All early retirements do not look the same. Your nest egg can vary widely. Obviously. Do you have $250,000 for your net worth and plan to take out $833/month, living in Thailand and working part-time somewhere? Or do you have $10,000,000 saved and plan to spend a whopping $32,000 a month?
Someone in the comments mentioned the various FIRE (Financial Independence – Retire Early) categories a while back and I’ve been looking into them. Nothing is one size fits all, so it’s nice to know there are options. I went down a reddit rabbithole.
Barista FIRE – “We are looking for the least amount of responsibility possible.”
There’s barista FIRE.
This is when you quit your job with maybe $250,000 in the bank to work part-time for some pocket money. It’s a throwback term to when you could work at Starbucks for twenty hours a week and get health insurance.
You’re barista FIRE if you don’t want a stressful job and just want the least amount of responsibility possible. It’s having F-you money, the ability to live life on your own terms.
Coast FIRE – “Have enough in the bank to do what you want.”
It’s not timing the market, it’s time in the market. If you put a bunch of money in your retirement fund in your early 20s, at some point, with enough time, you can fund a regular retirement without adding more. Then you can keep working until your sixties, but stop contributing to your retirement fund at like 30.
You’re coasting toward retirement, not worrying about your job. This is for those who still want to work, but want leverage over your employment. Again, f-you money, not necessarily FI money.
Lean FIRE
There’s lean FIRE, which is my type of FIRE and what I preach. Their Reddit page says, “For those that want to approach the problem of financial independence from a minimalist, stoic, frugal, or anti-consumerist trajectory.”
With lean FIRE, you have $625,000 to $2.5 million saved and take out a couple thousand dollars a month.
I like lean FIRE because I think it can save the world. Less stuff, less consumerism and more focus on living a good, simple life. This is having FU and FI money.
Chubby FIRE
The $2.5 million to $5 million net worth is chubby FIRE territory, the “upper middle class of retirement.”
You don’t count pennies and take out many thousands of dollars a month. You can do anything you want, but not everything you want to, if you’re chubby FIRE.
Fat FIRE
Fat FIRE is the top 0.01% of the FIRE movement. They can do everything they want. Live in a very high cost of living city, own a giant house, fly private. Just name it and they can do it.
You have $10 million or more saved if you’re fat FIRE. You take out $32,000 per month, which is a figure that blows my mind. What do you spend $32,000 on each month?!
Just goes to show you that you don’t have to be frugal to embrace the retire early lifestyle.
Did I miss any of the FIREs?
FatFIRE. $5M+ by some definitions but I agree. $5M is a difficult number. Can’t really do everything on $5M. So maybe after all this inflation the new $5M is $10M for FatFIRE. Depends who you ask I guess.
I Fired at 45. Got bored. Went back to work in a fun second “ give-back “ career I turn 55 later this year and thinking now is the time to pull the cord for real. During those 10 years I lost both parents and a sibling. It gets you thinking. What matters most is time not money. That gets lost on us so easily. Whether you have 250K and barista fire. Or $1.5M lean fire or $4M chubby fire or $10M lean fire what matters is that you have control of your time.
Time is the precious commodity that only a select few get to (somewhat) allocate ! An unknown finite number of minutes remain and we can’t make more time.
Been reading your periodic blogs for a decade- Maybe longer. Keep at it.
Wish you good Health. Happiness and sincerity in Love, and command of your time ! Mobey, funny as it is, becomes an after-thought.
This resonated with me so much! I fired at 37 but didn’t stop working. I am in the chubby fire category so definitely feel comfortable with anything I want to do. Last year at 40 it really hit me that I won’t be able to do everything I want to do especially as active as I want to be, forever. I take three months off of work a year to travel and do all the things I love. I work four days a week, but may contemplate going down from that if it becomes too much. for me work is still engaging so I likely will continue but maybe I’ll start taking four months off so I can fit in as much life with family as possible!
Sounds like you have the best of all worlds. Four months off to do whatever you like and eight months of an engaging job. Color me jealous. 🙂
Appreciate the thoughtful comment. So sorry for all your loss. You don’t think you’ll lose siblings so young.
I agree that the theme of FIRE is just control over your time.
Amazing that you’ve been with me for so long. Thanks for reading!
What are you going to do with $5m Greg?$5m is a nightmare.
Agreed on the story, time is what matters.
The origin of “I’m looking for the least possible amount of responsibility” is a line from the movie “American Beauty”, where Kevin Spacey’s character applies for a job while in the drive-thru line at Mr. Smiley’s, a fast-food restaurant.
https://youtu.be/TJh5wdvdfVE?feature=shared
There is a FIRE theme in the story, with Spacey questioning his “banal, numbingly materialist suburban existence”
Great movie, won the Oscar for Best Picture.
-Bob
Ha! I saw that on the Reddit page, too. I should have linked to it as well. 🙂
I’m chubby FIRE. I like it in that, as you said, I can do pretty much anything I want, but still be “outwardly normal,” i.e. no private jets, no fancy house, etc. I feel it’s like stealth wealth, maybe? And if I’m cautious and don’t spend too much, I should have enough in my old age to pay for the best possible healthcare (I’m child free and single so very aware I’m on my own as I age). I have no doubt there are already nursing homes that charge $32K/month! Scary.
$32k/month is insane! I try not to think about that. LOL. Maybe long-term care insurance eventually?
I’m too late to be FIRE cuz I’m 60. But I do have a family home in Jamaica 200 m from the Caribbean, and that only requires upkeep and taxes. So I could run away there and manage it as an AirBnb, while continuing my work as a therapist, consultant, writer and speaker, and would be totally fine with the <$500k that I have saved.
Absolutely! And you’re never too late to FIRE. 😀 60 is better than 65, right?
Yes. You forgot Flamingo FIRE. 😀
https://www.moneyflamingo.com/flamingo-fi-part-1/
Interesting. Thanks for sharing.
Do you really get health insurance with a job at Starbucks? That’s incredible – we need to pay fpr healthcare at $10k per annum whether you work or not. I guess US healthcare is a bit more affordable than I realised…
I don’t know if you can anymore, but you definitely used to. I still think the U.S. healthcare is crazy.
My life…..
I been many of these. I ‘thought’ I was a lean guy early on. From about 13yo to 30yo I was pretty cheap. FI was not a thing in the eighties, but I had a savings passbook that showed me at 10-12 yo that the bank was paying me for doing nothing and the other money I earned by working was a LOT of effort (we had a family dairy farm and worked, worked, worked- hard and long days). My early aaaha moment.
By thirty I had a dozen crappy rentals, a 350k 401k, and 200k Roth.
The math was always in my favor as you can see. Just cost right?
Then a divorce, super high stress managing rentals, part of the farm, a full time job with lots of travel, etc. etc.
I unloaded my rentals to unload stress, then both my parents went through 5+ years of cancer etc and died. This and the farm estate more than quadrupled the stress…..
Then a new marriage, now two small children.
The costs associated with kids, housing, taxes, etc. is staggering!
I did quit and ditch my job for five years and just started a new one this year to plug some $$ holes.
I guess the point is, when you are twenty running numbers is a wild guess even with the best FIRE equations. Everything goes up sooooo fast and with kids there is one surprise after the next from a financial perspective. Day care, school, health. Dang!!!!
Advice- if there is any chance you ever want kids, plan accordingly.
I’m currently 49 yrs old. Lots of greatness in my life. Lots of stress too. Finance can help I’ve always believed, but if you’re not chubby or fat it won’t help as much as you think.
-Grant G
Thanks for the thorough and thoughtful comment. I think you’re spot on. Kids are expensive. Housing is expensive. Yor last sentence especially resonates a lot.
I am new to investment. Where should I start investing?
VTSAX is my recommendation!
If I had the choice to FIRE young at any one of those levels I would choose fat FIRE (travel with friends and family, house with pool house, all the trimmings, full fat, excursion to the Titanic (kidding), generous donations). Alas, I am beseeched by the time or money calculus, presently landing lean, potentially future coast. I must say, so far this summer with my kiddos has been invaluable, a worthwhile trade for living lightly.
I think we’d all choose fat fire if we could! 🙂
True! 🙂
Enjoyed reading your perspective on FIRE. It’s the first time I’ve heard the term Chubby FIRE 🙂
ER 7 years ago and absolutely loved Chubby FIRE. Although I am not extremely high net worth, my wife and I have good government pensions and health care coverage.
One point, you mentioned Fat FIRE being .01% of the US households, I presume, which equals a little over $10 million in net worth, yet .01% is actually $50 million or over in the US. I agree though with your view that $10 million is Fat FIRE. The privaged few, one in a hundred, that can afford many of the luxuries in life.
Perhaps we need one more category, Fat-Cat FIRE for the .01 percenters? These are the folks that are living the life often idealized in Hollywood–mansions, Rolls Royce, yachts, etc.
Big fan of your writings,
Cheers
Ha, fat-cat fire! I love it. Thanks for commenting! It truly makes my day. 🙂
There are so many flavours of FI that it’s getting a little silly. I joke that I’m Trash Fire: broke but doing it regardless. I mean that in a good way.
Yeah, I’ve found more FIREs since this post. HENRY Finance = High earner, not rich yet. That’s a good acronym
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