Having studied and worked in finance, I had heard of the FIRE movement (Financial Independence, Retire Early), but never had been interested in living off as little of a budget as I could as is often preached by FIRE advocates. That is probably due to the fact that I have always generally liked my work but also have a deep passion for travel which isn’t compatible with the traditional version of FIRE. If you’ve never heard of it, FIRE is an approach to life that generally aims to save as much as possible in order to be able to accumulate enough to replace one’s work income and “retire” early.
The easiest way to do this is to have an extremely high savings rate and live a very simple life. That means the easiest way to do this for example for someone earning $80k/year might be to pay 20k in taxes, and save half of the rest (30k) thus living on 30k. That will get you to FIRE fairly quickly. I absolutely love the idea of not “having” to depend on a job’s income but I’ve gotta say, travel options are limited when your yearly budget including housing and food is 30k. I have no doubt it is possible, it’s just not my cup of tea.
Over time, FIRE evolved into different subsets and one of them caught my attention: FatFIRE. FatFIRE enthusiasts typically plan to retire with enough savings and investments to sustain spending levels that are well above the average retirement budget. This could mean having the financial freedom to travel extensively, live in a high-cost area, or simply enjoy the finer things in life without financial constraints. Achieving FatFIRE requires a significant income, higher savings rates, and often, a more aggressive investment strategy compared to the traditional FIRE path. Now, we’re talking!
Fair warning, even if you feel good about the state of your finances, you will feel poor when you visit the FatFIRE subreddit:) Just a few headlines from this morning:
“Will inherit $50M+ eventually. What do I do with my life?”
“$12mm NW, looking for input on fatFIRE number (given unique circumstances”
“32, 7M, could use life advice”
NW is “net worth”. And yes, that is someone who at 32 years old, has a 7M net worth and looking for help. So yes, FatFIRE is a truly unique community that can be inspiring but also make you wonder how these people actually exist. But they do. One nice feature of being online is that people generally feel better about talking about their unique circumstances.
Why Do I Aspire To FatFire?
No judgment obviously on those who target a different lifestyle, I absolutely understand I could already be considered FIRE if I wanted to, but my aspirations are clearly FatFIRE. Here are 7 reasons why:
–Financial security: Financial stress is a terrible situation to be in. It causes stress, is bad for one’s health, causes divorces, and is generally one of the worst situations one can be in. I aspire to not be in that situation. For me, that means having my income always be below my expected income (from employment, business and investments).
–Geographic flexibility: I don’t need or want to have 12 different houses around the world. But I would like to be able to move around a few times during the year either in hotels and/or condos in a few places around the world.
–Hobbies and Passion: I love watching tennis and have been lucky enough to see tournaments in many countries around the world including the 4 grand slams (New York, London, Paris and Melbourne) and do want to be able to continue to follow my passions around the world.
–Flexibility for life changes: Is someone in my family sick and I’d like to take time to help out? I’d like to have enough to not worry about the financial impact of such a decision.
–Early retirement: I’m not sure at what age I’d want to completely stop traveling. It might not be something I want to do for a long time. But I want to feel like I could stop at any point if I wanted. That will translate into doing things that I love, at a pace I feel good with.
–Travel: I LOVE traveling. I love thinking about future destinations, planning trips and obviously doing them. I do want to be free to travel pretty much as I wish. I don’t need to stay in Four Seasons hotels all the time but I won’t be staying in hostels either (been there, done that!).
–Lifestyle: While I don’t need to eat at the fascist places and live in a $10m house, I do enjoy some luxuries such as going to nice restaurants, having professional help for lessons, help in the house, a coach and more.
What Is My Number And How Do I Get There?
That is a difficult question of course and one that can become a trap. If my number is a moving target, I might never reach it right? That is not the goal of course. My current thinking is that the number is somewhere between 5-10$M but I do have more work to do to set a clear target. In terms of getting there, 2 main things in my opinion:
–Increasing assets quickly: Obviously I am still traveling and living a good life but I am also spending less than I am making thus adding to my assets every year.
–Being mindful when adding big recurring expenses: Doing a trip to Africa is expensive but once it’s done, the expenses stop. Buying a $200k car on the other hand will end up costing a whole lot more over its lifetime. I’m not saying I’m targeting a Honda civic 🙂 But I am mindful about such expenses that will alter my longer term finances. It’s a journey that I’m happy to be on and a great inspiration in my opinion.
When I look at the FatFIRE subreddit, one thing that stands out are the multitude of paths to get there. Some are doctors, others in finance or in tech, several members have their own business, others got an inheritance, etc. There is no one way to get there. The most important thing is probably having such a long term target and working on getting there rather than living paycheck to paycheck.
Through saving, investing, I have gotten a part of the journey towards fatFIRE done and now can start taking a few more chances to accelerate that journey. Those will be calculated risks but for example, I can now consider adding a bit more leverage to increase my net worth more quickly, can take bigger stakes in high conviction investments, etc. The goal is not to retire right away but rather continue to make progress towards my FatFIRE goals.