We started to get really serious about reaching Financial Independence in early 2016. However, we soon realised that the traditional path to FI would take us more time than we were willing to sacrifice. On top of that, early retirement was not really what we wanted – we had no intention of retiring from work completely; we just wanted more control over our time and the option to quit the rat race.
Once we started taking this realisation into consideration, it became clear that there was no need to “stick it out” until we reached our FI number. Since the standard approach to FI did not suit our goals, we came up with our own: Flamingo FI. Flamingo FI allowed us to create more freedom and choices in our lives in just a few short years AND will still get us to Financial Independence through compound interest alone.
Our plan follows the four lifestyle phases of Flamingo FI:
Phase 1 – Accumulation:
Our first goal was to complete this phase by early 2021 – around 5 years from when we started getting serious about FI. We actually got there in October 2020, four months ahead of schedule. We chronicled our monthly progress in the “Project 1000” section of this website. To reach Flamingo FI, we saved 12.5x our Future Annual Living Expenses:
Phase 2 – Semi-Retirement (our current phase)
In this phase, we no longer actively add money to our retirement nest egg. This means we have a lot more choices and flexibility when it comes to work.
During this phase, we really only have to earn enough to cover our ongoing living expenses while our nest egg continues to grow in the background through compound interest.
We will stay in phase 2 until the nest egg we accumulated in phase 1 has doubled. I’ve written about our plan for the semi-retirement phase in great detail here: Coasting to FIRE (Without Saving Another Cent!) – Our Semi-Retirement Plan
Phase 3 – Financial Independence:
Once our Flamingo FI nest egg has doubled through compound interest, we will be financially independent. At this point, we could choose to stop working altogether, but we think that’s highly unlikely.
Phase 4 – Traditional Retirement:
If we feel like living it up a little more when we are old, we might decide to draw down our nest egg once we hit the traditional retirement age (5-6% annually).
A quick note on our numbers
- We do not use dollar figures when we talk about our numbers. Instead, we measure our progress in time. It’s not about dollars. It’s about freedom. Allan Roth writes, “In actuality, a much better way of measuring wealth would be the number of years of financial freedom that is accumulated.” I completely agree. What really counts is not how much someone has in the bank but how many years of freedom these savings can buy him or her. Using time instead of money as a measurement allows you to compare your progress to that of others – even if their living situation is completely different to yours.
- Our FI numbers are based on our expected future cost of living. We currently live and work in Sydney and have two young kids. Our FI number is not based on our current cost of living but on “best guess” estimates of what our (retired) lives will cost in the future. We adjust our FI numbers for inflation four times a year.
You can learn more about the four lifestyle phases of Flamingo FI here.