After years of slowly kindling among fringe enthusiasts, the FIRE (Financial Independence-Retire Early) movement is spreading wildly.
Its burgeoning popularity has birthed a series of sub-genres as new proponents have come to add their spin on the original concept. Though the twin goals of being “Financially Independent” and “Retiring Early” remain the north star of the movement, this diversification proves there is more than one path to achieve it.
While some new additions to the FIRE family may fizzle out, FatFIRE, LeanFIRE, CoastFIRE, and BaristaFIRE have become common parlance in the community. Each has permanently shifted how FIRE advocates approach their money, time, and life choices.
Those who want to retire in style might want to aim for FatFIRE. Unlike traditional FIRE, this luxurious spinoff allows for generous spending during retirement.
FatFIRE means spending a minimum of $100,000 each year of retired life, according to InspiretoFire. Following the 4% rule (a rule of thumb for retirees’ annual withdrawal) would mean having a nest egg of at least $2.5 million.
Besides the apparent thrills of living large, FatFIRE offers a greater sense of security. Handling surprise medical expenses or other unforeseen emergencies is easier with deeper savings.
If a retiree doesn’t burn through their whole fat stash, they can make a difference by giving to a favorite charity or leaving a financial legacy and passing on the remaining wealth to their offspring.
While FatFIRE has its perks, it could take a lot more work upfront. It may also be unattainable for those stuck permanently in lower-paying professions.
At the opposite end of the spectrum from FatFIRE is LeanFIRE. As the name implies, this involves tightening one’s belt and going light on consumption.
Frugality is essential for those on LeanFIRE, who typically try to get by on less than $40,000 per year.
Yet there are benefits to foregoing creature comforts. Since LeanFIRE followers live on tighter budgets, they can retire earlier with fewer overall savings. It allows them to fast-track their financial independence and have more time to enjoy the rest of their lives.
To get there, many people focus on cutting down on high recurring costs, such as rent or mortgage payments. Strategies include living in a trailer or a tiny house, couch-surfing or house-sitting, or even staying back home and living with parents.
Sticking to a LeanFIRE income bracket can also lead to paying less tax and getting subsidized health insurance.
For those who want a laidback approach to FIRE and have more time on their hands, there is CoastFIRE.
If someone invests enough upfront, their nest egg can grow until it pays enough dividends to cover their future retirement needs. Of course, they will still need to cover their expenses in the present, but with some cost-cutting, they could move to a part-time job much earlier and “coast” toward early retirement.
For example, saving $90,000 at age 30 (assuming an average 7% annual return) will turn into $1 million over 35 years. With the knowledge that a million is waiting for them when they get to 65, that person can live their remaining decades a lot freer.
For instance, they can take more risks, strike out as freelancers, walk away from employers they don’t like, or even take a sabbatical. As long as they stay on top of day-to-day costs in the present, they can rest assured their retirement is taken care of.
CoastFIRE often appeals to those keener on becoming financially independent than retiring early. It also gives more flexibility and requires less sacrifice than other FIRE lifestyles.
Similar to CoastFIRE, but usually done later on in the game for healthcare benefits, is BaristaFIRE.
It typically appeals to those approaching retirement who already have a large nest egg but are really through with full-time work and feel they cannot keep turning up to their day job anymore.
BaristaFIRE (so named because Starbucks’ part-time employees have healthcare cover) allows for a soft transition into retirement where they quit their full-time job. Rather than hold out for several more years feeling trapped in the office cubicle, they get a part-time gig with healthcare and then wait until they are ready to stop work altogether.
This gives people more flexibility to strike a better work-life balance in those intermediary years. It also allows them to pursue passion projects while they chart a course toward retirement.
BaristaFIRE doesn’t necessarily involve brewing coffee. There are many kinds of part-time or flexi-time jobs that fit the bill. Some offer the benefits of staying home, like being a digital freelancer or virtual assistant, while service-sector positions like waiting tables or working a bar provide tips. Others may opt for gig economy jobs like ride-hailing drivers or dog walkers.
Is FIRE burning out?
Does this diversification herald the movement’s evolution and broader adoption across society? Or is it being watered down to become just another buzzword?
“I think it’s a positive development overall,” veteran FIRE advocate Steve Cummings of The Frugal Expat blog told Wealth of Geeks.
Cummings acknowledges some varieties, such as “Spouse FIRE” (where one partner saves enough for the other to retire early), are vague and may not add anything entirely new to the movement. He views diversification of the concept as making the movement more accessible, though.
“People previously associated FIRE with simply being frugal and retiring early, but these new varieties show how flexible it can be,” he adds. “It can be customized to fit your goals, so you have more freedom to live your best life.”
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