🚗 One Phone Call. $257 More Bitcoin Every Month.

FIRE BTC Issue #87 - A real-world example of Aikido Finance—and why paying cash for your car isn't always the best move.

Last August, I bought a Lexus and financed about $73,400 at 6.36% for 60 months. The payment was about $1,435 per month.

Recently, I asked the Lexus dealer whether they could refinance it at a lower rate. He told me my best bet was probably a local credit union, which might be able to cut roughly two percentage points from the rate.

I didn't really believe that was going to be the case. But after hearing it was possible, I figured, why not make a phone call?

The credit union came back at 4.39%.

The process was almost comically easy. I submitted an application, went through a quick credit check, agreed to the terms online, and signed through DocuSign. It was finished within 48 hours, with no upfront or out-of-pocket cost.

My payment dropped from about $1,435 to $1,178 per month.

That gives me another $257 every month to buy bitcoin. But the refinance also reset the 49 months remaining on my old loan to a new 60-month term. I lowered the payment by extending the loan for almost another year.

Whether that is a good trade depends on what happens to the $257, what the two loans cost in total, and what the cash could earn if it remains invested.

That is where this becomes more interesting than a story about finding a cheaper car loan. It is a concrete example of how I think about debt, compounding, and using the fiat financial system to build more freedom.

🥋 Debt-Free Isn't Free

There are trade-offs to everything.

A lot of people claim that all debt is bad and that everyone should become completely debt-free as quickly as possible. It is true that eliminating debt reduces the amount you need to spend every month to service it. That can lower stress and reduce the portfolio required to support your lifestyle.

But paying off debt has an opportunity cost too.

If you use cash to eliminate a fixed-rate loan, that cash cannot also remain invested in stocks, bitcoin, or another productive asset. When the cost of the debt is substantially below the expected return of the asset you would otherwise own, paying down the debt first can leave you much less wealthy later in life.

My father has always been strongly opposed to debt. In my view, he has left a lot of money on the table by not carrying a mortgage, financing cars, or using the fiat financial system as a tailwind.

Some people would still prefer the emotional comfort of owing nothing. That is a valid personal preference. It just is not the same thing as optimizing for maximum long-term wealth.

My comfort with carrying certain kinds of debt comes from tracking my finances closely and building a liquid asset base that could extinguish those debts if necessary. Since 2019, I've used the same spreadsheet—and, more recently, the FIRE BTC Compass—to follow my income, spending, savings rate, and asset base in detail.

That asset base could pay off every outstanding debt immediately and still leave a lot left over. Keeping the debt is a deliberate choice because paying it off would shrink the compounding engine I've already built.

In Speculative Attack, I called this Aikido Finance: understanding the forces inside a credit-based fiat system and redirecting them to your advantage.

The debt I prefer is fixed-rate, affordable, long-term, and priced below the expected return of the liquid assets I can buy instead. As the money supply and nominal economy expand, the fixed liability becomes easier to carry in real terms while the asset has more time to compound.

This is not a rule that all debt is good. Credit-card debt used to fund consumption is different from a fixed-rate loan that preserves investable capital. Margin debt and bitcoin-backed loans are different too because a volatile asset can trigger liquidation at exactly the wrong time.

The structure decides whether debt creates optionality or fragility.

🧮 A Look At The Loans

Here are the two loans using the intentionally rounded figures from my example:

The required payment fell by $257, or about 18%.

But a lower payment is not the same thing as a lower total cost.

If I kept the original loan, the remaining 49 payments would total about $70,315. The new loan calls for 60 payments totaling about $70,680.

During the first 49 months, the refinance leaves $12,593 more in my hands. Then it adds 11 payments totaling $12,958 after the original loan would have been gone.

The difference is only about $365 of additional scheduled payments.

This refinance is not a giant nominal-cost saving. It is a timing and optionality trade.

I bought an extra year on the financing and lowered the amount I am required to pay now. The lower required payment gives me a choice every month. I could preserve the cash, send more to principal, or invest it.

My choice is already made.

The extra $257 will go toward buying bitcoin.