How to reach FI even faster.

[Big_Paul]

So you've discovered MMM. You've face punched yourself for being such a consumer drone for so many years. You've unplugged from the matrix. You've drastically cut spending. You've moved closer to work. You're shopping at Aldi. The Vanguards filling up nicely and then you do the math. 10+ years of hard work until you reach FI.

Ugh! Not near soon enough. If like me that's too long it requires a different approach. Maybe think about doing things differently?

Here's my suggestion for turning things around a lot quicker. 1) FIGURE OUT NEEDS vs WANTS. Then 2) PART TIME WORK.

4% withdrawal for 40k a year income requires 1 mil in assets. Not a small amount.

So instead of getting disheartened I figured what I really wanted was to own the roof over my head. To live rent/mortgage free. I would happily still work for my wants part time and even food and utilities as these expenses are far less than rent/mortgage. So having 1 mil in assets now becomes 250k. Could be even less if you're willing to move. Now I can get 250k together far quicker than 1 mil. I've figured out my NEEDS vs WANTS. I can aim for this in 4/5 years instead of 10+.

Then once I have my home owned outright or have the rent paid for by income from index funds I now only need to find income for food, utilities and anything else. I can happily do this using the power of working PART TIME.

5 days a week 9 to 5 is a soul sapping grind. 4 days a week is a huge improvement. 3 days a week is practically retirement, more a hobby.

I know that if I was completely FI and had too much time on my hands I would probably drink too much and watch too much TV. I'm being honest with myself. Part time work offers me an income. Something to do 3 days a week and gives me 4 days off to do as I please.

So there you have it. My faster path to freedom. Get the roof over your head sorted. Then go part time.

[arebelspy]

Lots of different paths to where you want to go.

A semi-ER, like you've outlined, sounds appealing to a lot of people.

I personally want complete freedom, not to have to go work three days a week.  I want to travel full time for a long time, for example.

But if you love your job, just want some more free time to explore hobbies or whatever, cutting down to 3-4 days a week is a great idea.   You aren't FI, but semi-ER is enough plenty for some.  :)

[Emilyngh]

Lots of different paths to where you want to go.

A semi-ER, like you've outlined, sounds appealing to a lot of people.

I personally want complete freedom, not to have to go work three days a week.  I want to travel full time for a long time, for example.

But if you love your job, just want some more free time to explore hobbies or whatever, cutting down to 3-4 days a week is a great idea.   You aren't FI, but semi-ER is enough plenty for some.  :)

ITA.   I am semi-retired right now (work about 1/2 the year, have extreme flexibility and autonomy, really never have to get up early, etc).   And while it's better than the FT grind, I still am looking forward to complete FI.   Eg., I only have to go in to work for about 3 hours this week.   And yet, planning around working those hours, checking email, having work things in the back of my mind, etc, still are more mentally draining than one might think. 

[arebelspy]

That's an interesting and optimistic take on the journey.  I have to remind myself that the journey (grind?) to FI - the life hours I spend getting there - count for something, too.  That life does not begin when I reach FI. 

I like your perspective, but it allows you to enjoy the journey to FI, not just tolerate it.

Good point.

I've seen plans that essentially get enough money to where if they leave it untouched for a decade, it'll grow to enough.  So then they quit and work just enough to cover expenses for the next decade while the stache builds on its own.  Semi-ER with full FI coming just through waiting.

Of course, by the time you're at that point, you're probably only a year or two of full time work from full FI, but if you really hate your job, it's a way to pull the plug on full time work earlier.

[Eric]

I have a similar, though slower idea in mind.  I'm planning on accumulating enough to cover all of my basic living expenses.  That way, I never have to work again.  But, I also like to travel, so I plan on working some periodically in order to afford month(s) long trips to Europe or whatever.  This way, I never have to work, but if/when I get the travel bug, I can pay for it without dipping into my normal living expenses.  Same with any other luxuries I decide I'd like to work for.

[Cassie]

I think part of the decision that comes into play is do you really not want to work at all or would you still enjoy working some? For instance I thought I would love not working but within 6 months was bored (so was my hubby) and we both started our own p.t. consulting businesses which we love and we are not young (53 & 59).   Now the work we do is pure joy and fulfilling.  My FIL was very frugal all his life and retired at 62 from a job he hated. After a few years he was offered a p.t. job that he loved & he always said it did not feel like work at all.  He did it until at 78 he no longer wanted to work.  I think each person should examine what they really want out of life and what the path is to get there.  You may find out that what you thought you wanted is not what you really want & if so just make adjustments.  There is always room for error/adjustment unless you are dead. 

[quilter]

You don't have to decide today. Work towards paying off the house. On that date reassess. You may decide to stick it out, or may decide you have had it.

Everyone has their own level of comfort, but the good thing is you are making a plan and looking at all the possibilities.

Also, you have time to think about what you would do with your free time. I went out at age 52 and don't know how I ever had time to work.   But we both have lots of hobbies, get lots of exercise, love to read and have nice friends who are also retired.

[Ian]

I'm taking a similar path. My current job is very low stress and I don't work very many hours total. It doesn't bring in a huge amount of money, but I'm much closer to my ideal state post-FI. If we hypothesize units of happiness, I think I'm getting more by spending a longer period of time mostly happy rather than a short period unhappy in order to reach peak happiness sooner.

[DollarBill]

I'm sure a lot of people would disagree with paying down the house vs stock market but I like to choose paying off the house. I don't want to gamble unless I'm debt free. Plus it will be a shorter goal and will charge you up when you pay off the loan. I sleep well at night knowing that even in everything goes in the crapper I can survive off a minimum wage job, hell I could probably get by with cutting a few neighbors yards. It's a good feeling.

I will say if I chose to stay in the stock market I'd be about $50K closer but I still feel good about my choice.

[ChrisLansing]

Well, I like the idea of paying off the house.    We paid ours off last year (but we are "old") and it's a great relief and makes life easier.   

If I were young and highly paid (as you apparently are) then I think I'd work for 10 years and be truly FI.   Just my preference.  Your plan is very interesting and frees up a lot of time to enjoy while you are young.   

[milla]

This is the path we've taken, and it will take longer. But we have kids and we likely would work full time if we didn't have them. I honestly love that we're able to do it this way. No, we can't save nearly as much as we would with two full times jobs. But it's totally worth it.

[kpd905]

I've thought of this strategy and I'm not sure what I would do when I get to that point.  Would you rather work part time for 5 more years or full time for 2?  Or in this case, work part time forever, or just work full time for a certain number of years and be done?

[aclarridge]

I'm thinking that extra chunk of money would last for a good, long time and pay for much travel.

"much travel" got me.

[bobmarley9993]

It depends on whether you can get your same wage working pt.  Also things like training need to be considered.  I think its good to keep this as a motivator but personally i would wait for full fi.

[Big_Paul]

The point I think I'm making with this post is once you've face punched yourself and got your finances in order after a while, in my case a year, you start to think more deeply about your options. What is it I want? How quick can I get there? Do I still want to work? Will I travel? Where do I want to be in 5,10 years? Will I live overseas? Those kinds of things. How can I cut the unnecessary from my life and claim my time back? I hope it's got you thinking about the many different options you can have before you even reach FI?

[arebelspy]

The point I think I'm making with this post is once you've face punched yourself and got your finances in order after a while, in my case a year, you start to think more deeply about your options. What is it I want? How quick can I get there? Do I still want to work? Will I travel? Where do I want to be in 5,10 years? Will I live overseas? Those kinds of things. How can I cut the unnecessary from my life and claim my time back? I hope it's got you thinking about the many different options you can have before you even reach FI?

Absolutely.  It was a very good point, and something people should think about, IMO.

The biggest quibble I have is the title - it's not how to reach FI faster.  It actually delays FI.

So it maybe should have been called something to do with "Semi-ER", or "Why you might want to delay FI" or whatever.  No big deal, I just get tricked every time I click the thread, thinking it's about a trick to become FI faster, when it's the opposite.  :)

[bobmarley9993]

I agree big_paul.   That is the great thing about even the path to FI.  You have options along the way.   I already have used the financial security of living frugal/saving to do things which just wouldn't have been possible if I was living pay-check to pay-check.  The one thing I have thought about recently is starting my own company before I reach FI.   Since we are frugal and don't actually really need to save that much anymore it wouldn't be too radical of an idea if the business only generated 1/3 of my current income for the first few years.   If it is doing something I love, then why not?

[Jon_Snow]

Agree with ARS - thread title doesn't quite fit with the concept of the thread.

I do like the OP's thinking. For those (let's face it, the majority) for whom TRUE FI/ER isn't immediately feasible or possible, set your sights on other things that will still improve your life greatly.

I have sacrificed some quality of life for the past 5 years because I'm going "all in" - when I quit work I want the option of never having to work again. Semi-ER/part time work holds very little allure for me.

[rusty]

This is very similar to my route to FI.  I have no debt other than mortgage and a couple of rentals.  I enjoy what I do and will likely continue doing this.  My work tends to be seasonal, so I get the taste of FI each year.  Owning my own business helps.  My plan is to either finish off the mortgage in a year or so, or buy two more rentals.  Even though I like what I do, I still want to plan to FI asap.  It will give me more flexibility.
R

[slothman]

I'm considering a similar route as OP, by going 4 days a week in exchange for a 20% cut in salary. I think I would enjoy work alot more under this arrangement. I don't actually mind the work that I do, but I do find weekends to be a little too short :)

[CarDude]

Well, I like the idea of paying off the house.    We paid ours off last year (but we are "old") and it's a great relief and makes life easier.   

If I were young and highly paid (as you apparently are) then I think I'd work for 10 years and be truly FI.   Just my preference.  Your plan is very interesting and frees up a lot of time to enjoy while you are young.

Yup, we were in the pay off early camp, and have never regretted it.

[Daisy]

I like your idea. We all have different buckets of expenses (basic vs. enhanced/frills) and life may throw some curveballs at you when you least expect it. If you have the basics covered in your FI plan, then you can rest a little easier each night and just enjoy the ride.

I have reached FI for my basic expenses (and a little extra), but not enough for my travel budget. This is a great feeling to have. I am in my mid-40s and have casually mentioned to some co-workers that I plan to do something different at 50. Realistically, I could hit my real FI number in a year or two, but I don't let them know that. They are astounded with the 50 number a bit too much as it is, and I don't want to "show all of my cards" just yet so that I can still get to work on cool stuff.

It looks like some layoffs are soon approaching. It doesn't sound like they are asking for volunteers (which in the past has meant double the severance package) - this I would most likely take. I am of mixed emotions of both trepidation and exhilaration on whether I want to be on the list or not. I just got put on a cool project so I am thinking it is not my time yet.

I'll be able to cover the FI basics with what I've currently got, so I will be fine with either outcome. Part of me wants that extra year of work to beef up the funds and truly be FI, and the other part secretly wishes for the layoff so that I can start my ER life. If the layoff happens, I can pick up some part-time work to cover the travel budget each year.

[Big_Paul]

A great point Daisy is the fact you point out about layoffs and curveballs. The cold reality is we're only ever one accident or reshuffle or cost cutting exercise or divorce or whatever away from financial disaster. We really must prioritize getting our needs covered and protected ASAP. Then life can go a bit more on cruise control.

[quilter]

A great point Daisy is the fact you point out about layoffs and curveballs. The cold reality is we're only ever one accident or reshuffle or cost cutting exercise or divorce or whatever away from financial disaster. We really must prioritize getting our needs covered and protected ASAP. Then life can go a bit more on cruise control.

Exactly. Why it is so important to get your act together

[NeverWasACornflakeGirl]

This is the path we've taken, and it will take longer. But we have kids and we likely would work full time if we didn't have them. I honestly love that we're able to do it this way. No, we can't save nearly as much as we would with two full times jobs. But it's totally worth it.

I agree that the equation is different when you have children.  My daughter is nine years old and I've always worked full time, but now I'm happily cutting back to 10 hours a week, working from home as a consultant.  I really wouldn't need to work at all, but the extra income will be nice to pay for her private school as well as paying for the little things like vacations.  It's also nice to keep my technical skills up.  And, sometimes you just can't stand to put in that "one more year"....

[Zelda01]

Here's my suggestion for turning things around a lot quicker. 1) FIGURE OUT NEEDS vs WANTS. Then 2) PART TIME WORK.

Big_Paul - I really like your idea.  Prior to reading this, I was struggling with trying to reach a certain number at a certain age.  But I am similar to your responders with children, except that instead of a child I have a health issue that I must "nurture." 

Going full speed working does not work for me, it takes a toll on my health.  So instead, I took the happy medium of part-time consulting, which still brings enough extra income to save.  But it does not enable me to save the 50% that some people save, where I can save up a lot of money, then be done with work.

On the other hand, being self-employed makes it easier for me to get to a semi-FI state like you describe, then just ramp down a little to cover basic expenses (all with a fairly high hourly rate).

Your topic makes me feel better.  I do very poorly with an all-or-none mentality.  I am better off thinking about different middle-of-the-road options.

Also in response to bobmarley9993 - Yes, consider self-employment for yourself.

Note: I read the forums a lot, and rarely am I inspired to actually sign in and post ;) 

[Grande]

Paul

I can relate to the idea of part time work. A gradual tapering. I also worry about myself having too much time on my hands. I have a young child and and the reality is I cannot escape to Bali, just yet. I have to raise her.  I work 40hrs/week now but I would really like 3 days, 24hrs/week. I like my career. Its rewarding. But  40hrs plus commute is a bit much.. I'm thinking the same thing you are.

[SunshineGirl]

I also think it would be really fun to reach FI and then keep working for awhile but spend that percent we now save. i.e. Not dip into the savings, but also not need to save anymore. Not the most frugal thing, but in our situation, it might be how it plays out.

[mikefixac]

I like your ideas OP.

It'd be fun to crowdsource ideas to speedy FIRE.

I used to live in Bethesda, MD in an upscale neighborhood. The owner rented out each room. I lived in a cubby hole for 10 hours work/mo instead of money.

How about buying a mansion in Detroit for $1K, rent out rooms, grow your own food, and if  you have a job that you can charge $200/hour, work 1-2 hours/week.

This is not hard and fast, but along the lines of what you're talking about. I think if people were really smart/inventive, one could practically retire today.

[Hugh H]

To live in Detroit in a 1k mansion you would need bodyguards, tae-kwon do lessons, and a few firearms with you at all times. That increases the cost a bit.

[soccerluvof4]

 Big-Paul i think your Spot on. As with any goals I find revisiting them often is needed to keep them in check. Life will throw you curve balls and its important as you said to try to protect yourself as much as you can but also be prepared to change your plans as needed. Nothing wrong with having a black and white end game plan I.E. retired at 40 but getting there and what your priorities might be could change and or there is so many what ifs with Govt.. etc.. that can change a person plans its good to be prepared to be flexible imho.