What is Slow FI and is it Worth Pursuing?

Your friends just invited you on for dinner in a fancy restaurant downtown, but you have to refuse them because you are living a life of frugality. Working on saving up so that you can live a life of peace in your retirement. Well, good for you, but do you dislike missing out on the experiences and not being able to enjoy life now due to the prudent lifestyle? Well, then Slow Financial Independence might suit you more.

Slow FI (Financial Independence) is the weird brother in the FIRE family. He does fulfill the family’s legacy like the other siblings, but not fully.

Slow FI is a method in FIRE (Financial Independence Retire Early) that aims to relieve the stress of saving constantly and living a frugal life by allowing you to ease into retirement easily.

Through Slow FI, you would not have to live a life of constantly missing out on things, just so that you could retire early and gain financial independence as quickly as you can. This means that in this method, you would not have to save up and live a thrifty lifestyle as much as the other FIRE method.

The reason RE (Retire Early) is excluded from the term is that, even though Slow FI does focus on financial independence by saving slowly, it does not help retire earlier like the other methods.

Who is Slow FI For?

Slow FI might be a fit for you better than all the other Financial Independence methods if you think the following points match what you want:

Less Missing Out

Unlike traditional FIRE methods, Slow FI takes a longer way to achieve Financial Independence. The positive aspect of this is that you say yes to more experiences. As you would have less stress of saving as much as possible as early as possible, you would be able to join in new experiences and live life as much as you can without worrying about retirement later. Yay!

Less Thrifty

If you want to live a life where you don’t have to constantly live a thrifty life as hard as you can, this might be the way for you. As in this method, while you do have to save up for Financial Independence, you would not have to save up as much as other methods. In a short amount of time, you would miss out on tons of new journeys, which you could not follow due to your savings.

Living in the Present

Another great thing about this method is that you can focus more on the present than the other FIRE methods. If you use the other methods, chances are you will just be waiting for your early retirement, only after which you can live life to the fullest. However, you could be missing out on a lot during that period, and this method counters that to a certain limit.

How Can You Attain Slow FI?

After you have decided that Slow FI might be the best for you, you need to know how to begin your journey to Financial Independence.

Generally, to reach financial independence, you multiply your annual expenses by 25 times and that is the figure you would use to know how much funds you would need for your retirement.

You can also use the 4% Rule, which states that in the first year of your withdrawal, you can withdraw 4% of your retirement portfolio. In the following year, you adjust the amount by the rate of inflation.

Which means if you were withdrawing $50,000 in the first year. Next year, the rate of inflation is 3%. You would multiply it as follows $50,000×1.03=$51,500. And so on in the following subsequent years.

After you have decided how much you want to save up, you can then start your journey of financial independence by starting to save up. You need to first decide at what age you want to retire and save according to that.

For example: If you are the age of 25 and your annual income is $80,000. You have set a goal of retirement of 1 Million USD. You would be able to retire at the age of 42 years with a saving rate of 30%. The earlier you want to retire, the more you will have to save up.

After deciding how much you are going to be saving up, begin the real journey of Slow FI. You would need to then start saving up by different means such as cutting down expenses, making a budget to know what you can and cannot spend, and so on.

My Take on Slow FI

Slow FI is one of the best ways to reach Financial Independence for your retirement. It allows a person to not compromise on their wishes as much as other FIRE methods. While this method will also sometimes limit you to some experiences, you would not be living as much of a frugal life as in other methods.

This method allows a balance between caring about your future and living in your present. While it might not be for people, who would want to retire as early as possible, it is especially suitable for people who like their jobs. People who like their jobs would not have problems wanting to work some extra few years as they enjoy their jobs and can also build towards their retirement due to it.

To sum it up, Slow FI is a unique take on the FIRE movement. Unlike other traditional methods, Slow FI does not focus on saving up as much as possible in the early years of your life so that you can easily live a life of retirement. It proposes a balance between both and allows a person to enjoy life as it is currently without as much compromise in their earlier lives.

Be sure to research more about other FIRE methods, before deciding which one is for you. Checking all the methods will help you locate the one that fits your needs, and remember none of these are supposed to work for everyone. Customize the models however you would like according to your needs. Take it slow. Peace.