Borrow money now and worry later?

[Dr House]

I was speaking with a friend, has been out of work for the last 5 years but he has lived a crazy lifestyle for the last 5 years (drives a 911, fly’s all over the place, lives in a really nice flat, learned to fly helicopter, skiing most weekends) anyway he has run out of money so has borrowed another 150k against his apartment leaving only 15% equity so that he can keep living his lifestyle for another year or 2 before trying to get another job (he made a lot when he was working)

This got me to thinking if you knew you had good earning power and qualifications would you run up a bunch of debts (cheap debt) and enjoy your life and worry about it when you get older?

At present my mortgage is 2.5 times our combined income. My pay will not go up much over the next 6 years however in 3 years time my wife’s pay will double so the mortgage will really only be 2 times her pay. Our monthly payments are only around 800 quid a month we could easily borrow another 100 to 150k and just really enjoy our life for the next 3 years (until we have kids) and then worry about paying it back over the following 5 to 10 years which should not be a huge problem as it still will only be 2 times my wifes pay.

So would you live for now and worry later or be sensible and live within your means?


EDIT I am not saying I will run up lots of debts. Its just an a interesting discussion

 

[Gaz1988]

:/

 

[Buffman]

Id rather live sensibly than rack up a huge debt, although if I knew I could pay it off cant say I wouldnt slightly be tempted.

 

[Morgoth]

Racking up big debt is never a good idea.

 

[JBuk]

I'd rather live within my means and pay as I go

 

[Brian8bit]

Of course you should.

 

[TheCenturion]

that isn't cool. imagine if he did it with loan sharks. man he'd be dead(beat) by now.

I'd prefer to have financial security. has he been out of work through choice or was he made redundant or something?

 

[Kae]

Racking up big debt is never a good idea.

This...

Plus, your life doesn't end when you start having kids... you'd still want to spend money... And what if your wife decided to be a stay at home mum?

 

[4T5]

I owe Nothing to nobody. If you can't afford it then don't buy it.

 

[TJM]

Good qualifications, etc, will not make up for a several years of doing nothing on your CV. It would be grossly irresponsible to assume that you both you and your wife are guaranteed employment.

Do not borrow money unless it is completely unavoidable. If you want to live a luxurious lifestyle, start earning millions or playing the lottery.

 

[SkodaMart]

Finacially reckless, have you considered a job as a politician or banker OP?

 

[Dr House]

that isn't cool. imagine if he did it with loan sharks. man he'd be dead(beat) by now.

I'd prefer to have financial security. has he been out of work through choice or was he made redundant or something?

He got made redundant but he did not want to work for a few years but I assume he got a huge payoff


FYI: I am not saying I will run up lots of debts. Its just an a interesting discussion

 

[TheCenturion]

In which case, there's not necessarily a guarantee that he'll find work when he wants to, particularly after having been out of work for 5 years. I'd imagine this is not a good idea

 

[Nitefly]

I owe Nothing to nobody. If you can't afford it then don't buy it.

I don't think I can entirely agree with that. I don't see why people shouldn't take loans that they can feasibly pay off to buy something they desire. That is effectively how a mortgage operates, after all.

Of course, taking out a loan for something utterly frivolous would be silly, but a loan to increase the enjoyment of your life considerably is not necessarily so.

 

[TS7]

I owe Nothing to nobody. If you can't afford it then don't buy it.

AGREED.

If you want to live the life of a luxury ie flying around the world, driving nice cars - earning it is the only way to go. Your friend earned his way of life for the last five years and now appears he doesn't want to stop living his current lifestyle but can't afford to carry on so is getting into debt.

I don't really respect people like that, but everyones different. If he's happy I don't think anyones can nock him for it.

Sounds like a case of counting your eggs... he has the earning power, but he's not earning. What's to say when crunch time comes and he needs to begin repaying his debts there will be a job just waiting for him? No matter how secure you think your field of work is nothing is certain.

 

[sanaxe1]

I did this and traveled the world for 6 months. As my business was doing very good i thought i could just pickup and carry on but due to unforeseen circumstances my business took a massive loss in sales and i was left with a large amount of debt ( 20k ). After i got back For a few months i was depressed ( not diagnosed but just more worrying and feeling down) as traveling the world living the high life for 6 months to being skint just took its toll. But my business is doing ok now and I'm paying back my debt. But would i do it again? Hell yes traveling is amazing.

 

[=VTA=MANFACE]

Be sensible and live within your means

 

[Berserker]

I've done something similar on a smaller scale. Borrowed £60k against equity and had £25k debts elsewhere.

So was it all worth it? Well, with some thought, no.

The reason for the doubt is that I've done some 'once in a lifetime, if you're lucky' things - e.g. flying on one of the last scheduled Concorde flights, seeing one of the last Shuttle flights.

And the reason I decided no? Those things cost me at most £15k. I've paid back at least double that servicing debt. I'd be debt (and mortgage) free by now, but instead I'll be paying for the next 10 years.

 

[djkav]

I owe nobody nothing. Thats the way I intend to stay. Not being tied to anything or anybody financially is the best feeling of freedom ever. Its simply amazing.

 

[JBuk]

I will soon owe 10's of £k to my bank for a mortgage, apart from that I owe nothing to anyone

I hope to pay off my mortgage early though as I don't like the thought of paying all that interest