fatFIRE vs leanFIRE | Financial Independence Retire Early

So maybe you’re like me when I first
heard about the fire movement in the fire community I was so excited coming
from Dave Ramsey and his podcast it was kind of like cool to like learn about
these new people and these new things I started do podcasts I read new books I
thought I had everything unlock when it came to fire then somebody asked me hey
are you lean fire or fat fire and I just thought to myself ah more vocabulary I
mean I know fat and I know lean and I definitely know about fire but lean fire
and fat fire no idea so it was back to research to learn about lean fire and
fat fire so I could be up-to-date with all the newest terms and personal
finance and in this video I’m going to explain to you the difference between
lean fire and fat fire before we do dive into it if you are new here my name is
Brad I make videos with tips and motivation on how to get idaite save
money invest for retirement all in the hopes of one day getting us all to
financial independence if you are on a similar path as well give this video a
thumbs up and consider subscribing to the fin mindset sometimes when it comes
to lean fire and fat fire people are gonna have the choice which way they’d
like to pursue and for some of us like myself we don’t have a real option those
pursuing lean fire are your natural savers they have cut their spending
dramatically I was reading a subreddit on fire and they talked about those
pursuing lean fire we’re living on less than 40 thousand dollars per year at 40
thousand dollars a year that puts their Fi number at just about a million
dollars following the 4% rule these are the people that move off to the country
become home setters or take advantage of geo arbitrage where they might move to a
different country with a lower cost of living or even somewhere here in the
states that has a lower cost of living this type of fire doesn’t necessarily
require a bunch of side hustles and passive income streams these people are
living a nice simple minimalist frugal style on the other side of the fire
spectrum are those pursuing fat fire these are people living on an excess of
$100,000 per year putting their Fi number somewhere around 2.5 million
dollars and if you don’t know what that fi number is I did a video explaining
exactly what it is and how you can find your fi number I’ll leave it down in the
description and in the comments below so you can check it out after watching this
video now these people pursuing phat fire or generally not always but
generally gonna come from those that are high earners the people with really
really high incomes or those that have built large portfolios or people that
have massive amounts of side hustles and they’re an entrepreneur
these are people that are bringing in a lot of money and these people kind of
inspire me in a little way because they are living this way and they don’t have
to feel bad about it and these are the people that kind of get judged a little
by other people in the fire community I’ll give you an example
Oprah who’s worth billions of dollars she goes out and buys an eight million
dollar house and everyone’s like oh well that’s too much she doesn’t need an
eight million dollar house but then when you read the fine print and see that her
investments alone bring her in over a million dollars a year that eight
million dollars really doesn’t seem that extravagant anymore this is a little bit
of a conflict that I see between those following the lien fire and fat fire I
mean does there really need to be one or the other could you do both because I’ve
spoken to people that started as lean fire and they start with lean fire and
they’re trying to build up other passive income streams or real estate portfolios
all in the hopes of one day reaching fat fire and I know people that are lean
fire and just happy where they’re at for me I like both sides of the fence and I
probably will play both sides of the fence because they are following one
principle rule of personal finance in both sides whether you are fat fire or
lean fire you are living on less than your means and when you live on less
than your means you are setting yourself up for financial success regardless of
whether your lean fire or fat fire now for someone like me or something that
lives in a high cost of living area sapphire is
really my only option it would be virtually impossible for me to live on
less than $40,000 a year in my current living situation now granted I could
pack it all in put the kids in the car fly off and live in Southeast Asia where
the cost of living is next to nothing but that’s not really reality for me at
my stage of life right now I love it here on Long Island but the cost of
living is ridiculous I mean take a look even at my bare bones like even the
things that I just are fixed costs that are going to happen to me regardless
not counting food not counting my cell phone not counting Internet not counting
any luxuries whatsoever just looking at my four walls and my daughters and my
son’s childcare we got my mortgage their daycare
property tax insurance gas to get me to work my auto insurance my utilities and
my water bill I’m it pretty much 77 almost 78 thousand dollars a year like I
said bare bones before this before eating
so for somebody like me here in New York I’m almost forced to live a fat fire
life and it was actually kind of cool to like learn this because so many times
early in my debt free journey I kept looking at other people in other places
and I tried to live my life like other people were living I tried to budget
like they did and cut costs like they did and every single month I would look
at how much money I was spending and feel like I was doing something wrong it
was a huge realization for me just to realize that I live in a high cost of
living area and for me to reach financial independence if I choose to
stay here it’s gonna take me a little bit longer to reach financial
independence where my family is where my job is where my in-laws are like this is
the place that brings me value and if it’s gonna cost me more money and I’m
gonna be forced to be fat fire and I’m gonna be judged on how much money I
spend on things that are really just requirements to live then so be
the good news for you is that you you really don’t have to worry about it I
mean try and reach financial independence the best way you know how
trying to eliminate debt live below your needs invest as much as you can to
increase your savings rate while in turn trying to increase your income and
you’re gonna be fine wherever you are and if you’re lean fire right now and
you’ve learned how to live on less than $40,000 a year I mean look at mister
money mustache he’s done it good on him but for me right now I can answer the
question I am a fat fire person but only because I live here in New York this has
been a new term for me and it’s been around a little bit I would love to know
in the comments section below have you ever heard a fat fire and lean fire and
which one do you think you are or which one are you pursuing I would love to
start a conversation that I think the topic is really really interesting and
it’s a great look at how people are reaching the same financial independence
goal with a much different path that is the beauty of personal finance that’s
what makes it personal and that’s why I really tend not to judge what other
people are doing and I hope that people don’t judge me in return up here is an
explanation exactly what fire is if you’re new to the fire movement and down
here is that video I spoke about earlier telling you how you can find your Fi
number until I see on the next one guys stay positive work really really hard
and always be kind to others I hope you have yourself an amazing day and a
better tomorrow

24 thoughts on “fatFIRE vs leanFIRE | Financial Independence Retire Early

  • How about just slightly plumpfire ๐Ÿ˜‰? Thanks for the vid… I just heard about fatfire for the first time recently ๐Ÿ™‚ Oh, ๐Ÿ‘ Go Blue!

  • Leave a comment and let me know how you feel about leanFIRE and FatFire! And please whip that thumbs up for the YouTube algorithm! PS. I didnt go to Michigan or care about college football ๐Ÿ™‚ The shirt was a gift.. haha.

  • I think Iโ€™m definitely leanFIRE mainly because Iโ€™m 41 just really starting now investing and Iโ€™m still paying off debt. After debt payments are gone my current annual spending will be around $45K. If I can pay off my house then it will be about $24K annually.

  • I'm definitely LeanFIRE after starting so late…money has never been a big motivator here…as long as I have enough for my simple needs I'm good..

  • Never heard of fat/lean FIRE. Then again, I just heard about FIRE this year. I fall under the LeanFIRE pile. Always been a believer of living beneath my means.

  • B move to Houston, it's HELL HOT, but inexpensive real estate and you can always find a job. Texas would love to have you. Not sure where I fall in the fire, but either way glad to be along with you for the ride.

  • Once your mortgage is paid, what does your family still need (or want) at that point? Assuming that you'll likely have your mortgage paid off by the time you retire.

  • Speaking of I am on a cruise ship in Glacier Bay having a martini. I completely get the mountains. My happy place. I hope the baby comes tomorrow

  • We talked about you dad's passing and my moms. He birthday would be tomorrow. A sweet little Birgo boy, would be the icing on the cake.

  • Great explanation! Cost of living across all the demographics in this country (or beyond) is so diverse. Find your spot on the planet, and do your best. To me, it is as simple as that. Another great video, Brad. I hope you launch yourself into a great school year! Those lucky kids! ๐Ÿ™‚

  • I feel like you are the male version of my mind. We are a bit older 48 and 61 so our situation is different. Our side hustle has outgrown our day jobs.
    My husband will retire at 65 from being a police officer so he will have his police retirement but will not take Social Security until he is 70. Iโ€™ll continue to work part time. Technically we could live off our side hustle which is bringing in about 100,000 a year. We could retire lean fire in four years, We are aggressively paying our mortgage off before retirement. We would only need about $30,000 a year to live in Arkansas. I am very frugal however that feels a little too close to the line for me. In 3 1/2 years we will both work part time and still bring in 140 K, we will save half of it for another five years and be fat fire.
    Iโ€™ve heard Brad and Jonathan mention you several times on the podcast. Iโ€™ve been watching you since you started the YouTube channel and Iโ€™m so proud of you. Way to go!

  • Why would you include daycare in your lean fi number? You would be able to be with your family so you wouldn't need daycare. I understand where you are coming from though.

  • Hi Brad, I live in Wellington, the capital of New Zealand. Our budget is almost exactly the same as yours, so a very high cost of living place. Thanks for introducing me to geoarbitrage. That's our plan to retire in South East Asia, I just didn't know there was a term for that ๐Ÿ™‚ Love your passion and info, Amanda

  • These are two new terms to me. Currently I'd be closer to fatFIRE but once my debts are gone, I think leanFIRE could be possible. That said, I don't actually know which I'll strive for until I get closer to paying off my debt.

  • Never heard these two terms! I guess since I make very little, especially after leaving my job, and living at home, I'm going for lean FIRE. I am a natural spender, I've always LOVED spending money. But I've been able to cut WAY back and drastically reduce my spending. It's been hard, but it's put me in a completely different place financially and can't imagine going back to spending like I used to. Now, to get my income up so that I can make the money like fat FIRE while living like I'm lean FIRE!

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