031 – Debt

In today’s episode, the guys discuss how much debt they are comfortable with. And of course the always popular topic of HELOCs. If you found this podcast you’re probably familiar with the FIRE movement that has grown in popularity recently. Here at the FI Garage, we’re all on the path to FI, however, we consider the RE part optional.

*This post contains referral links, and the following content is intended as information only, not financial advice.

Beers – [1:10]

Debt [5:25]


  1. Great discussion gents. My take. Debt is a tool that can be used wisely or foolishly. It is truly about cash flow security. As a retired teacher my cash flow is more secure then when I worked full time. This allows me to carry debt comfortably and as/if interest rates rise I can easily adjust. Debt is psychological as well as numerical. I used to worry I could never stop working until the debt was gone until I realized that as long as I had enough passive income to service the debt I was ok. I treat debt servicing as just another bill to pay. That realization created an aha moment. I could work another 7-10 years and completely eliminate the debt OR see if I could generate enough passive income to service the debt and pay all my expenses. Discovered we could so that decision was easy.
    Everyone who has a home should also consider a HELOC to provide flexibility.
    When talking about debt with friends I often ask what they would do if they won a lottery that was worth the same as their mortgage? Their answers reveal much about their financial understanding and psychology about debt. Enjoy your banter – thanks for the effort.

    1. You make some excellent points here. I find that most people in the FI community, well those I see online in FB, are too conservative, and have a negative view of debt. While I am the first to call consumer debt a priority one issue. As you say, the wise use of debt is a huge tool that most people don’t understand. We are in the process of purchasing an RTO which will cash flow around $900/month after tax and debt servicing. What that means to us is that it is now paying for our mortgage every month. I am using my mortgage to pay my mortgage! I wish more people could make this psychological and mathematical leap. You’re right though, everyone needs their own aha moment. That’s also an interesting question to ask people about what they would do with a lottery win. I’d buy them a copy of Rich Dad, Poor Dad so they would learn to buy assets, and have those assets buy their liabilities! LOL Cheers.

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