This Simple Money Formula Helped Me Escape My 9-5 and Find Financial Freedom My life changed in 2020 when I discovered the concept of financial independence and early retirement — here's what you need to know.
By Anita Kinoshita Edited by Mark Klekas
Opinions expressed by BIZ Experiences contributors are their own.
Editor's Note: Anita Kinoshita, AKA The Retired Millennial, only recently learned about the FIRE movement, but within a couple of years, she had already achieved a level of financial independence. Anita writes exclusively for BIZ Experiences+; join today to access her content.
BIZ Experiencess are hard to govern. Look closely and you'll notice they don't fit neatly into an industrial schedule. Asking an BIZ Experiences to work 9 to 5 on a predefined project is like asking them to put a plastic bag over their head — they can only hold their breath for so long. Even if it's ten times harder to do it their way, at least they can breathe.
Like every BIZ Experiences, I am wired this way.
- I didn't want to go to college when the return on investment was unclear.
- I didn't want to climb the corporate ladder.
- I didn't want a desk job.
- I didn't want to retire in my 60s.
It wasn't until I graduated summa cum laude with an in-demand degree, got a lucrative software engineering opportunity, secured a corner office with two windows in a coastal town and was on track to retire beyond my 60s that I confirmed what my bones already knew: I didn't want this version of life. Luckily for me and my BIZ Experiencesial DNA, I unintentionally found a path to BIZ Experiencesial freedom without burnout when I reached Coast Financial Freedom (Coast FI). If you are looking to break the 9 to 5 life and retire early, here is the blueprint I used so you can do the same.
What is FIRE?
In 2020, I discovered the concept of financial independence and early retirement (FIRE) by accident. I thought I was the first millennial to come across the idea of retiring before 65 by investing aggressively, but little did I know there was a community around this philosophy and level of investing called the FIRE movement.
FIRE is a financial goal where someone's passive income could cover all of their life expenses. It's not much different than how retirement works. When someone retires, they expect their nest egg (retirement savings) to cover all their expenses. Similarly, when someone hits their FIRE number, their nest egg covers all of their expenses. The difference is that FIRE happens before age 65.
It's a philosophical rejection of the notion that one has to work until 65 before they can control their time.
Everyone pursuing FIRE has a FIRE number, which is roughly calculated by multiplying your annual retirement expenses by 25. For example, if your life will cost you $40,000 a year, then your FIRE number would be $1,000,000. Once you reach that FIRE number, you can withdraw 4% from your portfolio annually.
I quickly latched onto this idea when I realized that the more I invested, the earlier I could retire. This was partly because I was uninspired, unchallenged and unaligned as a federal contractor for the U.S. Department of Defense. In retrospect, I was living against my DNA. I felt like a circle being forced into a square; the only way I could fit was by making myself smaller.
There had to be a different way, and FIRE sounded liberating. I wanted freedom of creative expression and control, freedom from red tape and bureaucracy, freedom to work from wherever and freedom to work with people I respect.
How I reached Coast FI
After learning about FIRE in 2020, my goal was to reach full financial independence as soon as possible. What I didn't realize was that I could unlock a level of freedom earlier at a milestone called Coast FI. This was the point where my nest egg was large enough that even if I didn't invest another penny, I'd be able to retire at the traditional retirement age.
This milestone was a by-product of investing 50-60% of my income into low-cost, broad-based index funds, mindfully decreasing my top three expenses and starting side hustles to make that possible. While I had the opportunity to, I never earned a six-figure salary, but I still managed to hit this goal without feeling like I was sacrificing elements that made my life enjoyable.
Reaching Coast FI was liberating because it meant I could take some responsible risks without jeopardizing my nest egg. The risk I was interested in taking was on myself, on a life I didn't want to unsubscribe from, a life that involved work without the confines of traditional careers.
I took this opportunity to bet on my online brand and experiment with BIZ Experiencesship by downshifting to part-time work. A few months after I quit my full-time software engineering job, my following grew from 20,000 followers to 200,000 followers — almost as if it were a cosmic gift for listening to my internal programming.
Related: 5 Ways To Cut Your Company's 2024 Tax Bill
Don't quit your job right away
BIZ Experiencesship is hard. Right out of undergrad, I worked as an BIZ Experiencesial Lead for an AgTech startup through the NSF ICrop program, where I pitched to the co-founder of the ICorp program for an investment at the end of the intensive 6-week program. During this experience, I was responsible for customer discovery, but I also witnessed the heavy lift the CEO was carrying: payroll, the ramifications of a heightened passion that couldn't see past an invalidated value proposition, taxes, marketing, etc.
Building a software company is a heavy lift. Building any company is a heavy lift.
90% of startups fail, and what's worse is that 65% of failures are due to people problems. It's not enough to have a validated idea and customers ready to give you money, you also need the right people on the team.
Pursuing BIZ Experiencesship part-time is one way to mitigate risk. You don't need to quit your job and go all in to find out if your idea is profitable or if you enjoy the level of responsibility. When you reach Coast FI, downshifting your career to a part-time role can help you validate your product and find the right partners.
