Types of FIRE :
In recent years, various “modified FIRE” models have been developed to allow regular workers to achieve their early retirement dreams. There are five different types of FIRE —let’s see which FIRE lifestyle suits you best!
Regular FIRE
Regular FIRE refers to the most traditional and standard FIRE (Financial Independence Retire Early) model. The retirement plan is based on the “4% rule,” meaning you can retire once you’ve saved 25 times your annual living expenses. However, accumulating this amount of retirement savings in a short period is challenging for average people, which is why early adopters of FIRE were mostly high-income people.
Lean FIRE
An extremely frugal lifestyle, either naturally desireless or deliberately reducing desires, has quickly achieved retirement goals by focusing on the execution of financial planning strategies.
Fat FIRE
This type of FIRE mode is very abundant, aiming for a retirement life where money is not a concern and you can spend freely. Typically, this group consists of high-income earners or entrepreneurs who pursue a higher quality of life. The key to success: Increasing Active Income.
Barista FIRE
This type of FIRE enthusiasts advocate for retiring early even before earning enough for a full retirement. After leaving their regular jobs, they often choose to work part-time at places like Starbucks or cafes to maintain their health insurance and social benefits. This allows them to leave the 9-to-5 grind early and reclaim their valuable time.
Coast FIRE
This kind of FIRE is accumulating a certain amount of investments, after which you no longer need to actively save for retirement. By leveraging the powerful effects of compound interest, this retirement fund will gradually “coast” to the target amount. Therefore, this type of FIRE enthusiasts do not aim for early retirement but focus on achieving financial independence early.
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Tell us which kind of FIRE do you prefer!!
