120 | The 5 Types of FIRE
In today's PA the FI Way podcast episode, we will explore the 5 types of FIRE:
1. Traditional FIRE: This method is for you if you're pursuing financial independence (FI) with the option to retire early (RE) after investing until you accumulate enough wealth to sustain your lifestyle without relying on traditional employment. Typically, this means reaching a savings goal of 25 times your annual expenses, or up to 30 to 33 times your annual expenses if you want to retire very early.
2. Lean FIRE: This method is for you if you can have a tighter budget and embrace the more minimalistic lifestyle while living off of $40K per year or less.
3. Fat FIRE: This method is for you if you desire a large amount of money to spend annually on life's luxuries in retirement while living off of $100K per year or more.
4. Coast FIRE: This method involves you reaching a point in your savings where you let your investments grow on their own through the power of compound interest, without making additional contributions. Once you hit Coast FIRE, you no longer NEED to contribute to reach FI at a traditional retirement age. While you may not be fully financially independent yet, Coast FIRE provides more flexibility on the way to FI.
5. Barista FIRE: This method has you aim to accumulate enough to be able to transition to part-time or low-stress jobs, such as working as a barista, to supplement your income or provide benefits such as more affordable healthcare.
Which type of FIRE are you pursuing?
If you're ready to get started on your financial journey, reach out to me about coaching opportunities: [email protected]
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