Traditional FIRE is the process of increasing your savings rate and investing to reach 25 times your annual expenses quickly as possible. This often involves sacrificing current happiness by delaying gratification, with the goal of achieving financial independence and quitting work. But we will talk about Barista FI.

Even at a 50% savings rate, it would still take about 17 years to reach that milestone. That’s a long time to wait to be happy. Fortunately, there are more flexible approaches to financial independence that allow you to maintain a higher level of current happiness.

You may have heard of Coast FI, Barista FI, Slow FIRE, Fat FIRE, Lean FIRE, Summer Retirement, Mini Retirements—the list goes on. It seems like a new type of FIRE emerges every week.

Over the next few weeks, I’m going to do a deep dive into different financial independence strategies. We will explore their pros and cons, who they might be suitable for, and my own preferred approach.

While researching this guide, I came across a Personal Wealth Spectrum graphic on the Wallet Burst blog. Which I found interesting.

As you can see, there is a continuum of different types of financial independence. As you progress through your financial independence journey and your portfolio grows, so does your level of freedom over your time.

I’ve already made a few guides on Coast FI, so I’ll link to them. But today, I’m taking a deep dive into Barista FI.

What is Barista FI?

Barista FI generally refers to what many would traditionally call semi-retirement. While it doesn’t mean full financial independence, the idea behind Barista FI is to bridge the gap between passive income from investments and expenses by working a part-time job.

Despite the name, it doesn’t mean you have to become a barista. Instead, it’s about taking on a lower-stress, part-time, or lower-income job—preferably one that you enjoy. In my case, I aim to bridge the gap by building enjoyable side hustles.

In today’s gig economy, making money online has never been easier. Every $1,000 earned per year from a side hustle or part-time job is equivalent to having an extra $25,000 in your FIRE portfolio. That means earning just $4,000 a year from a side hustle is the same as needing $100,000 less in your retirement savings.

Barista FI vs. Coast FI

Although both strategies are similar, the key difference is that Barista FI involves withdrawing from your portfolio while supplementing it with additional income. In contrast, Coast FI means leaving your portfolio untouched so it can continue growing until full FIRE, while covering your expenses through employment.

Coast FI often requires working full-time for a period, whereas Barista FI might involve working just one or two days per week.

Example

Let’s look at an example. Imagine someone who has worked their way up to a well-paid position in their company—perhaps even reaching a middle-management level—by their mid-30s.

However, as with everything in life, there is no free lunch. Each promotion has meant gradually taking on more responsibility, often leading to longer and more unsociable hours, including regular evenings and weekends. This means regularly missing out on family events, birthdays, and other important moments.

Despite disliking their job, this person has been a conscientious and competent employee, gaining a few promotions over the years. As a result, they now earn enough to save and invest a decent amount of money each month. However, they are unhappy with how their life is unfolding and want to escape their high-stress job as soon as possible.

They discover financial independence but realize that even after dramatically cutting their expenses and saving over 50% of their salary, it will still take them 10 to 15 years to reach full financial independence. By that time, their kids will have grown up, and the opportunity to do the things they dream of may have passed.

Let’s say they have household expenses of around $2,000 per month. Since they have been on the FIRE journey for a few years and have always been naturally good at saving and investing, they now have a portfolio of about $150,000 in index funds.

The 4% FI Rule

Using the 4% rule, they could probably withdraw around $6,000 per year from their investments, or about $500 per month, while allowing the principal to continue growing. They also realize that by leaving their high-paying office job, their cost of living would drop to around $1,500 per month, as they would no longer have to pay for commuting, work lunches, expensive work clothes, and other job-related expenses.

With roughly $500 coming from investments, they would only need to earn $1,000 per month to make ends meet. Therefore, in this example, this person could realistically consider quitting their high-stress, time-consuming management job in favor of a lower-stress, more enjoyable job that requires only three to four days of work per week—while significantly improving their quality of life.

This approach can look very appealing to someone who is miserable in their current job. However, before jumping straight into the Barista FI approach, here are a few things to consider.

What Are the Positives of Barista FI?

1. Improved Lifestyle Much Sooner Than Full FI

Barista FI allows you to gain more free time while you’re still young, rather than waiting until you are older and potentially unable to do the things you wanted to. It is also a great strategy for those who want to spend more time with their kids before they grow up and no longer want to spend time with their parents…

Additionally, it provides the opportunity to work on a potential business or side hustle while maintaining financial stability.

2. Health Benefits With Barista FI

One of the key benefits often discussed on U.S. FIRE movement blogs is that Barista FI allows individuals to continue receiving employer-sponsored health insurance. However, in the UK, this is less of a concern due to the publicly funded National Health Service (NHS), which ensures healthcare access for all.

3. Barista FI Give You Lower Stress Work Environment

Some articles argue that working in retail or the service industry can be highly stressful due to demanding customers. That’s a valid point. However, if someone is pursuing Barista FI from a position of financial strength, they can take their time to choose a job that is a good fit for them—one that aligns with their interests and reduces stress rather than adding to it.

4. A Good Transition to Early Retirement

Many FIRE bloggers and early retirees talk about the challenges of transitioning from a high-earning, high-status career to suddenly quitting and doing nothing. The sudden loss of routine and purpose can sometimes lead to struggles with depression, mental health issues, and even relationship breakdowns.

By choosing Barista FI, individuals can ease into retirement gradually rather than abruptly, allowing them to adjust to a slower-paced lifestyle without losing a sense of structure and purpose.

Therefore, I think the Barista FI route provides a great way to gradually transition to FI. It allows you to dip your toes in the water, even if it’s just reducing your workweek by a few days at first, and start designing a new life that will work for you in the long run.

5. Barista FI Doesn’t Necessarily Mean Becoming a Barista

People hear “Barista FI” and immediately dismiss it because they have no interest in becoming a barista. However, it doesn’t have to be that specific job—it could be anything that offers part-time work or more flexibility. More on potential job ideas later.

6. Barista FI Provides a Safety Net in Case of Market Crashes

One common worry in the FIRE community is the impact of market crashes and sequence of returns risk. However, with Barista FI, you have the flexibility to pick up a few extra shifts or take on side work if the market drops, allowing your portfolio time to recover.

In theory, this should help mitigate sequence of returns risk. Additionally, the ultimate goal is still to achieve full FI at some point, so it’s crucial to keep investments growing—either by maintaining a lower withdrawal rate or continuing to contribute to the portfolio in some way.

7. More Time to Follow Passions

Less time working means more time for hobbies and personal projects. Enough said.

8. Less Commuting

Ideally, your part-time job would be close to home, or even better, remote, eliminating the stress and expense of long commutes that many workers despise.

9. Forced Socialization

This ties in with point #4—early retirement can be isolating for some people. A part-time job encourages social interaction, which can be especially beneficial for introverts who might otherwise withdraw from social settings.

What About the Negatives Of Barista FI?

1. Status and Adjusting to a Lower Paycheck

By pursuing Barista FI, you’re essentially choosing time over status. Many people tie their identity and self-worth to their job title, and it can be difficult to let go of that.

Taking a significant pay cut and going from a high-paying career to a minimum-wage or lower-status job can be a blow to the ego. Some people struggle with this transition and feel undervalued in society.

2. People Can Be Judgmental

Building on the first point, people often make snap judgments based on job titles, clothing, and perceived social status. Some may look down on those working in traditionally “low-status” roles.

Not everyone is like this, of course, but we’ve all encountered rude and inconsiderate individuals who judge others unfairly. It’s surprising how many people still behave this way.

3. Slower Path to Full FI

Barista FI requires withdrawing a small amount from your portfolio earlier than traditional FI, which slows down the compounding process. This means it will take longer to reach full FI.

That said, the trade-off is gaining more time and flexibility now, rather than deferring your ideal lifestyle until later in life.

It’s also important to remember that if you want to reach full FI, you will likely need to withdraw at a rate lower than 4% or continue investing a little to keep your portfolio growing.

4. Uncertain Job Market

Who knows what the job market will look like when you decide to transition? Part-time jobs can be highly unstable. For example, barista jobs likely took a hit during recent economic downturns. Depending on the industry, finding or keeping part-time work might not always be easy.

5. The New Job May Not Live Up to Expectations

Let’s be honest—most of us have had part-time jobs before. Some were enjoyable, while others were downright awful.

You might think you’d love a particular job, but if your boss is difficult or the job comes with unexpected stresses—like angry customers and toxic coworkers—it might not be as appealing as you initially thought.

6. It Can Be Awkward to Keep Your Wealth a Secret

You’ll likely have to downplay your financial status.

First, many employers don’t appreciate employees who have financial freedom, as it challenges the traditional work structure. Some might even see it as a hit to their ego if they realize their employee has a larger investment portfolio than they do.

Second, many of your coworkers might be struggling financially, living paycheck to paycheck. If they find out you’re working just for “pocket money,” it could create tension and make workplace relationships awkward. You might even feel excluded from the group.

7. Barista FI Isn’t Really FI at All

Technically, Barista FI isn’t “early retirement” because you’re still working.

That said, the FIRE movement, to me, isn’t necessarily about retiring early—it’s about achieving financial freedom and having the choice to work on your own terms.

Even if Barista FI doesn’t fit the textbook definition of retirement, it’s still one of the quickest ways to escape the traditional 9-to-5 grind while working fewer hours and having more time for the things you truly enjoy.

Potential Barista FI Jobs

In the UK, since healthcare isn’t as tied to employment as it is in some other countries, there’s a broader range of job opportunities for Barista FI. Here are some ideas:

1. Online Jobs

• Teaching online
• Freelancing (e.g., Upwork, Fiverr)
• Digital marketing, graphic design, or content creation

2. Seasonal Jobs

• Sports summer camps
• Skiing instructor
• Teaching water sports

3. Upmarket Grocery Stores

• Shops like Waitrose and Marks & Spencer offer staff perks, such as a 25% discount at Waitrose and John Lewis.
• However, be warned—some customers can be notoriously snobby and rude.

4. Part-Time Passion Jobs

If you have a passion for something, why not work in that field?

• Love coffee? Work as a barista or for a coffee company roasting beans.
• Wine enthusiast? Try a job in a wine bar, vineyard, or wine shop conducting tasting sessions.
• Love books? Work in a library or bookshop.
• Interested in conservation? Find a job at a nature reserve or pet shop.

5. Consulting or Coaching

Leveraging your previous experience could allow you to earn more in a single day of consulting than in a week working a standard part-time job. Plus, it doesn’t require taking as big of a hit to your social status—if that’s something that matters to you.

Is Barista FI Right for You?

The key question: Is Barista FI the right path for you?

If you can’t understand why anyone would voluntarily take a lower paycheck for a part-time job, then Barista FI probably isn’t for you—especially if you have a well-paying career that you enjoy and find fulfilling. In that case, you might be better off sticking with your job and continuing on the path to full FI.

However, there’s no right or wrong answer—it all comes down to personal preference.

For many people, full financial independence might not be achievable for another 20+ years. In that case, Barista FI could be worth considering as a way to reclaim time and enjoy a slower-paced lifestyle sooner. If status isn’t a priority for you and you value freedom now rather than later, then Barista FI is definitely an option worth exploring.