Episode Summary:
In this episode of ChooseFI, Brad, Jess, and Corey dive into the transformative concept of CoastFI—where saving for retirement becomes optional. Jess and Corey, popularizers of the term, share their unique journey transitioning from high savings rates to a fulfilling CoastFI lifestyle. They explore vital themes like financial flexibility, the psychological aspects of money fears, and how experimentation in spending can lead to empowered financial outcomes.

Key Topics Discussed

00:00:00 Podcast Intro
Introduction to the episode and the special guests, Jess and Corey from the Fioneers.

00:02:28 Defining CoastFI

• CoastFI is described as a financial milestone where saving and investing for retirement becomes optional.
• Discussion of how this concept allows individuals more flexibility in their financial journey.

00:07:11 The Realization of CoastFI

• Jess and Corey share their personal journey to reaching CoastFI at the age of 31, needing around $245,000 to retire by 62.
• The importance of time horizon in achieving financial goals through compounding.

00:21:38 Transitioning to a CoastFI Lifestyle

• Exploration of how their focus shifted from aggressive saving to experimenting with spending for meaningful experiences.

00:23:47 Experiments with Spending & Money Management

• Jess emphasizes the value of testing different spending patterns, such as renting before big purchases and embracing travel rewards instead of convenience spending.

00:48:09 Overcoming Money Fears Together

• Jess and Corey discuss how money fears can resurface, how they navigate these fears together, and the importance of open dialogue and regular financial check-ins.

00:57:31 Conclusion

• Reflection on their journey and the broader implications of personal finance choices in achieving a fulfilling life experience.

Timestamps and Key Insights

• 00:02:33 Quote: "Achieve freedom with CoastFI - where saving becomes optional!" – Jess

• 00:04:13 Actionable Takeaway: Calculate your CoastFI number using a CoastFI calculator.

• 00:07:11 Quote: "Longer timeframes mean less upfront investment to achieve CoastFI." – Corey

• 00:10:00 Related Resource: Work Optional by Tanya Hester.

• [23:47] Jess emphasizes purposeful spending experiments, leading to a reduced savings rate while enriching their lives.

• [48:09] Discussion on dealing with money fears, showcasing the couple's process as compassionate and collaborative for emotional support.

• [53:10] Quote: "Combat fear by knowing your unknowns!" – Corey

• [57:31] Highlights the journey through money fears as a natural part of the financial independence path.

Actionable Takeaways

• Experiment with Spending: Allow yourself to explore different financial habits and adjust your spending as needed to enrich your life experiences.

• Use Financial Tools: Leverage tools like the CoastFI calculator to identify your financial milestones and create a roadmap tailored to your lifestyle.

• Open Communication: Regularly check in with your partner on financial matters to address any fears and reaffirm your plan together.

Episode Mentions

• Previous episode 229: "Managing Stress by Leveraging FI."
• Book recommendation: "Work Optional" by Tanya Hester.
• Upcoming course: Coasts with Confidence.

What is CoastFI?

CoastFI refers to a financial milestone achieved when you have sufficient investments that can compound over time to reach your financial independence (FI) goals, without needing to contribute more capital. It represents a state of flexibility and optionality in your financial life. When you reach CoastFI, your required savings rate can decrease significantly, creating space for a more enjoyable lifestyle while still being on track for retirement.

Calculate Your CoastFI Number

To determine your CoastFI number, utilize a CoastFI calculator. Input your desired retirement age and the expected growth rate of your investments to see how much you need saved today. Understanding this number empowers you to make informed financial decisions and adjust your savings strategy accordingly.

The Psychology of Money Fears

Venturing toward CoastFI often uncovers underlying money fears. These fears can arise from not knowing what lies ahead or whether you will have enough to sustain your desired lifestyle. It's crucial to develop a healthy money mindset that includes recognizing these fears and confronting them through informed decision-making.

Combat Fear by Knowing Your Unknowns

Many fears stem from the unknowns in our financial journeys. To combat this, engage in open discussions with trusted partners or friends about your financial aspirations and the fears surrounding them. Together, you can evaluate your financial situation, explore your options, and gain clarity, which is vital for a confident CoastFI pathway.

Transitioning to a CoastFI Lifestyle

Embracing a CoastFI lifestyle requires intentional decisions. Consider shifting your focus from aggressive saving to spending on meaningful life experiences. This shift may feel uncomfortable at first, particularly if you're used to a high savings rate. However, spending more on what brings you joy—like travel or personal growth—can enhance your overall happiness while maintaining your financial trajectory.

Experiment with Spending

Adopting a mindset of experimentation allows you to test different ways of spending and saving. For instance, consider renting a camper van before making the substantial financial commitment of buying one. By conducting these low-stakes experiments, you’ll gain valuable insights into what truly enhances your lifestyle without detrimental financial risks.

The Role of Flexibility and Lifestyle Design

Flexibility is a crucial principle in the CoastFI framework. As you make financial decisions, ensure they align with your values and desired lifestyle. You have the power to craft your journey—whether that means working part-time, pursuing entrepreneurial ventures, or exploring new areas of interest like van life or travel rewards.

Embrace Lifestyle Changes

When designing your lifestyle, don't shy away from spending on experiences that enrich your life. Whether that includes adventurous travel or investing in hobbies, pursuing what inspires you is essential. Create a budget that accommodates these expenses while assessing how they impact your CoastFI timeline and overall financial stability.

Navigating Money Fears Together

For couples navigating financial independence, open communication is key to dealing with money fears. Regularly discussing your financial goals and experiences, whether positive or negative, provides a supportive framework for growth and reassurance.

Build a Support System

Establishing a community, whether through friends, family, or online groups, can provide support as you navigate your financial journey. Sharing fears and victories can help normalize the challenges of transitioning to a CoastFI mindset, reinforcing that you are not alone in this pursuit.

Achieving CoastFI is not merely about reaching a numerical target but embracing a lifestyle that prioritizes freedom and choice. By understanding the nuances of this financial milestone, calculating your CoastFI number, and engaging in open discussions about money fears, you can carve out a path that aligns with your life goals.