The Fat FIRE Approach to Financial Independence

3 min readPublished Feb 1, 2024

Dive into Fat FIRE, a lifestyle strategy in personal finance aimed at achieving financial independence and a luxurious early retirement, different from traditional FIRE.

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Fat FIRE (Financially Independent, Retire Early) is a lifestyle strategy in the realm of personal finance, distinguished by its focus on achieving financial independence and early retirement while maintaining or enhancing one’s current lifestyle. This approach is tailored for individuals who aspire to a more luxurious retirement, differing significantly from the more frugal lifestyle often associated with traditional FIRE.

Key Elements of Fat FIRE

  • Higher Savings Goals: Fat FIRE involves saving a larger portion of income to amass a substantial nest egg, often much larger than what traditional FIRE requires.
  • Investment Strategy: This approach emphasizes building a robust portfolio to generate enough passive income for a luxurious retirement. It typically involves diverse and potentially more aggressive investment strategies.
  • Lifestyle and Budgeting: Fat FIRE seeks to balance a high-quality lifestyle with sustainable financial planning, ensuring that luxurious living doesn’t compromise long-term financial security.
  • Tax and Healthcare Planning: Efficient planning in these areas is more pronounced due to higher income and investment returns.

Fat FIRE vs. Traditional FIRE

While traditional FIRE focuses on minimizing expenses and maximizing savings to retire early, Fat FIRE allows for a more comfortable lifestyle both before and during retirement. It requires a significantly higher annual budget and savings rate, reflecting the desire for a more opulent retirement.

Planning for Fat FIRE

In planning for Fat FIRE, it’s important to:

  • Set Realistic and Ambitious Financial Goals: Understand the amount needed to sustain the desired lifestyle in retirement.
  • Implement Effective Financial Strategies: This includes aggressive savings, diverse investments, and meticulous budgeting.
  • Regularly Review and Adjust Plans: Given the higher stakes involved, staying on top of financial planning and making adjustments as needed is key.

Example: Alex and Jordan’s Fat FIRE Journey

Alex and Jordan, a couple earning a combined income of $350,000 per year, aspire to retire early while maintaining a high standard of living, with an aim to live on $200,000 annually in retirement. To achieve this, they calculate needing a portfolio of around $5 million, based on a 4% withdrawal rate commonly used in retirement planning. Their journey involves aggressive saving, diverse investments, and continuous financial review.

Achieving Fat FIRE with ProjectionLab

ProjectionLab can assist in planning and tracking your progress towards achieving Fat FIRE. By simulating various financial scenarios, you can strategize effectively to reach your desired lifestyle in early retirement. Discover the possibilities of a luxurious retirement with ProjectionLab.

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