Quit a High Pay Job with Coast FIRE
Most people in corporate America don’t love their jobs. Let’s face it—if the paycheck disappeared, so would their motivation. Nobody would do corporate work for free (that’s not my idea for volunteering). Deep down, we all crave meaningful work and purpose. Today, I’ll show you how to use the Coast FIRE method to transition from a soul-draining job to a fulfilling career.
Enter "Coast Fire"
Coast FIRE is simple: Work a high-paying job, aggressively save and invest for a short time, then quit to pursue a career you love—even if it pays less, but it’s what you love, it’s your calling. Meanwhile, your investments grow in the background through compound interest, eventually allowing you to fully retire. If this doesn't sound appealing, REMEMBER that the alternative is to work 40 to 45 years in a career that is just... Mehhh, but pays the bills and a little more. So here is the step-by-step breakdown for a more exciting path.
Like other types of FIRE - Financial Independence Retire Early methods such as the Lean Fire or Barista Fire (I’ll cover these in a different article), we start by defining your FI or Financial Independence number. This is the total amount of money you need in order to not have to work another day in your life, because your investments are providing the income you need to cover your expenses. Essentially your investments are replacing your job.
Step 1: Define Your FIRE Number
Your FIRE number is the amount you need to have in your investment portfolio, to never have to work again because your portfolio covers your expenses.
To find your FIRE number simply look at your expenses for an entire year, let's say that is $60,000 for one person, and multiply that by 25. That gives us a total of $1.5 million dollars. This is all based on what's called the Trinity study and the 4% rule which I explain in detail in a video called "How I will retire by 43 as a Millionaire" on YouTube. If you haven't seen it, just trust the math for now and afterwards go watch that video for all the details.
Example:
Yearly Expenses = $60,000
4% Rule multiplier = 25X
F.I. number = $60,000 x 25 = $1,500,000
Step 2: Save Aggressively for a Few Years
Let’s say you earn $100,000 a year after taxes as a 30-year-old and live on $60,000. That leaves $40,000 to save annually (40% savings rate).
If you stick to this for five years, you’ll have saved $200,000 ($40,000 x 5 = $200,000). But if you invest it in the S&P 500, which historically returns about 8% annually (adjusted for inflation), you’ll have $234,000 by age 35. That’s a $34,000 difference in just 5 years!
Here’s the magic: If you were to leave those $234,000 untouched and invested in the SP500 until the age of 60, and NEVER... EVER... add an extra penny, it will grow to $1.6 million. That is more than your FIRE number.
A side note, some people may say “hey but those $1.5 Million dollars are based on today's money and need to be adjusted for inflation”. Which is correct. That is why I use 8% as the SP500 rate of return instead of the true 10% rate of return. 8% is already adjusting for inflation. In this scenario this person will end up at age 60 with a lot more than 1.6 million. But, its going to be the equivalent to 1.6 Million dollars in today's money.
On a personal note, my wife and I always had the dream to travel the world in our 30s, and having blown by the Coastal FIRE milestone a few years ago by investing over 60% of our income, is what gave us the confidence to quit our high pay jobs and travel to over 20 countries and experience other cultures. Because Coast Fire gives you a world of possibilities. To be completely transparent, we are pursuing traditional FIRE and not Coast FIRE, as our goal is to be fully financially independent by the age of 43.
Step 3: Transition to a Fulfilling Career
Once you’ve built a solid investment base, it’s time to quit the corporate grind and pursue work that excites you. The key is ensuring your new career or project pays enough to cover your living expenses.
Using our example:
Your expenses are $60,000 per year.
Your new job needs to cover that $60,000—giving you the freedom to explore meaningful work without worrying about saving any additional money from your paycheck. You can save more if you want, but you don’t need to. This is fantastic news as that means you have tons of new and better job options that are in alignment with how you want to spend your time and ultimately your life.
If you want to give the entrepreneurship path a shot, consider working an additional year and half to save an extra $60,000, giving you a safety net of one year to launch your business.
The generational belief that you have to work a boring job until 65 is a lie, one that can easily be debunked with the Coast FIRE strategy. And remember, if you need more guidance as to where to start, how to deal with credit card debt, create a budget, or invest, you can always look at my services where I have different ways I can support you on your journey.