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Today, in 10 minutes or less, youâll learn:
đš Why the financial independence game is changing in the 2020âs
đş My journey to semi-retirement, what is semi-retirement, who is a good fit for semi-retirement, and why consider it
đ˘ How to calculate your semi-retirement number, plus the downsides
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đ Ultimate Guide to Semi-Retirement
Early retirement is overrated.
While I appreciate some of the values behind the FIRE community, Iâm not a huge fan of early retirement.
One reason: I actually enjoy working.
I also see high-achievers obsessively chasing a FIRE number, which comes at the expense of fulfillment during the journey.
Contrary to popular belief, you can unlock financial independence sooner. But not in the way you might think.
The new game? Semi-retirement.
These days, heaps of online writers talk about FIRE, but not many talk about Semi-FIRE. Yet, it offers a practical alternative path to building a wealthy life.
In this newsletter, Iâm going to break down what semi-retirement is, who itâs a good fit for, why semi-retirement, and how to calculate your own semi-retirement number.
The financial independence game is changing đš
Over time, I realized each financial independence pathway is a different game you can play (with different rules).
In the 2010âs, the popular games were:
Work 9-5, climb the corporate ladder, and retire at 65 with a pot of gold
Play the startup lottery in your 20âs and 30âs, hit 1 jackpot, and transition to investing in your 40âs
Work a normal job in your 20âs and 30âs, but save and invest 30%-50%+ of your income to FIRE in your 40âs
Now in the 2020âs, I expect the number of games people play to explode due to the rise of part-time work, remote work, and adoption of AI technology.
Letâs discuss the game of semi-retirement.
Iâll share my experiences first:
My journey to Semi-Retirement đş
To be honest, I stumbled upon semi-retirement by accident on my journey to financial independence:
For the first 10 years of my adult working life, I focused on growing my tech product management career.
During this time, I accumulated an investment portfolio, which I donât touch and let grow. (Although, I recently discovered it generates enough income to cover 60%+ of my living expenses in Mexico City.)
In 2019, I took a travel sabbatical, which gave me a taste of flexibility and freedom. I was hooked. I sought to integrate this flexibility into my work and life.
In 2023, I left my last full-time role and started my entrepreneurial journey. Since then, Iâve offered product consulting, 1:1 coaching, cohort-based courses, ads, and affiliates. This covers all my expenses, while I save and invest the rest.
The good news is that after running the numbers, I discovered that I will not need to return to a full-time tech job if I maintain my current lifestyle and expenses.*
I can continue working on what I enjoy: teaching, coaching, and consulting.
*Caveat is future expenses, including kids and health expenses. Iâm working out a plan that factors in these costs.
What is Semi-Retirement? đ¤Š
This is how I define semi-retirement:
Semi-retirement is where you âretireâ from a high-earning profession, but continue working part-time or on things you enjoy.
This lifestyle is made possible by growing an investment portfolio that generates enough income to cover partial living expenses, while the rest is covered by your semi-retirement working income.
Hereâs the trade-off:
What you give up | What you get |
|---|---|
- Income | - Time to enjoyable work |
One popular version of semi-retirement is Barista FIRE, which is where freedom-seeking professionals switch to a less stressful job (eg Starbucks baristas) that generate income and covers health insurance expenses.
While Iâm skeptical that former high-skilled professionals will enjoy a service job, I know many who would like a creative role or their own business.
(Nothing wrong with service rolesâmy mom owned a restaurantâbut I just havenât seen this transition happen.)
Hereâs who I think would be suited for semi-retirement:
Who is a good fit for Semi-Retirement? đŤ
Semi-retirement is a good fit for a person or couple who:
Wants to experiment with retirement, but isnât sure if full retirement is right for them
Live in Tier 2 global city (Austin, Melbourne, Mexico City), which is lower cost than a Tier 1 global city (San Francisco, Singapore, Sydney)
Has a working spouse (with the goal of semi-retiring both people)
Has no kids or theyâre old enough to have moved out of the house (since kids are expensive)
Work as a remote consultant, freelancer, or entrepreneur
In other words, semi-retirement is a good alternative for someone who realizes they would keep working in retirementâalbeit on things they actually enjoy (while managing costs).
Now letâs talk about why semi-retirement:
