FatFIRE: What It Is (And How To Easily Achieve It) | Wildchildretire

Key Takeaways:

• Fat FIRE means having enough passive income to do basically whatever you want to do in life, i.e., travel, food, entertainment.
• A Fat FIRE life can significantly reduce stress and give you more life options in retirement.
• You can achieve Fat FIRE by saving at least 50% of your paycheck, getting a side hustle such as blogging, and investing in VTI.

You heard of FIRE, but what about Fat FIRE?

Let us break it down for you.

Here we’ll discuss precisely what Fat FIRE is and how to easily achieve it in 3 simple steps.

From saving more money with free budgeting apps, making more money with realistic side hustles, and more.

Let’s check it out.

What is Fat FIRE?

Fat FIRE is total freedom! It means having enough passive or semi-passive income to cover your annual expenses, so you can do whatever you want in life.

For example, let’s say you’re a single person with $30,000 in annual expenses. Fat FIRE allows you to travel about anywhere and do any activity if you have $200,000 in passive or semi-passive income from investments like real estate or stocks.

The best part of Fat FIRE is that it’s attainable for anyone willing to make the necessary sacrifices and put in the hard work. So if you’re looking for a way to retire early and live life on your own terms, Fat FIRE may be the perfect option!

What Are The Benefits of Fat FIRE?

Two things come to mind when thinking about the benefits of Fat FIRE: less stress and more options.

When you have to budget every single penny, like when you Lean FIRE, it can be highly stressful. Fat FIRE allows you to relax and enjoy your life without having to worry about money all the time.

In addition, Fat FIRE gives you more options in life. For example, if you want to travel the world or start your own business, you can do so without worrying about how you will pay for it.

In short, Fat FIRE is the perfect way to retire early and live life on your own terms. So if you’re looking for a way to stress less and have more options, Fat FIRE is the way to go!

How To Calculate Your Fat FIRE Number

Mr. Money Mustache famously stated that to calculate your traditional FIRE or regular FIRE number, you can take your annual expenses and multiply them by a number between 20 and 30. So, for example, if you have $30,000 in yearly costs, your FIRE number would be between $600,000 and $900,000.

While this method is a great starting point, it doesn’t consider that some people want to retire sooner than others and have a more lavish lifestyle. For example, if you want to retire in 10 years and travel 6 months out of the year, you’ll need a much higher FIRE number than someone who wants to retire in 30 years.

This is where the Fat FIRE method comes in. To calculate your FatFIRE number, you take Mr. Money Mustache’s formula and multiply it by three. So for our example above, the Fat FIRE number would be between $1,800,000 and $2,700,000.

While this money may seem daunting initially, remember that you don’t have to save all of it overnight. You can start small and increase your savings with enough time. The important thing is to start now so you can enjoy a worry-free retirement later.

How To Achieve Fat FIRE (3 Simple Ways)

I know just 3 simple steps!

Yep, 3 steps.

Don’t overthink it.

Listen, take notes, attack/execute, then enjoy the fruits of your labor!

Step 1. Save More Money

This is the foundation for Fat FIRE. First, you need to save a large percentage of your income – 50% is a good starting point. This will allow you to retire sooner and live a better lifestyle in retirement.

There are a few ways to save more money. One is to budget using Personal Capital. This tool can help you track your spending and find areas where you can cut back. Another way to save money is to aim for a 50% savings rate. This means that for every dollar you earn, you save 50 cents. Finally, you can use only cash for purchases until you reach your Fat FIRE number. And if you do use a credit card, PAY IT OFF AS SOON AS YOU MAKE A PURCHASE. This will help you stay on track and not overspend.

With these tips, you can save more money and reach Fat FIRE sooner. Start budgeting with Personal Capital, aim to keep at least half of your paycheck, and use only cash for purchases. You’ll be on your way to a comfortable retirement in no time.

Step 2. Make More Money

And on to step number two. Making more money! If you want to achieve fat FIRE, you must make more money.

There are a few ways that you can do this. One way is to get a higher-paying job. If you’re in a low-paying job, it’s time to start looking for something that pays better. You can also make more money by creating a blog like Michelle Schroeder on Makingsenseofcents.com. She makes over $100,000 per month from her blog!

To get started building your own blog, you can use Bluehost. They make it easy to get started, and they’re affordable at just $2.95 a month.

Another great way to make more money is to do side hustles. There are a lot of great side hustles that you can do to make some extra cash. One of my favorite side hustles is using Fiverr. You can do all sorts of things on Fiverr, from graphic design to writing to video editing.

So there you have it! These are the two best ways to make more money to achieve fat FIRE. So get out there and start making more money! You can do it!

Step 3. Invest More Money

Last but not least, investing money. It is how most people achieve FIRE. Of course, you have to be good at it and have some money to start with, but if you can make a reasonable return on investment, it can go a long way.

There are many ways to invest money, but one of the best ways to do it is through J. L. Collins recommended tool, Betterment. Betterment is an investing platform that helps you invest in a diversified portfolio of Vanguard index funds like the VTI.

Betterment is so great because it allows you to invest more money than you would be able to on your own. For example, if you were to invest $2,500 a month on your own, you would only be able to invest in one fund. However, with Betterment, you can spread that money across several different Vanguard index funds, which will help you get a better return on your investment.

Additionally, Betterment has an excellent track record. Since it was founded in 2008, Betterment has consistently outperformed the market, delivering an average annual return of 8.5%.

So imagine if you made $60,000 a year from ages 20 to 40 and invested $2,500 a month, with a 8.5% return, you could have made over $1,500,000! Way more than enough to Fat FIRE.

Investing is a great way to achieve Fat FIRE, and Betterment is one of the best platforms to help you do it. So if you’re looking to be an early retiree and achieve Fat FIRE, check out Betterment.

How To Maintain Fat FIRE Lifestyle

Keep doing what got you there. That’s all you have to do. Well, as well as not succumbing to the pressure of “keeping up with the Joneses.” The fat FIRE movement is about retiring early and living on your own terms. So, if you want to maintain that fat FIRE lifestyle and that cushy nest egg, you need to keep doing what got you there in the first place.

For example, if you saved 50% of your income to get fat FIRE, you need to keep doing that. If you had a side hustle that helped you reach your fat FIRE goals, then keep doing that too. And, of course, keep investing in the stock market.

But don’t get caught up in thinking you need to keep up with others. Just because someone else buys a new car or does some home upgrades doesn’t mean you need to do the same. Remember, fat FIRE is about living life on your own terms. So, as long as you’re doing what makes you happy, you’re on the right track.

FAQ

How much money do you need to Fat fire?

A good start is 25 times your annual expenses times 3. So if your annual spending $50,000 a year, you would need an $50,000 x 25 x 3 = $3,750,000. This would give you enough wealth to relax for the rest of your life and not worry about getting another part-time or full-time job.

How do you get fat fire?

There are many ways to achieve fat FIRE. The most common way is to save a large percentage of your annual income, invest in the stock market, and have a high income. Other ways to achieve fat FIRE include side hustles and extra income by investing in rental properties.

What is lean FIRE?

Lean FIRE is like barista FIRE, where you retire early with a more modest and frugal lifestyle. For example, if you need $20,000 a year to live comfortably, you would need a net worth of $500,000 and a safe withdrawal rate to achieve lean FIRE. This is opposed to fat FIRE, where you retire early with a lot of money and a more luxurious lifestyle. To fat FIRE, you would need much more money – typically 3 or 4 times the Lean FIRE amount.

What is a great Fat FIRE forum?

There are many personal finance fat FIRE forums, but one of the best is Reddit.com/r/fatFIRE. This fatfire subreddit is full of people from the FIRE community who are passionate about fat FIRE and always willing to help others who are just getting started on their FatFIRE journey. You’ll see plenty of topics ranging from retirement plans, high-paying jobs, lifestyle inflation, real estate investments, health insurance, and more.

Is Fat Financial Independence Retire Early for everyone?

No, fat FIRE is not for everyone. It takes a lot of hard work to set up passive income streams and dedication to saving up enough extra money to retire early. Additionally, fat FIRE requires a higher level of risk tolerance, as you are relying on cash flow from your investments to provide for you in early retirement. So, if you’re uncomfortable with taking on many risks, the fat FIRE life may not be the right choice for you.

Summary

Congratulations, you have made it to the end of our post on FatFIRE! We hope you now understand what FatFIRE is and how easily you can achieve it. Remember, saving more money, making more money, and investing more are all key steps to reaching financial independence sooner. So get started today, and let us know how you go!

Related Articles:

• THE Financial Independence Guide (Read Now To Master Money)
• Accumulating Wealth: A Money Building Guide That Actually Works
• Expenses in Retirement: What You Need To Know To Spend Less

Do you plan on achieving FatFIRE? If so, please tell us in the comments below!