Personal finance is truly personal.
This is a maxim that can be difficult for some to follow. While some folks find one recipe to achieving financial independence resonates with them, some other individuals find it easier to tread a different path, whether due to their own circumstances, starting point, income, or more.
Just as there are many roads to Dublin, there are many ways to reach your goals.
As this guest post, which originally appeared on the Money Flamingo, discusses, that’s a very good thing.
Financial independence is the end goal for pretty much everyone in the FIRE Community. If you intend to become financially independent at some point in your life, then FI is what you strive for.
It doesn’t matter if you want to reach FIRE and retire early in your 30s or if you are happy working (even if it’s just on a part-time basis) until you are 60 or 70 – the end goal is the same. It doesn’t even matter if you want to achieve Lean FI, “Standard” FI, or Fat FI. The math is the same for everyone.
But the answer to the question of how to best approach financial freedom isn’t as simple and looks different for everyone.
You are probably aware that there are many FIRE acronyms and “types” of financial independence these days. These often get made fun of in the FIRE community. Sure, some of them have hilarious names.
Terms like “Flamingo FI”, “Barista FI,” and “Baby FIRE” (the latest term I have come across) definitely sound a little silly, so it’s easy to dismiss new approaches like this.
But let me tell you one thing: If you roll your eyes every time someone comes up with a new FIRE term, you are missing the point.
In this article, I’m going to make the case for all these different types of FI that have sprung up over the years. In fact, I hope we’ll see even more of them in the future.
But first, let me tell you a personal story.
The YOLO Trap
When I first found out about FIRE, shortly after I started my first “real” job in early 2012, I was over the moon. I hated the prospect of sitting at a desk for the next 40 years and was so glad I had found a way out of the rat race.
I ran our numbers based on our incomes at the time and quickly realized that in order to get to FI we would have to be ultra frugal and save every penny we could find for 17-20 years. I was gutted.
So I did…nothing. For several years. I actually did less than nothing, I started to waste money and developed some pretty bad habits (both financially and health-wise).
Finding FIRE, daydreaming about how awesome my life would be if I could get there, and then realizing that it was out of reach was depressing.
The thing is that at the time (almost 10 years ago at the time of writing), most people who shared their journey to FIRE were male engineers from the US on high incomes (at least compared to my entry-level paychecks).
There was only one path to FIRE back then – the “traditional” path. Work hard, earn a lot of money, cut your expenses, save like crazy, invest, and in ten or so years you are free. I didn’t think that this was possible for Mr. Flamingo and me, and even if it was, the price we’d have to pay seemed too high, and the timeframe required too long.
I fell into the YOLO trap (“if I can’t be free, I might as well just enjoy myself”).
When financial independence seems out of reach, it can be pretty demotivating.
The Moment That Changed Everything
Fortunately, I kept reading personal finance books and blogs, so the idea that we could one day reach FIRE never disappeared completely. One day in early 2016 I had a lightbulb moment – couldn’t we use the power of compound interest to somehow create a shortcut to freedom?
What if we only saved 50% of our FIRE number and then just worked part-time until our nest egg had doubled? Flamingo FI was born. And that’s when our lives turned around and our journey to FIRE really began.
The rest is history. You can go back to the archives to see how we went from a net worth of almost zero to hitting our goal and semi-retiring in under 5 years. I can honestly say that our lives are 1000% better now and I am proud of what we have achieved.
Sometimes I have to pinch myself because I can’t believe how lucky we are to live this awesome life that allows us so much freedom and time for our young family.
When we came up with Flamingo FI everything changed for us. Creating an alternative FIRE strategy that suited us, our goals, and our lifestyle made all the difference.
To be completely honest, I am pretty sure we would be nowhere near as financially secure as we are today if the “traditional” path to FIRE was still the only one out there.
Finding our perfect FIRE strategy did wonders for our happiness, health, and wealth.
The Incredible Power of Finding YOUR perfect Financial Independence Strategy
The magic behind creating an approach to FIRE that was more in line with our goals is simple: it motivated us to get started. The timeline to freedom (semi-retirement in our case) turned from over a decade to just five short years. That was an amount of time we were willing to “sacrifice.”
The funny thing is that the moment we got started, all aspects of our lives improved almost immediately and kept getting better all the time. My outlook on life improved. My health improved. Work became enjoyable (and I actually love my job now!). Plus, we didn’t actually feel like we were sacrificing anything.
And now that we have created our financial snowball and are done saving, FIRE is an inevitable outcome for us, probably much sooner than expected, too.
I am sure I am not the only one who got demotivated after first finding out about FIRE. If you are in your 20s with a high-paying job and no dependents, it’s easy to get started with the standard approach to FIRE.
But maybe you don’t have a high-paying job. Maybe you are older and feel you left it too late. Maybe you have a young family and are desperate to have more time with your kids while they are little. This is where alternative FIRE strategies truly shine because they offer people options that suit their goals and priorities.
Choices, Choices, Choices
Of course, our approach – Flamingo FI – is just one of many different ways to approach FIRE (although I know it resonates with many people). There are now many different subcultures in the FIRE community and many different strategies people use to claim their time and freedom back. This is something we should celebrate.
A few years after we got started the concept of Coast FI surfaced and started becoming more popular. It turns out that Flamingo FI is actually a variation of Coast FI. And as I’ve said often on this blog, you can tweak the principles of Coast FI to create your own FIRE and semi-retirement strategy. This will allow you to create more freedom for yourself and your family much sooner than if you stayed on the traditional path to FIRE.
Mini-retirements are also a great option. Working for a few years and then taking a significant amount of time off during your journey to FI gives you something to look forward to all the time and offers regular rewards.
This is a short article and I can’t list every single type of FIRE, but that’s also not the point.
If You Struggle To Get Started, Do This One Thing
My main message is this: if you struggle to get started; if you feel like FIRE is out of reach for you, too far away, or that you left it too late; don’t do what I did in 2012. Don’t bury your head in the sand. Don’t fall into the YOLO trap. Instead, spend some time researching alternative FIRE strategies. Make your own plan. Break it up into manageable milestones.
One of the primary reasons I have written about this stuff for over three years and continue to do so even after we reached our goal is that I want to help others avoid the mistakes I made.
And if using an alternative FIRE strategy (or creating your own!) helps you to get started, you should go for it, even if others think it’s silly.
I have had plenty of people make fun of Flamingo FI over the years. I’ve received my fair share of rude and sarcastic comments.
But you know what? Flamingo FI has changed my life. It has freed up my time and allows me to spend quality time with my kids every day. Because of Flamingo FI, I don’t worry (or even think much) about money. It has improved every aspect of my life. And while it’s not the right concept for everyone, I truly believe that there is a perfect strategy for every single person who wants to achieve FIRE.
Remember, personal finance really is personal. And so is your path to FIRE. There is no such thing as a “one size fits all” solution in personal finance. And there definitely isn’t one in the world of financial independence either.
Which path to FIRE are you on? Are you following an alternative FIRE strategy?