I received a comment on my youtube channel that, because I speak a lot about saving, expressed concern in my lack of investing. So for this post I wanted to reveal how I achieved COASTFI by the time I turned 30! For those who are not aware: COASTFI is a derivation of the fire movement where you front load all of your investing while you are young, to a point where you will reach your retirement number by retirement age without contributing another dollar into the stock market, real estate, or savings. This is often the first branch of fire that people reach on their personal finance journey. I did not initially set out to reach COASFI, and only realized that I reached it when calculating my net-worth against my retirement number.
What is your retirement number?
Knowing this number is the best place to start on your COASTFI journey. The reason is because it sets the pace at which you need to invest, and can serve as a blueprint to how you should maneuver into eventual retirement. As a general rule, your retirement number is based on your yearly expenses. multiply your yearly expenses by 25 and that is the number that you want to aim for. (25 because that is a healthy amount of years into retirement to have saved if you retire at 65 years old). As of 2023, by the time I retire I will be sitting at 1.2 million, which is my COASTFI number. This number does not include my husband’s investments or savings. If i include my husband, our retirement number is at 2.4 million. At first glance this seems pretty low, especially if you account for inflation. So how is this a viable number?
Keep your expenses as low as possible
My expenses are currently pretty low at around 22 thousand per year. Multiply that by 25 and that is a bit over 500 thousand dollars. As you saw above, I have enough saved for that to be twice as high when I retire, but if needed, half of 1 million would be enough for me to live the same lifestyle that I currently do in Seattle Washington! It sounds impossible, but the key is to keep your expenses as low as possible to reach COASTFI. We don’t necessarily cut out things, but we forgo what isn’t important, such as: DEBT, car payments, alcohol, mortgage, etc. These are just a few things of which we do not indulge. However, the most important thing is that we live off of 1 income. I make less than my husband, and we spend only half of it to live comfortably throughout the year.
Always invest, early and often
This is the point that no one ever wants to hear, but if I’m being honest, If I didn’t invest my excess money, what else would I spend it on? That is the reality for a select number of people who are living the DINK (double income with no kids) lifestyle. I invest for my future, pay bills, and spend on what makes me happy. If I did not invest, I would have an excess of money doing absolutely nothing. I know a lot of people would deem this to be not living life to the fullest, but I would have to disagree, as the things that make me happy will likely differ from what suits someone else. My bills being low has allowed my money to work in my favor for 9 years. This is mostly thanks to my work funded 401K. Not being actively involved in my work investments has contributed greatly to reaching COASTFI by age 30. Mainly because those contributions are taken from each paycheck pre-tax. That, plus moving mywork investments away from a target date fund, and into an S&P500 index contributed to being bale to take a year off of post-tax investing while I paid off my student loans in 2022 and 23. I do not currently max out my work investments, but I hold about 75K in my current 401K, and another 72 thousand in my IRAs. My post tax account is brand new at 23,000 + so total invested is sitting at 171+ thousand dollars at the moment. All of these decisions made in my 20s has allowed me to reach COASTFI.
What’s next?
Just because you reach COSTFI, doesn’t mean you have to accept retirement at 65 years old. Now that I am debt free and no longer need to utilize my money to pay loans, I will be using every post-tax dollar to decrease my retirement age. Since I am still in my early 30’s each dollar invested is worth around 18 dollars in 20 years. that’s still pretty powerful compounding that I plan to take advantage of. So now it’s your turn. What is your fire number, and what are your thoughts on COASTFI? it is one of the easier milestones to reach, and I cannot wait to see what is next. If you enjoyed this post, then check out this one next!
