Today, in 10 minutes or less, you'll learn:

Subscribe | Advertise

FROM OUR PARTNERS

With Betterment's expert-built ETF portfolios, you’re automatically diversified across thousands of stocks and bonds at once. These expert-built portfolios are designed to help reduce risk, regardless of what’s happening in the market.

Learn more.

I have a confession to make.

FIRE is not for me.

While I’m a fan of some the ideas behind FIRE, I don’t love the obsessive pursuit of early retirement.

Part of me can’t help but feel it’s a bit like escaping one hamster wheel just to get stuck running on another wheel.

But what’s the alternative?

I went down the internet rabbit hole researching various answers to this question, and I’m excited to reveal the fruits of my labor. Don’t miss the surprise at the end.

In this newsletter, I will deep dive into what is FIRE, my apprehension with FIRE, 9 types of FIRE alternatives, and which alternatives I’m pursuing.

FIRE stands for Financial Independent Early Retirement.

It’s a movement that champions early retirement in your 30’s to 50’s and financial freedom instead of the traditional method of working until you’re over 65, then retiring.

FIRE seekers typically have a so-called a “FIRE Number,” which is measured by 25x your yearly expenses (4% safe withdrawal rate) and denotes when you’re ready to retire.

FIRE sounds good in theory. I love the ideas of financial independence and gaining more control over my time.

But here’s a few common traps I notice that FIRE seekers tend to fall into:

Yet, I believe Covid triggered a huge wave of shifting societal attitudes towards work and life that’s still being played out now.

Namely, people care about flexibility more than ever. They want to spend more time focusing on family, kids, health, etc. In December 2023, an all-time-high of 22 million Americans chose part-time work. While it’s partly due to market forces, I believe underlying this is as a society, our priorities have flipped.

So what exactly are the alternatives? Let’s jump into it.

Instead of the all-or-nothing approach of FIRE, what if you could earn steady income and build your career while gaining more flexibility?

Part-time or fractional roles from 10 to 30 hours per week are an excellent vehicle for flexibility. Let’s take the working parent’s paradox earlier. By negotiating with your employer to work for 20 hours per week instead of 40 hours per week, you’ll carve out an additional 20 hours to spend with your family and raising your kid.

At the same time, you’ll still be gaining skills, expanding your network, and furthering your career. Sounds like a great balance to me.

Plenty of successful examples out there like Sergio Pereira, Bradley Jacobs, Elena Verna, or Alissa Riter.

Similar to part-time work, but branching out as an independent consultant means you’re working with multiple clients. The upside is you get to set your own projects, rates, and hours. The downside is the stress that comes from not knowing where your next contract is going to come from and needing to generate your own leads.

Barista FIRE is a semi-retirement version of FIRE. Instead of quitting work 100% and living off your investments, you save until you reach a point where you only need to work part-time (or earn investment income).

It’s called Barista FIRE because this was popularized by people who chose to work part-time as a Starbucks barista to get health care benefits (one big gap with FIRE). Many Barista FIRE achievers end up choosing a less stressful job, hobby, or teaching that they wouldn’t have done if salary was a top concern. For example, after former Investment Banker Sam Dogen retired, at 39 he decided to become a high school tennis coach because it was something he enjoyed.

Flamingo FIRE is phased retirement strategy. There’s 3 phases:

Mini-retirements, retirement in installments, sabbatical, break from work, whatever you want to call it. These are all some flavors of the same concept, which was popularized by Tim Ferriss in the 4-Hour Work Week.

The idea is you switch off between periods of time where you work and go on mini-retirement. For example, Sam Bleckley is a software engineering consultant in Michigan who works full-time 6 months each year then spends 6 months drawing, painting, hiking, and reading.

Geoarbitrage is the practice of exploiting differences in price, cost of living, salary, taxes, and currency in different markets or locations to save or make money.

For example, by moving from US to Singapore, I took home net positive earnings from lower cost-of-living and taxes. The upside: aside from the savings is exposure to new surroundings and people. The downside: upending your whole life is overwhelming for most people.

There’s many success cases of digital nomads and expats who moved from a high-cost-of-living country to low-cost-of-living country. Amon and Christina Browning are an American expat couple who retired at 39 and 41 respectively and moved from the US to Portugal with their 2 kids to take advantage of lower cost-of-living.

House hacking is where you build a portfolio of rental properties that stream rental income for you that covers your lifestyle costs and grows your investments.

Personally, I’m not a huge fan of rental properties because of the return on sweat. But there’s no denying that during Covid, this alternative blew up in popularity, especially on social media.

For example, Sharon Tsueng and Sean Pan generated over $5,000/month of profits on their 3 Airbnbs while they travel the world for a year.

While running a business can be intense, this doesn’t have to be. If you don’t focus on growing the business as much as possible, then you can tailor the business to your lifestyle instead.

For example, Alaa El Ghatit worked in IT while building his side hustle, LifeOnRecord, to over $100,000 annual earnings. Then, he took it full-time as a business but still adapts it to lifestyle flexibility for family reasons. This journey took him over a decade, but he seems quite fulfilled with the path.

Finally, buying a business is an emerging alternative. This is particularly the case in the US where there’s a huge wave of retiring boomers, leading to more business ownership changing hands.

The idea here is you invest a certain amount of your money into purchasing a cash-flowing small business with long history of performance. The upside: you continue to grow your skills, network, and career while generating cash-flow. The downside: you’re probably not going to be as hands-off as you envisioned.

For example, Doug Johns, a former business executive, and his wife were looking for something new to keep them occupied after his kids left the house. And so they decided to buy a plumbing business that’s grown to $2m EBITDA.

I’m pursuing Coast FIRE that’s enabled by growing a portfolio of businesses, geoarbitrage.

Why? I enjoy working. I get deep satisfaction from impacting customers, learning new skills, and contributing to an industry.

In the meanwhile, I want to gain life experiences that I enjoy (like living internationally) and build a lifestyle amenable to starting a family eventually.

What FIRE alternative are you pursuing? Reply to this newsletter with your thoughts. I read every email.

🗾 Japan to Launch Angel Investor Visa, Ease Investment Requirement for Entrepreneur Stream (link)

🇸🇬 Passport-free travel in Singapore is here (link)

🇺🇸 Who Still Works From Home? (link)

💪 The Best Way to Get Things Done (link)

🏠 r/FluentInFinance: Is renting better than owning? (link)

That’s all for today!

Whenever you’re ready, here’s how I can help you:

For daily insights, follow me on Linkedin or X (@dexteryz).