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13 Ways to Reach FI Sooner (Even if You Live in an Expensive City)

Nighttime Vancouver city and water scene.

Downtown Vancouver” by PoYang is licensed under CC BY-ND 2.0

By the way…

If you live in a low cost of living area, I’ve still gotcha covered! There are plenty of tips in this article that’ll work for you—wherever you happen to live.

We’re number… one?

Vancouver has the dubious distinction of being the most unaffordable city in Canada. We have the third highest home prices in North America, but rank at number fifty for household income! In other words, Vancouverites are both house-poor and cash-strapped.

How can we (or anyone in a high cost of living area) possibly consider FI? It seems impossible… and yet, our story proves that it doesn’t have to be. The truth is, you can pursue FI, with kids, living in a city like Vancouver—no deprivation required!

Okay, but how?

The answer: trade-offs. Trade-offs are life changes we make in order to reach our goals (in this case, FI). I love trade-offs! They’re the secret to preventing deprivation. And that’s so important in the FI journey. You need to feel happy and fulfilled if you’re going to be on this sometimes-long path.

I’m intrigued… tell me more

Some easier trade-offs for FI include eating out less, buying used, and cancelling cable. These changes are a step in the right direction, but those of us living in costly areas need to make more and bigger trade-offs to reach FI.

This article is a collection of trade-offs that’ll help you significantly reduce your expenses, make more money, and reach FI sooner than you thought possible.

The list is broken into two categories: housing and lifestyle. Click through the table of contents below to jump to each section:

8 housing trade-offs that’ll get you to FI sooner

Since housing is such a significant expense in expensive cities, making trade-offs in this area makes a huge impact.

1. Buy a smaller home

Wooden model retro camping trailer.
The cutest "tiny home" ever!

North American culture tell us that success is a big house with a huge backyard and multi-car garage. But if you want to reach FI in a costly city, tune out that cultural programming and follow our European and Asian friends.

Plenty of wealthy families in other developed nations happily live in homes we’d consider shoebox-sized. When we visited Japan, we stayed in an area filled with apartments and no single family homes. And yet, we were surrounded by families of all sizes. 

How do they manage to fit into their tiny one and two-bedroom apartments?

Well, to start with—they ride bikes and take trains, so cars and garages are unnecessary. Parks and playgrounds are everywhere, so why have a backyard? Clever use of space, combined with bunk beds and fold-up futons equals fewer rooms and bedrooms needed.

Don’t believe it can work in your North American city? Check out this single dad, who lives in a downtown Vancouver apartment with his FIVE kids! Truly inspirational.

If a condo is too big of a trade-off for you, what about a townhouse? You’ll get the best of condo living and house dwelling. If a townhouse still isn’t big enough, go for a duplex or triplex. You’ll not only save on the purchase price, but also on the property tax, year after year.

Finally, if a smaller home is just too cramped, and you just have to have that big ol’ house, consider the next trade-off…

2. House hack

homestay bedroom 1
One of our homestay student bedrooms

House hacking is a term coined by Brandon Turner at BiggerPockets. (Back in the “olden days”, 😏 house hacking was called “having tenants or “getting roommates”.) Whatever you call it, house hacking is a smart way to put your home to work for you, allowing you to offset your housing costs.

  • Lily at The Frugal Gene and Kevin at Financial Panther house hack by listing their spare bedrooms on Airbnb. 
  • Paula Pant at Afford Anything house hacked by living with roommates well past the age where that was considered “normal”. 
  • Our house hack of choice was a unique one: hosting international homestay students.

House hacking is one of the best ways to reach FI in an expensive city. The popularity of your city, initially a downside, now becomes a benefit to you—you’ll never have a shortage of potential guests/roommates/students!

3. Live at home for longer

living with parents
Photo by Thought Catalog on Unsplash

While this trade-off is often thought of as embarrassing, shameful, or a sign of failure, I challenge you to rethink it. 

(After all, you’re in the FI community—you’re used to being different!)

If your parents will let you live with them into your late-twenties (or even early thirties) grab the opportunity and take full advantage!

But of course, there are some caveats:

  1. Discuss this with your parents. Help them to understand your goals and how living at home will help you to reach those goals.
  2. Offer to pay rent and help take care of things around the house.
  3. Don’t be a freeloader—you have to actually work hard and save towards FI!
  4. Agree on boundaries that’ll allow everyone to have space and privacy.

Some of our millennial family members did this, and it’s what helped them to save up enough to buy a house in the Vancouver area. 

This also allowed them to skip the stepping-stone condo—one less move to deal with, and huge savings in transaction costs.

4. Rent from family

Photo by Carlton Brown via flickr, licensed under CC BY 2.0

Some of our friends and family members were given the opportunity to temporarily live for free or cheap in a family member’s basement suite or rental apartment. 

Sometimes it was just to keep the place occupied. Other times it was to help an elderly relative with day-to-day chores in exchange for lower rent.

In all cases, the decreased housing costs allowed our family and friends to reach their savings goals much faster, while also helping out a loved one. 

So try asking around to see if someone you know is looking for a reliable tenant!

5. Rent instead of buy


Rent vs. buy—it’s a huge debate. Kristy and Bryce at Millennial Revolution advocate for renting, especially for millennials living in expensive cities. While I don’t think their advice works for everyone, I do think their opinion is valuable and worth considering.

The decision to rent or buy is never straightforward, but doing the math helps bring some clarity. To do this, create your own spreadsheet, or use a calculator like this one to crunch the numbers. 

Note for Canadians: Set the “marginal tax rate” to zero—Canadians can’t deduct mortgage interest from their income like Americans can.

It’s worth taking the time to compare the costs—you could save yourself tens of thousands of dollars (and massively change your path to FI)!

6. Live in a co-op

co op building
“Starley Housing Co-op” by Lydia via flickr, licensed under CC BY 2.0

Co-op housing is the little-known housing hack made for FI enthusiasts (especially those pursuing Lean FIRE). My new Mustachian friends Stephanie and Celestian spend less than $800/month on their downtown co-op apartment!

Co-ops are affordable because they’re run as non-profits, by and for the residents. This housing model is not only a huge money-saver—it’s also a unique, community-minded form of housing. 

If you have visions of low-rent, grimy ghettos—think again! Vancouver is home to dozens of up-to-date, centrally-located co-ops. Most, if not all, major cities have co-ops of all kinds. Google the co-ops in your area and see if they’re the right fit for you.

7. Put your land to work

laneway house
“Serene West Side Lane House” courtesy of Smallworks Studios/Laneway Housing Inc.

Have you heard of coach houses or laneway homes? With land prices the way they are, they’re all the rage in Vancouver. Smallworks Studios describes laneway homes as:

“… a small home or cottage-like structure located at the rear of a property lot. Basically, a lane house replaces a current structure like a garage or carport. 

A laneway house is a great solution for families who need more space, or who need secondary income through a rental, and they offer an affordable solution for Vancouver’s growing population of new residents,”

Typically, you’re not allowed to sell your laneway home, but you’re encouraged to rent it out. This makes for a possibly-lucrative income stream and simplified property management since your rental unit’s only steps away!

In expensive cities, the land is what’s most expensive. Adding a building is a comparatively small cost (but you still have to do the math). For many big city-dwellers, this could be an amazing housing hack! (Plus, it helps the community as a whole because you’re providing more housing options.)

8. Put your home equity to work

smith manoeuvre graph
Fraser Smith, a Victoria-based financial strategist, wrote the book on using your home equity to invest

When I first discovered FI, I began to realize the huge opportunity cost of owning a home. Sure, we had a beautiful house that we loved—but so much of our net worth was tied up in it. All that equity was doing nothing to speed up our journey to FI.

This made me miserable, which prompted me to (what else!) Google my way to a solution. After much research, I discovered something called the Smith Manoeuvre*. At its most basic, the Smith Manoeuvre means pulling out your home equity and investing it.

*In Canada, this tactic has a fancy name because you’re “manoeuvring” your mortgage into a tax-deductible investment loan. In the US, the basic concept is the same, but you don’t have to do any manoeuvring, since your mortgages are already tax-deductible!

How to invest your home equity (in a nutshell)

This process applies whether you’re Canadian or American. Skip step 5 if you’re American.

  1. Refinance your mortgage or get a HELOC. If you’re mortgage-free, take out a new mortgage.
  2. Take that lump sum of money and invest it. (I’d suggest index ETFs/funds.)
  3. Leave the investments to grow for as long as possible. (Ideally for 25+ years.)
  4. For maximum gains, pay only the interest on the loan and keep the mortgage/LOC open forever.
  5. For Canadians, there’s the additional tax benefit of being able to write off the interest from the loan. This is what essentially makes your mortgage tax-deductible.

Rocket fuel for FI

Our lifelong frugal choices are what got us most of the way to FI, but investing a large chunk of our home equity was like adding rocket fuel to a slow-burning fire!

Implementing the Smith Manoeuvre shaved at least four years off our FI plan (!) and helped me make peace with living in an expensive city. 

Investing your home equity is such a  hack for expensive city-dwellers—instead of being dragged down by the ridiculous real estate valuations in your city, you can capitalize on it!

BUT there’s a lot more to know about investing with your home equity. It’s not for everyone, and it can be risky—so you must proceed with caution. I’ll write more about this in a future post… stay tuned for more! 

5 lifestyle trade-offs that’ll get you to FI sooner

Okay, you’ve done all you can to minimize your housing costs (or maximize the income you earn using your home). What’s next? Let’s take a look at some of the lifestyle trade-offs that can shorten your time to FI.

1. Go car-free (or drive less)

In Japan, even the buses are cute! (Photo credit: Chrissy 🙂)

Big, expensive cities tend to have lots of things going for them:

  • Reliable, affordable transit.
  • Networks of bike lanes.
  • Good walkability.
  • Close proximity to jobs and amenities.

These advantages make going car-free an easy choice. You’re paying for this infrastructure with your tax dollars anyway—so take advantage of it!

Another way to save on commuting costs is to negotiate a work-from-home-day once a week. Or make it a full-time arrangement—we know a few friends who’ve successfully done this.

I have to admit, this is an area we’re not great at. Still, I do what I can by walking the kids to school everyday, batching errands, and driving mindfully. However you’re able to cut your commuting costs and time, you’ll make a significant impact on your saving rate now and for years to come.

2. Have kids later

boys at window
Kid 1 and Kid 2 at our old house in 2009

While I’m happy with when we started our family (I was 26), I can’t help but wonder how much sooner we’d have reached FI by delaying that decision. I could’ve continued working a few more years, which would’ve allowed us to invest more money and put it to work sooner.

I also think how nice it would’ve been to reach FI while our kids were still little. M would’ve been home with me to watch them grow, and we would’ve had more years to travel without worrying about them missing school. (Once they hit high school, long-term jaunts around the world become much less feasible!)

In the end, I’m still glad we had kids when we did, and we’ll still enjoy FI just as much with them as teens. But there can be benefits to delaying parenthood, so take the time to consider if that’s the right choice for you.

3. Start a side hustle (or two!)

Photo by Anthony Young on Unsplash

There’s never been a better time to pick up part-time work. The gig/sharing economy has made it so easy to earn extra income on the side. Often—little or no skills, experience, or upfront expenses are required to start. You don’t even need a lot of time! PT Money suggests fitting in side hustles while you’re “… on the way or while you’re away.”

On your way: you could become a Lyft driver (turn on your app so you can do a pick up anytime you’re headed in or out of downtown). 

While you’re away: you could rent out your house through Airbnb (your rental can pay for your vacation, while you’re on vacation)!

Our side hustle/house hack was hosting international homestay students (I hosted while being a full-time stay-at-home mom). Lily at The Frugal Gene not only Airbnbs, but also blogs and dogsits through Rover. Kevin at Financial Panther squeezes in eight side hustles along with his full-time job!

Earning an extra $10,000 per year through side hustles is very doable, without adding an undue amount of stress—and it could shave years off your FI journey.

4. Earn more at your job/side hustle

Photo by Hunters Race on Unsplash

“There’s only so much frugalling you can do.” 

– Paula Pant

Paula’s right—there’s a point where saving doesn’t move the needle anymore, and you need to earn more income.

The good news is, there are plenty of ways you can leverage the job or side hustle(s) you already have to earn more:

  1. Ask for a raise or increase your hourly rate so you can earn more doing the same thing.
  2. Take on extra projects/duties at work.
  3. If your job is seasonal, fill your off-months with temporary employment (e.g. teach summer school if you’re a teacher).
  4. Find a new job that’ll give you higher pay, better benefits, a shorter commute, or simply just more happiness.
  5. Work overtime (especially if it earns you a higher overtime rate—like this BART janitor).
  6. Improve your workflow and efficiency so you can produce more with less effort and cost.
  7. Restructure your side hustle offerings so you can offer more value and charge more, without more work (e.g. swap the twin bed in your guest room for a queen so you can charge more on Airbnb).

Unlike cutting expenses, there’s no ceiling when earning income—so why not push yourself, and see how much faster you can reach FI?

5. Aim for FI by 45… or 50… or 55

freedom 45
Photo by rawpixel at Unsplash

This was a tough one for me. I desperately wanted to emulate my FI hero, Mr. Money Mustache, and retire in my 30s. We could’ve reached this goal by selling our house and moving to a cheaper city. But in the end, our number one value of living near our families won out. We’re staying put, and aiming for FI in our 40s instead.

It can be hard to choose FI at an older age when the FIRE community is filled with 20 and 30-somethings who’ve already made it. But if we’re truly honest with ourselves, we know we could do more—we just choose not to. This isn’t a bad thing! It simply means we’ve prioritized other core values over reaching FI at a very young age.

Knowing this might be helpful to some of you, but others may still be feeling conflicted. I’d encourage you to spend some time getting clear on your core values. When you understand what’s truly important to you, and you prioritize those values, everything falls into place.

You’ll suddenly feel empowered, and realize that you’re on the right track. Or if not, you’ll see exactly where you need to change direction so that you can reach FI and be happier and more fulfilled.

We’re trading FI by 35 for FI in our 40s so we can stay in the Vancouver area and live close to our families. That’s not early retirement extreme, but we still feel great about it because we’re living true to our values.

Besides—reaching FI by 45, 50, or 55 still beats the pants off the standard retirement of 65!

Summing it up

It may not be Mustachian to live in a detached house in an expensive city, but if it works for you and your family, that’s exactly where you should be. As you can see, it doesn’t have to mean FI at 65. There are plenty of ways to use your costly, desirable location to your advantage!

I hope this article sparked some creative ideas for you, and that it’ll help you find a new, faster path to FI.

I’d love to hear from you! Share your successes in the comments, and tell us about your unique ways to save and earn money in an expensive city.

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  • Reply
    January 8, 2019 at 1:13 pm

    Love it! I see a lot of people doing backyard Airbnb minis and I think those are adorable – and a great ROI! I think when I do Airbnb later I’ll just buy land and get lots of mini houses in the yard to rent.

    • Reply
      January 8, 2019 at 1:42 pm

      Thanks for the comment Lily. 🙂 Backyard Airbnbs are absolutely adorable! Our neighbourhood doesn’t currently have (or allow?) them, but they may become a necessity with housing prices the way they are.

  • Reply
    January 8, 2019 at 4:12 pm

    Living in an expensive city myself(San Francisco), it does sound really tough to reach FI but doing these methods that you mentioned can help you get to FI closer than you think.
    We are currently renting and fortunately it is pretty low for SF standards ($1000/month). It is a small in-law but we will live here until we buy a home.
    Also as a family of 3, we only use one car. And with my wife and I having different work schedules we are able to pull it off using the same car to drive to work.

    • Reply
      January 8, 2019 at 6:20 pm

      Hi Kris, it’s so cool to see you commenting here on my lil’ ol’ blog! I see your gravatar all over the place! I’m totally impressed with your $1k/month rent in San Francisco. That’s a steal! You’re obviously very organized to be able to juggle a kid, two working schedules, and one car. Nice work! I’m sure you’ll reach FI a whole lot quicker than most (all?) of your peers!

  • Reply
    January 8, 2019 at 10:09 pm

    Hi Chrissy,
    Great post! For someone that moved to Vancouver recently and don’t know much about FI I think I have been doing lots of things to reach my FI asap. Sounds hard and impossible haha but I am sure that the day will come eventually.
    But one thing that I keep asking myself and I am still not sure about is “what is FI for me? What exactly I will need?”. I am single, no family here, so it feels a bit uncertain to imagine something.
    Like, I have been doing all those things to speed FI, but I am not sure what exactly I want after that or what I’ll need. I was wondering if you have any ideas or examples of how to plan/create a FI that makes sense.
    BTW loved the blog. Thank you!

    • Reply
      January 8, 2019 at 10:41 pm


      Thanks for your kind words. I think you have some great questions. It can be hard to figure out a plan when there are uncertainties, but it’s not impossible!

      The best thing when planning for FI (for anyone) is to be flexible. Plan for a best-case scenario and a worst-case scenario, and figure you’ll most likely land in the middle.

      If I were you, I’d start with planning for the current amount you live on (to reach FI, it’s generally considered to be 25x your annual spending—which works out to a 4% withdrawal rate). Once you reach that, you can decide if you want to be more conservative and maybe aim for 28x your annual spending (which works out to a safer 3.5% withdrawal rate).

      And if your life situation changes at any point, simply recalculate! (This is my favourite tool for tracking our progress to FI:

      Feel free to contact me if you have more questions. I’d be happy to help!

  • Reply
    Financial Orchid
    January 9, 2019 at 5:52 am

    Great post Chrissy! Now that your boys are teens what are your plans when you FI in a few years? I grew up in a neighborhood where most of the ppl were FI or didn’t speak English and bought a house in cash after they sold their home in Asia (last generation geo arbitrage) so I guess they were FI or under employed after migration depending how u look at it. Hehe sound familiar?

    One of my high school friend/neighbors parents did home stay, others offered gourmet meal prep for elderly, some provided infermery cooking/cleaning services for new moms 陪月, others drove neighborhood kids to school or ran dayhomes.

    Lots of side hustles now that you triggered my memories.

    It’s hard for me to give up all the benefits at work tho especially when I have no kids. But u know we FI folks love planning for the future. 😉

    • Reply
      January 9, 2019 at 8:49 am

      Hi Financial Orchid—thanks for the comment!

      I’m so fascinated by these Asian FI people you grew up with. Many of my relatives immigrated to Vancouver from HK in the 90s, but none of them were FI. Your experience is so interesting! I really like that the people you knew found ways to keep busy and be of service.

      To be honest, my life won’t change a whole lot post-FI, since I’m already living the FI life, being a stay-at-home mom! But I look forward to being able to travel more often and for longer with my husband and the boys. The sad thing is the boys will be teens and might be too busy or not want to travel with us as much!

      My husband loves his job, and like you, we’d hate to give up the benefits at work. He’ll very likely continue to work for at least a year or two once we hit our number. But at least once we reach FI, he’ll have that mindset shift, knowing he doesn’t HAVE to keep working if he doesn’t want to.

      I love your interesting comment—got me thinking!

  • Reply
    January 14, 2019 at 9:27 pm

    Great post Chrissy! As a fellow Vancouverite I agree that we, and others in high cost centers, have to get creative and take our trade offs to a new level in order to reach our FI goals. Love that you’ve started the blog, and look forward to reading more great content!

    • Reply
      January 14, 2019 at 9:58 pm

      Thanks for visiting and commenting Phia! It’s really nice to finally be part of this little community of Vancouver FIRE bloggers. You and your husband accomplished the seemingly impossible and retired in your 30s in Vancouver! Obviously, you two did a lot of the right (and hard) things to reach that accomplishment. You’re an inspiration to us all!

  • Reply
    Alain Guillot
    May 27, 2020 at 7:42 am

    Airbnb was a great boost for me. I was an early adapter and at one time I had five Airbnb properties in Montreal. I gave up Airbnb about 3 years ago, out of laziness. It became too stressful to be on call 24 hours a day 7 days a week, but I am full of gratitude because it got me a bit closer to FI, and it gave me a lot of self confidence as an entrepreneur.

    • Reply
      May 28, 2020 at 10:17 am

      Hi Alain—I’ve been a listener of yours since 2018, so am very familiar with your story, and your experience with Airbnb.

      I’m impressed with what you were able to accomplish, and applaud you for sticking with it as long as you did. As you say, it’s more than a full-time job!

      We felt the same about hosting students, after more than ten years of nearly full-time hosting. As much as we still loved it, it became harder to host with our full energy once our kids were older and our lives became busier.

      It’s wonderful to see that simply being on the FI path gives us options to scale back or quit things that no longer bring us joy. It flips the script from focusing on money and earning income to focusing on overall life satisfaction.

  • Reply
    Moe (Moementum Finance)
    May 16, 2022 at 11:31 am

    Great tips here, Chrissy.Thanks for sharing. My wife and I are finally pursuing Smith Manoeuvre. 😁

    • Reply
      May 25, 2022 at 7:48 pm

      Hi Moe—sorry for my late reply. WordPress hasn’t been notifying me of all my comments, so I only see them if I log in!

      I’m so excited that you and your wife have decided to pursue the Smith Manoeuvre! For those who have the know-how, stomach, and organization for it, it’s an incredible way to get ahead. Well done!

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