Barista FIRE in an Uncertain World

In early 2026, the headlines in Singapore and abroad feel like a broken record.  Whether it was tech giants "right-sizing" or traditional industries grappling with high costs, retrenchment has moved from a distant possibility to a local reality.  This is exacerbated with rising oil prices and this creates immense operating pressure for many businesses, especially small and medium enterprises (SMEs).  Even in the Prime Minister's May Day speech, Mr Lawrence Wong noted that AI will change jobs, and inevitable make some jobs disappear.  

As such, even in Singapore associated with stability, job security no longer feels like a given, especially for a non-citizen like myself.  Yet, in the midst of this uncertainty, I find myself in a position I did not fully appreciate until now.  I am not fearless, but I am far less afraid.

The 8-Year Pivot

This year marks my transition into Phase 1 of my Barista FIRE journey.  It was not an overnight achievement, instead it was an eight-year journey of consistent discipline.  As of 2025, my portfolio generated approximately S$31,000 in dividends.  This number represents something far more valuable than income alone.  It represents optionality.  It is the reason I can step back from the "7-days a week work" and focus on tutoring with a sense of flexibility rather than desperation.

The "Lag-Time" Strategy: Using Last Year’s Harvest

One of the most important lessons I have learnt is how to manage cash flow to avoid panic.  I do not spend this year’s upcoming dividends to cover this year’s bills.  Instead, I use part of last year’s accumulated dividends to supplement my current expenses.  This creates a "time cushion".  If a parent or tutee delays payment of fees for whatever reason, or the market gets choppy, I am not worried about next month’s expenses because that money was banked months ago.  It allows me to adjust my finances without the pressure of an immediate crisis.

The Two-Way Shock Absorber

Real-life investing is not a straight line up.  We saw this in Q1 2026, with dividend cuts from stalwarts like UOB and Hong Leong Finance.  In a traditional "Full FIRE" scenario, a dividend cut can feel like a disaster.  Under a Barista FIRE model, however, I have a two-way shock absorber:

1)     When Active Income Dips: If I lose students or my active income declines substantially due to frequent cancellations by students, especially during school holidays, my dividend base is there to catch me.  I am never starting from zero.

2)     When Passive Income Dips: If the portfolio's dividend payout suffers a cut (as experienced recently), I lean more on my active tutoring income and spend less from my dividend buffer.

This flexibility is the "secret balancing sauce" for myself.  I am no longer fully dependent on any single source of income, nor am I entirely at the mercy of the performance of my portfolio.

Peace of Mind is the Real Dividend

No doubt, I am still a little worried about losing my students or seeing my income decline.  It is human to feel that prick of uncertainty.  However, the difference now is that the fear does not spiral out of control.  It does not force me into reactive, desperate decisions.  Because I chose to build a portfolio when things were stable, slowly and patiently, I now have the freedom to stay calm while the storm passes.

The lesson I learnt in this journey, is never to wait for a financial stress event like a retrenchment notice to start thinking about passive income.  Dividend investing is not for "today", it is a gift to one's future self.  Build one's fortress while the sun is shining, so one will have a dry place to take shelter when the rain inevitably comes.  I believe "my future self" will thank "me from the past", for doing what I did, since 2018 till today.  My current two-way shock absorber do not eliminate uncertainty, it just makes uncertainty manageable, and to me, that is more than enough.  Barista FIRE, here I come...!