Isabela: Welcome back to the ETF Experience podcast. My name is Isabela Sagan, and today we're going to be talking about Coast FIRE” the “Financial Independence Retire Early” movement that's been trending all over TikTok and Reddit. Today, we're going to be covering the definition of Coast FIRE. Why? It's resonating now with millennials and Gen Z, how this connects to investing and ETFs, and some mistakes to look out for when working towards Coast FIRE.
Joining me today is Ben Gossack, who's going to help us navigate through today's episode. Welcome, Ben.
Ben: Hi, Isabella. Thanks for having me on the ETF Experience.
Isabela: Thank you for being here. I'm excited. Before we dive into it, Ben, I want to start off with a round of Rapid FIRE. So, I'm going to say some words related to Coast FIRE and you're going to say the first thing that comes to mind. No overthinking. Are you ready?
Ben: Okay, FIRE away.
Isabela: All right, here we go. Retiring early.
Ben: Sounds like a great idea.
Isabela: Investing early.
Ben: Probably what everyone should be doing.
Isabela: Compounding.
Ben: Surprisingly, I think this often gets overlooked. But the engine to create wealth.
Isabela: Sacrificing total return for income.
Ben: Never a good idea.
Isabela: And net worth.
Ben: Never enough.
Isabela: Facts. Okay, so we're definitely going to be diving into a bit of those in more detail. But let's start off with the basics, because Coast FIRE sounds like a bit of a buzzword. At its root, what is Coast FIRE?
Ben: So, when we were discussing the FIRE movements, I didn't even know about the Coast FIRE movement. I was first familiar with FIRE, which is “financial independence, retire early”. And I think a lot of us also caught a lot of speed and attention in COVID where people weren't working or were working remotely, making different decisions with their lives and thinking, you know, do I want to be dedicated to this sort of corporate lifestyle and how can I retire early and build passive income strategies?
Ben: What is interesting about this Coast FIRE movement, you can think of these individuals as continuing to work in what might be a corporate job, but really starting to think about what are their needs at retirement and then working their way back to figure out how much money do I need to set aside such that I can sort of let the market compound my wealth and I can sort of take a step back and, you know, maybe I want to work really hard for the next ten years, but not have to sort of slug it out every day in a corporate job.
Isabela: Absolutely. And I feel like Coast FIRE is really hitting the home for younger generations who want that really value like flexibility and time as well as money, like making money.
Ben: And I think, you know, there is a common misconception. So, I think there are people that believe that let's say a younger cohort doesn't want to work. And I don't think it's about, you know, not wanting to work. I think it's really about giving yourself more financial independence. So oftentimes you're like, I need this job because I have all these bills to pay.
So, there's this dependency on a job. So, a lot of people don't like that dynamic. And I think what we've also seen, especially through COBRA and post-COVID, you know, some people may not even go to a workplace. They're working remotely. They've been fired, you know, over, let's say, telecommunications. The corporate world today is very impersonal versus how it might have been 10, 20 years ago.
And so, by focusing, making some sacrifices today makes the person feel like they have some control over the situation, because finances can provide a lot of stress for people.
Isabela: And would you be able to explain the difference between FIRE on its own versus coast FIRE?
Ben: Yes. So, I think, you know, when I grew up, it was all about “freedom 55”. So, could you retire by 55? And so, with FIRE, a lot of it I hear is, you know, can I stop working by 30 or how do I build up all these passive income strategies, so I don't have to work? So, let's say you make $100,000 a year, could you come up with a whole bunch of passive income strategies?
One that really caught my attention, Isabela, was vending machines. So, it was all these podcasts I was listening to. But could you create this, you know, I go to saw a wholesaler, I could buy candy bars. You could create ... it's great profits in terms of vending machines. But like all things you realize, well, who's going to let me put my vending machine in their establishment?
So that's where it gets really complicated with all these strategies. There's no such thing as easy, easy income. But, you know, FIRE would be, how do I create these income streams? But I'm not like actively working. Coast FIRE, you can imagine people are still working their jobs. They may be working 100-hour weeks with the intention of putting away like a squirrel a lot of acorns and then trying to figure out, you know, at what point do I have enough?
Is it $500,000? Is 300,000? Is the million such that you can now coast? So, you know, maybe I don't have to do the 100-hour workweeks. I can go back to sort of, you know, 50-hour work weeks. Maybe I can go to a part time job. But you are still working, but now you have the flexibility because you know that you have this nest egg.
And the assumption is that it's getting market like returns. So, let's just say high single digits.
Isabela: That makes sense. Perfect. And for the purpose of the podcast today, we're going to be focusing on Coast FIRE. So, speaking of Coast FIRE, why do you think it's resonating so much with millennials and Gen Z specifically right now?
Ben: So, you know, I think about myself, and when I grew up, it was all about the baby boomers had all these jobs and they were going to retire and we would get all these sort of, you know, really big important positions and that didn't play out for my generation. People just kept working longer, so it was harder to sort of move up the ranks.
And so, I would say also housing was a bit more, you know, maybe a little bit more attainable than it is today. So, a lot of it was I need to work because I have a mortgage and I got to make interest payments. And a big financial milestone would be, you know, finally finishing your mortgage and then you could really focus on savings, I think, for this generation,
You know, we have seen a lot of inflation, in particular housing inflation. And so, a lot of the stuff like housing or maybe a car that my cohort would have tried to go after, Isabella just seems out of reach. And again, it goes back to this sort of social contract between as employees and the corporation that we feel like it's shifted.
And so I think it's not that people don't want to work again, they value a bit more independence and feel like the power dynamics have shifted their way because if something were to happen and they got laid off for whatever reason, they got beyond your control, you're like - wait, but I do have this nest egg that's working for me.
So, I think it's a shift in and a perception of power dynamics.
Isabela: Absolutely. I think three things that come to mind for me would be kind of also like burnout culture is one of them. The increased cost of living and then housing affordability, which you touched on a lot as well. That's especially now why millennials and Gen Z are talking about it. And also, I actually was reading a study earlier this week and it was the 2025 Millennial and Gen Z study, and there was an equation there that I really liked, and it was for like millennials and Gen Z, it said that happiness equals money plus meaning plus well-being.
Isabela: Mm hmm. So that's like the equation that everyone is kind of striving towards. They say.
Ben: I think it's a great equation.
Isabela: So, let's connect this back to investing because Coast FIRE doesn't work without a growth engine. Where do ETFs fit into the Coast FIRE strategy?
Ben: So, if we have a starting point so I'm saving all my money. I'm building this sort of nest egg. It needs to grow and compound because I got to hit this target. You know, whatever year I decide, I think I'm going to retire. So, like you said, we need growth avenues. ETFs, I think, are very sort of flexible.
There's a lot of visibility. They trade like stocks on the exchange. They come in baskets so you can get them in many different flavors. They can vary in cost, but for the most part, I think they're fairly inexpensive in terms of ... I want this exposure to the broad market, I want this exposure to ... a theme, maybe it's technology, maybe it's A.I., maybe it's robotics.
But I can sort of pick up all this stuff and, you know, it's sort of that one stop shopping. So, I think ETFs in one way are very easy way for you to start putting in the tools that allow you to compound.
Isabela: And would you say that ETFs are good for anyone, whether you're a beginner or a professional, when it comes to investing?
Ben: So, I think there's a misconception, Isabela, and you can correct me on this, but, you know, to me, the way I look at an ETF, it's a wrapper. Let's say you need to take a medication. Some people are comfortable taking pills. Some people want it in a gummy form. I think what's really important in terms of when someone's thinking about, okay, I want my money to compound at seven, I want to think about, you know, in any given year, could it be up 12?
Could it be down 5? I really don't want it to be down 5. I like the 12. So, you have to think about the volatility of these specific vehicles. And I think to me, ETFs kind of are that nice wrapper, whereas other vehicles will still do the same thing, but maybe they only price one time of day. You don't get a lot of visibility in terms of how much it's worth.
I think ETFs are a great wrapper that's easy to consume and I think it's available. It's a vehicle that anyone can use.
Isabela: Absolutely. So essentially, like by using ETFs, like you don't need to be an individual stock picker, you just need like time, consistency and a plan.
Ben: Exactly. And I think the time, consistency and plan is very important. I remember I was getting my hair cut and this young individual was talking about dividends and growth and compounding. And I was like, wow, this is music to my ears. You're young, you're thinking about savings. And then they were they were saying how the, you know, they got a dividend increase and it only increased by like $0.04.
And they didn't think that was a big deal. And I'm like, but you're not thinking about the big picture. Like, what if every year it grows and grows and grows and grows and grows? So, you definitely need the plan, and you definitely need patience.
Isabela: The power of compounding, which was one of the words, are used for the rapid FIRE at the beginning.
Ben: Exactly.
Isabela: Awesome. So, for someone in their twenties and early thirties, what matters more? Saving aggressively early or chasing higher returns.
Ben: So, I think, you know, the research would bear out that saving is really important. Timing and sequencing of returns is really important. I think the challenge of chasing returns, if let's say you do, you do go after a specific theme, and you're right. That tends to lead to overconfidence, Isabela, and more often than not, when you do run with overconfidence in the market, the market has a healthy way of putting you in check.
And so, you definitely do not want to risk losing your money. So, this is about saving accumulation and growing, and any setbacks can slow you down from reaching your goal. So, I think saving, having a plan and if you can, the earlier you can aggressively save is easier than saying, hey, I might have a whole bunch of money in ten years from now.
Ben: You know, if someone started ten years versus you, starting ten years later is a massive difference in terms of compounding.
Isabela: So, what I'm hearing is start today. Don't wait until tomorrow if you can.
Ben: Yes, I have a motto. The best time to do something was yesterday. The next best time to do it is today.
Isabela: I like that. I'm going to use that. What are some mistakes people make when working towards reaching Coast FIRE?
Ben: So, I think there's a couple of things. Let's say you extrapolate. Hey, you know, when I get to 60, this will be my lifestyle, and you make a whole bunch of assumptions. I think you need to adjust for inflation. You know, in recent years, I think we've all seen, you know, inflation can run rampant. So, if your money is growing at 5% but prices are going up by nine, well, that that's going to be a problem and it keeps compounding and compounding.
I think another thing, especially when you're young and even at my age, I still you know, I suffer from this, too. But, you know, you're healthy today and you think you'll be healthy forever. And it could be a setback to yourself. It could be a setback to your partner. It could be a setback to your, you know, your dependents, your children, or maybe it's your parents or a family member.
And so, these are things that you can never really plan for. Life could be going great. Tomorrow there could be a big change. And I think that really needs to be factored in. You might be healthy now. You might pick up a chronic condition later on that requires a lot of money. So, I think people have to be flexible and reevaluate exactly how much they think they need and lifestyle choices and change all the time.
I mean, you know, if I met myself, you know, as I was in my twenties, I don't know if that person would recognize me and nor would I recognize that person. So, we change. So, I think, you know, the biggest things would be your needs and wants might change. Watching for inflation. I can't say enough about health.
And that goes back to your equation about well-being. I think it's a really important consideration.
Isabela: Absolutely. So, lifestyle creep might also be one as you start getting more senior in career, maybe start making more money as well. And then you have to go back and change your assumptions that you initially said maybe for coast FIRE. Another thing to consider.
Ben: I will say this if you've ever been upgraded to business class, then it's sometimes hard. I mean, you still have to fly economy. Not everyone can fly business every day, but you know what's up there behind the curtain. So, yeah, any time you sort of elevate parts of your life, it can be very difficult to go back to, you know, fish sticks and baked beans.
Right.
Isabela: It's tough, for sure. But I think, you know, coasting doesn't mean disengaging. It means just being intentional.
Ben: Yeah. And I think that's what's really great about the Coast FIRE movement. Like I said, it's not about people not wanting to work or coast. I think you can have very type-A people that are working really hard. Again, it's just knowing that in the back of your mind, it's almost like you have this secret power, which is, Yeah, I'm working, I am, I'm toughing it out, I'm trying to move up the corporate ladder.
But if anything were to happen, I got this, this sort of safety net that I built for myself. I think that's a very powerful feeling.
Isabela: For sure. Well, thank you for all your insights today, Ben. So, as you heard today, Coast FIRE isn't about escaping work. It's about designing a life where money supports your choices instead of controlling them. So, as always, stay curious, stay informed and stay invested.
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