Flamingo FIRE vs Coast FIRE: Charting Your Course to Financial Independence

“Finally, I have decided to take up my FIRE journey. Now all I need to do is get started on researching the right FIRE model for myself.” Have you said this to yourself and been stuck on understanding the right FIRE model for you, for the past 2 weeks? While your children are disappointed in you due to you not leaving your room, and your partner is sick of handling all the house chores themselves? Well, do not worry, as today we will be guiding you through two of the most well-known FIRE models and helping you choose the right one for you.

While beginning your FIRE (Financial Independence, Retire Early) journey, you might arrive at various models that you can use to achieve financial independence. However, not everything can be as clear as the sky on a good day. This is why we are going to help you differentiate between two different types of FIRE methods, which are Coast FIRE and Flamingo FIRE.

Understanding the Basics

Before diving into the specifics, let’s establish a common ground. Both Coast FIRE and Flamingo FIRE share the core principle of achieving financial independence, allowing you to retire early and live comfortably without relying on a traditional paycheck. However, they differ in their approach and timeline to reach this goal.

They also have the same factor of growing your nest egg enough to gain financial independence. Usually, this growth in your nest egg is suggested by increasing investments and earning through interest. The time when a person should stop investing is different for the models.

Coast FIRE: Setting Sail on Autopilot

Imagine reaching a point where your investments passively generate enough income to cover your basic living expenses. This is the essence of Coast FIRE. By diligently saving and investing early in your career, you aim to accumulate a nest egg that, when combined with projected growth, reaches a critical mass. At this point, you can “coast” towards full financial independence, potentially allowing you to:

• Reduce your work hours or transition to a less demanding job.
• Pursue passions and hobbies you might have sidelined due to work commitments.
• Spend more time with family and loved ones.

Key Considerations for Coast FIRE

• Savings Rate: Achieving Coast FIRE typically requires a higher savings rate compared to traditional retirement planning. This ensures your investments have sufficient time to grow and generate the desired passive income.
• Investment Strategy: Choosing the right investment portfolio is crucial. A balanced mix of assets with appropriate risk tolerance helps achieve steady growth while mitigating potential losses.
• Lifestyle Adjustments: Coast FIRE often involves downsizing expenses and adopting a minimalist lifestyle to ensure your passive income covers your essential needs.

Flamingo FIRE: A Strategic Blend

Flamingo FIRE, often described as a hybrid of Coast FIRE and Traditional FIRE, offers a unique approach. It aims to achieve financial independence sooner than Coast FIRE while allowing for a more comfortable lifestyle post-retirement. Here’s how it works:

• You save and invest aggressively, aiming to reach a higher nest egg compared to Coast FIRE.
• However, this nest egg needs to be enough to cover not just basic needs, but also some discretionary spending.
• Once achieved, you can semi-retire earlier, working part-time or pursuing flexible income opportunities to supplement your passive income and support your desired lifestyle.

Key Considerations for Flamingo FIRE

• Increased Savings Effort: Compared to Coast FIRE, Flamingo FIRE necessitates a higher initial savings rate and potentially longer investment horizon.
• Balancing Lifestyle and Savings: Striking a balance between saving aggressively and enjoying a somewhat comfortable present lifestyle is crucial.
• Flexibility and Adaptability: Being open to adjusting your work schedule or income streams as required might be necessary to maintain your desired lifestyle.

Differences to Consider

Choosing between Coast FIRE and Flamingo FIRE can be difficult as there are many similarities yet, a lot of differences between the two methods. The choice between these two hinges on several crucial factors that influence your financial journey:

Income Level

• Coast FIRE: This strategy is generally more accessible for individuals with moderate or lower incomes. The lower savings requirement allows for earlier investment and potentially faster growth of the nest egg.
• Flamingo FIRE: While still achievable with moderate incomes, this approach might be more suitable for individuals with higher earning potential. The larger savings buffer allows for faster accumulation of the targeted retirement corpus, potentially leading to an earlier departure from the workforce.

Risk Tolerance

• Coast FIRE: This strategy adopts a conservative approach, relying primarily on passive investment growth over time. This minimizes the risk associated with market fluctuations.
• Flamingo FIRE: This approach requires a slightly higher risk tolerance compared to Coast FIRE. While still focusing on long-term investment growth, it might involve incorporating a mix of asset classes to achieve the desired savings target faster.

Desired Lifestyle

• Coast FIRE: This strategy prioritizes financial security over early retirement. While you gain freedom from relying solely on a traditional job, your lifestyle choices might be more constrained due to the dependence on investment returns to cover basic expenses.
• Flamingo FIRE: This approach balances early retirement and financial security. By accumulating a larger nest egg, you gain more flexibility to pursue your desired lifestyle choices in retirement, potentially including travel, hobbies, or pursuing entrepreneurial ventures.

Utilizing FIRE Calculators

Online tools like Coast FIRE calculator, Flamingo FIRE calculator, and other FIRE calculators, can help make your journey easier and can help you set a potential goal. They can be a valuable resource to estimate the savings required and potential timeline for achieving your desired FIRE goals based on your specific financial situation.

Beyond the Basics: Exploring Additional Resources

Before choosing and finalizing your choice of method, remember that these FIRE models are not set in stone. You can change these according to your needs and wants. However, before fully deciding on your method, be sure to check more about these models in depth.

Remember, the journey towards financial independence is a marathon, not a sprint. Decide the path that aligns with your values, prioritize consistent effort, and enjoy the process of building a secure and fulfilling future!