Deliberately coasting to FI?

[Ego]

What if the work doesn't pay enough and requires you to draw down?

What if there's a lost decade of investment returns?

@jacob, in my mind those are ideal scenarios.

Those possibilities *force* me to remain creative. They force me to avoid complacency. They force me to maintain contacts. They force me to keep a hand in a variety of fields so that I could shift focus if one becomes unproductive.

It is much easier to do a little more of something you are already doing than it is to start cold. It is so much easier to call on a friend you deal with regularly than one who you stopped communicating with years ago because you had no need to maintain the contact.

[M]

Coasting to FI seems pretty ideal to me, honestly, especially if one still has the urge to be productive. Work a couple days a week, take a week off a month, etc.

The bigger question for me is what is an ideal coast to fi job, that has flexible hours?

Maybe like a remote software dev job, where you work on projects whenever you want, but get paid hourly? idk.

[M]

What if the work doesn't pay enough and requires you to draw down?

What if there's a lost decade of investment returns?

I assume one would then do what my poor Aunt does whenever she needs more money - spend the weekends working as a waiter/waitress at the local fancy restaurant until you have enough money for thing x or year of living expenses, then quit this second job and only work main job.

Maintain a good reputation then repeat as needed.

[ertyu]

That's a good idea, maybe we can crowdsource a list of all suitable jobs? Seems like most here do full time work but for a limited period of the year.

[classical_Liberal]

I think there is some sort of psychologically freeing by declaring yourself retired.

Very important. My only caveat, is "retired" the best choice of words or concept? Psychological freedom, in itself, seems best. Many different types people have different hangups regarding whats "holding them back"

maybe we can crowdsource a list of all suitable jobs?

Great idea to create a theoretical framework on how it "could" work. Theory is important to help people "take the leap". My experience is those jobs (I'd prefer the term activities) find YOU once psychologically free. Often times not what a person may of thought, because the psychological freedom changes thought process.

[horsewoman]

I'm a lifelong coaster (nearly 43, around 8 years of FT work, the rest PT or "Work-from-home-Mom"). My impression is that it comes down to personality. Coasting comes naturally to people who are predominantly generalists, as compared to specialists.

Those two mindsets will make very different kinds of decisions. A traditional career looks like a boring golden cage to a generalist, while a more "jack-of-all-trades" lifestyle looks like failure/laziness/stupid to specialists (at least, that is my personal experience!).

It is rather obvious here in the forum, that the "semi-ERE" crowd are more of the generalist mindset. People with very wide interests, diverse skill sets and little interest in accumulating vast sums of capital. To be a financial success, this needs to be coupled with low expenses and good decision-making overall, or rather, the ability to learn from mistakes.

[mathiverse]

I think a list of all suitable jobs could include all jobs. It's more about the relationship of the job to your lifestyle than about the particular job you do.

Working full time (FT) part of the year, then quitting again could be a part of semi-ERE. Even working FT for a few years, then quitting (again) could be a part of semi-ERE. Working part time (PT) also could be semi-ERE.

I think the main point that marks you as semi-ERE instead of ERE is that you are working towards being a Renaissance person, but 1) you don't have a complete FI stash and 2) getting the FI stash is not the number one priority or zeroth order goal of the things you are doing.

I can still give a partial list of jobs here that I've personally seen:

• Chess/sport/subject instructor - either PT all year long or PT for a "semester" or "session"
• PT Cleaner/front desk person/instructor/etc at a gym you go to anyway (for a free membership plus income)
• PT librarian or library front desk person
• PT Tutor - at a uni or with private clients
• Consulting/freelance - a few months a year of a contracting or PT for a longer period
• Surgical assistant that you only need a certificate program to qualify for - you can get a role where you are assigned 1 - 3 surgeries a week
• Tax preparer - seasonal work (you can be PT or FT during the season)
• Bike repairperson
• Handyman in your neighborhood
• Gig economy worker
• Etsy store owner
• ... The list is really endless.

I'll also add that c_L's comment about the work finding you seems to be less my experience so far. I actively keep an eye out for work that could fit my life and I apply for roles that fit, some I get and some I don't. I don't get too emotionally attached to any particular role, but I'm also willing to send in a resume, send follow up emails, and go in person to express my interest in order to increase the odds I get a callback for an interview (maybe an hour of work total per job before the interview). If I recall correctly, chapter 5 of Charles Long's book "How to Survive Without A Salary" is a good description of the type of mindset and activities I do to keep income opportunities in my life at the moment. In the long term, I hope I get more serendipitous opportunities like c_L indicates, but for now that's what I do.

[IlliniDave]

I never participated in the initial discussion. I would have said coasting as defined wasn't an approach I'd take. I was more on a "cruise control" path. I harnessed my situation as it was at the time I chose to strive for FI (just entering my peak earning years) and more or less kept the pedal to the floor until I got to full FI. As some alluded to, beyond a certain age career changes or even reentering the workforce after an absence becomes increasingly difficult. My initial impulse to strive for FI was not to retire early, but to hedge against the possibility of being a 50-something corporate minion type involuntarily booted from the workforce. The initial goal was to remove as many constraints regarding a theoretical next stint at work-for-pay as I could: how soon would I have to find work and at what pay level to avoid implosion. Driving until future work-for-pay was completely optional made the most sense in that context since I was already on that path and just getting it done was the simplest way forward.

Aside from not being an approach for everyone, nothing wrong with the coasting method as far as I can tell. It would have been too stressful for me--if I knew I'd need to continue work of some sort or find work at some point in the future when finances got tenuous, I wouldn't rest easy until I was back in some form of employment that allowed me to gain ground rather than tread water.

[Ego]

It would have been too stressful for me--if I knew I'd need to continue work of some sort or find work at some point in the future when finances got tenuous, I wouldn't rest easy until I was back in some form of employment that allowed me to gain ground rather than tread water.

Good point. Perhaps an important part of the deliberate coasting is to use that recurring stress as a float valve, turning on and off income production as stress levels wax and wane. In my experience, the rest periods (fallow) set the stage for new and exciting things to occur. Rather than being driven by inertia in a straight line, the changes allow sprouting branches which then branch again, building a web.

Suddenly one day the float valve that once measured stress has become insignificant. It now turns on and off by different measurements. It might measure how interesting are the skills I will learn or how interesting are the people I will meet or what interesting tools will I get to use or how many branches will this new opportunity sprout or just plain fun.

[jacob]

Those possibilities *force* me to remain creative. They force me to avoid complacency. They force me to maintain contacts. They force me to keep a hand in a variety of fields so that I could shift focus if one becomes unproductive.

Depending on how you define unproductive...

In my experience, the things I have most wanted to do have not always paid enough to pay my cost of living.

See ERE indicator.

Putting on an income constraint may exclude opportunities because they don't pay enough relative to the time they demand, for example full-time volunteering.

In the ERE book, I posit that the cost or income of an activity is related to skill going from "pay to play" over "free to play" to "get paid to play". The first too are relatively much easier to achieve than the last one.

The things I do/have done that did not pay anything or enough to reach my $7000/year mark are: blogging, running a forum, non-profit board member, bicycle repair, woodworking, gardening, sail crewing, podcast talking head, ... and probably a few I forget.

Methinks the distinction is more a question of whether one desires to be forced to maintain a connection to the job/market?

[Laura Ingalls]

@C-L You are right retirement was the wrong word. It was the one we used and that was in retrospect a mistake because it dumped negative judgment and jealousy by others on us.

[Ego]

Putting on an income constraint may exclude opportunities because they don't pay enough relative to the time they demand, for example full-time volunteering.

Methinks the distinction is more a question of whether one desires to be forced to maintain a connection to the job/market?

The distinction for me is in how I measure and what I define as income. The connections, maintenance of skills and forced avoidance of complacency is itself income.

[Jin+Guice]

This looks to me like it's getting closer and closer to a discussion of semi-ERE vs FIRE and salaryman vs. workingman.

Losing a job is always scarier for a salaryman. If you're in the salaryman mindset, switching job opportunities close down as you enter late middle age. If you're in the workingman/ renaissanceman mindset, they don't.

I don't think there is one right choice between traditional FIRE and semi-ERE. It will be different for different people and maybe different throughout one's life. The more exciting point is there are options.

[thai_tong]

I had a similar idea. Work until accumulating 75% FI , then live in a developing country for 1/3 cost of living until reaching FI.

Developing countries are more enjoyable when you are young. Not so much when you need better medical care or have limited mobility

[jacob]

Another issue with coastFIRE, which might have been discussed already/elsewhere, is that it can create a selection bias that leads to or increases sequence of return risks when implemented naively.

Lets invert. (Always invert.)

Intuitively, the Trinity portfolio's safety, that is, the lower tail (the 95% confidence level), grows at 4% per year. Lets, however, say that while coasting, the market has increased by >4%. If so, it is now higher than than it should be if the worst case path was chosen randomly. IOW, we've introduced a selection bias because we "consumed" some of the better trajectories of our sample space.

This might be easier to understand in concrete terms. If say, coastFIRE was enabled in 1990 and underwent the dotcom bubble and FI triggered in 1999, the portfolio is now starting at a high point AND/OR you have removed one decade with above average returns from the sample space.

Note, this presumes that long term market returns are in fact not random... but that's also the presumption of the Trinity study. Otherwise, FIRE planning would be a simple Bell Curve and all you'd need to plan would be the Black Scholes equation.

[WFJ]

OP: Didn't plan this strategy but worked in practice. My assumption was that the utility of my leisure is fixed, independent of market conditions, but the value of my labor is highly correlated to market conditions. I've worked when times were good and coasted when times were not (maybe 60% working and 40% coasting in my adult life). I suspect that this is counter the default in most people who may view an increase in market performance and portfolio value as a sign to FIRE, while I viewed this as a time to work and strike while the iron is hot. IMHO now is a time to coast for at least the next few years.

[prudentelo]

@WFJ: interesting strategy

I understand logic if you dont have the job right now. Why work hard to find the job when it's hard?

But if you already have the job, now is the best time to keep it? Did timing just occur by accident, that you lost jobs when markets crashed? (I guess not full accident...)

[Jin+Guice]

@jacob: I'm not sure I understand what you are saying, but

Under this argument, doesn't any person who takes longer to retire incur more sequence of returns risk?

If this is the case, it might be true that the coastFIRE person has more sequence of returns risk than the fastFIRE person, but they are cutting their working career down from 40 years to 10, greatly reducing sequence of return risk?

I might be totally missing what you are saying though or just plain wrong.

[OutOfTheBlue]

As it has been highlighted before, to the extent that Coast FIRE by its definition solely relies on the compounding effect of a necessary initial capital (which grows larger the older you are) to reach FI at a future date, this does seem quite fragile. You cannot rely on the market going up all the time.

However, the SemiERE discussion in this and other threads is broader-ranging and incredibly thought-provoking. Add to that all those who lead by example and living experiments.

What a less market-dependent strategy could look like?

Here's another take:

An ERE player could tweak this with two steps: (1) Sustainably achieve low CoL, which in turn makes it easier to (2) Continue accumulating at around 50% (instead of 75%+) SR, while part-timing, working seasonally or freelance, taking sabbaticals between FT employment, combined income streams etc. (the result being ~50% per studied time period).

It's important to consider how easy it is to cover expenses by casual work which in particular depends on how high those expenses are.

For example, a high salary of $8000 per month coupled with a for average people average spending of $4000 month will be tough because a $4000/month income is not something that can just be picked up doing whatever whenever wherever. But remove one zero from those numbers and the possibilities go way up.

So unlike FI which just depends on ratios like savings rates, semi-retirement depends more on absolute numbers.

This would remove the investment returns unknown factor. Any positive compounding would be an added bonus, not a prerequisite. This also means the strategy becomes viable starting from lower x levels of accumulated capital.

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Example:
For a $10,000 CoL, 50% SR would mean income streams of 20,000/year.
For a $7,000 CoL, this would be 14,000 and for a $5,000 CoL, it's just 10,000.

Does this sound doable? I think so.
Choosing a job with a decent hourly income would work best. I don't know why a skilled ERE player should be stuck in an entry level PT salaryman job. It's an option, but it's not the only one.

In my mind, a skilled freelance/workingman work could fit the bill nicely. Example: given some time and effort, it's not that hard to become a web developer, which can be applied in many settings: in house or freelance work, in home country and abroad, etc.

As a translator, I'm at ~$30/hour, but let's say you get something like $20/hour.

For a $10,000 CoL, that's 1,000 hours per year to achieve 50% SR.
For a $7,000 CoL, that's 700 hours, and 500 hours for $5,000 CoL.

If we divide 1,000 by 11 months of 4 weeks each, that's 22.72 hours per week. And quite less for lower CoL.

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If you start doing that from 10x (say $100,000), adding $10,000 per year would represent a 10% increase, that is without relying on any additional compounding interest on investments.

You don't just meet your yearly expenses, but continue accumulating and improving financial resilience, even if markets are down or flat.
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That's what low CoL ERE does for you.

It opens possibilities that would not be there otherwise.

[2Birds1Stone]

If you're working to earn 2X COL then by definition you're working vs. coasting....regardless of the absolute values.