Types of FIRE

Previous I discussed the principles of Financial Independence, Retire Early (FIRE) but there is more than one type of FIRE. There is a no one size fits all when it comes to financial independence. 

LeanFIRE

LeanFIRE is living the most frugal life to allow you to save a huge percentage of your income, and once you get to your FIRE number, you would stop work and survive on the bare minimum to get by. This is the lowest cost of living, no luxuries (anti-consumerist), likely no children, occasionally living in a cheap country or in a caravan. People maybe aim for £15-20k a year, so may get away with a FIRE number of £375k. People who aim for this, can generally get there in 10 years or less. The huge benefit is that you stop work very quickly, but for me, if feels like you have delay your life until a later stage (when you may be too old to appreciate it) and even then, have to scrimp on too much.

CoastFIRE

CoastFIRE is an interesting premise. You first consider when you would want to stop working. Then you decide how much you need by that date depending on your calculated likely expenses. The plan would be to save heavily until you reach a pre-calculated total, then you can leave your investments to grow naturally towards your FIRE number.  This means you living frugally until you hit that number, then you can theoretically live better once achieving it as you don't need to contribute to your savings from then. You can switch to a lower paying, but more enjoyable job or could just increase your spending and enjoy life a bit more. Then when you hit your FIRE number, you can stop work (or do what you want). Not as draconian as LeanFIRE and does allow more discretionary spending. You can calculate your CoastFIRE numbers here.

BaristaFIRE

BaristaFIRE is more financial independence than retiring early; if you can live off £30k a year, then baristaFIRE is taking a drawdown of £15k a year from your pot and taking a job you want to do (perhaps low paying or part time) to make up the other £15k. It stems from working in Starbucks coffee shops in the USA which would provide private healthcare as part of their employment (hence Barista) because healthcare can be a huge expense in the USA. But this is not really too relevant here as we have the (free) NHS. So not retiring totally but it gives the freedom to work less or a different lower-paying job.  

FatFIRE

FatFIRE is living without a budget in retirement, which could be drawing down over £80k a year from your pot, though could be (much) more. This may mean having a pot of over £2 million in investments. It is likely that this person's pre-retirement income is very high to attain that level. This is obvious the dream but realistically not attainable for most people.... but anyone can win the lottery so there's always hope!

What is this best type of FIRE for you? Please share below.