Although typical FIRE (Financial Independence/Retiring Early) gets all the attention and accolades these days across the interwebs, its lesser known relative Flexible FIRE deserves a serious look as well.
As I mentioned in a previous post, typical FIRE consists of creating an investment portfolio that is large enough to sustain your level of spending forever (simple calculation is 25x your annual spending). This usually means spending a good chunk of your life earning/saving to reach that milestone – going to a job, that statistically, you probably don’t enjoy 100% of the time – before finally pursuing your dreams. It involves limited free time and dedicated hobbies, putting them off until retirement some day. Most of your energy is dedicated to adding as much cash to the nest egg as fast as possible by doing well at your job. But even at an accelerated pace, for most of us, this is still probably a 20+ year journey after we learn about the FIRE concept. Granted, it could be a lot worse (especially for a 25 year old staring down a 40 year career to reach the prescribed age of 65 for traditional retirement), but 20 years is still a long time! What if you could “short-circuit” that path and start doing more of what you love RIGHT NOW?!? That’s where Flexible FIRE comes in.
After doing a quick google search it looks like the term Flexible FIRE has been used before, but here is what it means to me:
Flexible FIRE is having enough of a nest egg (that will continue to grow over the years), combined with one or more sources of income, to provide the financial confidence and flexibility in life you are looking for.
And guess what? There is no right way to do this! What works well for me may sound terrible to you. This is where Dreaming Big comes into play once again. Options are endless, only constrained by your imagination and willingness to act upon any ideas it generates. What activities do you want to do more of? Would part-time work be more enjoyable for you? Is it even possible in your situation? What would need to change financially for a part-time schedule to work? Are there ways to add an income stream to your life? What about two or more? For parents, how much would be saved if daycare wasn’t a line item in your budget (I know ours is currently larger than our mortgage/home insurance/property taxes!!!)? And on, and on, and on….I think you get the picture. Once you start thinking outside the box things can get exciting in a hurry.
I get it though, if you’re working 40+ hours a week your mental energy for silly dream games is limited (or non-existent). Even if all you can think of doing is eating dinner after work, watching a couple hours of TV, then going to bed Monday-Friday – I encourage you to create some time on the weekends to seriously think about what your ideal life looks like and ways to make it happen. This could be a great opportunity to dedicate some time to personal fitness as well (which leads to a wide-array of fantastic benefits).
Carve out an hour for a walk/hike/bike/run/paddle board, whatever sounds enjoyable to you, give some thought to your life/lifestyle and think of how you may want it to change for the better. Maybe you need to be a bit more extreme for the creative juices to get flowing – then rent a cabin or airbnb and get away. The point is, you need to get outside of your comfort zone and normal routine for this to have an impact. Your normal routine most likely isn’t allowing you enough dedicated quiet time to think clearly and dream about your future.
Flexible FIRE Example
For reference, here’s one of the Flexible FIRE routes that may work well for me. I am really enjoying this new blogging gig, so a dream of mine is for the blog to enable me to go part-time at work. This would in-turn leave more time for things I love outside of work (family/friends time, running, camping trips, naps) while creating additional creative space for this blog. It could reduce commuting/daycare expenses, which would lower our annual expenses, which would increase the amount we’re able to add to our current nest egg each month, which would speed up our progress to traditional FIRE.
With fewer hours spent at my employer doing things they want me to do, I would have more hours to do the things I want to do. Sounds pretty sweet to me. Especially with little ones at home who are growing up WAY too fast, the more time I have that isn’t dedicated to an employer, the more time I can spend with them before they no longer think I’m one of the coolest people on earth.
Challenge For You
My challenge to you as we head into the final stretch of this week is: between now and Monday, dedicate at least one hour to thinking creatively about your future (bonus points if it’s incorporated into exercise), then actually write down your ideas as this helps solidify them. Once you have done that, leave a comment below or send me a tweet (@chasingFIREblog) to fill me in on your ideas…I would love to hear them!
Until next time,