F.I.R.E (style) - It's a Function of your Why

Tucker Fahlen |

Now that we’re familiar with “Financial Independence Retire Early”, better known as FIRE (if you aren’t, this previous post will bring you up to speed) we know that it is a movement and not just an acronym. Today we are going to dive into some specifics on how people across the world are using FIRE to work for their situation. Luckily there’s not only one path to pursue FIRE! If you have followed the movement for any length of time you’ve likely heard the terms Barista FIRE, Flamingo FIRE, Lean FIRE, Fat FIRE, etc. Today we’ll explore various types to illustrate how devotees are becoming Financially Independent and Retiring Early in real life.

| The Original FIRE

As a baseline, let’s talk about The Original FIRE and how most people calculate their FIRE ‘number’. The simple calculation to find your “Original FIRE” number is to take the total sum of your annual expenses and multiply by 25 (derived from the famous 4% Trinity Study Rule). This number represents the sum of investment assets you will need to accumulate to live off when you stop working to fund your living expenses.

| Early Iterations of FIRE

As the FIRE community has evolved over the years, new varieties of the FIRE Method have emerged to better fit individuals' personal goals with the movement.

  • Barista FIRE – No this doesn’t mean you have to retire and become a barista – although that could be an appealing option if you love coffee! Barista FIRE is defined as having enough money to retire early while using a part-time job for additional income and health insurance. This method became popular when Starbucks started offering health benefits to part-time employees.
  • Lean FIRE - As the name suggests Lean FIRE means a trimmed down version of FIRE to cover your necessities like food, transportation, and shelter (mortgage or rent and utilities). People that practice Lean FIRE may need to supplement their retirement with extra active income sources if their expenses grow or they overspend.
  • Fat FIRE – The opposite of Lean FIRE, Fat FIRE is for those who want to live comfortably when they stop working and have plenty of money to spend. The numbers will vary depending where you live but Fat FIRE seeks to live on upper-middle-class income. Common numbers for Fat FIRE are living on $100,000-$200,000 per year which means you would need $2.5 to $5 million invested when you retire.
  • Obese FIRE – This is a step up from Fat FIRE for those that desire to live a lavish lifestyle on a big income. Obese FIRE is planning to retire with $5-10 million invested. Part of this may come from inheritance or the sale of a business. This method is for high income earners that aggressively save money for their working years.
  • Slow FIRE – Slow FIRE is designed for those that have goals to retire early but also want to enjoy life now. If you find yourself using the YOLO motto often, this may be the FIRE option for you! Slow FIRE balances current spending now and investing for the future while working a job that you enjoy. Sometimes slow and steady is the way to go, right?

| New Wave Spin-Offs

  • Flamingo FIRE – This method combines 3 retirement phases into one strategy – accumulation phase, semi-retirement, and traditional retirement. The idea is to work hard and save as much as possible early on until you have half your FIRE number invested. At this point you slow down or can stop adding to your nest egg and work just enough to cover your current living expenses while you let your invested money potentially grows over time to double in size to reach your full FIRE number.
  • Fast FIRE – This method is about retiring as fast as possible in as little as 5 years. This method is well-suited for those that make a lot of money, work very hard, and are very intense and intentional in saving as much as possible.
  • Camp FIRE – For those that love the outdoors and desire to spend some or all of their time living in an RV. Many choose to boondock and live in their RVs on public land off of solar power. Others book monthly reservations at parks and travel around as necessary. This can be a fun and exciting way to live on a budget for the minimalist that can take life on the road.
  • Boat FIRE — For those that love cruise ships. If you’ve ever dreamed of living for a year on a cruise ship – at a discounted price this is the FIRE for you. It takes a bit of planning, but you string together back-to-back cruise ship itineraries and buying at the right time to get them at deeply discounted rates. With Cruises having most expenses included this makes it easy to plan out what your future expenses will be.
  • FIOR – A twist on the original FIRE but with retirement being optional, “Financially Independent Optional Retirement”. This is for those that love what they do and see themselves working for most of their lives in one capacity or another. This journey emphasizes flexibility to scale back on work when needed for family or travel and using financial independence to have the option to retire when the time is right.

| FIRE Away!

Yes, there are a lot of approaches to FIRE. The good news is that you get to choose which method is the best for you and your family. The question to ponder is what’s your why for Financial Independence? Your why for Financial Independence is more important than which method you choose to pursue it. At Embark Financial Partners, we’re here to help you figure out your why and the tactical strategies to pursue your goals.


The opinions voiced in this material are for general information only and are not intended to provide specific
advice or recommendations for any individual.  Investing involves risk including loss of principal.  No strategy assures success or protects against loss.