Looking at different levels of FIRE retirement: Lean, Regular, Fat/Luxury and Barista

FYI … FIRE = Financial Independence / Retire Early

It’s a movement that has taken root in the past 10 years, kicked off by this book: Your money or your life which I absolutely recommend as a starter money book.

To be honest with you, I have never really followed this FIRE movement. It all smells a bit cult-ish to me, and I never considered myself part of it, because it advocates living on as little as possible and saving as much as you can in your early years just to reach a goal and to ‘retire early’ and stop working.

It looks like this:

• Lean: $0 – $40k yearly income  (Less than $1M invested)
• Regular: $40k – $100k yearly income ($1M – $2.5M invested)
• Fat/Luxury:  $100k+ yearly income ($2.5M+ invested)

This is what I knew:

• I did not want to retire early and cheaply
• I wanted to still spend my money shopping, on vacations, buying nice things, driving a nice car
• I wanted a balance in my life, and not be so focused on MONEY
• I wanted more time but in a balanced manner, not like: ZERO TIME NOW and then SO MUCH TIME NOW!
• I did not want to stop working – I still enjoy my day job and make good money
• I just knew I had to save money and live on less than what I made
• I knew I did not want to rely on my day job

I did not fit into any of the standard categories of “FIRE” so I didn’t feel like I was a part of it. I still don’t.

It wasn’t until the last level “Barista” was added that I think it made more sense to me so now the levels are this:

• Lean: $0 – $40k yearly income  (Less than $1M invested)
• Regular: $40k – $100k yearly income ($1M – $2.5M invested)
• Fat/Luxury:  $100k+ yearly income ($2.5M+ invested)
• Barista: A mix of any of the above + side incomes or a part-time job (????)
• Coast: You now have enough money for retirement if you stopped saving

These are all pre-tax numbers by the way.

LEAN FIRE – $0 – $40K

$0 to $40K in yearly income from your investments.

Whoa what? Zero in income?

If you’re wondering how you can retire with $0 in income, you can certainly do this if you lived a lifestyle where either someone else paid for you completely, or if you lived a lifestyle where you just bartered for everything. You live in a grass hut maybe, you grow, hunt or fish for your own food, and live super, SUPER simply, bartering your services for basic necessities. It isn’t common but it isn’t unheard of.

For this level, you need less than $1M invested, more or less.

It also depends on your expenses – if you spend more than $40K a year, obviously you can’t retire at this level, you will need to save a lot more.

Here are some Lean FIRE levels:

Yearly	Monthly
$10,000	$833.33
$20,000	$1,666.67
$30,000	$2,500.00
$40,000	$3,333.33

I am partly in this category because I only have about $600K invested at the moment, but I don’t need much to live. My bare bones expenses every month are $1200 or so (up to $1500), so I am in the $20K or less range for income required.

Also, please note that I do not pay for my partner – he also is at Lean FIRE and has to bring his half. I only pay for half of the household which includes Little Bun’s half. I am only covering MY expenses.

Together, we would need around $36K – $40K of income to cover our basic expenses, as a family.

REGULAR FIRE – $40K to $100K

So the REGULAR fire levels which most people are at, are this:

Yearly	Monthly
$40,000.00	$3,333.33
$50,000.00	$4,166.67
$60,000.00	$5,000.00
$70,000.00	$5,833.33
$80,000.00	$6,666.67
$90,000.00	$7,500.00
$100,000.00	$8,333.33

You need about $1M – $2.5M invested to obtain these levels, and it is actually a lot of money. A serious amount.

I would consider this to be my Luxury Level of FIRE, but everyone is different. Again, I am only covering my half of spending, so for me to spend $8333.33 a month, means that I am literally spending over $6000 just in pleasure alone (vacations, shopping, eating out)…

I CAN DO IT, mind you (hahahaha).. I just think it’s quite a lot for me personally.

I would say that $50K is my average basic level of retirement income I’d enjoy, because with a budget of $3000/month for me, I’d be happy as that means almost $4166 in fun spending instead every month (remember there are taxes too so $4166 is more $3000 net more or less).

FAT/LUXURY FIRE – $100K or more

And finally, the very last “luxury” level:

Yearly	Monthly
$100,000.00	$8,333.33
$110,000.00	$9,166.67
$120,000.00	$10,000.00
$130,000.00	$10,833.33
$140,000.00	$11,666.67
$150,000.00	$12,500.00

I personally don’t have enough expenses to warrant needing to reach this level, but the way that I am saving my money and investing, I will likely reach this if I continue on the path that I am on.

An 80% savings rate, and high income, means I can easily reach $2.5M invested if I keep at it. I am only at $600K+ mind you, but give me another 10 – 20 years and I could be here.

But do I want to be?

That’s really another story altogether.

It means living on very little, saving as much as I can, JUST to reach these levels. As I don’t need all that money, it seems like overkill to be honest.

BARISTA – Any level + side job

This speaks to me a lot more than any of these other levels.

I am here.

I am definitely a BARISTA FIRE person, as it gives me a nice work-life balance in the sense that as a contractor I no longer rely on my day job (my work is optional for me, so I can refuse crappy projects that suck because I don’t need the money), and my side incomes help buffer it all out.

On top of my side income if I wanted, I could pick up a barista job (hence the level name), and work for just enough money to cover my living. That’s if all my side incomes failed of course.

As it stands, I made almost $35K in 2019 from my 11 side incomes, and in 2020 I made about $80K in side incomes alones.

This year, I am aiming for $50K from my side incomes, and my dividend income covers my bare bones expenses already.

I am still reinvesting that money back into the market on a DRIP (Dividend reinvestment plan), so I am really living off my blog/side incomes instead, which bring in about $2000+ a month, or more than enough to cover spending + adding to the investment portfolio as well.

All in all, I would never consider not working at all at any level of retirement. I’d need a part-time job of some sort if I had no side incomes, and I need to stay busy. I can’t imagine turning into a Helicopter Parent to soak up all that free time as well.

Note:

“Barista” is half a joke for this kind of FIRE level.  It simply denotes that someone in that level COULD pick up a minimum wage job to supplement and just be fine, even if they don’t actually become a barista.

It’s just a placeholder name for a job that they either need to supplement their income, or don’t need at all but do it to stay busy.

COAST – You don’t need to save any more $

You could ‘coast’ into retirement. You have enough money saved to compound on itself until the age 65 whereby you have the money to live.

You don’t need to save another dollar into investing, and you will have enough at 65. At this point, you could just cover your basic expenses and not worry about anything.

A lot of people who reach “COAST” FIRE, have a mental load taken off them in the sense that they just need to focus on paying their bills now, which is really nice.

How do I figure out my FIRE level?

If you want to read more about how to reach these levels and calculate it based on your numbers, check out my piece on Personal Finance Score which can help you calculate your FI/RE level:

What level are you at / aiming for?