AM »
We're not married.

If you both have investments, the single filers brackets are half of MFJ. If one of you holds all of the wealth it's a different story.