Why Coast FIRE is Irrational | Sam Dogen (Financial Samurai)

[@MarriageKidsandMoney]

What are your thoughts on Coast FIRE?

[@manuvns]

coast fire at 50-55 year old is ok , of you have 10-12x saved

[@CW-ez7mn]

Agree. I have an old retirement accounts ~120k I kept separately and did not add a penny to and it did not generate anything close to projected 8% in 20 years!!! It was all invested in the markets but unfortunately this account went through recession and many major downturns in 2000s, 2008, Covid, etc. You need to continue to add money when the market drops to benefit from rebound so this coast fire math doesn’t work. Maybe it’ll only work in a continuous up market. It would be risky to assume someone’s $400k would turn into 2+ million in 20-30 years and it’s not even double when you’re arrive at your retirement age. Then too late to do much except continue working.

[@Azel247]

In my opinion, traditional FIRE and coast FI are completely different approaches to financial independence. Traditional FIRE is like a 100 m dash. You go all out, maximal exertion for the minimal distance, to reach your end goal, and then you collapse to the ground in celebration. Coast FI is like running a triathlon. You have an end goal but you must learn how to budget your energy and adjust to changing conditions to ensure you can reach the finish line. During a triathlon, you don't go the same speed throughout. You also don't use the same techniques when you're swimming vs. cycling vs. running. However, you always have the finish line in mind and you know that you can get there with your strategy. What you DON'T do during a triathlon is celebrate before you cross the finish line. Can you imagine an athlete completing the swimming portion of the race and then doing their victory dance because they think they can finish the remainder of the race in record time? No, and that's the same with Coast FI. Once you reach that coast number, you constantly reassess whether you are still on track to reach your goal. You budget your efforts so you don't burn out, but you don't stop running and you don't celebrate until you cross that finish line. I've been on this FI journey for some time now. I have never met a person who just stopped everything once they hit Coast FI. People who have enough financial savviness to reach Coast FI don't just suddenly put blinders on and stop thinking about money. Every one of them will continue to monitor their portfolio, adjust their strategy, budget/plan for life changes, and make sure they are on track to retire. The people who are said to be "irrational" about Coast FI might not actually exist, or represent a miniscule portion of the FI community.

[@MarriageKidsandMoney]

Excellent comparison and breakdown.

[@aprilracine]

I agree with this statement.

[@ianc4278]

I've read Sam's blog, kudos to him for hitting FIRE. However, his story is anchored on people that didn't factor in having kids. I have 2X the kids that Sam does, am not FIRE but on the path, still stocking $ away. Kids cost as much or as little as you'd like them to (barring unforeseen health expenses). 1 sport vs 3 sports, used car vs new car, organic vs Costco, public vs private school. Sam seems like a "have your cake and eat it too" guy. I can't say that I would go to him for financial & family advice....Financial advice, sure, he retired at 34, but didnt have a kid till he was 39 out of fear of kids costing soooo much.

[@samdogen1846]

How is your path to financial independence going? My wife and I definitely discussed having kids before we left. Are they jobs at 34. But we wanted to have enough money to be able to both be full-time parents.

[@FIRE_DrNinjaTurtle]

I was demoted and that sparked my FIRE journey. I am financially free today.

[@MarriageKidsandMoney]

While painful at the time, you've probably found a way to be grateful for that demotion today. Congratulations!

[@tonyalaw8197]

​@MarriageKidsandMoney. I 💯 agree 👍.

[@josdomam]

In my opinion, Coast FI is the best FI. There is no one in the FI community that will stop saving when they reach coast FI. We are addicted to saving! What Coast FI tells you is that, instead of killing yourself working 80 hours per week, you can slow down and enjoy life a little NOW. You probably won't stop saving; you will just stop saving less aggressively and enjoy more time with your loved ones now. We are going to have to agree to disagree.

[@MarriageKidsandMoney]

I absolutely love the way you explain this. So true.

[@josdomam]

@@MarriageKidsandMoney Thank you. Great show, like always.

[@JC-xl2bq]

Agreed. It just gave us “permission” to step down from our terrible jobs and take something less stressful (with less pay) that keeps up with annual expenses. We didn’t stop savings entirely, still getting up to match & HSA and doing Roth’s.

[@MarriageKidsandMoney]

@@JC-xl2bq Your "happy medium" is a smart way to Coast!

[@CCCC-gk7qm]

Great interview and discussion. Fun to see Sam D on the show. You both have great presence and energy when you speak. As for the topic, I can appreciate that everyone's situation and retirement approach is different b/c there are so many variables at play. Coast fire definitely isn't for me so I can understand Sam's points quite well. I wish everyone a comfortable and stress free retirement however it comes to be!

[@MarriageKidsandMoney]

I'm glad you enjoyed it! It's been fun to have Sam on the podcast over the years and I'm grateful that he came on the show again to show us another viewpoint on Coast FIRE.

[@tylercampbell6058]

Sam said “remember if you’re coasting you’re going down hill.” But more importantly Ricky Bobby said “if ain’t first you’re last.” 😂

[@livingtheslolife]

How many people can realistically negotiate a severance if they decide to leave their job? Why would your employer give you a big chunk of $$? They aren't even required to provide unemployment benefits if you leave on your own.

[@KayFabe87]

It’s relatively rare but can be done, particularly if you are in the midst of working on a major project for the company and your departure would cause a major disruption and entail some risk to the company. It is also feasible when you have a particular skill set or are so specialized or knowledgeable in your work that it will take a while to get others trained, thereby creating risk for the company if you leave. You can simply agree to stick around to complete the project or train others to take over your responsibilities in exchange for a severance package that you negotiate. In those scenarios it is in the company’s best interest to pay you to stick around until the handoff of your duties can be seamless. This will probably not be feasible for the guy stocking shelves at a grocery store.

[@TheGhu123]

Choosing to live in SanFran which is HCOL area will be harder to coast fire or fire. Adding kids will also increase you level of difficulties. We are at coast fire by circumstances. Currently living on a single income (on a significantly lower paid job) with no kids but have 2 dogs in Chicago. Can't really save on limited income. However, you just have to make adjustment. Driving to Canada vs flying to Europe or Asia for vacation. Staying at residence inn instead of Marriott etc. It's not how much you make but how much you spend.

[@CoastFIREisawesome]

spending $500k on education for anyone for any reason is irrational

[@samdogen1846]

Could be, but have you calculated the cost of education today and 16 years in the future? How many kids do you have and how much do you plan for them to pay for college in the future?

[@IAmebAdger]

I like the idea of doing some kind of proportional contribution to kids' funds. If the kid is contributing 50 dollars per month to an investment account, you contribute 25, or even 50, up until some reasonable threshold/time (for example when they are able to get a reasonable salary). If the kid is contributing 500 dollars a month, you contribute 250, or even 500. By providing a match, you encourage good behavior like investing/saving by rewarding effort on the part of your kid, without giving them something when they've done nothing.

[@Jebidee]

I don't think coast is irresponsible if you update the coast numbers as your life changes. What's the difference between updating the FIRE number and updating the COAST number? I think Sam just doesn't like the idea of not contributing further to the retirement accounts because it feels too risky. However if your coast number is sufficiently high enough it's based upon a very conservative withdrawal rate in the future, it's not that risky.

[@samdogen1846]

This risk is staying in a Coast FIRE mentality and NOT updating the FIRE number and other assumptions. But life is full of risks and people are free to operate as they see fit. I'm just sharing my perspective after 12 years into FIRE and seeing how so many things have changed.

[@Kornheiser10]

Wow, the hate for Sam speaking the truth. He's just telling you that you need to understand "room for error" in calculation of independence because of the unknown variables that life will throw you and the underestimation of the cost of kids. Talk to people who have failed at FI, if you can find them becausecthey dont post or get interviewed on youtube. The survivorship bias is so strong on social media that reality is hard to see because the unsuccessful are pushed out of sight.

[@MarriageKidsandMoney]

I appreciate Sam coming on and sharing his point of view. It's always good to look at both sides of a topic and find the route that works best for you.

[@aprilracine]

@@Kornheiser10 Please show me someone who has failed at FI and I’ll show you someone without a good imagination. You can have a good life living on $2,500 or 25,000 a month. Neither retirement income means that you failed.

[@Kornheiser10]

@aprilracine there are thousands that enter in and fail because "life" shows up, but you'll never see them on podcasts because it would destroy the narrative. It's called survivorship bias. It's like showing all these people who reach FI because they started their own businesses, but then fail to even discuss, much less mention, that the failure rate of new businesses is well over 50%. Sure people can reach FI. These podcasts mostly show the rainbows and unicorns of FI, never what happens when $200k in illness comes into play.

[@slmunney7760]

Interesting and well-done video. I'm not a fan of the Financial Samurai blog, but I agree with Dogen's take here and he did a great job of articulating it. Don't stop running 1/2 way through the race and expect momentum to carry you to the finish line. For one thing, the finish line may move as you get older and your expenses increase. Keep earning and saving until you have reached FI and then some and are ready to retire. I've never heard any current retiree say that they saved too much for retirement. My thoughts anyway.

[@MarriageKidsandMoney]

Great feedback and contribution! Thank you!

[@MJIKS22]

Teach your kids skills to make a living free from the chains of corporate work. Teach them how to make money with their own money. It’s encouraging and creating that mindset within your kids so they can be self sufficient. After having been through the corporate world I wouldn’t wish it upon my kids ever.

[@MarriageKidsandMoney]

Smart words to think about right there...

[@ingridenroute]

This episode was a good listen, and Sam's perspective is interesting. Like with timing the market, or betting our financial stability on a single source of income, it is unrealistic for the majority of people to try to "engineer" their layoff. I don't see an issue with quitting a job, we are human that quitting and not being employed temporarily does not mean the end of the world. The ability to retire timely comes from years of consistency and a financial plan that takes the downs into consideration. It is ok and even quite normal to experience setbacks. *I'm 26 and high income

[@tylercampbell6058]

I think from reading Sam’s blog in the past his focus seems to be more fat FI or FI for HCOL areas which is great too. These principles can work anywhere with some derivations depending on circumstances. But I think Sam sees Coast FI differently than I see it. One example of Coast FI that comes to mind would be a person that takes a high paying but stressful position from ages 22-34 while saving a high percentage but decides to take a less stressful and lower paying job in their mid 30s to focus on a family. Sure, you aren’t full FIRE yet but let’s say you’re at 15x of what your expenses with a family will be. That means you only need one more double to hit FIRE. We’re talking about 7-10 more years past that point even if your savings rate is lower. If you want to have kids you have a limited timeline in which to accomplish that. And it’s pretty hard to hit full FIRE by one’s mid 30s before you likely start having kids. I don’t think most people would want to keep doing the 70-80 hours per week grind while their kids are young and miss out on most of that important stage. In my thinking that’s where Coast FI shines. You have the flexibility to say if I’m 12x-15x my annual expenses in my mid 30s it’s safe to say I’m going to hit FIRE even if I take a lower paying job only working about 40 hours a week but can’t save much anymore. It’s all about trade offs though. Would you rather keep grinding and miss your kids fist 5 years and be 100% available after that or go for a balanced approach working reasonable hours with some balance after they are born but not hit FIRE until they are 7-12 years old? I have done both while missing most of my daughter’s second year due to working tons of OT to try to punch through to FIRE as fast as possible and after 10 months of that I realized that was going to be less than ideal.

[@MarriageKidsandMoney]

Your assessment is spot on in my opinion. Perhaps I'm biased because you're describing my work-family-life exactly.

[@aprilracine]

My Coast FI number has nothing to do with my adult children in particular. I have a giving fund and they can fall into that. My Coast FI number is to provide for myself after I quit working.

[@hunnybunny4306]

You can reach Coast FIRE and start prioritizing saving for your kid’s education, building a big sinking fund, paying off your mortgage early, etc. If for any reason you decide to prioritize saving for retirement again, go ahead. That’s what I’m doing.

[@MarriageKidsandMoney]

I like that sentiment.

[@dinahtravis9664]

At any time a person is able to adjust their lifestyle to fit their needs. But that's just it... NEEDS. Everyone's needs will vary from person to person, however there are basic needs that everyone as a human being needs regardless. That being said, I hear a lot of talk about "not having enough", that concept is subjective because people's needs and wants are so drastically varied. For instance, if you have kids, one, two, more, it is a personal decision on whether or not as a parent you decide to let's say pay for your child's college or private school or car, ect. Also life will always be unexpected. Say your child or family member has a medical condition, something that cannot be foreseen or controlled. Life is give and take. If life takes an unexpected turn, then you must learn to rebalance some other aspects of your life to accommodate what needs to come first. It is doable but definitely not easy. My point is I read and listen to people over worry about having enough. Basic human living does have a cost, but beyond that it boils down to our wants and our vision of how we want our life to look like once we retire. Set a goal and work hard to get there. Absolutely! But don't forget about the most valuable asset you have, and that's time. No amount of money can buy us more time and how we live our lives TODAY is in our control, while what's going to happen TOMORROW is mostly outside of our control. Don't let worry rob your most valuable gift of time spent in the moment. Whatever version of FIRE or nonFIRE you choose isn't right or wrong. As presented on the podcast if your life changes then adjust your numbers to change with it. If the numbers cannot be adjusted accordingly, then you may need to adjust your expectations of what you can afford. Be flexible, be modest, be realistic, and don't let obsessive worry rob you of enjoying life today and tomorrow.

[@MarriageKidsandMoney]

Excellent points right here. Thank you for contributing to the conversation.

[@shaunrosenberg4568]

I know people are going to view this and think to themselves that they just won't have kids, will always keep expenses super low, will avoid anything that may make life more expensive, etc. But remember, the goal isn't to just retire early. The goal is also to live a life worth living. No point in retiring early if the rest of your life is shitty.

[@steveklein9335]

the thing about people who actually obtain coast fire in their 20s or early 30s is that they are unlikely to actually reduce future investments to zero. after all, these people are typically upper middle to high earners and understand the power of compounding. i achieved coast fire about 6 years ago but haven’t taken my foot off the saving gas at all for many of the same reasons that sam gives (uncertain future costs, especially with raising a family… and wanting to at least keep the option open to live a relatively boujee life in retirement) now as i am coming up on age 40, i am planning on taking the foot off the gas a bit. i’ll probably reduce our savings rate from about 35% to 15-20% over the next few years. the extra disposable money will make it feel like we are coasting even if we aren’t. it seems silly to not continue to take advantage of no brainer investments like maxing out a roth ira or take the employer match from a 401(k). it’s the extra money being plowed into brokerage accounts that i’ll trim back significantly.

[@MarriageKidsandMoney]

@@steveklein9335 I like your planning and rationale! I hope interviews like this promote the type of intentionality you’re demonstrating

[@RRonnieDSILVA]

I think Dogen is right. I live in New York and everyone starts Coast Fire after $5 million, due to the high cost of living. I make $400k, pay $50k tax and spend $50k. I invest 300k and will reach Coast fire at age 40 - I'm 33 now. Goodluck everyone.

[@a012345]

Financial Samurai, delusional as always. He’s the one that afraid to FIRE.

[@samdogen1846]

For sure, I am afraid. Which is why I plan so much so my family won't need to be afraid.

[@SurpriseMeJT]

He lives in San Francisco, which is not a good cost controlling strategy. Heck, living in California is probably not a good cost saving strategy.

[@FinanciallySavvyPT2012]

@@samdogen1846I recently was 2 years from coast Fire at age 38. Just took on a medical illness. Battled it for 6 weeks now I’m back to work . Felt what it was like no pay check but also what it was like not working. Gonna save best I can as well as find purpose with work . I feel your point of view stronger than ever now

[@samdogen1846]

@@FinanciallySavvyPT2012I’m glad you have recovered! So many unexpected things can happen, it’s so important to prefer for the unexpected. Best of luck on your FI journey!

[@samdogen1846]

@@SurpriseMeJT choices have consequences. A good thing about living in San Francisco is the amount of wealth you can build. And if you decide to relocate anywhere else, it’s probably much cheaper. Where do you live?

[@barryinciong6822]

This guy would say that someone with a $B and no kids living in Thailand doesn't have enough to give up their job safely. Kinda like Suzy Orman. Do I believe he actually believes this? No, but his schtick to get attention is to have this "you'll never have enough" opinion of everything.

[@feldhdleh]

Sam great interview! I comment periodically on FS and love all of your work. It's great to see you "live" in this format. I think you officially opened a debate. Is it "Shirtsleeves to shirtsleeves in 3 generations" or "Rice paddy to rice paddy in 3 generations" that came first? Regarding this session, listeners who don't understand what it is like to live in your (ours too) socio-economic bracket cannot easily relate to the numbers you put out there. The audience here is very different than back home on FS. Some of the comments here don't surprise me.

[@samdogen1846]

Thanks. I just want to warn people not to stay on the coast fire mindset given there are so many unexpected variables. It is also easy to trick us into complacency, and then we wake up time to 20 years from now, and wonder where it all went wrong.

[@blutack7462]

OK, I don't understand this at all! If I'm coast fire, that means I expect to be FI by a certain date without making any further contributions. If I now have kids, as long as I can continue to cover my (and their) living costs from my income, and as long as the kids are financially independent of me by that certain date, there's no problem. What am I missing?

[@MarriageKidsandMoney]

I think you summed it up well. That's what my wife and I are doing.

[@blutack7462]

In that case why is this "irrational" and "not allowing for lifestyle changes"?

[@MarriageKidsandMoney]

@@blutack7462 My guest thinks Coast FIRE is irrational and I wanted to hear his thoughts. I don't agree with all of his thoughts, but I'm always interested in learning other peoples viewpoints on subjects. Especially ones that I have difficulty only seeing the positive side of ... As an optimist, it's a good habit for me.

[@blutack7462]

@@MarriageKidsandMoney in that case I think we both agree that your guest was wrong! Thank you for exploring the issues though, and for replying to my comment.

[@Marl-hj8hh]

This guy’s shock to discovering that kids are expensive is like a cave man’s reaction to discovering fire (pun intended). Duh!!

[@befree9579]

Sam Dogen gives me the Grant Cardon vibes. Dudes going 10x in the fire movement. These days you hear even Grant saying people with 10 million dollars are broke lol. Delusional factors goes up once they start making crazy money that they forget they left behind most people in terms of net worth.

[@phoebekranefuss1944]

Thanks for this, Andy! The cost of college (among other things) definitely makes coast fire super out of reach for most. Great interview!!

[@samdogen1846]

I’m thinking community college for two years and then state school for the last two to save.

[@SurpriseMeJT]

If you are coasting to a number which is 100 percent of your current inflation adjusted salary (while easily handling the cost of kids), I see no issue with coping with coast. Regarding kids, I think people spoil their kids today. The whole reason savers are able to save is because they understand scarcity. Yes, even kids need to understand and practice scarcity in order for them to learn how to survive and thrive in the future. This involves some tough-love (tiger parents?) that some of us all hated when we were young, but boy are those lessons burned into our heads. Should we pay for our kids education? Depends. I say, make them take out loans for their education so they study something that can pay it back. Then help them pay it off or if you're really proud of them, pay it off for them - it will also help their credit score. I've worked around highly paid doctors or otherwise very successful people who gave so much to their kids that it ruined their drive to make something for themselves and appreciate it.

[@samdogen1846]

Yeah, it’s hard to say how much education we should pay for our kids. I think by the time I kids are 16 years old, will get a good sense of whether they will take our funding for granted or whether they are mature and will appreciate the opportunities given to them.

[@tacrewgirl]

I think Coast FI is easier to get to that full FI for most and it's a huge disconnect to say otherwise. The FI community is very privileged and often certain professions that make at least $100k when most Americans make under that even with 20+ years. This privilege in this video is irrational.

[@MarriageKidsandMoney]

I appreciate this constructive feedback! The concept of Coast FIRE has been a gift to our family. That combined with a debt-free life has helped my wife and I go from full-time work we didn't enjoy to part-time work we do enjoy. I do understand Sam's points of view and appreciate him taking a look at where Coast FIRE might go wrong for some.

[@tacrewgirl]

@@MarriageKidsandMoney Bingo. The ability to choose part time work that you actually enjoy and feels fulfilling is the goal of Coast FI for many. You can still work but don't have to be an entrepreneur, you can be more around for your family and self, and your retirement is already setup for success. Not everyone has the ability or privilege to completely divest from working completely.

[@MarriageKidsandMoney]

@@tacrewgirl You describe it well! And thank you -- it's a good reminder for me.

[@TheFirstRealChewy]

The way I see it, if I reach Coast FI then I'll keep going to get to FI. I'm not one to say no to early retirement.😊

[@KayFabe87]

You sound bitter, angry, and envious. Increase your skills and make yourself more valuable in the marketplace so you can earn the high salary as well. Sam made a lot of money because he had the skills to do so. He was compensated based on the value he brought to his employer. No one just “gave” him a high salary because of some phantom “privilege” you referenced.

[@avainvestmentanalytics]

Dogan is a total scam artist and absolutely clueless investor.

[@seansullivan5781]

Good to hear from someone outside the echo chamber

[@MarriageKidsandMoney]

Glad you enjoyed the conversation!

[@MrInsomniac1]

Ugh, this guy is a pessimist.

[@TheFirstRealChewy]

If you're coasting, you are making it easier for someone else to pass you. Just make sure that everyone doesn't pass you.😊 I'm paranoid so I track everything... daily.😅

[@samdogen1846]

Hah, indeed. You are right in that the more people take it easy, the easier it is for those who don’t to get ahead. It’s funny how everything is relative in Finance.

[@ryankemp3602]

I really respect Sam and love his blog, but his opinions are so heavily based on having children, and it’s not relevant for the childfree.

[@Cyclepilot85]

I have kids, but still think he's out in left field. 0% chance I ever pay hundreds of thousands or even millions for my kids college education. What an incredible waste for the status of saying you went to XYZ school. State schools, scholarships, and even community College are just fine.

[@samdogen1846]

@@Cyclepilot85 I agree. I'm all for community college and state school. I'm a William & Mary graduate (public). Unfortunately, we are not smart or gifted people. We are also not an underrepresented group, so my kids will unlikely get any scholarship or grants. I'm trying to be conservative to minimize the need for student debt. BTW, left field has a lot of action when I play softball. Right field is so slow and boring.

[@samdogen1846]

Might have to ask Andy to change his podcast to just Marriage & Money then :) Without kids, Coast FIRE and regular FIRE is more feasible. Having kids is tough.

[@seansullivan5781]

And based on his numbers, only focused on private schools.

[@samdogen1846]

@@seansullivan5781 I'm trying to be conservative as I can't expect my kids to be smart enough to get grants, or smart enough to go to public school like we did.