FIRE as a Range of Options

Pecos Pueblo Mission in 2022

Originally this post was going to be about why I didn’t plan to start a transition to part-time as I approached FIRE. It then evolved into something that I think is more interesting. HisHerMoneyGuide also made this post that had a lot of the same ideas I was going to talk about, I’d suggest giving it a read. This week I thought we’d take a look at something I don’t think I’ve seen discussed much elsewhere, FIRE as a scale.

Before we get started we’ll get some items out of the way. This discussion will ignore Lean and Fat FIREs for now as the definition of those two aren’t useful for this post, as they deal more with spending rather than the source of income.

I’m also firmly in the camp that retirement is what you define it as be that working (full-time or part-time) or sitting on a beach with your beverage of choice. I’ve seen some discussions that the RE part of some of the types of FIRE we’ll be discussing doesn’t count as one would still be working and thus aren’t retired. I disagree. But for other individuals, I can see why they’d say that. I wouldn’t consider myself retired if I was still working for income, but I’m not going to tell someone else what retirement means to them.

I’m also going to assume that after some point, say age 67, all outcomes are the same.

The discussion instead will be about CoastFIRE, BaristaFIRE, and regular FIRE as a gradient. For this discussion, these terms will be used as follows.

CoastFIRE – Having sufficient assets to retire after compounding occurs, however, current living expenses are covered by a job.

BaristaFIRE – Having sufficient assets to cover some living expenses from the portfolio however some amount of work is still needed.

FIRE – Having sufficient assets to cover all living expenses with withdrawals from a portfolio, income from a job is no longer needed.

Or to sum them up with a bit of math. X is the percentage of current living expenses that require a job to cover them.

CoastFIRE: X =100%

BaristaFIRE: 0%<X<100%

FIRE: X=0%

For BaristaFIRE, you could do seasonal work, part-time, change careers, or some other arrangement. This allows you to enjoy a higher quality of life on a smaller portfolio and with fewer hours. Say you only need to make $2,000 a month from a job and you withdraw the other $2,000 a month from your portfolio to reach $4,000. That would essentially halve the size of your FIRE portfolio, assuming you’re accounting for when you’re ready to leave the workforce.

The interesting thing I see about this is that those who take the BaristaFIRE route have a lot of options on how much they get from their extra job, or how much of a portfolio to have. Say you only want to replace 75% of your income with a job, you could cut your hours back to 3/4ths time and let your portfolio make up that last 1/4th. You could do the opposite too, withdraw 75% from your portfolio and then work a few months a year. I definitely can understand how this would appeal to people who don’t like their current career and want a change or to people who like their job but want to cut some of the demand out of it.

So where do I fall on the range?

Now after reading all of that, even if you know my current plan, you may be thinking that maybe I’ve bought into the BaristaFIRE or CoastFIRE and that’s what my goals will become. Well no, I’m still a fan of traditional FIRE myself.

Before you shout at your screens for wasting your time, I think it is important to look at other options. You need to consider them to know which ones will appeal to you, even if in the end they aren’t for you. For all I knew, BaristaFIRE could have been the real goal that I wanted instead of full-blown FIRE.

Plus we should discuss why I prefer one of the extremes on this gradient. Like with many of my financial opinions, it’s driven by safety and freedom.

If I have to work a job to meet my expenses, even if it is $1 a month, then that means to some degree I’m chained to a job. Even if it’s just working a day at minimum wage, I still have to be beholden to that job. That either means time or location. Assuming I was able to find a remote-work engineering job, I still would have to work with other people meaning I wouldn’t, in some ways, be able to set my hours. For me, part of the search for FIRE is to be able to do what I want with my time, be that work on a project or just vegetablize on my couch for a few hours. Having any amount of my income be dependent on my employer isn’t the goal, the goal is to have the option to work if I want to.

CoastFIRE is the same way, while it would take a couple of years, I could cut back to about half time and meet my FIRE goals. I could then work just half-time for the next 30 years or so and then be able to retire, but until I get enough money from compounding I’m still dependent on my job. What happens if there are layoffs or the employer closes, job security is still a risk. Even at half-time, I’m still dependent on my employer to have to get by.

The Advantages of the Rest of the Range

That is not to say I don’t think there are advantages to using this range. I think you could use it to help set some of your smaller goals using these definitions. I could see someone using CoastFIRE as a goal, getting onto one end of the gradient to begin while they’re working towards FIRE. Maybe from there, the goal becomes 25% of income covered from the portfolio then 50%, etc until you’ve reached FIRE at 100%. Even if your larger goal is FIRE, there are smaller steps on the way there that you can use to motivate you without feeling overwhelmed by the larger goal.

I also want to look at FIRE as a set of steps and phases you pass through rather than just setting a goal and working at it until you achieve it. Instead, for someone who wants to become full FIRE, they have to first reach a point where CoastFIRE is an option even if they decide to continue working towards FIRE.

Finally, for some, full-on FIRE is a bit much. Maybe they fall somewhere around 25%-50% of their income from a job so that they can cut back to half-time. For me, I’m going to use it to help set medium-term goals for FIRE, say hit CoastFIRE then reach a specific type of BaristaFIRE.

As always what works for me may not work for you, be that saving strategies or what kind of FIRE to settle for, seek balance in your lifestyle and set goals that work for you. It’s a journey, not a  death march.

Wrapping it up

So there are my thoughts on CoastFIRE and BaristaFIRE, I can see why they would appeal to some people, just like SlowFIRE. But they’re not for me.

Instead, I plan to use these definitions to describe phases I’ll have to go through on the way to FIRE. First I’ll have to reach CoastFIRE and have the option to go that route. Then I’ll have a plethora of stops along the road in BaristaFIRE where I’ll have the option to start cutting back my hours or switch to a different job. Finally, I’ll reach FIRE where work is completely optional. While that might be what I think will work for me and help me with my goals. I can respect others who decide to exercise their option to start cutting back on work earlier even if I didn’t take that option. Find what works for you, even if it isn’t the same things that worked for me.

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