Coast FI Masterclass | The Fioneers | Episode 538

28:16And so we ultimately decided that I was going to leave my day job in February of 2023. So about two years after, as we're recording this and now having left that job and having the benefit of hindsight, it was definitely the right decision. I know I had a lot of fears going into that decision of like, do we have enough saved? And are we far enough along on our five journey. Now looking back on it, I wish I had left earlier. Right. And I think that's what I've heard from many other people in a similar story of like, I stayed too long. And that's the beauty of it is like you get to choose your own journey and figure out what's what's the right time for you.

28:54And also be really intentional and know that you don't necessarily need the hundred thousand dollars more that you might be telling yourself that you do. It's easy to get sucked into one more year syndrome, no matter where you are on your five journey or what kind of flavor of fire you're looking for. And first off, huge congrats, Corey. That's awesome. That's really, really awesome. So right. As we're recording this, it's 24 months after and that's, yeah, that's really, really awesome. Thanks for listening to choose a fi and for all your support of our mission here. The absolute best way to support choose a fi is when you sign up for your next rewards credit card to use our cards page at chooseabout.com slash cards.

29:33I keep this page constantly updated, so it should always be the top resource for you. Thanks for being part of our community and for your support. So I think sometimes having a sense of like the actual numbers of this can really help people because this is not easy. It's not a slam dunk for most people. And I'm curious if you could just give either generalities or specific numbers of like, okay, two years ago, you made a fairly significant decision, right? Can you give a sense of what COSFI looked like for you at that point and how, maybe more importantly, how you were able to make that decision in terms of the psychological aspect?

30:12So in terms of where we were numbers wise, two years ago, we had about 750 K in investments. And then we had about one and a half to two years of a runway of cash saved. Now that's separate just from the 750 that's on top of it? From the 750. Yeah. And then within that 750, there was some, but not a lot in a taxable account. So most of it was tied up in retirement accounts. Okay. So at that time that gave us a lot of confidence. Well, I look back and I say that it gave us a lot of confidence, but it did. It gave It was confidence, even when we had moments where our scarcity mindset and these money fears popped up.

31:04We had confidence and knew that, one, our future selves were taken care of because we were close by. And we had this runway that if we generated zero dollars for a year and a half or two years, we would still be okay. And the very strong likelihood is that we would generate more than$0 since I was running my group coaching and we were running our first retreat that was sold out. You know, that like we had evidence that we were generating income that was going to help us to be able to, if not cover all of our expenses, cover a good portion. And so we'd be spending that runway down more slowly. And so then that gave us the confidence to have Corey take almost like a six to nine month sabbatical where he really needed to decompress from work and really take time to figure out what he wanted in the future.

32:06Would he go back to employment of some sort? Did he want to join me doing the fine years? And so we had that confidence from that runway. that we had built. I like that. So yeah, I think this is important for everyone listening to understand you really did split it up because you could have mathematically just lumped those numbers together, right? Lumped the amount you had saved in your quote unquote net worth plus this runway. It's really at the end of the day, it's all net worth. You could have used that as your COSFI calculation and said, Hey, we're going to make enough money because it would have actually made the COSFI calculation a little easier, right?

32:45It would have made it a more advantageous number. but you very purposely said, okay, this is, again, math is math and that it's all well and good, but most of money, most of personal finance is psychological. And I think at the end of the day, you need to do what works for you. So are there people who are saying, oh, you should have lumped it in. It's all your net worth. Come on, blah, blah, blah. Okay. Well be quiet, but nobody cares, right? Like for you, the decision was, all right, this is our safety. This is our, let's experiment for a year and a half to two years, if we make zero dollars, which is almost inconceivable, we have two years of runway, we're still Coast Fi, then between the two of us, and now a couple years prior, we were making about$200 ,000 together in your regular jobs.

33:32Can we cover between the two of us our expenses each year? Because you're still Coast Fi, right? Even if you blew through all that runway, you're still Coast Fi just based on the 750 that you have that's operating in the background. And if anybody knows what's happened the last couple of years, you know, the market's been okay, right? So more than okay. And that's a really neat thing. So, okay, we have two years to play around with this. And then worst case, we just have to cover our expenses. Exactly. And I think it was helpful to have that as a separate bucket because, yeah, like we weren't incorporating it into our Coast Fi number because the expectation was we could spend it.

34:09if we had incorporated it into our COSTFI number and we needed it to be COSTFI, then I don't know if we would have had the same confidence, right? It gave us this confidence to say like, we are planning on spending some of it down, or we could potentially spend all of it down. And I think the reality is that we ended up spending most of it down. And we actually started to withdraw from our taxable account in the last two years because we decided to sell our Boston condo and move to New Hampshire. And so we pulled out money from our taxable account to buy our home in cash and do some necessary house projects that we weren't able to cash flow right away.

34:54We would have to save up a longer period of time for them. And so we definitely had to work through then all the emotions around that, right? Of saying, let's start to withdraw. And it was helpful that the market has done well, right? And it was helpful to go back and look at the numbers and actually run the scenarios to say, if we do withdraw this, what does this mean for our, one, are we still co-spy, which we were? Two, what does this mean for our FI timeline if we actually take this amount out of that nest egg. And then, you know, for us, we were moving to a lower cost of living area. So in some ways, it was almost like six of one, half a dozen the other, right?

35:37Because we were eventually going to be reduced, you know, our expenses will be reduced because we no longer have the mortgage and live in a lower cost of living area. But there was that fear of saying, wow, are we going to just take out like half of our taxable account to do this? So we don't need to take out a mortgage, you know, whatever crazy rate was happening at the time. And as Jess was saying, it was helpful to give it that just the cash runway, that distinct purpose, because then it made it easier to spend down that money. Because I think there is a huge shift for many of us on this journey of like accumulation mode, accumulation mode, you're just like adding to accounts, seeing the accounts grow.

36:24And then when you first like start to spend that money, it's like, wait a second, am I doing something wrong? Is this okay? You know, and am I jeopardizing my future by spending this down now? And so by giving you that purpose, that was one of the many things that helped us make that transition from saver to spender. Yeah. And that certainly makes sense. But Corey, I have to imagine, especially with all these spreadsheets and such, that going from a 60 plus percent savings rate for and change years prior to now, okay, not only are we not really saving anymore, but now we're spending down, even though, again, like Jess said, it's really important that everybody understands this.

37:06Spending usually implies expense and the money's gone. It's vanished, right? You're essentially reallocating your net worth from investments to a home and then you're lowering your monthly expenses. Like you said, in theory, like once, you know, work on the house and et cetera, et cetera, there is a light at the end of the tunnel in terms of, all right, theoretically our lives should cost less. So therefore we have to change the calculation for our fine number and our coast fight timeline. But nevertheless, Corey, 60 % savings rate to zero to, we just took half of our taxable accounts and put it into the walls of a house in New Hampshire.

37:42Like, I imagine there were some, some feels on this in terms of like, wow, how does, how do we do this? Yeah, I mean, the last two years, even the last year, when we moved to New Hampshire and spent the money on the house, but I would say even the last two years have been challenging. And I think that's what often doesn't get talked about is the money fears that come back and back over and over again. And they, they flare up, I would say, from time to time where that's maybe not necessarily a constant fear but there are these these flare-ups of like are we spending too much money am i gonna have to get another like real job real job in quotes right but like am i gonna have to get a traditional job to like help support the cash flow there have been several moments over the past couple of years where we've had to like sit down with the numbers, talk through it as a couple and say like, hey, are we fine?

38:38Like, are we okay with how much we're spending and the cash runway depleting? Are we going to generate enough income in the coming year to be able to sustain our lifestyle this way? So there have been a number of conversations that way. And I won't sugarcoat it. Like it's been really hard at moments, but there's also been so many more positives and moments that make it worth it. And it's, we often use the phrase that we choose our own heart. And so the heart of us four years ago was either being stuck in a job that we kind of enjoyed or like that we didn't really have a lot of freedom. And now our heart is like wrestling with these money fears from time to time and having to work through them.

39:23Yeah, there's something really poignant about that. The money fears come back and back again, as you said, and the flare ups. I can vividly picture that. And I know it's visceral for me too, because I think money fears plague a lot of us, right? No matter how long we've been in this five world. And I think it's important to say it's okay. That's very normal, especially when things are going crazy in the world and during certain times and that's okay. So just give yourself some grace. I think that's the important takeaway for everybody. And so just a quick question, Jess, and then I want to follow up with another one.

39:56So just doing the back of the envelope math, it sounds like maybe about five years ago when you made this decision, you're around 31. So, you know, you're somewhere in the 35 to 37 range now, plus or minus. What is your time to five? Like, what's your close five number at this point? Age? Yeah. So we actually it's interesting because we moved last year. And so we were also waiting to see, like, let's shake out, figure out what our expenses are going to be. And we did the calculations last fall because we finally felt ready to say, okay, here's what we think we're going to spend moving forward and all of that.

40:34And it's interesting because with everything that's happened in the stock market, we've made all of these changes in our lives. we've taken three multi-month like trips of a lifetime in the last two years and people constantly tell us like that's in a once in a lifetime opportunity every year until next year and at the same time in the background you know we had about 750k of investments and now we're at about 1.1 two years later because the stock market has gone gangbusters in the last couple of years. And so for us, then we looked at those numbers and we realized if we didn't invest a single dollar for the next two or three years, we'd reach FI, which is wild, right?

41:32Because that was not at all what we were expecting this five years ago, it was like, oh, we're coast five for the age of 60. And even when Corey quit his job, it was like, oh, well, we're coast five for the age of 50. And then with the combination of reducing our expenses, not having a mortgage, the stock market going big, gangbusters. And then one interesting thing was last fall, it's interesting, right? Because we're in this place, yet these scarcity mindset and financial fears flare up. And so last summer, we spent four months traveling around the Pacific Northwest, Montana, such an awesome place.

42:12And it was like a million degrees. And so we did no work for the whole summer because it was just so hot. And we were in a camper van. So what were we going to do? We're not going to sit in our camper van and work when it's like 90 degrees. We need to be like in water somewhere. And so when we got home, I was like, Oh my gosh, I have like only worked like five to 10 hours a week for the last three months. I really need to like get in gear so that because I need, you know, we need to like cover our expenses. And like, in my mind, I'm like, Oh, we have this goal of like, how much money do we need to generate?

42:47And like how much money we need to eventually generate. But then my mind tells me, well, you got to do that this year, you know right because there's this like scarcity mindset coming up and then i'm working a lot more than i want to be because i like stressed out about money for some reason and then we actually step back right zooming out on the finances is so incredibly important because then we actually put those numbers in the calculator which we hadn't done in a couple of years at this point and realized you know if we don't invest at all it's two years to five Or if we reduce our income, like if we reduced our income and only generated like 50 % of what we needed, we could still reach five in like five years, which was incredibly wild to me.

43:35And it was like, let's just remove all of that pressure that I'm putting on myself to say like, I need to generate all of this income when the reality is like, I don't need to have that pressure because compound interest is doing its thing in the background. And it's like not this all or nothing thing. Like I fall back into that. Like we're either, it's like we're fire. We're not fi sometimes. And realizing that I feel like many people listening to this podcast are in a much better position than even they think that they are to be able to make changes to improve their lives. Yeah, I totally agree.

44:15And I love that. So it's not even just we're FI or not FI. It can also be we're COSFI or not COSFI because as you just described in there, Jess, it's so important. I really want to slow down on this and have one or both of you talk about it. Okay. We've come up and you have popularized this concept of COSFI, but that presupposes, okay, we are earning enough to cover our expenses. So maybe some people think that is a prerequisite. But what you just said in there was, hey, what if we only earned enough to cover half of our expenses? Now that's an interesting wrinkle, right? Because some people may think, oh, does the math not work?

44:52Does this make it impossible? Am I going to run out of money? From the sound of it, and obviously you have to run your own numbers, but from the sound of it, your withdrawal rate under that scenario would be well low enough that your money is still compounding in the background, certainly, it just extends your time to that true coast phi slash phi number, right? The phi date. That's an interesting thing that I really, I want us to talk about. So whichever one of you wants to jump in on that, but I think it's, I think it's really important because again, it's not zero or one. I think that's maybe one of the big takeaways from this whole episode is none of this is just, I'm not, or I am.

45:30There are shades of gray on all of it. And that's the beautiful thing. Yeah, there is definitely a danger of just moving up that mile marker from like full financial independence to Coast Fi where you don't give yourself permission to make changes in your life until you reach that threshold. And so while I love the direction that the fire movement is going and that we have more people embracing a Coast Fi lifestyle, there is that risk of then moving up that milestone of either you're either coast-fi or you're not, right? It's similar to like you either fi or you're not, as you're saying. But it is helpful to think about financial freedom as a spectrum, I think.

46:10And it is gradual. And even when someone is debt-free, they can make decisions that improve their everyday life and get out of a toxic job or reduce their hours if they can afford to do so. I think it is, there's so many options. And sometimes when we talk about financial independence, it can be so linear. And it's really like the number of paths to FI are infinite. Totally agree. Yeah. So sometimes I like to think of it as like, if your Coast FI number and timeline coincide with the number of years it would take you to reach Coast FI, right? If that's the same as the date that you want to retire, that just means you're on track for a traditional retirement.

46:58And if you're on track for a traditional retirement, bravo, because not many people are, right? And if your timeline to reach Coast Fi is even like you're going to reach Coast Fi if you're 35 and you're going to reach it at 45, bravo. Like you at 45 then can totally reduce your income or you can do all of these things and have more freedom. or you can make changes right now that could extend your Coast Fi date a little bit. That could be worth the trade-offs for you, right? And so you could say, ah, I really, though, I want to save up this runway and I want to take this mini retirement for a year, you know, and that might push back my date to reach Coast Fi until like 47, 48.

47:46is that a trade-off that's worth it for you? And so I think it's helpful to look at the numbers to then be able to say, is this worth it to me? To be able to do this thing that I want in my life that even if it would push back your coast by timeline, that's okay. As long as you're enjoying your life and you're on track for a traditional retirement and you're not gonna live in poverty in your old age, live the life you want. Yeah, I think that is, it's so important. And it goes back to the experimentation, right? Like at the end of the day, that's what all of this is. There's nothing prescribed.

48:26There's nothing set in stone that to be a card carrying member of the five community, you have to do X, Y, and Z. That nonsense died a long time ago, right? That's like circa 2014. That's not today's five movement. And I think we all need to experiment in lots of ways in our lives. And just, we talked about this on an episode where we talked about the cure for the boring middle, right? And it's a, Hey, you need to figure out what do I want my life to look like? And you might have some ideas of things you like and whatnot. But again, without it truly experimenting, without going through that iterative process, you don't really know.

49:05And I think that's, what's fun to me about life is I get to experiment, right? If I'm really lucky, I get 80, 90 plus years on this planet and I don't want to be stagnant. I just want to constantly experiment. And like you said, and it's really important that people understand this is, hey, if I make a decision that might extend my five date or my coast five date, that's okay. That is really okay. But as long as you do it with eyes wide open, right? And you make that decision very intentionally. I think that is critically, critically important. So I definitely wanted to slow down on that. And yeah, you just figure it out.

49:43And I think that's, that's kind of fun. So I did want to kind of circle back to some of those money fears. So talk about flare ups. And I know that sometimes that can be a mutual thing. If there's some like outside exogenous thing happening in the world, like you both might be freaked out. There might be times that one or the other is having a flare up of some kind of stress or money fears. how did you two work through this together? Because clearly this has been an evolution over the last five or six years and it's a massive one at that. Talk me through because I think, I think a lot of couples are trying to figure out this five thing together.

50:22And sometimes one person is taking the lead and one person's along for the ride. Sometimes it's mutual. There's, there's just lots of different flavors. I'd love if you could give us some sense of how you've worked through maybe this entire process, frankly, together, but especially these money fears? So it's been really important for us to be open with each other when these money fears are coming up. And I think we've found that there are moments where one person is experiencing it and then the other person is able to help them see things in a more logical way or to be able to, you know, ask some compassionate questions and help problem solve and, you know, do all of that.

51:07and you know there have been moments where we've both been like you know at the same time and so you know we at those moments have sat down and looked at our numbers and talked through it when we've needed to there have been a few particular examples and I think it would be helpful to share a couple of those specifically and so Corey I think you have an example. Yeah, I was actually just thinking of, so the first year that we did an extended van trip, we did it without any bikes with us. So we traveled for three and a half months across like Southwest US. And we came back and one of those stops on that trip was the Grand Canyon, which I was like most anticipating on all probably of all the stops on our trip.

51:58and it ended up being the probably my least favorite stop which is ironic right like I was like the build maybe is because of the build-up I don't know but that's probably a conversation for another day but what saved that stop for me was renting e-bikes for the day and just riding along the rim and being able to experience it in a different way and that was like it salvaged that stop for me that we like got back from the three and a half month trip and we're like we need to get e-bikes and we need to bring it on our next trip. And so this was like the fall of 2023. And so we're like, okay, let's do all the research so that next time when we go out on our next trip, we'll have e-bikes and we'll be able to bring them with us.

52:41Ends up, e-bikes are very heavy. And so to get an e-bike that can fit on a bike rack that goes on a van, you have to spend a decent amount of money for an e-bike. And then the bike rack that carries the e-bikes is pretty expensive we ended up spending like eight thousand dollars for these e-bikes and the bike rec which like we had the money so it didn't like i didn't really think about it at the time but then we also like had a slow month in the business where we didn't generate as much income as i was anticipating and so the kind of the confluence of both of those events at the same time really like got to me and it was one of those unique flare-ups of like wow are we wasting away our money and like not thinking about like how long of a runway we have left and do I need to get this like I went through this cycle of like wow all these fears coming back to the surface and so it was really important to like sit down with Jess and be like okay like this is what I've been thinking like I know it's probably absurd but like let's talk through this let's look at how much we actually have in savings left now that we've spent this money and like how long will that last us and so really looking for that evidence or the facts and being able to work through those fears was tremendously helpful.

53:55And just like such a poignant example of like a flare up of money fears and how it can just come out of nowhere, then you may not be anticipating it. And I think together, we were able to look at the numbers and actually think about scenarios. And I feel like the most important thing I think is like thinking through what would actually happen in different situations. Because I think sometimes so much of our fear comes from, I don't know what I don't know, versus, you know, like, I'm scared of something I do know, which is often doesn't actually like, the fear isn't as much when that's the case.

54:35And so for us, we actually then we looked at the business. And we said, Okay, what's our realistic revenue target? What's our everything goes really well revenue target? And what's our like, things don't go very well. And like, what's the baseline revenue target? And like, are we going to be okay in each of these scenarios? And so it was helpful for us to look at, you know, that sort of lowest scenario and realize like, okay, this is probably like the lowest it could be. And like, we'll still be okay, if that happens, you know, so that's always really helpful for me is to look at like, what's the worst, likely worst case scenario.

55:19And one, do we need to adjust if that happens when, and I think at a certain point, there were times where we were saying, okay, well, we're in sort of wait and see mode. And we don't need to find work yet. Like there were moments where we said, neither of us needs to look for external work yet. And we feel like we're on a good path that we don't need to. But like, let's continue on the path we're on, but recheck back on this in May. Gotcha. And that makes sense. And so like, that was helpful to then to say, okay, we have this hypothesis of like, what we think is going to happen, right in this experiment, and we are going to trust ourselves and trust the process until that point.

56:04And then we'll assess it and see if we need to adjust versus, you know, constantly living in this state of stress. Yeah. And I think one of my reflections as I think about how we've worked through money fears is that I used to assume the presence of fears was an indicator that I was either doing something wrong or that I needed to change course. Like if I'm feeling afraid of X, Y, or Z, it means like either I don't have enough money saved or like I need to do something different. As I've worked through this and realized that money fears don't go away and that it's something we'll have to continue to revisit from time to time.

56:46It's kind of given us that permission to like kind of sit in this like hard, difficult moment and just acknowledge that like we're going to have to work through this. And it doesn't necessarily mean we have to abandon like our plans or like shift gears. And so I think that's really important to call out and normalize that we all have these fears and have to work through them. Corey, that was a beautiful way to end this because I think these money fears are really important. They're important for all of us. We have to understand that like, and again, give ourselves a little grace that this is part of life.

57:19They don't go away. I think for a lot of us who certainly deal with, I think most of us deal with money fears, but I know personally dealing with anxiety and recurring thoughts and things like it just, it happens sometimes and you have to give yourself some grace. And I think it doesn't mean you're doing it wrong with fi here or coast fi. It doesn't mean you're doing it wrong. Just means you're human and that's okay. We're all human. We have to, we have to understand that. And just because you're on the path to fi man, it sure makes life easier, but it doesn't take away all worries and all concerns and all stress.

57:51That's just not practical. It's just simply not. You two are living wonderful lives, but yet money fairs flare up. That's okay. So I think this was a beautiful masterclass on, uh, on coast by generally, and also just very specifically the amazing journey you guys have had over the last, certainly six years about this coast vibe. But even before that, it's, this is, this is a long five journey of savings and seeing it really come to fruition. I'm just, I'm really happy for you both. So yeah, this is, it's just really, really incredible. I just, just wanted to say a huge congrats. So, okay. Everyone knows you from thefioneers.com.

58:28And of course we'll have a link in the show notes, but where do you want to send people to these days? Is it just the homepage of Fioneers or talk me through that? So people can find us on our website. We also have a YouTube channel that people can find. So we've been doing that. Actually, that's been Corey's main focus with the Pioneers for the last two years. And so we're doing that together. But he puts a lot of work into that. And then people can find out more information about coaching courses, our retreats all on our website, and then find us on social media, on Instagram, and threads at the Pioneers.

59:04And we're also launching our next cohort of Coasts with Confidence, which is a four-week course that we ran the first beta group, if you would call it that, in November of last year. Had amazing results coming out of that that we decided that we're going to run it again. The exact timing isn't clear yet, but probably late April, early May for launching the cohort. So if anyone is interested in gaining more confidence in their numbers and working through those money fears to be able to make a lifestyle change, it may be something of interest. And we can also share the link to the waitlist page for people to learn more about that course.

59:43Great. We will definitely have that link in the show notes. And yeah, that's Coast with Confidence. So again, we'll have that link in the show notes. But right, this is going out mid-March. And you said that'll probably launch sometime in April or May. But I assume that waitlist will go to a real thing sometime before then. So definitely when you're listening to this, you can sign up for list, just click through that link. And like you said, you can find everything at thefineers.com. Jess and Corey, this was amazing. Thank you both for coming back. I really appreciate it. Thanks so much for having us.

1:00:15Yeah, this was really fun. Thanks so much. Thank you for listening to today's show and for being part of the Chooseify community. If you haven't already, the best ways to get involved are first subscribe to the podcast. So you're listening to this on a podcast player and just hit subscribe and then subscribe to my weekly newsletter. I actually sit down every Monday and write this by hand and I send it out Tuesday morning. So just head over to choosefi.com slash subscribe. And it's really, really easy to get on the newsletter list right there. And I would greatly appreciate it. It's the best way to get in touch with me.

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1:01:24Chooseify episode 100 is kind of our welcome to the FI community. and even though it's a couple years old at this point, it still stands up and it's a really great just starting point to get an understanding of what is financial independence? What are we doing here? Why are we looking to live a more intentional life where we save money and use it as a springboard to live a better life? And then Choose a Vi created a Financial Independence 101 course. That's entirely free. Just head to choosefi.com slash fi101. And again, thanks for listening. Thank you.