How to Reach Coast FIRE (The Relaxed Way to Retire!)

24:02That's what we used at Bigger Pockets. That's what we use at Bigger Pockets Money when we're doing sub-goals here at Bigger Pockets Money. And there's another one called the Four Disciplines of Execution, which is a very similar type of style run a business. And pick one. There's more out there too. But if you use one of those, your odds, I think, of succeeding are so much These are free, by the way. You can do free versions of these, right? You can also pay thousands of dollars for coaches if you have a large business. Did you do something like that, Andy, to get your business off the ground or did you wing it?

24:32So I did a combination of winging it as well as adopting some tools. One of the big tools that I use is a planner. I just use this planner from the Michael Hyatt group called the Full Focus Planner. And it helps me to, again, not affiliated with them either. I've used it for the past five years. It helps me align what my week looks like, what my goals are for the week, and it really helps me stay focused. If I don't put it down and I say exactly what I'm going to do, I'll find myself drifting off on some social media rabbit hole. And I'm like, where the heck am I right now? What am I supposed to do?

25:08And then I look back at it and I say, OK, this is what you needed to get done today in order to actually move forward with your goals. So having some systems, some voices out there that help with this process, as well as some some great resources and tools can really make this possible. And it helped me to focus. And I've transitioned from that sort of scattered moment of my life where I was trying to do way too many things to being more realistic with how many hours do I want to work? How many hours do I need to work in order to make the income that I need for my family and find that balance?

25:44And over the last three years, we found that balance for both my wife and I to be around 20 to 25 hours per week. This allows me to still do all of the other things that I want to do in my life, those other identities I talked about. And a big part of it, to your point, Scott, on exercise and being an athlete is being an athlete, like spending more time at the gym, spending more time going for runs. And if I can combine that with my time with my wife, because she's a runner, it's like a win-win for our family at home. So trying to combine all these goals, but my work week is now centered between Tuesday and Thursday because I've always wanted that.

26:19I always thought it'd be so cool to have a four-day weekend. It's sort of this middle ground of complete financial independence where I don't need to work anymore and this corporate life where I needed to work five days, maybe six days plus. And the reality with the corporate life is that my brain never really slowed down. I'd work five days and then I'd be emailing until five or six p.m. And then I'd be thinking about all those work things until Saturday, even when I woke up. And then on Sunday, I'd start to think about, oh my God, work is coming up on Monday. So it's like my brain never actually relaxed throughout those seven days.

26:58So did I even get a day off? Not mentally. So with this new structure that I really like, I get this sort of ramp down of stopping thinking about work on Thursday at the end of the day. I can focus on my friends, my family, my health, and then just enjoy a longer weekend. And then I'm ready and excited to start working again late Monday, early Tuesday to get things done. 100%. I can't tell you how many times I would, oh, I'm just going to pop on and check my email, see if that guy responded. I want to make a note really quick so I don't forget. and then you're on your computer for an hour and a half that morning.

27:40And you're like, oh, I didn't mean to do that. And then on Sunday, you're right. You're like, okay, what do I have to do this week at work? Work is at work and home is at home. And the pandemic did not help. I remember, oh, I can work right up till five. I don't have to drive home. I just have to, my commute is like 17 steps. So this is awesome. But then I would work until 5.30 and oh, I just have one more thing. And then I'm at six. And then I'm getting up in the morning and I have my every morning I get up and have a cup of coffee. Oh, I could do that in front of my computer. And it became this like and then my kids were being homeschooled and it was a horrible experience.

28:16So I'm like, I'm just going to go to work now. And yeah, you're right. It's not your time. You never have your own time. Absolutely. And it was those little things, those distraction moments that I started to pay attention to. And I said, OK, what can I do to eliminate more of those so that I don't fall back into that? And a big one for me, I don't know how it is for you guys. My phone is super distracting. And I had these apps on there, the Instagrams, the LinkedIn's, whatever, all these things. And I would just reflexively try to go look at it to see, oh, I posted something. Let me see what people said about it or how many likes I got or whatever.

28:52So I decided, let me delete these things off of my phone completely in order to help my brain relax. Because if I keep saying that I want to be an athlete or a better father or a better husband, that I need to actually do that and let my brain transition out of work mode and into the life that I want to live. So I deleted those apps probably two or three years ago. It's been very helpful for me. What I also do is at the end of the day on Thursday, I'll go into my phone and turn off my email for my work and my personal so that, again, I don't reflexively look at it. Do I mess up every once in a while?

29:30Of course I do. I'm human. But if my intention is to start there and that's like my North Star, then I do it more often than not for sure. So those types of things, I just find those things that were distracting me and try to chip away at them. I love that. I want to go back to this concept of building a business is really hard. If your plan is, I'm going to raise a million dollars in venture capital from friends, family, and a few professional investors. And then I'm going to hire a couple of people and I'm going to burn through that in the next 12 to 18 months, try to stand up a product and figure out if it works.

30:04And it is almost inevitably going to succeed if I could last 10 years, if I never make a dollar from this business and I'm going to do something I enjoy and see if I can make my first dollar and then my second dollar and then my first 10 ,000 over the course of the next few months. Is that been your experience to a large degree? Is that kind of like what you're seeing? And do you know other people that are kind of finding that same? It's just enjoyable that way too, I think, compared to the entrepreneurship of the pressure cooker that I think most people think of when they think of these entrepreneurs that emerge victorious from years of battle in a very brutal competition.

30:42Yeah, I wanted to do it in more of the slower pace, also the ability to not need a ton of money in order to make my business a business. I think that was a huge advantage. Yeah, did it make me a lot less money in the beginning? Yeah, but over time, I've learned a lot over the years. In the beginning, like I said, I was making$70 ,000 in income my first year. This past year was well over 200 ,000. So now I'm able to pay myself a salary of about$100 ,000 as the only employee of my business. and I'm able to work on a part-time basis. But that didn't happen in the beginning. You know, it was a lot of experimentation, a lot of failure, a lot of figuring things out.

31:30But over time, I had that North Star of like, yeah, increase your income, but mostly figure out how to own your time and so you could work less and enjoy more of your life. And hey, if you're able to make more while carrying that, you know, FI type schedule, that's fantastic. So let that be your North Star. But I had difficulty with taking on any sort of debt or ownership or borrowing a big amount from a bank or getting venture capital or anything like that. I would feel so much mental stress and pressure to perform that I feel like I would be buying myself an even more stressful job, honestly.

32:08So I wanted to create my ideal work situation. And it wasn't what you were describing with trying to, you know, get a million dollars of capital from borrowed sources in order to try to build something. So Andy, your book is called Own Your Time, 10 Financial Steps to Put Your Family First and Escape the Corporate Grind. But chapter one, part one is commit to a better family life. And chapter one is define the life you want to live. I love that you start here. You're not just saying, oh, yeah, be debt free. Of course, you talk about that because that's very important. But even before you get into the finances, you're talking about defining your life.

32:51So many people start this fire journey. Oh, I want to quit my job. I hate my boss. OK, what are you going to do? I love that as a motivator, but you don't have to have it all figured out. That's a great. I just want people to achieve financial dependence. And then because I want to call out something here that what you just described there, I love it. But defining your life is a privilege for people who have the opportunity to pursue financial independence and the option to do so. And it's like we can get all philosophical. What's the best life here? Do you really want to chase another five years at the corporate job there?

33:23Some people don't have a choice. They must do that to sustain the basic situation, the lifestyle that they desire for the current set of circumstances for their family. or forced to because it's the bare minimum to survive. But we in the financial independence community can choose that option. And I think it takes time to realize that. It takes a surplus of several years, I think, before you can really wake up and say, there's more to just escape than escaping this job I hate. There's actually a fulfilling life out there. Anyways, I get on my high horse on that because I think that it's so healthy for a lot of people to realize the unhealthy dynamic of their job and the total power an employer can have over you if you live paycheck to paycheck and want to fight out of from that before kind of realizing now I can actually design what I want.

34:08Do you think there's a middle ground though there where I could say even just spending five to 10 minutes outside of work, outside of your family commitments to just sit there and write down what does your dream life look like? What is your ideal week look like? Honestly, how would you plan your perfect week? And that can take five, 10 minutes. It might not take years. It might not take that long at all. And then I think some people also have trouble, Scott, to your point, about coming up with that dream life. They're so consumed by their job or so consumed by stress that they can't even think about what a better life might even look like.

34:47So you could look at it from the opposite side of things and use experiments like, hey, let's say you go to your mailbox and there is a$5 million check in there written out to you, no taxes, no crypto scam. Like this goes into your account. What is the first thing that you stop doing tomorrow? Like, okay, well, I hate my job. I hate my boss. I would call him immediately and say, I am out of here. Okay. That is your goal. That is your, now you are motivated to make that happen. Or you might say, well, I like what I do, but I don't want to do it as many hours as I'm doing it right now. I could do it like 10 to 20 hours because I enjoy the work, but it's just so overwhelming.

35:28I want to do other things in my life. Great. Now you have a goal. The point is of this first chapter or this conversation is like, get a goal, get a dream. So you actually have something that you are pursuing, not just growing your net worth, growing your savings rate. The numbers thing I think we get fixated on. I know I did. I would speak to my wife in a fashion of like, hey, our savings rate is 40%. And she'd look at me like, who cares? Or, hey, our net worth is crossed over a million. Great. What does that do for me? And the do for me is the part, right? It's like, get those dreams, get those goals aligned so that you can use the numbers to help you get to those goals and dreams and keep moving forward and realign those goals and dreams over time as well.

36:09So I think it's a combination of both of what you said. I just think some of us are wired different. Like at 23, three, I couldn't have done what you just did. I couldn't have done it. I mean, I could, I could do components of it, but that wasn't how my life was structured at that point. Right? Like I like to, I like to go out with my friends on the weekend and play rugby. And I was doing those things, but like, I wasn't like, it was more like, I don't like not having independence. Like that was it. And so that got me started. And then, you know, now at 35, I can be very prescriptive about what you just said there and say, here's what I want to move towards.

36:39It's not about moving away from something. But I also think that like for some, maybe people like myself, like young men like that, that are not clear on what this is going to look like, what life could look like in the future. There's a, it's just the pursuit of accumulating some wealth begins to ground you to some degree, right? Like if you have a couple hundred thousand dollars in wealth as you're emerging from your twenties, which is possible, but hard for a lot of people, all of a sudden you're, you're, you're very unlikely to be, you know, as disillusioned perhaps as many other, other, many of your peers out there around things as, as negative toward the world, you're much more likely to begin being receptive to this kind of thing of like, there actually are possibilities out there.

37:21The world is not totally rigged against me. And I have the opportunity to go and pursue that life I want. So anyways, I completely agree. I just, I just wanted to say like, if you're out there and you're like, I don't like the woo woo goal setting stuff. I didn't either at some points with the, uh, the, the life visioning component, it's okay to just want to escape from something, but just know that just put in the back of your mind that one day that will reframe to life I want. I completely agree. And I think that there's something about hitting those number focused goals that gives you a sense of confidence that is fantastic in the world, because that can allow you to do things that you do want to do.

37:56That can allow you to have the confidence to maybe speak to your boss about a better working situation. And it doesn't always have to be like, hey, I'm working in this corporate job, or I'm completely out of here. There are middle grounds too. And maybe you don't want to be a solopreneur or a business owner, you maybe have built up enough confidence based on what Scott's talking about here to approach your boss and just say, hey, is there any situation where I can work part-time here? Or is there situations where other people have done this at the company where I could continue to contribute, but I could work half the time?

38:27Maybe you pay me less, maybe you pay me half the money, but I can have more of my time. So there's sort of good middle grounds that could be discovered there. Maybe that's freelancing in the industry that you know really well or consulting in the industry you know really well or jumping ship and going to a competitor that might allow you to work part-time that wants your information and your knowledge and the ability for you to kill it like you have at your current company. So I think investigating those middle ground areas could be really important for people, especially as they're deciding what their version of financial independence is.

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40:42All right, welcome back. I want to go back to something from a few minutes ago here. You jumped You jumped ship right before the pandemic, had a okay first year, right? 60 % drop in income. But hey, like sounds like that covered your expenses or came pretty close. And then you had, I guess, the glide path to entrepreneurship over the last couple of years where it's, you have a thriving business that provides for all you need and more, probably allows you to throw a big surplus on the investment pile and allows you that four-day weekend and flexible work schedule. How has your net worth grown? And have you begun to use the tools of many entrepreneurs like the solo 401k or these other tax-advantaged retirement accounts that allow you to sock away kind of an unfairly large amount more than employees can in most cases?

41:24It's a great question. And I will tell you that I have fully embraced this concept of Coast Fire. We slowly decreased our contributions and then eventually stopped our contributions. And so, no, I haven't contributed any more to a Roth IRA, traditional IRA since we said goodbye. And that has not been a bad thing. Our$550 ,000 investment level has now grown to around$900 ,000 through time and compound interest. The market has been fantastic, of course, over the past four or five years. That's not going to be forever. That's not an always average type thing. But this stuff works. This time and compound interest on big money on top of big money.

42:06That being said, our home value has grown. Our investment balance has grown. So when we were around a million dollars about five years ago, when we talked, we're around$2 million now where we're talking today. So I've decreased the amount of time I'm working. I've decreased my salary in turn, but we've still grown our net worth by a million dollars in five years. That was exactly the opposite of what I was expecting you to say with the 200K in income or so from the business in terms of that. Sounds like you are, generally speaking, either paying... So do you pay the tax man, just straight up on all of that, and then add it to your after-tax investment pile?

42:43Or do you spend it on your lifestyle currently? So I have an S-corp with my business, and I'm the only employee of my business. I pay myself a salary. And with that, I pay just the general taxes that I would as an employee of my business. As far as investments are concerned, we have just not added to the pile right now. Over time, if we make more money, which I hope to, I will probably get back to investing more. But for this period of time where Coast Fire has been a blessing for us, looking at those projections of what$900 ,000 will do over the next 17 years by the time I want to touch it when I'm 60, it's looking like$2 million,$3 million.

43:22and that's going to be plenty for us when we're older because we spend around$6 ,000 to$8 ,000 a month right now and that's plenty because we are mortgage-free and we're not piling a bunch of money into our investments because we've hit Coast Fire. Do you think traditional fire is dead? I don't think traditional fire is dead. I think the tenants of all these other iterations we're talking about are born from the original financial independence fire movement. They are just evolving into different versions of what works for different people. I would say for parents, for people who want to own more of their time and spend more of it with people that they love, I think Coast Fire is a great iteration of the fire movement because it gives you more of that time back sooner than if you were, okay, let's say you're making$100 ,000 as a single person and you're trying to pursue fire, but then you feel like, oh my God, this is too much restriction for my wife and I.

44:22This is going to be one of those situations where something's got to give. Either I'm going to get divorced or I'm going to force my spouse to go on this path with me. I'd hate for that for family. So if there's a middle ground where it works for both parties and you can still achieve the type of independence that you want to have, I love that there are multiple versions of fire out there that people can experiment with. Do you consider yourself fire or do you not even use that RE part to describe what you're doing? I think the word retirement is so loaded within our community that people just jump into it too much.

44:56I really like try to wear the hat of a small business owner. I like to wear the hat of a solopreneur and say, that's what I'm doing now. I hit to a point where I felt financially confident to start my own business and that's what I'm doing right now. So I don't think there's anything wrong with people saying they're retired or even me saying I'm retired. It's just such a loaded word that in through conversations like this, I think you nailed it. I think it's the word retire. I think there was universal acceptance of, yeah, they won. That's what I want out of my life. I want that outcome that they have here, that option.

45:30But there was rejection of the word retirement. Like, for example, I think this actually stems back from one of the OGs in Mr. Money Mustache. He has no bones about it. There is nothing. There is no room for debate. There is no disagreement. He is retired. And this was in response to people talking about, hey, you run this small business of your blog, essentially, where there's a couple of affiliate links. And he's like, no, I'm retired here. It doesn't include that. And I think some people, like half the community accepts that and the other half rejects it. And I think that's where this comes from.

46:02That's so interesting. And maybe it also comes from horrible stock images of showing people who are retired just sitting in chairs or sitting on a couch like like that's what retirement means as opposed to like exercising, spending time with your family more, maybe working on a passion business and growing it. So it's like even more exciting. I think the definition of retirement could evolve maybe if these stock images would change. Well, anyways, I think it's a great discussion there. But it sounds like you just don't use that word to describe. I just don't use that word. I don't I don't have any problems with it.

46:34It's because I'm excited about what I'm building here, but it doesn't consume my entire life. It's almost as if the equivalent of saying I'm an employee or I'm a worker. If you went to a party and you said, I'm in corporate event marketing, that's who I am. And now you finish doing that. Now you say, I'm retired. It's like, that's the only identity that you say that you are. It's so tied to work that I have trouble with that. I would rather, and it's difficult to introduce yourselves as five different identities, but I don't want to be the person who only focuses on what I do as my work, as who I am.

47:14So if I were to say I'm full-time employed or retired, I'm still adopting that worker mindset. And that's something that I don't want to do. I resolved this for myself by adopting the new title on LinkedIn of semi-retired podcast co-host. That's how I describe what I do these days. Semi-retired is a great way to say it. I mean, could the people in the comments tell us if semi-retired is okay? That acknowledges all of the mixed views on whatever the heck it is I'm doing right now. Okay, Andy, you have alluded to this podcast and this online stuff. What is the name of your podcast and where can our listeners find more about you online?

47:55Absolutely. Well, my podcast is called Marriage, Kids, and Money. And I named it that because that's mostly what I think about all the time and I want to improve all in those areas. So yeah, you can find that anywhere podcasts are out there. And do you also have the marriagekidsandmoney.com? Absolutely. Marriagekidsandmoney.com is where people should go to learn more about the podcast, YouTube channel, and my book, which is out now, Own Your Time, where you can find it on Amazon and Barnes & Noble. And any support there would be fantastic. Own Your Time, 10 Financial Steps to Put Your Family First and Escape the Corporate Grind by Andy Hill.

48:30Everywhere books are sold. All right, Andy, thank you so much for your time today. This was a lot of fun catching up with what you've been doing over the last five years. And I really appreciate you. Have a good day. Thank you, Mindy. Thank you, Scott. Appreciate it. All right, Scott, that was Andy Hill. And that was a super fun conversation about the concept of getting ready to leave your job and then actually leaving your job so you can own your time. What did you think of the conversation? I just think it's another reflection of the spectrum for entrepreneurship. I feel like many people listening to this podcast would be very uncomfortable leaving their job with a million dollars in net worth with two kids and a family spending seven or eight thousand dollars a month with a hundred grand savings.

49:15I think he's on the more entrepreneurial end of the spectrum in terms of people who generally speaking will pursue financial dependence. And I think though that more people should really take a lesson from what he's done and how he lives his life and consider it. And it all stems down from a relatively low spending level and a relatively large cash position or runway. It just increases the options or looks like makes all these possibilities emerge in a way that if you don't have those savings, if you don't have that liquidity, if you don't have that passive income and you spend nine or$10 ,000 a year and you have a job that pays you$150 ,000 a year, it seems really terrifying, right?

49:57Probably everything seems fairly terrifying or fairly stressful in your life because you're also worried about the very real risk of even one or two bad weeks or if you stop showing up for work or things, whatever, you could lose your job. You could lose your job even if you're doing a pretty good job, depending on how company performance is going. And I think it just comes back down to this low spending, this abundance mindset, and the flexibility of having some wealth that is gradually expanding, and in particular, that liquidity and that runway in the cash position. I think it makes everything much more achievable.

50:30Yeah, absolutely. That is my favorite thing about Coast Fire, is that your traditional retirement will be taken care of. And then you can make the choice, do I continue to contribute, or do I not continue to contribute? If you continue to contribute, you're just marching your retirement date back. And if you choose not to, you are understanding that you will have a funded retirement at traditional retirement age. I mean, that's what the majority of Americans are doing anyway. And if you like your job, there's nothing that says you have to retire. I think I'm gonna start using language a little bit more precisely here or in a way that is generally more accepted here.

51:13And I'm going to start calling it Coast Fi personally. This is everyone else, their choice. But I think that the concept of he does not describe himself as retired early. And I think that that's the way that that term for me is going to be used going forward, I think, to discuss this. There's Coast Fi and there's traditional fire. And I know some people who are fire and I know some people who are financially independent and I know some people who are Coast Fi, but I don't know anybody who is Coast Fire that I've met so far. Let me know what you think in the comments here on YouTube, but let me know if that's the right way to use that term going forward.

51:52Yeah, and Scott, I'm gonna go you one better. I think we should stop using the term Fire and just start saying Fi because we want people to have options. And one option is retiring early. One option is not retiring early. But we still want you to get to financial independence. So this is now a FI show. Yeah, I think I'm going to use financially independent as the default here and then FI-er where appropriate, right? I think we could have described many of the situations we've had in the show where people have been FI-er and then decided to do some kind of part-time work as financially independent.

52:31And I think I'm going to continue to view them as FI-er in my mind. but we're going to use the term financially independent to avoid confusion here. That sounds great. All right, Scott, should we get out of here? Let's do it. That wraps up this episode of the BiggerPocketsMoney podcast. He is Scott Trench. I am Mindy Jensen saying goodbye, Rye.