When most people think about financial independence, they think about spreadsheets, net worth projections, and savings rates.
Andy Hill thinks they should start somewhere else.
“If you received a $5 million check today, what would you stop doing immediately?” Hill, a family finance coach who reached “Coast FIRE” with his wife, Nicole, told Business Insider.
Hill believes this thought experiment can reveal more about your goals than any retirement calculator.
“If your answer is, ‘I’d quit my job immediately,’ then maybe that’s a signal that you don’t like your job,” he said. “Could you find a different job that pays the same but offers a better environment? Could you work fewer hours? Could you make changes before reaching financial independence?”
For Hill, dreaming comes before number-crunching.
“The very first step would be to do some dreaming,” he said. “I know a lot of the time we’re looking at these numbers, but I really think you should step back and say, ‘What would I do if I hit financial independence? What would I do if I hit Coast FIRE? How would my life be different?'”
Think about what your ideal week looks like, and write it down. That way, financial independence becomes more than just an arbitrary number, he said: “When you just focus on the numbers, it loses purpose. It loses a why.”
Once you’ve identified what you’re working toward, then you can run the numbers. Keep in mind that financial independence doesn’t have to mean saving more than half of your income and accumulating millions of dollars. There are offshoots of the FIRE (financial independence, retire early) movement that can feel more attainable, such as “Coast FIRE,” which the Hills pivoted to after getting burnt out chasing traditional FIRE.
“FIRE itself can be a 15-, 20-, or 25-year journey,” Hill said. “And depending on your income, it might not be the most comfortable journey for a lot of people.”
Coast FIRE still involves front-loading your investments, but the goal isn’t to stop working altogether. The goal is to build a portfolio large enough to grow to your retirement target on its own through compound interest.
Once you reach your Coast FIRE number, you can reduce or stop retirement contributions and redirect that money toward other priorities, whether that’s spending more on experiences, working fewer hours, changing careers, or starting a business.
For the Hills, that number was about $550,000 invested by age 40. Assuming a 6% annual rate of return, Hill estimated that the balance could grow to roughly $2 million by retirement age.
“That was plenty for us to live on,” he said.
Of course, those projections aren’t guaranteed, and it’s important to account for inflation, fund expenses, and advisory fees when estimating future returns.
Hill, who quit his corporate job in 2020 to focus on growing his financial education business, Marriage Kids and Money, regularly checks his family’s progress using compound-interest and Coast FIRE calculators.
“It’s important to continually check in over time to make sure you’re still on track,” he said, adding that if the numbers change, there’s nothing wrong with adjusting the plan. “If we find we’re not on track anymore, we’ll go back and continue to add to our IRAs so that we’re continuing to have a comfortable retirement.”
