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Coast FIRE with High Yield

Hit 'Coast FIRE' 5 years earlier by pivoting to high-yield compounders.

DivAgent Research Team
2026-01-03
5 min read

Key Takeaways

  • •The Concept: Coast FIRE is the point where you stop contributing to your 401k and just let it grow.
  • •The Problem: Waiting for the S&P 500 to double takes ~7-10 years (Rule of 72).
  • •The Hack: High Yield assets (Tier 2/3) reinvested monthly compound faster in flat markets than pure growth stocks.
  • •The Result: You can take your foot off the gas sooner, knowing the income machine is building itself.

The Math of Coasting

Traditionally, if you need $1M at age 60, and you have $200k at age 30, you assume 7% growth and stop saving. That works. But it relies entirely on market price appreciation.

If the market stays flat for 10 years (like the 2000s), your Coast FIRE plan fails.

The Dividend Accelerator

When you Coast with High Yield (e.g., a DRIP portfolio of SCHD + DIVO), you are buying more shares every month regardless of stock price.

Scenario: The "Lost Decade"
If stocks trade sideways for 10 years:
• Growth Investor: Has the same number of shares. Price hasn't moved. Net Worth: Flat.
• Income Investor: Has doubled their share count via reinvestment. Even if price is flat, their income stream has doubled.

How to Execute

  1. Hit your number: Calculate the Coast number (e.g., $300k).
  2. The Pivot: Shift 50% of that into Dividend Growth (Tier 2) and 20% into Income Generators (Tier 3).
  3. Turn on DRIP: Set dividends to automatically reinvest.
  4. Stop Stressing: You no longer care about stock prices. You care about share count. And share count only goes up.
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