Developer Financial Independence

by Hugh Bien — 04/09/2020

I made a website — DeveloperFI! It's for software developers interested in FIRE.

What's FIRE?

FIRE is an acronym for Financial Independence, Retire Early. It's important to separate the two. Reaching financial independence gives you the freedom to: start a business, work part-time, pursue hobbies full-time, focus on a charity, spend time with family, travel, or retire early. All without worrying about your finances.

The 4% rule is a general rule that many FIRE seekers use to determine how much they need to save up. It comes from the safe withdrawal rate, which says you can annually withdraw 4% of your saved portfolio without running out. This means you need to save up 25x times our annual spending. For example, if you spend $40k a year, you'll need to save up $1M.

LeanFI, FatFI, CoastFI, BaristaFI

A few sub-communities popped out of the main FIRE group. They each have their own strategy, depending on their lifestyle, earning opportunities, and values.

LeanFI — takes a leaner approach, accelerating your time to financial independence by reducing how much you spend. Pursuers tend to spend below $40k/year and target $1M saved for their FI number.

FatFI — takes the opposite approach to LeanFI, wanting to make no sacrifices in their lifestyles during retirement. There's no set amount, but pursuers tend to spend above $200k/year and target above $5M saved. This might mean staying employed longer to take advantage of your high income years as a senior individual contributor or manager.

CoastFI — this strategy involves saving enough money where investment returns should be enough by the time you hit your retirement age. For example, saving $250k by the time you're 30 years old. According to the Rule of 72, your portfolio should double about every 10 years. So it should be $1M by the time you're 50 years old. CoastFI means saving that initial $250k by the time you're 30, then "coasting" at an easier job that might pay less. As long as you don't spend your savings, you should be set for retirement.

BaristaFI — similar to CoastFI, someone who reaches BaristaFI isn't ready to retire yet. This strategy involves saving money in a high income (but perhaps also high stress) job before switching to a lower income (but also lower stress) job. Pursuers of BaristaFI will use their income to supplement the income they make from their investment portfolio.

Check out DeveloperFI!

If any of this sounds interesting, take a look at DeveloperFI! Right now, it's a collection of tips about: using tax advantaged accounts (401k/HSA/IRA), participating in ESPP, investing in index funds, diversifying with lazy portfolios, and more. I'm hoping to add more calculator tools (or even a command-line tool) later on.


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