Coast FIRE and Barista FIRE: are you already financially independent?

Last updated: March 2026

True wealth isn't about millions in the bank. Through an unexpected conversation with my son, I rediscovered an essential truth about financial independence: it begins well before the withdrawal phase. Here's how to identify the moment you enter financial independence — even if you haven't realised it yet.

"Dad, are we rich?"

WTF. I didn't see that one coming.

• Hmm, how to put it... What does being rich mean to you?
• Well, it means I can buy everything I want.
• And what is everything you want?

I'll spare you the list. It basically comes down to the games console that starts with an S and ends with an H, topped off with a few football shirts.

• And that's it?
• Well (visibly surprised by the question)... yes.

And at that point, Seneca comes to my rescue.

Wealth according to Seneca

• Then you're rich!
• Why do you say that?
• Because "He is not poor who has little, but he who always desires more."
• ... (wide eyes)
• That means if all you want is a few video games and football shirts, you can have them easily by saving a little.
• Yes but I don't have the money yet, so I'm not rich.
• And if you had the money?
• I'd buy the video games.
• And then you'd be rich?
• Hmm... no.
• But you told me rich meant being able to buy everything you wanted.
• Yes but then I wouldn't have any money left!
• For what?
• To buy more games!!!

And he walks off, visibly frustrated that his dad doesn't get it.

I got off lightly that time, even if he left with more questions than answers. And it got me thinking. Those few innocent questions were enough to remind me that the Rat Race has been part of us since childhood. Breaking free from it requires conscious, daily effort. It lurks everywhere, at every moment, ready to pounce the instant we let our guard down.

But above all, these questions about wealth remind me of something else: it's not about money, it's about choice. Financial independence means having the freedom to do what you want, when you want. If you own several millions but are compelled to keep accumulating to satisfy never-ending needs, you are not free. Conversely, you are financially independent the moment you can afford the luxury of stepping outside the system.

Financial independence is not a door to walk through

This brings me to another distinction. We often talk about the journey towards financial independence, as if at some point there is a door to cross to get to the other side. I held that image in my mind for a long time during my FIRE accumulation phase. Yet this picture is anything but accurate — you only realise it later, once you have been in the withdrawal phase for some time.

Living in the present moment is an essential part of financial independence: FI is not a finish line, it is a progressive state. And that is precisely what the concepts of Coast FIRE and Barista FIRE allow you to identify.

The path TOWARDS vs the path WITHIN financial independence

Moving from the accumulation phase to the withdrawal phase seems like the Holy Grail for FIRE followers. Yet it is only a symbolic milestone in the broader journey. Rather than simply distinguishing between accumulation and withdrawal phases, we should also differentiate between the path TOWARDS financial independence and the path WITHIN financial independence. The first begins when you decide to exit the Rat Race by saving and investing. The second begins as soon as you can start reaping the fruits of that first phase.

At this stage, you are already financially independent — even if you haven't fully realised it yet. You are, because you can already make choices about your future that others cannot: reduce your working hours, take an extended sabbatical, or leave a job without having another one lined up and without filing for unemployment. This progressive financial freedom gives you what is known as "FU money": the ability to say no to whatever no longer suits you.

This path WITHIN financial independence can arrive much sooner than the full withdrawal phase. Even though you are not yet drawing down capital, your savings rate gradually falls as income from dependent activities declines. This can last months or even years — living with a near-zero savings rate while already being WITHIN financial independence.

Coast FIRE and Barista FIRE: you are already living WITHIN financial independence

What I describe here has been given two distinct names in the English-speaking FIRE community. Coast FIRE refers to the point where your accumulated capital is sufficient to reach financial independence through market growth alone, without saving another penny. Barista FIRE describes the situation where you reduce your working hours to prioritise quality of life, with your income covering day-to-day expenses without touching your capital.

These two concepts are not mutually exclusive. On the contrary, most FIRE followers live a combination of both: they progressively reduce their working hours (Barista) while letting their accumulated capital grow (Coast). This is exactly what I define as the path WITHIN financial independence: that transition phase where you are already free to make your own choices, even if you haven't yet shifted into full withdrawal mode.

I personally lived this transition, shifting into Barista FIRE at 39, then Coast FIRE a few years later, before entering the full withdrawal phase at 48. This experience taught me one essential thing: you don't wait until you've "arrived" to start living free.

The psychological phase before full retirement

This final stage, before the withdrawal phase, is necessary — not financially, but psychologically. You are already financially independent, but your mind isn't ready yet to make that last great leap. "Work" is a fundamental value in Western societies. Breaking free from it is not straightforward: socially, within your family, and personally, you need to have thought through everything and summoned the courage to finally make the switch.

If you want to model your own trajectory concretely — capital needed, projection through to full retirement with integration of Swiss AVS and LPP pension pillars — CaRBuRe is the tool I developed precisely to answer these questions.

"Dad, are we rich?"

Rich, no. But financially independent, yes. And that is worth all the wealth in the world.

Frequently asked questions

What exactly is Coast FIRE?

Coast FIRE is reached when your invested capital is large enough to grow on its own to your retirement target, without needing to save another penny. From that point, you only need to work enough to cover your current expenses, without adding further to your portfolio.

What is the difference between Coast FIRE and Barista FIRE?

Coast FIRE is defined by your level of accumulated capital: your portfolio can "coast" to the target on its own. Barista FIRE is defined by your lifestyle: you work part-time or at a reduced pace to cover expenses without drawing down capital. In practice, the two naturally combine as you transition towards full retirement.

Do you need a high savings rate to reach FIRE?

No. A savings rate of around 20%, combined with a solid investment strategy and sufficient time, is enough to reach FIRE in under 20 years. The key is consistency and compound returns over time — not extreme financial sacrifice.

How do you know if you are already financially independent before retirement?

The clearest sign is freedom of choice: if you can reduce your working hours, turn down an assignment, or take an extended break without jeopardising your financial future, you are already within financial independence. It is not about a specific number — it is about real room to manoeuvre.

Is full retirement truly necessary to be free?

No. Full withdrawal is often more symbolic than financially decisive. Many people in Coast FIRE or Barista FIRE already enjoy total freedom in their professional and personal choices. The main obstacle before full retirement is psychological, not financial.

Sources and data

• Seneca, Letters to Lucilius — quote on wealth and poverty
• Barista FIRE calculator — dividendes.ch/calculateur-barista-fire