Today’s guest post is from my friend Carla! Carla is a friend and all-around excellent human who happens to be another Longmont local. She has an excellent podcast with her husband Robert called Pennies and Popcorn. Check out the episode that Doug and I appeared on where we discuss Fight Club.
Today, Carla guest posts to discuss different flavors of FIRE. Take it away Carla!
A FI By Any Other Name
So – how ‘bout those humans? We’re a pretty fascinating little species. I mean think about it, Shakespeare is the same species as Eminem. (Actually, they’re both amazing at wordplay and would probably have been friends. Come at me.) And Eminem is the same species as Queen Elizabeth. And Queen Elizabeth is the same species as … everyone featured in Tiger King. Whoa. Needless to say, we humans are all different.
But what a boring world it would be if we were all the same! I mean, if Queen Elizabeth were trying to fill the world’s need for good rap, well, let’s just say there would be a lot more suffering on Earth. And if the cast of Tiger King were trying to fill our need for … basically anything other than guilty-pleasure TV, the world would be a dark and scary place.
In the world of FI, our differences are also a good thing. A lot of creative people have come up with different varieties of Financial Independence. These different types of FI all lead to similar places, but each one is unique. So today we’re examining the many varieties of FI and asking: do these FIs by other names smell as sweet as good-old-fashioned Traditional FI??
First on our list of FI-varietals is LeanFIRE. LeanFIRE is when you achieve financial independence and then walk around at an angle for the rest of your life like you’re in one of those old V-8 commercials from the 80s.
I mean, it might be that. It does look fun. Orrr if you want the boring “real” answer, LeanFIRE is basically just FIRE, but mixed with the idea that you’ll be extremely frugal – for the rest of your life.
Folks who strive for LeanFIRE, as the name suggests, plan to live lean and mean with very little money in savings. Probably the most well-known example of someone who retired on an itsy bitsy amount of money is Jacob Lund Fisker, who writes at Early Retirement Extreme. Jacob spends about $5k-7k per year. I know, I know: you have lots of questions about how that’s possible. Jacob will answer them for you here! Such a small budget meant that Jacob only needed about $175,000 to retire – well under what most Americans spend on just their home these days. So what’s his secret? Well, living in an RV was a big piece of the puzzle for him. Beyond that, he eats simply, buys almost everything used, and doesn’t have expensive hobbies. As the name of Jacob’s blog implies, though, for most people, this is a very extreme approach. Many others consider themselves “LeanFI” if they plan to retire with anything less than a million dollars.
So does LeanFIRE smell sweet to you?
Our two cents: Don’t live a lifestyle where two cents is a sum of money that you are forced to pay attention to. Before you plan on quitting paid work forever with less than $200k in your pocket, you should take a long and hard look at what you want out of life and how resourceful you are. If your oven breaks, can you afford to replace it on a budget of $7,000 per year? Or can you try to fix it on your own? Or do without an oven? Can you afford regular check-ups and dentist visits? If your glasses break can you afford to replace them?
These are the kinds of tough questions you’ll face if you choose an extreme version of LeanFI. Jacob himself actually enjoys continuing to work. So even though he “retired” and only spent about $7,000 a year, he probably sleeps well at night these days knowing that he can spend much more if necessary.
Although LeanFIRE comes with the huge bonus of being able to quit sooner, it also requires a lot more planning and precision than other types of FI, so make sure you do your research and consider as many contingencies as you can dream up.
- FatFIRE or even … ObeseFIRE!
FatFIRE means that you reach financial independence and then sit around eating cheeseburgers and Cheetos all day until you become morbidly obese!! Well, it might be that. But I guess some more (eye-roll) serious-minded people would say that FatFIRE basically just means retiring with like, a lot of dolla dolla bills. (This is something a serious-minded person would say, right??)
Put simply, FatFIRE proponents want the finer things in life. Or at least, they want to have the option of enjoying those things from time to time. They aim to save a lot of money so they have more flexibility and options in life. ObeseFIRE is, as you can probably guess, the idea that you’ll save a really really ridiculously large amount of money.
So do these heftier FI options smell sweet to you?
To decide whether FatFI is for you – ask yourself:
Are you not happy unless you own the latest gadget? Do you revel in 3,000 thread count sheets? Are those new Teslas just so tempting you can’t resist? Did you watch The Devil Wears Prada and identify more with Meryl Streep than Anne Hathaway?
Then you need to save a lot of money to support all your fancy choices in life! And hey, you’ll get no judgment from us. We all have things we like to indulge in. You just have to be honest with yourself and decide what you need in life to feel satisfied and fulfilled. But do beware. Many times people enjoy these finer things largely because they like to impress others, which is a pathway to certain unhappiness. (Remember that scene in The Devil Wears Prada where Meryl Streep reveals she’s actually super unhappy and has been through multiple divorces?? Meryl Streep doesn’t lie, guys.) If you feel like poor old Meryl, take a good look in the mirror and think about what makes you happy and try not to give a damn about what anybody else thinks.
CoastFIRE means you retire early and ride roller coasters for the rest of your life! Wheeee! Ok, so that’s not actually what CoastFIRE means, but it totally should be and we need to invent a new kind of FIRE to cover this option because it sounds amazing.
Even though the real definition of CoastFIRE is slightly less awesome than riding roller coasters, it’s still pretty damn cool. CoastFI means that you save enough money early on in life that you can just sit back and not save another penny, and the magic of compound interest will give you enough to retire on later in life. For example, let’s say you save $600,000. You don’t feel good that this is enough to retire on right now. But your expenses are only about $40,000 a year, so you would feel good retiring when you had a little over a million dollars. If you expect to get an annual 7% return on your investments, you’ll have over a million dollars in just about 8 years! If you just earn enough to cover your living expenses for the next eight years, you’ll be set to retire. No more saving required!
Lots of folks have realized that when you’re in this glorious situation, you can try downshifting to a less strenuous job or maybe work fewer hours for the next eight years, since you don’t need to save more money. And that’s pretty darn appealing.
So does CoastFIRE smell sweet to you?
CoastFIRE might be for you if you’ve saved a lot early in life and can find a job you love that can cover your expenses. Of course, you’re never guaranteed to love a job completely. And that’s why some folks stick it out and keep saving while working a higher-paying job they do not love to get to traditional FI faster. But … there are an awful lot of ways to earn money in the world. Why not give yourself a chance at finding one that works for you?
BaristaFIRE is when you save enough money to retire early so you can sit around and watch this classic piece of American cinema over and over again on a loop: “Coffee Shop: Love is Brewing.” You don’t get to claim that you’re really BaristaFIRED until you can recite the whole script from heart.
But if you want to get all technical about it, what most people mean by BaristaFIRE is that you’ve saved enough that you can cover most of your expenses, but you still want to have some kind of a low-stress low-paying job that covers some more fun expenses and hopefully also gives you health insurance. And the job of barista is kind of glorified – see Coffee Shop: Love is Brewing as evidence – so as a result, many folks dream of just whipping up coffee and chatting with/falling in love with customers all day as a fun way to bring in those extra dollars.
So does BaristaFIRE smell sweet to you?
Well, BaristaFIRE definitely smells like coffee. So that’s a plus. Our take on BaristaFI is close to the same as CoastFIRE. If what you really want in life is no obligatory work whatsoever, then this option isn’t for you. But … many people actually like working in some capacity. It gives you a social outlet. And it feels good to feel needed – to feel like someone is expecting you. If that resonates with you – then for heaven’s sake get out of the hellish job you hate and try something like BaristaFIRE.
SideHustleFIRE is when you do everything you can to quit your job in a hurry so that you can spend your days doing The Hustle (y’know, that dance from the 70s?) and settin’ the dance floor on FIRE.
You know you want some solid-gold clothes and platform shoes now. This is the one true definition of SideHustleFIRE, but I guess what some people mean by it is that you are working every kind of side job imaginable so you can save money hand over fist and retire as fast as humanly possible. Side gig walking dogs before your 9-5 job starts? Yes, please! Driving Uber on a Friday night? Sign me up! Freelance photography? Selling your knitted hats or handmade soap or original artwork on Etsy? You bet! These people are constantly looking for new ways to stash some cash.
So does SideHustleFIRE smell sweet to you?
SideHustleFIRE can be an incredible way to turbocharge your savings. It can also inspire you to take on new and challenging hobbies, which can be deeply rewarding. On the flip side, it can also ensure that you barely sleep and end up hating your life if you are working around the clock. If you’re already working a demanding full-time job, you should recognize that and be gentle with yourself. If you really can earn a little extra doing something you already do and enjoy, then go for it! But if you’re grinding and gnashing your teeth for a little extra boost to your annual savings rate, slow down, friend. Getting to FI is a worthy goal, but as the usual author of this awesome blog has astutely pointed out, it’s not the be-all, end-all. Enjoy the journey!
SpouseFi is when you marry Bill or Melinda Gates (don’t forget, they’re recently single!) and therefore never have to work again. Ok, seriously, I know I was kidding on all the other ones, but this one is actually kind of accurate. SpouseFI is what it sounds like. Your spouse brings home the bacon and you … don’t!
This reminds me of that song by The Offspring called Why Don’t You Get a Job, in which the singer commiserates with a friend whose significant other doesn’t work and “wants more dinero just to stay at home.” The Offspring’s advice is to lose that awful gold digger immediately. And … fair.
But also, it can be a pretty awesome set-up in life to have one person working a job that provides income and benefits and have another spouse working less or not at all who can focus on managing all of life’s tasks that add up to basically a full-time job. Cooking, cleaning, laundry, home maintenance, car maintenance. And oh yeah – raising little humans can be a big one!
We humans (even adults) are like little Tamagotchi pets from the 90s. We require constant care and feeding. It takes a lot of time just managing all the minor tasks that make up a life. And when you have a live-in person you love who is able to take the lead on all those tasks, both people can live a more relaxed and enjoyable life.
So does SpouseFI smell sweet?
It certainly can! SpouseFI can be a fulfilling and stress-minimizing way to structure a couple’s or family’s life. But it’s something everyone has to be fully on board with and willing to talk honestly about. One spouse could easily feel like the martyr in the relationship. Things to consider include: Does the working spouse genuinely love their job? Will the non-worker be sad and lonely? How will you divvy up domestic chores? What if the marriage ends – will money saved from the working spouse’s income all belong to her/him in a divorce settlement? Will the non-working spouse have a difficult time re-entering the workforce if they ever needed to? These aren’t fun questions. But they are the critical real-world issues to consider so that neither of you ends up singing: “I won’t pay, I won’t pay ya, no way. Na-na, why don’t you get a job?” (We’re here for you, The Offspring fans.)
- All the Other Types of FIRE
If by now you’re thinking: “Oh my goodness … just how many names can there be for saving up money and trying to free yourself from mandatory work??” Well … there are lots more! This post won’t cover every last one because most of them are basically about the different ways people hope to spend their lives post-mandatory-work. For example, DisneyFIRE is for people who want to quit their jobs so they can visit Disney theme parks kajillions of times. BoatFIRE is for people who want to quit and sail around the world. BabyFIRE is for people who want to save enough so they can focus exclusively on raising kids. If you decide you want to retire early so you can visit every baseball stadium, well … you just invented BaseballStadiumFIRE! If you want to retire early so you can dedicate your life to crafting the world’s most perfect macaroni and cheese, you’ve invented Mac’n’CheeseFIRE! And also … can I have some of your amazing mac’n’cheese?
Immature Carl note: I have one more to add! In 2018, I invented fartFIRE! But wait, it’s not what you think! In Swedish, fart means fast. So, fartFIRE is getting to FI ASAP:
- Work a lot of hours.
- Flip homes.
- Live in a basement.
- Eat food from the discount bin.
Practice all of the above and more and you’ll be fartFIREd before you know it! Note that I don’t actually recommend fartFIRE. It’s exactly what I did and in retrospect, it was a mistake.
Choose Your Own Adventure
The point is, there are as many paths to FIRE and reasons to FIRE as there are people. Life is one big Choose Your Own Adventure book! Actually, it’s way better than those books because they were usually terribly written and only presented you with like three options. Real-life is chock full of options.
And if there’s one thing you take away from this post (other than getting that The Offspring song stuck in your head, which is clearly my ultimate evil plan), I hope it’s this: You do have options. There are so many ways to both earn and save money. If you want to free yourself from mandatory work, great. But don’t stay at a miserable job until you hit some magic number, hating every day between now and then. Get creative. Ask around. Research. Explore. You might end up turning the page to a fantastic new chapter, or end up writing a whole new book altogether.
Thanks so much for this awesome post! Please find Carla at:
- Pennies and Popcorn: https://www.penniesandpopcorn.com/
- Twitter: https://twitter.com/PenniesnPopcorn
- Instagram: https://www.instagram.com/penniesandpopcorn/
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