Here's What Scares People Most About Coasting to Financial Independence—And 3 Ways To Overcome Those Fears
Bonus article this week.
I recently asked the 7.3k members of the Slow FI Enthusiast Facebook Group to tell me what scares them most about coasting to financial independence.
The responses came flooding in, with everything from fear around the math and assumptions to fear about future healthcare issues.
But before we dive into the details, here's a little backstory for those that aren't familiar:
What is Coast FI?
Coast FI or “coasting to financial independence” is a variation of the financial independence retire early (FIRE) movement.
Coasting is all about reaching a point where savings becomes optional rather than attempting to reach a point where work becomes optional. Then, “coasters” can work flexibly on their own terms to cover their living expenses while their assets grow and compound in the background.
It’s a more balanced and sustainable approach to financial independence, with less emphasis on “retire early” and more emphasis on “freedom and flexibility.”
But, like any big lifestyle decision, coasting to financial independence can be scary.
Here are some of the responses to my question: What's your biggest fear about coasting to financial independence?
I’m worried I won’t have enough.
I’m worried that my earning power will be permanently reduced because I took a step back in my career.
I’m worried about covering the cost of healthcare for me and my family if I leave my employer.
I’m worried my math is off.
I’m worried about a black swan event that could wipe out my retirement assets while I’m coasting.
These are valid concerns.
The decision to coast to financial independence could mean downshifting your career to take a lower-paying but more satisfying job. And while that downshift could benefit your life in many ways, it could also negatively impact your future earning potential. So, it's important to go into that decision eyes wide open.
And while coasting doesn't mean you can't save more for the future, many choose to pause savings and maximize their freedom and flexibility now.
On the one hand, this allows you to work less as you only have to cover your current living expenses. But, on the other hand, if your retirement calculations are flawed, either because you overestimated the growth potential, underestimated your future retirement spending, or both, you could find yourself in a situation where you simply don't have enough to meet your retirement needs.
But, while these concerns are valid, I don't think they have to limit you.
You can navigate these fears like anything else, and here's how:
3 Ways to Overcome Your Fears About Coasting to Financial Independence
1. Choose your thoughts wisely.
While I'm no proponent of toxic positivity, I am in favor of consciously evaluating and choosing your thoughts.
The way I see it, what's happening in life (example: I fell down), and then there's the story or narrative we create about what's happening (example: oh my god I'm such a klutz).
The stories or narratives are our thoughts, and they're incredibly powerful—shaping the way we feel and act, which in turn drives the results we get in life.
But unfortunately, our thoughts don't always serve us well.
In fact, some can be severely limiting, causing us to miss or avoid opportunities due to our limiting beliefs, thoughts, or stories.
So, what can you do about it?
Fortunately, there's a mental model you can use to evaluate and choose your thoughts.
I won't dive into too much detail here as I've written about this extensively in another post, The 1 and Only Mental Model You Need to Transform Your Life, but here are some high level takeaways.
What's happening in your life is a neutral circumstance—it's neither positive or negative.
You then build stories or thoughts around that circumstance—labeling it as positive or negative.
Those thoughts drive the way you feel, the actions you take, and the results you achieve.
Using the model, you can evaluate and choose your thoughts based on the results you want to achieve. The fundamental key to the entire model is that you pick your thoughts.
Applying this to overcome your fear of coasting
Let's look at an example of how this could help you overcome your fear of coasting.
You just left your job and you’re worried that your earning power will be permanently reduced because you took a step back in your career.
Using the model, you'd realize that the circumstance or "neutral" situation in this example is that "you left your job". That's not good or bad, that's just the neutral circumstance of the situation.
Now, your current thought is "my earning power will be permanently reduced because I took a step back in my career." With that thought, you can expect to feel scared, act indecisive, and the result is you stay in your job until you have enough money to be completely financially independent in 10 years.
If you're good with that result then there's no need to change that thought.
But, if you want a different result, consider a handful of different thoughts you could choose with increasing degrees of difference:
Instead of: my earning power will be permanently reduced because I took a step back in my career.
Try:
My earning power could be permanently reduced because I took a step back in my career.
My earning power could be permanently reduced because I took a step back in my career and that’s ok.
My earning power could be temporarily reduced because I took a step back in my career.
My earning power could be temporarily reduced because I took a step back in my career and that’s ok.
My earning power will be fine even as I am taking a step back in my career.
Taking a step back in my career will have no impact on my earning power.
Taking a step back in my career will increase my earning power by opening up new opportunities.
You can see that with each iteration, you'll feel, act, and get different results.
And ultimately, we become the stories we tell ourselves about ourselves. And I truly believe that if you were tasked with arguing why any of those thoughts above are true, you could do it.
The point being: once you realize that you get to choose your thoughts, you can begin to overcome many of your fears, realizing they were just limiting beliefs all along.
2. Focus on what you can control.
But what about the stuff that's not just a limiting belief?
What about the possibility of a stock market collapse right before you retire, an unexpected health issue that wipes out your portfolio, or a significant and unforeseen change in your retirement income needs? Any of these black swan events have the ability to completely upend even the most well laid financial plans.
So, what can you do?
I believe the only practical thing you can do is focus on what you can control.
This belief stems from an ancient stoic philosophical idea known as "the dichotomy of control." The idea is that some things are within our power, and some are not.
If you spend your time focusing on things you can't control you'll likely feel stuck, stressed, and pessimistic. Alternatively, by focusing on things you can control, like how much you're saving, spending, and investing, you'll feel more positive, less stressed, and un-stuck.
Applying this to overcome your fear of coasting:
While it's essential to plan for the worst and hope for the best, there's a fine line between planning and obsessing.
Of course you should be aware of things like sequence of return risk, inflation projections, market projections, recession indicators, and projected healthcare costs in retirement. But you shouldn't let them limit your ability to live and design a life you love.
Instead, embrace these things as a possibility, plan for them to the best of your ability, and then let them go.
Realize that you could spend the rest of your career second-guessing the math, your assumptions, and your projections, working "just one more year" in an attempt to control everything. Or, you can accept that there are things outside of your control, and that's okay.
You don't have to control and manage every possibility because frankly, you can't.
Then, when you're worried about a black swan event that could wipe out your retirement assets while you're coasting, you can simply remind yourself that sure, it's possible, but you've planned for that to the best of your ability, and you're going to spend your time focusing on what you can control.
3. Lean on your community.
Lastly, you don't have to figure this out on your own.
One of the best things you can do on your journey to financial independence is to lean on your community. It doesn't matter if you've been pursuing FI for decades or are just starting out. Odds are, if you've got a question, someone in the FI community has an answer.
And while each journey is unique, many of us have similar fears, struggles, and blind spots.
For example, in the Slow FI facebook group, for every fear that someone posted, two or three others echoed that same fear. But what would it look like if these people put their heads together? Imagine if they set up a weekly check-in with each other to conquer their fears. How quickly could they help each other find a path forward?
Applying this to overcome your fear of coasting:
There are many ways to find community, but if you're coasting to financial independence, here are two to consider:
1. The Slow FI Facebook Group: Slow FI Enthusiasts (7.3k members)
This group isn't Coast FI specific, but there's a pretty heavy coast FI presence. That's because Coast FI is really considered a branch of Slow FI which is a branch of the larger FIRE movement. I know, getting nerdy here.
This is such a great place to find like-minded people, ask questions, hear about virtual meet-ups, and share your wins.
2. The Coast FI subreddit: r/coast (30.5k members)
I love the Coast FI group on Reddit. It's another great place to ask questions and even just read some of the things that others are dealing with on their coast FI journey.
I feel that many of us understand the power of community in our lives, we just sometimes forget to tap into that power in all areas. Remember, there's no need to travel to financial independence alone. Odds are, if you've got a question, someone else has an answer.
And in the end, as you overcome your fears about coasting to financial independence, keep in mind that the fact you even have fears means you're pushing yourself out of your comfort zone. Growth is happening, you are on the right path, and you've got this, my friend.
Want to learn more about coasting to financial independence?
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