Why We Need Different Types of Financial Independence

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.

Whether your goal is Lean, "Traditional" or Fat FIRE, there is a path to Financial Independence that is right for you: CoastFI, Barista FIRE and many more.

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 “BabyFIRE” (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 realised 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 realising 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 10 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, of course, 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 a 20 something 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.

CoastFIRE, Flamingo FIRE and Traditional FIRE are just some of the many paths you can take to Financial Independence
CoastFI, Flamingo FI and “normal” FIRE are just some of the many paths that can get you to Financial Independence

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?

26 thoughts on “Why We Need Different Types of Financial Independence”

  1. MyFIRE = FlexFIRE. At the moment it is FIRE + LateFIRE + SlowFIRE + (FlamingoFI?). It could change as life changes. We started down the traditional path and quickly realised that massive savings rates weren’t us. However, as you said, the most important thing is that we were doing something, regardless of whether it fit with the traditional tenets. And just doing something has made a far more massive difference than we ever could have imagined. Don’t worry about names, don’t worry about rules. Take what suits you from everything out there and “tread your own path”.

    Having said that, the concept of FlamingoFI was a revelation and a massive motivational boost, so thank you!

    Reply
    • Hi Mrs. ETT, I could not have said it better – simply doing something (instead of nothing at all) makes all the difference. I agree, it makes sense to change the FI approach when life circumstances and goals change. That’s why I think it’s so important to know all the different strategies out there, it just gives us more options and flexibility. I love the term FlexFIRE by the way!

      Reply
  2. I agree with everything you say in this post! I felt exactly the same when I discovered FIRE. We are past Coast FI and will likely keep going until we hit Flamingo. We might reward ourselves with a year off once we get there. Congrats on the Plutus nomination btw, very well deserved! ๐Ÿ‘

    Reply
    • Thanks Rico! I’m really happy about the Plutus awards nomination!
      I think a lot of people feel like this when they first discover FI. Congrats on reaching Coast FI, you’ll be at Flamingo FI in no time (and then at Lean FI soon after?!). ๐Ÿ™‚

      Reply
  3. Spot on, you know my story (you interviewed me), find the version of FIRE or Part fire that works for you… set that goal.

    aim for the stars (full fire) and you may find the moon is all you really needed (Flamingo fire)

    Mark

    Reply
  4. Couldn’t agree more. We have young kids, and to pursue FI 100% at the expense of time with our kids when they’re young and want to spend time with us, only to hit FI when they’re older and prefer to spend time with their friends seems like the wrong way around.

    So we’re pressing pause on the careers, doing a little bit of freelancing, and spending the time now with our kids. We can always go back to work once they’re in high school / college.

    Reply
    • Hi Mr C, we are in the same boat. We have two young kids and I completely agree – prioritising FIRE over spending time with them (while they still want us around all the time) makes no sense. You never hear anyone say “I wish I’d spent less time with my kids when they were young.” but many people regret working too much instead of prioritising family. It’s a no-brainer. Enjoy your career break – as you said you can always go back when they are in high school.

      Reply
  5. Absolutely! Couldnโ€™t agree more ๐Ÿ™‚ When I found FIRE, I was 47 and definitely did not fit in the white male 20 something engineer earning a huge pay cheque profile. The best thing one can do is just start – I reached Coast FI 3 years later using superannuation. Itโ€™s the best feeling ever! Congratulations on your Plutus Awards nomination:)

    Reply
  6. Great article! Tread your own path I feel is the best approach. Being in our 40s and not really having out stuff together we are now focusing on the items we can control. Utilizing our leave is a great option for us to take some mini retirements at our age. Next year we will both take our long service leave and head off for 3 months! We have barely taken more than 2 weeks leave at a time previously. What probably makes it worse is that when we take this leave we will actually have banked another 3 months of annual leave up as well so we can then take another mini retirement either at the back end of our long service leave or do it all again in 12 months time. Bonus is whilst you are on leave you are still accruing leave, so can leverage our leave a lot more and we have the freedom of not really having children at home now either. Focus now is just setting ourselves up really well for our 60’s but more importantly to set ourselves up a lot better for our 50s to have the option to slow down should we decide as well. Who knows we may love having this 3 months off so much that we want to do more of this and sooner

    Reply
    • Thanks Ann! ๐Ÿ™‚ I agree 100% with what you said. Control what you can control and don’t worry too much about the rest. Using your leave (especially the long service leave) for short mini-retirements is a great plan and will keep you motivated. My grandparents started taking 4 months a year off to spend the winters abroad when they were in their late 40s. They always said how good it was for their health and wellbeing. I’m sure it will be the same for you. All the best!

      Reply
  7. Money psychology and feeling good about oneโ€™s financial progress definitely is a huge part of making progress.

    As someone who has been writing about FIRE since 2009, I guess Iโ€™m old school since I just aimed for one definition: Having enough passive investment income to cover our desired living expenses.

    My problem is that our expenses grew beyond anticipated given we had a couple of children after we were retired. But thatโ€™s OK, the challenge of making more passive income was fun, and we plan to retire in 2022 once there is more herd immunity.

    At the end of the day, everybody Hass to be comfortable with their financial situation. Thatโ€™s it!

    And congrats to you guys!

    Sam

    Reply
    • Thanks Sam! I agree 100%, being comfortable with one’s financial setup is so important. I read about your story a while ago, the cost of raising a family in the US seems insane from an Australian and European perspective. It’s great that you were able to go back to work and adjust your plans accordingly. I think the key for anyone who “retires” so long before traditional retirement age is to stay flexible and roll with the punches. All the best!

      Reply
      • Yes, kinda insane here in San Francisco. But SF is like Sydney, a beautiful city and nowhere Iโ€™d rather be if I have enough money to live here!

        $300,000 a year is about right. But obviously, a lot of people will disagree.

        Sam

        Reply
        • Sydney is pretty affordable compared to SF, but I understand what you mean. I would never trade this place for a cheaper location with a worse quality of life (for us).

          Yes, $300,000 probably sounds crazy to most people, but that’s the beauty of FI: the math is the same for everyone and works for any budget required.

          Reply
  8. I cant believe I haven’t found this blog earlier. My path started on the Full FIRE movement for about 5 years. But in the last year, especially with a new born, your life changes. I am more halfway between Flamingo and coasting FI.

    You need to enjoy your hard earned wealth, and to enjoy it now and enjoy being FI later, that sounds more enjoyable.

    Reply
    • I couldn’t agree more, having children is such a big change. Our whole perspective on life has changed quite a bit since we had our kids. Thanks for stopping by, I look forward to checking out your blog!

      Reply
  9. I feel like we have fallen into CoastFI path. Now full time digital nomads, we are working 25 hours a week, but enjoying life to its fullest! I think we have finally found our balance.
    Saying that – this path changed for us MANY times. You can be flexible and make changes along the way. Nothing is set in stone. Thanks for sharing ๐Ÿ™‚

    Reply
    • Congrats, sounds like you have found a nice balance. And remember, this will probably change a thousand times over your life. You guys are still really young. If you decide to have kids your life will change a lot as well.

      Reply

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