Personal Finance

I'm 33 with over $3 million in net worth but underleveraged at less than 10% debt — should I take on more?

Aaron Webber

Published: January 4, 2025 8:30 am

You need to have money to make money. Rich people know this and use tools available only to them to grow their wealth to unimaginable levels. If you have access to some of these tools, you might also fall into the trap of comparing your financial situation to those around you and feel like you’re failing, even if you have more than enough money.

One person felt like this and took their concerns to the people in r/fatFIRE, a community based entirely around amassing huge amounts of money and retiring early. They were worried that they weren’t leveraging their current wealth as well as they could be and wanted to know what to do. Here is what they said.

The Question

The author is 33 years old and lives in an expensive area. They have a net worth of more than $3 million, with an additional $3 million in stock options. Currently, they are leveraging around 10% of their net worth, but they feel like this is too low based on the comments and information they have read in the community.

The author would like to leverage more, hopefully up to 50%–75% of their net worth, preferably without investing in real estate. They wanted to know the best way to do this, and if they can leverage their un-vested stock options to help achieve this goal.

The Community Response

Before we get into the comments, we feel obligated to remind people that online communities, and the financial groups on Reddit especially, are not real life. They are neither typical of the majority of people, nor are they useful or helpful resources to base your financial or life goals on.

That being said, the most popular comment, by far, was a cautionary real-life story of another community member who was heavily leveraged at a time the market fell. They lost everything.

As humans, we tend to be optimistic and only include positive or reassuring stories in our mental calculations. Also, people are more likely to share their success stories online, making the financial industry seem much easier to navigate than it really is, and making it look like getting rich is simple when it is not.

It is important to remember that financial leverage multiplies your potential gains but can also multiply your potential losses. Also, it was generally not recommended to use RSUs to achieve higher leverage because if the author lost their job or the company went out of business, then they would lose those RSUs and they would find themselves in a very bad situation.

In the end, besides the various strategies some users proposed on how to best leverage the author’s existing wealth, the main consensus was this: don’t seek to leverage your wealth “just because”. You need a better reason to take the risk of losing everything than “everyone else is doing it”. If you don’t have a real, common-sense goal for doing so, then you should just be happy with what you have and learn to enjoy life instead of comparing your wealth to that of your peers.