Have you ever heard of the FI/RE movement. That is, financially independent, retire early. Well it turns out there are actually a vast number of different ways to reach financial independence.

There is Fat FIRE, Lean FIRE, Slow FIRE, Coast FIRE, Barista FIRE, and Flamingo FIRE. Who knew that there were so many ways to FIRE???

Because each route to financial independence is unique in its own right, I am going to do a little mini series of each of the different types.

This first one ☝ is going to kick off with the matter of Coast FIRE.

Now as much as I wish it were retiring early and living on the coast, sad to say, that’s not actually what it is.

Coast FIRE is essentially where you save enough money at a young age so that you can STOP contributing to your savings and investments altogether but you still reach financial independence in the future. Even though you stop saving money, since your money is invested in the stock market (preferably in a Vanguard Roth IRA or in Fidelity in order to take advantage of those low cost index funds) compound interest will take over and work its magic and growing your money.

Now whereas many in the FI/RE community are looking to reach financial independence and retire early, that’s not actually what those on the Coast FIRE path are looking to do. Instead, they aim to retire at a more regular or normal time frame, think 60 or 65 years old. However, the BIG distinction here is that they save very aggressively early on in their career and then have the ability to stop saving money all together, for decades, all while still reaching financial independence.

Of course saving aggressively early on in life, has a number of perks. Well if you can get a significant lump sum of money invested you can take advantage of a long time horizon in the stock market. That is the best thing you can do for your money and wealth building.

Also, being that you saved so aggressively early on, that means that you don’t have to focus on saving later in life. Which means you are free to spend your entire paycheck and elevate your lifestyle if you so choose. (That is not really an option in any other types of FIRE approach.)

But of course there are some drawbacks as well.
1. You have to be earning significantly more than you are spending.
2. You have to live drastically below your means.
3. You have to have little/no debt and/or a high income both would be preferable.

Having a lot of debt is one of the biggest deterrents to this path to wealth. How could you possibly save a larger percentage of your income is really high but it is still going to be harder if you have to spend a great deal paying back lots of debt. So having a debt free lifestyle is really ideal if you are going to try this approach.

Of course you are going to have to be making more than you are spending, that’s the whole premise of this concept. If you don’t, well, it’s rather impossible.

Finally, you have to be willing and somewhat enjoy living below your means. Of course if it makes you absolutely miserable to live the frugal lifestyle, well, this approach may very well not be for you.

However, if you are able to save a large percentage of your income, early on in your life, this approach very well may be worth considering on your journey to wealth and financial independence.

Disclaimer: Please note that this video is made for entertainment purposes only and not to be taken as financial advice. Always make sure to do your own research.

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