In part 1 of this post we discussed the four stages of Flamingo FI and how it allows you to quit the 9-5 in record time.
By now you know how Flamingo FI works – you work and save hard for a few years and then you semi-retire. While you are busy enjoying the perks of semi-retirement, your nest egg continues to grow in the background. Before you know it, you are financially independent. Magic!
“This is stupid! I don’t want to semi-retire. Once I’m done I will never work another day in my life!” you might say. But here is the problem with this statement: It is not true.
Someone who becomes financially independent in their 30s or 40s is not going to sit by the pool slurping cocktails for the next 50 years. You know this; everyone knows this. And while you might feel like you want to never work again once you hit FIRE, chances are that you will. Most people are not on this path because they hate working. They want to achieve FI so that they have more time for their family, health and hobbies. Almost everyone who reaches FI ends up finding a fun part-time job they enjoy or works on interesting side projects and hobbies that make some money. While everyone knows that this is what usually happens, no one actually seems to plan for it.
Let’s have a look at what a typical FIRE plan looks like:
Now compare it to what usually happens once someone reaches FI:
Everyone likes a holiday, maybe even a long one, but eventually you will get bored. Think about it – you are going against the norm, you work hard and stay focused for a long time to get to FI. This means you are an ambitious, motivated and driven person (just not when it comes to your silly day job). If you are like us, you have a long list of projects you want to tackle once you don’t have to spend all your time working, commuting and ironing your work clothes anymore. And this will almost certainly lead to some form of paid work after you reach FI.
So why wait until you hit your FIRE number before you downshift and do what you really want to do with your life?
Now compare the charts above with Flamingo FI:
With Flamingo FI, we don’t pretend that we will never work again once we quit our jobs. Instead, we save enough to ensure we will still be able to enjoy FIRE (and a traditional retirement if desired) at some point in the future. After that, there really is no reason to stay in your full-time job, unless you want to.
Mr. Flamingo and I won’t be financial independent when we leave our full-time corporate jobs in early 2021. We are happy to work a few days a week (or a few months a year instead). I’m not talking about jobs that pay six-figures here, just a bit of income on the side. This will be more than enough to sustain our fun yet low-cost lifestyle.
If you are currently working towards FIRE, you should consider Flamingo FI. The advantages are obvious:
- You can exit the rat race faster: It doesn’t take long to accumulate the nest egg needed for this approach. This means that you are free to leave your full-time career and start semi-retirement sooner. Once you hit this milestone, you don’t have to add to your savings anymore. With the pressure to keep adding to your nest egg gone, your options are endless – become a part-time diving instructor, start your own dog-walking business, retrain to become a pastry chef – it is all up to you.
- The best out of both worlds: Semi-retirement is part of this plan, but not the entire plan. You will still become financially independent with this approach.
- A soft landing: With Flamingo FI, the transition from full-time employment to retirement is slow and smooth. You don’t have to worry about sinking into depression once you pull the trigger because you downshift gradually instead of going from 100 to 0. This gives you plenty of time to find out what you want to do with the rest of your life.
- You don’t need to to save 75% of your income to get there: Flamingo FI is achievable in a reasonable amount of time even if you don’t have a crazy high savings rate. If you can manage to save 50% of your income, you will reach Flamingo FI in 10 years (if you start with zero savings). It is of course unlikely that you start with no savings and Super, so if you have a small nest egg already, you can reach Flamingo FI in just a few years. This is doable even if you live in a high cost of living area (like Sydney and Melbourne) and earn an average income.
By now you have probably figured out why we have chosen this silly name – Flamingo FI – for our approach. We will pull the trigger and quit our jobs when our FIRE plan stands on one leg – like a Flamingo. The word “flamingo” comes from the Spanish and Latin word “flamenco” which means – you might have guessed it – fire. Flamingo FI = FIRE standing on one leg!
You don’t have to slave away in a job you hate until you reach your FIRE number!