Not everyone needs two million dollars to retire early. And not everyone can live on thirty thousand dollars a year. That’s why the FIRE movement has evolved into multiple paths. Today, we’re exploring every type of fire from traditional, to coast, to lean, to fat, and helping you discover which one fits your personality, your needs, and your sanity.
Hello, hello, hello and welcome to the Bigger Pockets Money podcast. My name is Mindy Jensen and with me as always is my fired up co-host Scott Trench.
**Scott:** Hey Mindy, great to be here and as always and to blaze into new opportunities for financial independence. We have put together a visual breakdown of all of the fire types that we’re going to cover today. So I’m gonna share my screen and let’s go ahead and jump right in.
**Mindy:** Okay, Scott, how many types of fire are we going to be talking about today?
**Scott:** We’re gonna be talking about six. There is no official beginning or end to types of fire and a new acronym is invented by the hour in the fire community. But we’ll talk about the six most common uh of these types here today. So do you want to kick things off Mindy with the first one?
**Mindy:** Yep. Up first we have traditional fire. This is the kind of numbers that we originally started talking about in the FI community 10, 15 years ago. One to two point five million dollars in net worth which implies a middle class lifestyle. We are spending between forty and a hundred and twenty thousand dollars a year in retirement. The timeline for this is between seven and twenty years for somebody who’s earning a good upper middle class income. The biggest lever that you have to pull for your traditional fire journey is your savings rate. We talked last week with Mr. Money Mustache about his shockingly simple math to early retirement and the savings rate, the more you can save of your income, the faster you will get to traditional fire. Uh, the pros of this are pretty easy. You can um get to a comfortable and traditional retirement in a fairly short amount of time. It’s it’s you know seven to twenty years depending on how much you’re making and it can be achieved with a typical career. You don’t have to be some super high earning wage earner in order for you to be able to attain this level of FI. The cons are few. Uh the numbers can seem so large that it takes decades to get to where you need to go. With the people that we have been talking to in the past here, Scott, it takes about ten years. I think seven is a very aggressive goal and implies a very high savings rate. Most people are in the 10, 12, 15 year range. The numbers can seem a little small for a higher end lifestyle. This is not for somebody who wants to be able to spend as much money as they possibly can in retirement.
**Scott:** Yeah, I think this is the bread and butter of what the folks in the fire community are are generally looking for. You’re going to see the majority of people in this community looking for an outcome in this range, one to two and a half million. You’re going to find a lot of commonalities among the people that are looking for this, a prioritization of freedom over work, a prioritization of efficient living. These are not folks that are trying to live a luxurious lifestyle. They’re try trying to live probably what most people would equate with a a typical middle class lifestyle uh in this. And there’s um a a concept of enough. The the the goal of having enough in life to enjoy their time, their day to day, doing simple, reasonably priced activities is going to be a higher priority than, you know, a a a a long and very successful career climbing the corporate ladder, building a business, or otherwise accumulating that next level of wealth. And I think this is what the fire community is started at and and will remain grounded in adjusting for inflation, of course, over the over the coming years and decades. I think this will be the the typical goal for many people. And I would even go so far as to say, this I think this has taken the place um of the old American dream for an increasingly large percentage of society.
**Mindy:** And Scott, you just called it the bread and butter. Let’s call this bread and butter-fi.
**Scott:** Yeah.
**Mindy:** Okay, what do we have next?
**Scott:** Next up we have just the bread, just the bread. Um no no butter. uh that component of fire. So that one’s probably Barista fire, lean fire. But we have Coast-fi here. Coast-fi is really just a milestone on the fire journey. It’s not this is not a state of financial independence. What it is describing is a position where you have enough saved in your retirement accounts where if you take any reasonable approximation of historical uh average returns for typical investment portfolios and extrapolate them to the future, your retirement wealth will be fully funded. So for example, if someone who is 25 is hoping to at 65, in 40 years, have 2.5 million dollars in inflation adjusted wealth. So probably closer to seven or eight million at that point in time. Then if they have 167,000 dollars in their retirement accounts or in their portfolio that they do not plan to spend, that number will likely, again, if we extrapolate historical returns, compound and double, you know, every every 7.2 years and get and and fully fund that level of wealth by that point. So they don’t have to save any more money for retirement, for example, if you’re 25 and have 167,000 dollars saved. If you’re 35, that number jumps to about 328 grand. 45, 646. and 55, 1.3 million. And if you’ve got that much accumulated, you’re done saving for retirement. And that can be a very freeing feeling because a lot of people feel pressure to accumulate, accumulate, accumulate, accumulate. But if you can calculate that you’re coast fire, then you can ease off the gas. You can take part-time work, you can explore things like Barista fire, um, or you can continue grinding it out to the other forms of fire, but know that you are well ahead of the game and the pressure’s off. Uh, you’re not behind by any sense in terms of the financial goals that most Americans um seek to achieve. And this is a much more approachable timeline um for many. Especially if you’re younger, I think that many people in the fire community will find that they’re able to actually hit this goal in the three to five year time range. that that between salary increases that seem to accompany the uh start of many fire journeys, hardcore saving, and then the investment approaches and the compounding of initial dollars, I think that you’ll find many people who are able to achieve this in three to five years. Of course, it can take much longer or even lifetimes for many people, but inside the fire community, you’ll find a lot of people achieving it in a pretty short amount of time. However, if you’re older, you need way more in order to achieve coast fire because you have less time for that doubling and I think you have to be a little bit more conservative in the assumptions you have around growth rates um, because timing, um, you know, the returns in the next decade matters so greatly for you actually achieving this. Um, so you can compute this and see how long that will take you with the Fioneers calculator, which we talk about uh at length in episode 664 and actually bring them on to discuss in episode 665 um here on the Bigger Pockets Money podcast. We are going to take a quick mini retirement from this conversation and then we’ll be right back.
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**Mindy:** Let’s jump back in. The pros of this is that you know that you are set for traditional retirement and then you can kind of ease off the gas. You don’t have to have this frantic, I have to save every dollar I can mentality. So it does allow for a little bit more spending throughout your the rest of your life. Um, the uh it relieves a lot of pressure because saving up one million dollars or two point five million dollars, that’s a big number. But if you’re 25 and you have a hundred and sixty seven thousand dollars, you’re like, oh, okay, this is the math maths out. Um, if you’re 24 and you see that you have 50,000 dollars, you’re like, okay, I need to, you know, save a little bit more. Um it gives you a great place to just check in where you’re at. I love the CoastFi calculator from the Fioneers. It’s so so much fun to play with and just throw in different scenarios and, oh, okay, if I have this much money, I’ll I’ll have that much at retirement. And if I need this much, I’ll have to have this much by this date. So you can really like play around and uh check it out. There’s like I said, there’s a lot less pressure in your later years because you not not so much pressure to just save, save, save all the time. And you can you can pivot in your career without worrying about your retirement savings. You can take that job that’s a little uh more risk, more reward or less stress if you’re just kind of burnt out. Uh less stress, less pay. The cons are that it still requires working until traditional retirement age. So it’s not really the RE part of fire. It assumes consistent market returns for 20, 30, 40 years and, you know, past performance is not indicative of future gains as they say in every single ad for any sort of investment property. It could lead to lifestyle inflation once you have pulled the pulled your foot off the gas pedal with regards to saving. And it doesn’t provide the ultimate freedom to completely leave your job that other levels of FI does.
**Scott:** Tell us about the one of the next types of fire, Mindy.
**Mindy:** So, we ordered these in the amount of money you would have to save up. So, the next up is Barista-fi and this is when your traditional retirement is fully funded like in Coast-fi and you can distribute income from your asset base to partially cover your expenses, but you wouldn’t have enough money saved to be able to live off of it fully. So it’s like FI with a job, but a job that is traditionally less stressful. Like a barista, when they go into the coffee shop, they are making coffee, and then when it is done with the when they’re done with their day, they just walk away. They’re not worried about what’s going on at work and if you’ve ever had a very stressful job that you bring home either like to do work or to actually just sitting on your shoulders worrying about it, this can be a really desirable opportunity. So, your FI number in Barista-fi is between 250 and 750,000 dollars. We’re not even hitting the million dollar mark right now. You have partial financial independence with 15 to 20 times your annual expenses instead of the traditional 25. Uh your timeline can be three to seven years, so it’s a much shorter timeline. Um and you typically reach this five to 10 years sooner than traditional fire. The pros are the flexibility and the lower savings amounts that are required for it. The cons are that many people in the middle or upper middle class will have a difficult time stepping back from this, you know, more prestigious job, and I say that in air quotes because I think that uh baristas are awesome. They make me my fabulous coffee drinks all the time. Having a less stressful job is a really great tradeoff. Let me tell you, as somebody who had a stressful job and now no longer has a stressful job, it’s a great tradeoff. Um, but you do really need to have part-time work for a considerable portion of the year. And part-time work might be harder to find.
**Scott:** This really, I think, it it takes a different kind of mindset um than one that I’m frankly wired with where you’re comfortable with, you know, living at a very low cost, uh actually needing to distribute partially from a portfolio. Imagine, you know, we we talk about the the 4% rule. Say if you have a million bucks that allow you to distribute about a $40,000 a year. A $500,000 portfolio would then allow you to distribute $20,000 a year. And if you needed $40,000 a year to live, generating $20,000 in income part-time is not something that many people find to be too challenging, especially if they’re willing to be reasonably flexible with those hours like, for example, tending bar at the busy time during the weekend and having off much of the rest of the week. So this is a very, this is, this is a kind of niche or niche, depending on where you’re from, uh approach to living again that that I think few in our community are truly pursuing um in the Bigger Pockets Money community, more precisely, are are pursuing, um but I think these folks may actually get the maximum amount of life uh force out of out of their time on this planet um by approaching something like this. It just takes a different a little bit of a different um brain wiring uh to really wrap your head around this and and and go and and live out your life um as a barista fire.
**Mindy:** Yep. And honestly, those cons really aren’t that bad. I think that part-time work would be fairly easy to find, especially if you’re just needing to cover your expenses. You’re not needing to cover your expenses plus save for retirement. All right, Scott, what’s next?
**Scott:** Next up, we got Lean-fi. So, I’m gonna call this in that, you know, 600 to 1 million, maybe we maybe even there’s there’s no hard lines here so you could even go up to like 1.25 potentially um in some places and call this uh or even 1.5 and call that Lean-fi if you’re on like the West Coast for for example, but this is gonna be that lower end of fire. This is where you’re living a a a lower middle class, is how I’ll I’ll describe it, type of lifestyle off of one’s portfolio. And the advantage here, of course, is that it’s an even more achievable target than traditional fire, it can be achieved faster or on a lower income level and um it can be done with basically no deviation whatsoever from the traditional fire formula. You don’t have to earn a high a super high income, you don’t have to do real estate if you don’t want to, you don’t have to do have a business or side hustles or alternative investments. You can just take a normal job uh even like a government type type job or something that that is uh relatively attainable um for in the from a career perspective, grind it out for maybe 10 or so years and likely be at or close to this objective if you keep your expenses low and embrace the frugality component of the fire journey. And so I think that’s the big the key advantage. Um I think that the disadvantage is that a very large portion of the fire community seems not to be content with the relative frugality required to live this lifestyle for the duration of one’s life. Um, and it’s not really a desirable lifestyle in particular, I think in the higher cost of living areas, um which is, you know, I think a a a growing part of the United a growing portion of the United States. And then you really have very little room for emergencies, lifestyle inflation, giving, or or or, you know, maybe being more of a a leader in your your social circle or your family setting with this level of wealth, although it’s still still substantial. But I think those are the the pros and cons of this. And again, I would say, you know, about about a 15% or so of the Bigger Pockets Money community is looking for this outcome as a stated goal.
**Mindy:** Yeah, I you said something, Scott, I thought it was very very perfect for this. You have to embrace the frugal lifestyle. If frugality is not your natural setting, Lean-fi might be more difficult for you. But I think that you can always combine these with, you know, Barista-fi and get a job for a few years or get a less stressed job for a few months out of the year. You said you don’t have to do real estate if you don’t want to. You never have to do real estate if you don’t want to, but renting out a room while you’re traveling or, you know, otherwise covering some expenses so that you can have a more robust yet still lean-fi lifestyle, I think it comes down to creativity. But uh yeah, this is this is the frugal fi.
**Scott:** Yeah, and I I also think that, you know, there’s there’s a little bit of a a timeline or or or sliding scale here and I think many whose whose goal starts out as Lean-fi, like for example myself, maybe Mindy you’re in this camp as well, I don’t know, but you know, you start out with this goal and this this is the goal and you achieve it and it is freeing. You you now really do have all these options in life and you can live this lifestyle and you can choose to work on one of the larger fi fire numbers in a much under much more agreeable circumstances, either with a job with much more pay or something with much more flexibility or you can begin a business. This is when you really get to have that control over your life if you’re able to keep your expenses low enough during the journey to fire where you can live on a lean fi a a fi item. So it’s fine to get here, declare and have that freedom, and then continue building on top of that to to layer in the the lifestyle that you really want, um which maybe at the upper upper end there. So I wonder if that’s where some of the folks who say, I want lean fire, maybe what they mean is they want that freedom and that’s my goal, but I am also going to continue to to apply myself after that because that’s not really the the total end destination, it’s just the beginning of the end where I where I will begin to exert my freedom and say no to work that I don’t like and yes to the things that I do like, um even if that comes at the expense of base salary, for example.
**Mindy:** Yeah, I think Lean-fi can open up the doors to sabbaticals and new work opportunities that are potentially high risk, high reward with like a startup or even just leaving that job that you hate that got you typing onto Google anyway, how do I quit my job early? So Lean-fi gives you, it opens up a lot of options. Okay, this will be our final ad break and we’ll be right back after this.
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**Mindy:** Up next, Scott, because we’re doing this in order of like how much money you need, we’ve got traditional fire in the order, but we’ve already discussed that because I think it’s a great to I thought it was great to to give a baseline for where we were starting. So, again, this is a one to two million dollar net worth, spending between forty and a hundred and twenty thousand dollars. So, let’s move on to the next one, Chubby-fi. I don’t know why this makes me laugh so much, but it does. Uh, the portfolio that you have is two and a half to six million. I think six million might be squeaking into Fat-fi territory.
**Scott:** Yeah, I I had a really hard time pegging that number, right? There these are not like, like there’s no like, oh, there’s a clear cut off here. It’s just that some people say that Fat-fi begins at 7 and a half million and some people say it begins at 5. So I called it six, uh, to be be in the middle there. So this, you know, if you have a problem with that, you can email, uh Mindy has the email address actually, it’s called, um I don’t care at go bother somebody else.com. Uh and you you can quibble with the the exact cutoff for Chubby and Fat-fi. Chubby, the the answer is Chubby-fi generates an upper middle class lifestyle. This is somebody who can live in a nice home, in a nice for in a nice part of town, that has really good schools, maybe even send uh a kid to private school. This is somebody who can afford the to take pretty reasonable upscale vacations, maybe even travel the occasional trip first class, um and and and in has no trouble funding kids college accounts, those types of things. But this is not somebody who is, you know, driving a hundred thousand dollar sports car, um or or is comfortable driving driving a hundred thousand dollar sports car. This is not somebody who’s flying private. This is not somebody who’s frequently traveling first class. This is not somebody who’s frequently eating out at Michelin Michelin star restaurants. This is an upper middle class lifestyle and there’s a good trappings that come with it, but this is not an ultra lavish, um high, you know, elite lifestyle that I think that the Fat-fi term better signifies.
**Mindy:** Yeah, you’re spending between 100 and 240 thousand dollars a year. So you’re not saying no to a lot of stuff, but you’re not saying yes to everything yet.
**Scott:** So, a couple of distinctions here, this is going to take most people at least 10 to 20 years. Um, typically this is going to be, this is going to be the folks who achieve this are going to have a very ultra high income, uh especially towards the back part of the journey, the end part of the journey here, or they’re going to be a business owner, um and and and selling or building a pretty pretty large business here. This is these are folks that are probably going to be touching or grazing the top 1% in terms of income generation at least for portions of their career and this is going to take take a while even with that that level of diligence here. I think that the pros are you can really live a a good lifestyle here. You can live a lifestyle of an uh of a, you know, someone who’s climbing the corporate ladder or is that, you know, is an executive or or expert in their field. But it’s also not so far out of reach that it’s unattainable but for all but the the truly elite, you know, superstars of the the business and entertainment world, for example. The cons are this is this is really unattainable for those without a high super high income or those willing to basically dedicate the entirety of their adult lives to the accumulation of wealth and and controlled spending. Um, it will still require folks in this in this category to be reasonably disciplined with their saving and to control their costs to some degree. There there is there is a budget that is going to be required for someone in this in this category um to control their lifestyle expenses. Um and I think that that’s that’s pretty much the the overview of your Chubby-fi here. I think this is this is increasingly, this is this is there’s a swelling trend in the Bigger Pockets Money community to this level of wealth, the a a portfolio in this range and this and this probably two and a half to six million dollar range. I I imagine that an increasing number of the of folks, this will be the most popular range within the next two years, I believe, in our community.
**Mindy:** Yeah, I think that’s fair to to state. Followed very closely by traditional fire. Mindy, what do we got after Chubby-fi here?
**Mindy:** We have Fat-fi. This is not a state of body, but a state of your bank account. We are starting Fat-fi at about six million dollars in net worth. This supports annual spending easily in the 300,000 plus range and you are upper middle class or even, what’s after middle class? Upper class? Upper class? You’re upper middle class or upper class.
**Scott:** You’re you’re part of the the absolute elite in America, top 1% in terms of wealth, almost certainly in your age bracket, if you attain anything close to Fat-fi uh, in your lifetime.
**Mindy:** The uh timeline for this one can be quite a while depending on what sort of income you have. And I do want to encourage people who are like, yeah, I want 6 million dollars. Is that a realistic goal with your income? Um if you have Fat-fi goals or if 6 million dollars is a fairly easily easily attainable goal, then you are looking at an income of 2 to 500,000 dollars. You are a business owner or a doctor or an attorney or somebody who’s just making a lot of money and not spending all of it. You are getting really great investment returns. Now, I find myself in the Fat-fi category, not because that was what my goal was, but because Carl and I saved and he retired and we I kept working and I continued to generate income to cover our expenses and more that we could put towards more retirement savings. So we continued to save and invest even after we reached FI and we did some some uh risky isn’t the right word, well, it’s kind of the right word, uh some non-traditional investments that really boosted our portfolio. Um the pros of this is that you are really able to spend almost as much as you want. You don’t really have to look into your budget very much. You just have to kind of keep an eye on the spending like, oh, it’s June and we already spent 200,000 dollars. I guess we only have 100,000 dollars for the last six months of the year, or recognize, yeah, I’m spending a lot this year and next year maybe we’ll just pull it back a little bit, or keep spending because you’ve got so much money, it doesn’t matter. You can buy that second home that you don’t necessarily have to rent out. Uh you can have that dream car, that 1987 Toyota MR2 that is your dream car or, you know, a nicer one. You can drive a Maybach. What are some other nice ones, Scott?
**Scott:** I’m not really a car guy, so I have my Tesla Model Y and I’m thrilled with it. And I’m like, this is the fanciest thing ever since I drove a Corolla for 10 years prior to that.
**Mindy:** It is a really fancy car. You can you can travel almost whenever you want, go wherever you want, sit in the first class seats, don’t even bat an eye at buying business class seats on those the the longer flights. Uh stay in the nicer hotels. No more Motel 6 for you. You can upgrade to the Hampton. or beyond. Uh you can you can really just live the life that you want almost with no regard to how much it costs. The cons, of course, are you are acquiring millions of dollars before you retire and that requires a high income. So if you don’t have a high, a super high income, this is probably not going to be attainable unless you’re going to continue to work past traditional fi number, your Chubby-fi number. Honestly, I don’t think this is going to be attainable for much of the population simply because spending is is preventing you, your day-to-day spending prevents you from saving enough to achieve Fat-fi.
**Scott:** I think that’s a really interesting point on on your spending is going to make it hard to attain Fat-fi because what what I I think there’s like two types of Fat-fi that people don’t really break apart in their minds when they think about this this part of the community, right? One is this person who’s living this very lavish lifestyle and spending 300,000 dollars per year, 25,000 dollars a month, really doing high-end vacations, driving fancy cars, living fancy uh neighborhoods, eating out a ton, those kinds of things. And then there’s the person who has 6 to 10 million dollars but only spends 80 to 120,000 dollars a year, spends like the other fi categories, and it’s just that their portfolio ran away over the last 10 years. And you are in that category, Mindy, would you would you agree?
**Mindy:** I would absolutely agree.
**Scott:** Yeah. And I spend I’m also in this category, but I spend I spend more than you, but I don’t spend like this like anything with close to this level on an annualized basis. You know, I I you know, I’m I’m probably getting up there, you know, getting up there with the the two kids in daycare at this point in my life, but I’m not I’m not in this in this ballpark. I think that those are the two distinctions to me, right? If you want to spend 300,000 dollars a year, all the way through achievement and past Fat-fi, you’re probably going to be somebody who is absolutely elite in your field, an athlete, an entertainer, a rock star, uh uh an executive, somebody in private equity or in Wall Street, um somebody who who builds or joins a a a business uh or early in the trajectory that just absolutely explodes. But many people, I think in the fire community will be in this category and it wasn’t even their goal. They just hey, you know, I I I fired with two and a half million, made some part-time income, that covered my expenses. And then the last 10 years have been pretty good. So now I got 6 million. I think that’s a good point, Scott. I think people will find themselves sliding into Chubby and Fat-fi even though that wasn’t their goal simply because they are saving too much money. They are, you know, one more year syndrome is a real thing and I had it, my husband had it, everybody has it. Being able to leave and still trusting the math is a superpower in the FI community. So I think you’re right. I think a lot of people will see themselves sliding from lean to traditional, from traditional to Chubby, and from Chubby to Fat just how the market shakes out.
**Scott:** So, you know, we say this will be unattainable for all but a tiny fraction of the population early in life. But I imagine that a large percentage of the people who achieve fire will later in life potentially find themselves in the Fat-fi territory, because what gets you to these other versions of fire, frugality, excellent income generation capability, the ability to understand and manage investments, a very long-term outlook, will likely by default in future decades continue to result in wealth snowballing and continuing to build. And so I wonder if a lot of folks in the community will be in this category even if they never spend like they’re in the Fat-fi.
**Mindy:** Without building a house, I would never spend in the Fat-fi territory. All right, Scott, I thought that was a very succinct wrap up of the different flavors of FI. Thank you for making that slide deck. I think it’s awesome.
**Scott:** Awesome. Yeah. Uh, thank you. And and shout out to Blake. I I just put some notes in a piece of Word document and Blake, our producer, put together this beautiful deck. So thank you, Blake for all you do for Bigger Pockets Money.
**Mindy:** Oh, well, yes, let me let me rephrase. Thank you, Blake, for making this beautiful. This was a great slide deck. Yes, and agreed. Thank you for everything you do. Scott and I just talk. Blake makes all the magic happen. All right, Scott, should we get out of here?
**Scott:** Let’s do it.
**Mindy:** That wraps up this episode of the Bigger Pockets Money podcast. I am Mindy Jensen. He is Scott Trench, and behind the scenes is Blake Staub, the best. And we are saying until next time, live.
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