What is like to be in Coast FI?

This will probably be a short post. I reckon I am just not in the mood to write a long post.

It could be due to long period being stuck at home due to the Phase 2 (Heightened Alert) measures. The super hot and humid weather is not helping much. On the other hand, it could also be because there has not been much changes in my portfolio or lack of interesting news.

Nevertheless, it is good to pen down some of my thoughts, just to clear my mind. On another note, I did manage to spend and engage with my family more.

For this month, I have moved most of my US-listed and Hong Kong listed counters from UOB Kay Hian & POEMS to Tiger Brokers. It was pretty smooth sailing except for some hiccups. For me, I will sell the counters in UOB Kay Hian / POEMS, wait for the cash to be deposited into my bank account, deposit the money into my Tiger Broker account and purchase the same counters. During this time, I will hope that my purchase price is lower than my sell price. Things don’t usually go my way, there are times when I purchase back at the same price or higher price. In one case, for International Houseware Retail, the price actually appreciated by close to 10% (the difference between the sell and buy price). Oh well.

Coast FI (What is it like to be in it?)

There is really no single way to pursue financial independence. A number of people within the community are modeling a different approach, called “coast” or “slow” financial independence (FI).

Coast FI rejects the idea that you should try to reach financial independence as soon as possible. Once you reach your coast FI number, you could continue pushing hard towards full financial independence, or you could pursue one of two alternative paths:

1) Stop saving for retirement completely: Scale back your work and/or side hustles so that you are only earning enough money to cover your cost of living. This could be considered fully coasting. Essentially, you will continue with your new work arrangement until you reach conventional retirement, which is 25X your annual expenses.

2) Keep saving for retirement, but at a slower rate: Use your new levels of financial freedom to make incremental lifestyle changes. Depending on the changes that you make, you will still retire before the conventional retirement age, but not as early as someone pursuing a traditional or more extreme version of financial independence.

People who pursue coast FI focus on finding happiness along their journey. They use the increasing levels of financial freedom that they gain to live happier and healthier lives in the present.

In fact, recently there has been much talk about the concept of Coast FI within the blogosphere. Perhaps this is triggered by Kyith’s post below. In his post, he went on to break down the numbers one may need to have, to be able to coast FI.

Coasting Financial Independence / Barista FI – More Realistic, Attainable and Balance (read here)

I think it is great to know financially (the numbers), how much we need to be able to ‘coast’. Another aspect, I often wondered is: How is it like to be in this state of Coast FI, from a psychological and emotional aspect.

We often hear about the technicalities of it, but what is it like actually?

I reckon this pandemic actually made a lot of us think hard about our career, our current path / lifestyle, etc…

In fact, while reading the Sunday Times today, I came across an article in the Life section talking about “Uncle caregivers“, whereby more middle-aged men are switching to the eldercare sector. Some were forced into it by retrenchment, while others were drawn to it after caring for their own elderly parents. Perhaps this quest for a more meaningful life and happiness is what this latter group of men pondered before they switched to the eldercare sector. Some left their higher paying job, and opted for this lower paying job (with one man stating that his current eldercare job pay is 1/6 of his last drawn salary). They chose to leave their current career to switch to a more emotionally / mentally fulfilling endeavor.

I came across this Youtube video by chasejuggler. It is a simple self made video. He talked about how it is like after 5 months into Coast FI.

In his video, he mentioned that he and his wife started doing odd jobs when they adopted the coast FI path. The jobs that he is doing now is like delivery driving (for Door Dash, Jimmy John’s or grocery delivery called Shipt), selling Plasma (liquid portion of his blood) twice a week and starting a tutoring business.

During this period there are a few changes he noticed about himself:

1) Dislike the grind, not the work itself.

He originally thought that he disliked working, which is what motivated him to achieve financial independence. However, after coasting, he realised that it is not work itself that he disliked, but rather it was the 40hrs a week grind part of it. Currently, he is only working 10 to 15hrs a week, and he does not mind it at all (in his words, it is something ‘cool’ to him now). He does not feel exhausted and feel like he is making progress on his personal goals.

After ‘coasting’ he started to question if full FIRE (Financial Independence/Retire Early) is a goal he wanted anymore. He can see himself doing what he is already doing now for the rest of his life, or until he is 70 yrs old. eg. 10 hours week odd jobs whereby he can choose his own schedule.

2) Stronger in their money saving endeavor

He and his wife became more frugal after they stopped working full time (during their coast FI period). He and his wife started planning their budget for meals and errands better.

Their expenses dropped more.

3) In control of how much money he wants to earn

When he was working full time, he was always thinking about earning as much as he possibility could. He would try to aim for a better pay grade, etc. Now, the question is more of “how much money do I want to earn”. If the job pays a bit more but stresses him out, he would opt out.

He is in control of how much money he wants to earn now. If there is a purchase he wants to make or a vacation he wants to go to, he can now scale up his income to meet it (since he is doing odd jobs). Eg. If he wants a better E-bike, he can do more odd jobs to pay for it.

This is in contrast to when he is stuck at a full time job; he is stuck with the amount of monthly income they pay him. There is very little he can do to push it up or down. Now, for some weeks he does not work, for some weeks he hustle more.

4) Stopped ‘measuring’ money

When he was working full time, he was measuring his income, expenses and investment returns constantly. He was obsessed with it as money means freedom.

Now in Coast FI, when it comes to money, there is no super goal in front of him anymore. It is simpler now. He only measures money in 2 ways, like if they are earning enough and have enough or if they are not earning enough and have not enough.

He does not go into specific amounts. As the money would not drastically alter their current lifestyle 3 months down the road (in the near future). He feels that when people have a surplus of anything (including money), they stop measuring it or going into the details of it. People only measure things that have a scarcity.

5) Timing is more important than effort

He highlighted that it is more important to apply the effort at the right place at the right time (rather than just focussing on putting in more effort). Now that he is in coast FI, he can apply his efforts at the best possible time to get the most out of the situation. For example, like grocery shopping – when the store is not busy, he can go in and get it done quickly (or other errands).

There are a lot of jobs that pay a person more money when he/she can be more flexible with their timing. For instance, for his Jimmy John’s delivery job, he told the company that he is only willing to do his shift when they are really busy. He does not want to do delivery when they are not busy as he does not earn as much money (for the same amount of time). And they don’t mind that at all because the period when they are the busiest is the time they need drivers the most.

With ‘infinite’ flexibility with his time, he can use his time more efficiently.

He and his wife can also do projects like indoor hydroponic growing of their own vegetables or biking (putting together e-bike). He can now put his whole life on pause and be obsessed with one project / hobby, and work at it to achieve his goal quickly.

In gist

Well, I am not in Coast FI yet. However, I can totally understand his point of view, and can understand why many would opt for this lifestyle change. On another note, I can also see why some would rather opt for Coast FI rather than the full FIRE.

COAST FI CALCULATOR:

WalletBurst: https://walletburst.com/tools/coast-f…

The Fioneers: https://thefioneers.com/coast-financi…

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