FIRE Your Way: Comparing FatFIRE and LeanFIRE Retirement Strategies

The concept of FIRE (Financially Independence Retire Early) is something the working class is working hard to achieve. FIRE is a social movement that is encouraging people to save money and invest so that they can gain financial independence and allow them to retire early. People don’t want to work until they hit their retirement age. Many working class are looking for ways to become financially independent so that they can retire early.

Retiring early means you don’t have to work for someone else. Instead, you can earn a living doing the things you enjoy and are meaningful to you. Such jobs may not have direct monetary value, but they bring you fulfillment and satisfaction. There are different ways you can retire early and achieve financial independence.

Types of FIRE

There are several ways you can retire and achieve FIRE (Financially Independence Retire Early). The most common way is to save one’s income and diversify your investment portfolio. Thereafter, you can live off the income from your investments. The goal is to reach a point where your investments can pay for your living costs and afford you a good lifestyle. The following are some of the ways you can retire early and achieve financial independence.

  • FatFIRE. FatFIRE meaning is that you retire early and live a luxurious life afterward.
  • LeanFIRE. LeanFIRE meaning is that you retire early, but you can only afford to live a simple lifestyle.
  • CoastFIRE. CoastFIRE meaning is that your savings can cover your after-retirement expenses, but you continue to work to afford the living expenses.
  • BaristaFIRE. The BaristaFIRE allows you to retire early, but you do not stay completely hands-off from working. This FIRE option gives you the choice of working for pleasure rather than working to survive.

What is FatFIRE?

FatFIRE retirement is being able to retire early and live a good life without having to sacrifice your spending. As such, you continue to enjoy the finer things in life without having to work. It means that your investment income can cover your expenses and afford you a good life. You don’t need to do anything to supplement your income.

How to Achieve FatFIRE

FatFIRE is achieving financial independence yet with high living standards. To achieve FatFIRE, you need to have 25 times your annual spending in your investments. This means that your investment income should be enough to afford you a luxurious lifestyle. FatFIRE will depend on how much your luxury life costs. If your luxuries are extremely expensive, then you need to have large savings and investments to cater for the costs.

What is LeanFIRE?

LeanFIRE retirement is being to retire before you can hit the age of 60, but you can only afford a simple lifestyle. It means your investment income can only cover the basic necessities, and you cannot afford a luxury lifestyle. Also, it is hard to afford to live in a major city and your income cannot allow you to have children.

How to Achieve LeanFIRE

LeanFIRE means retiring early, but you just have enough savings to cater to your basic necessities, and you cannot afford luxuries. As such, the best way to achieve LeanFIRE is to take up a part-time job to supplement your income. You need to boost your passive income with at least 25% from some part-time work. LeanFIRE retirement requires you to plan a modest lifestyle and cut unnecessary spending by living a minimalist lifestyle.


The main difference between LeanFIRE and FatFIRE is that in FatFIRE, you live a luxurious life while in Lean FIRE, you live a minimalist life. As such, you can achieve Lean FIRE much quicker than you can achieve Fat FIRE. You may need to work for more years and invest a lot to achieve Fat FIRE. The downside of LeanFIRE is that you may need to live without kids because it is challenging to live frugally with kids.

How to FatFIRE

Most people don’t retire from work entirely. They just find something fun and fulfilling. To Fat FIRE, you need at least 25 times your annual expenses. As such, if you have annual expenses of $100,000, then you need $2.5 million to FatFIRE. If you are planning to retire early and achieve FatFIRE, you can consider starting a highly profitable business. You can start building on your business or investment before retiring and once they are profitable enough, you can consider FatFIRE.

How to LeanFIRE

Lean financial independence requires you to retire early before the conventional age of retirement and live a simple lifestyle. Many people who are striving to Lean Fire try to live below $50,000 per year, which is about 25% less than the average annual household annual expenses. One of the ways to Lean FIRE is to live without kids and cut your living expenses. You need to get a part-time job to supplement your passive income.

How to Choose the Right FIRE Option for You

One FIRE option might not work best for everyone. Consider the following factors when deciding which FIRE option is the best for you:

1. Consider your Current Income

Your current income will help to determine the best FIRE option for you. At its core, the FIRE movement involves people who make a lot of money at the beginning of their careers. This will take you a little time to achieve FIRE than when you have a lower salary.

2. Take your Timeline into Consideration

The FIRE option you choose will depend on the time you want to take to achieve FIRE. If you want to achieve it in a short time, you might have to compound your efforts in that shorter amount of time. If you have a shorter time, you might want to optimize your savings and investments. You should also keep an eye on your tax efficiency.

3. Consider your Lifestyle Preferences

Your lifestyle preferences will determine your FIRE option. If you can survive living on off-brand cereal for three meals per day, then LeanFIRE is best for you. If you like or prefer a few more luxuries, you may want to consider FatFIRE.

4. Do you Want to Work?

Decide if you still want to work another job when you’ve retired. If you do, consider the BaristaFIRE approach. This approach allows you to launch the business you’ve always wanted to get off the ground. This will also help to save lots of money.


If you are looking to retire early and achieve financial freedom, then you need to decide whether you want to FatFIRE or LeanFIRE. Your decision will be informed by whether you want to live a minimalist life or a luxury life. If you are considering living a luxurious life, then you need to FatFIRE by working longer, saving, and investing a lot to afford a luxury lifestyle. If you want to LeanFIRE, you can save just enough to cover your retirement expenses, retire and look for a part-time job to supplement your passive income.


How does FIRE retirement work?

FIRE, or Financial Independence, Retire Early, is a financial movement advocating early retirement through aggressive saving and investing, aiming for retirement in one's 30s, 40s, or 50s instead of the usual retirement age of 65. There are two main strategies within FIRE:

  • FatFIRE: This approach allows for maintaining one's current lifestyle in early retirement, necessitating substantial savings and investments.
  • LeanFIRE: It focuses on early retirement with a more modest budget, requiring smaller savings and investments but also lifestyle changes like downsizing or reducing expenses.

What are the principles of FatFIRE?

The principles of FatFIRE are:

  1. Live below your means: This is the foundation of FatFIRE. By living below your means, you can save more money each month.
  2. Increase your income: This can be done by getting a raise, starting a side hustle, or investing in passive income streams.
  3. Invest wisely: When you invest your money, you want to make sure it is working hard for you. This means investing in a diversified portfolio of assets that have the potential to grow over time.
  4. Be patient: It takes time to save and invest enough money to retire early. Don't get discouraged if you don't see results immediately. Just keep saving and investing, and you will reach your FatFIRE goals eventually.

How much do you need for LeanFIRE?

The amount of money you need for LeanFIRE will depend on your individual circumstances and goals. However, as a general rule of thumb, you will need to have enough money to cover your annual expenses for 25–30 years. For example, if your annual expenses are $30,000, you will need to have $750,000-$900,000 in savings to achieve LeanFIRE.

What is the range for FatFIRE?

There is no strict numerical range that defines FatFIRE, because it depends on your individual circumstances and goals. However, a general rule of thumb is that you will need to have enough money to cover your annual expenses for 30–35 years.

What is the 4% rule in FIRE?

The 4% rule is a guideline for determining how much money you can safely withdraw from your retirement savings each year without running out of money. A retiree with a 30-year time horizon could withdraw 4% of their portfolio in the first year of retirement and adjust for inflation each year thereafter with a 95% probability of success. This means that if the inflation rate is 2% in a given year, you would increase your withdrawal by 2% to maintain your purchasing power. So, if you withdrew $40,000 in the first year, you would withdraw $40,800 in the second year (assuming 2% inflation).

Does LeanFIRE work?

Whether LeanFIRE works depends on your individual circumstances and goals. LeanFIRE is a financial strategy that allows you to retire early by living on a very modest budget. To achieve LeanFIRE, you will need to save and invest a smaller amount of money than you would need for other FIRE strategies, such as FatFIRE.

LeanFIRE vs CoastFIRE

LeanFIRE and CoastFIRE are two financial independence, retire early (FIRE) strategies that allow you to retire early. LeanFIRE is a more aggressive approach that allows you to retire early by living on a very modest budget. CoastFIRE is a more relaxed approach that allows you to retire early by continuing to work part-time or in a lower-paying job.

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