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Mr A

What is Fat FIRE?

Fat FIRE is a spin-off of the original Financial Independence Retire Early (FIRE) movement which advocates for achieving financial independence and retiring early through disciplined savings, smart investing, and frugal living. Fat FIRE, as its name suggests, takes the concept of FIRE and adds a level of luxury and comfort to it. Those who pursue Fat FIRE aim to retire with a high net worth and maintain a more luxurious lifestyle in their retirement while still adhering to the principles of the FIRE movement.

Why Pursue Fat FIRE?

The idea behind Fat FIRE is to achieve financial independence and retire with a nest egg that allows for a higher standard of living, more financial security, and the ability to indulge in certain experiences or luxuries. Some reasons people might choose to pursue Fat FIRE include:

  • Desire for a higher quality lifestyle: The traditional FIRE approach often requires a high level of frugality and tight budgeting. Fat FIRE, on the other hand, allows for a more comfortable and enjoyable lifestyle during both the wealth accumulation phase and retirement.
  • Increased financial security: Having a higher net worth provides a safety cushion in case of unexpected expenses or changes in the financial climate. It also allows for a higher withdrawal rate during retirement, reducing the risk of running out of money.
  • Ability to pursue hobbies and passions: With greater financial resources, individuals following the Fat FIRE path can pursue their interests and hobbies more freely, such as traveling, philanthropy or learning new skills.
  • Flexibility to help others: A higher net worth enables individuals to generously help family members or friends in need, or to donate to charitable causes they're passionate about.

Steps to Achieve Fat FIRE

Achieving Fat FIRE requires careful planning, commitment, and a focus on increasing your income, reducing your expenses, and maximizing your investments. Here are the main steps to put you on the path to Fat FIRE:

1. Determine Your Fat FIRE Number

The first step in achieving Fat FIRE is to determine your target net worth—your Fat FIRE number. This number represents the total amount of money you need to reach financial independence and maintain a high-quality lifestyle during retirement. To calculate your Fat FIRE number, follow these steps:

  • Estimate your annual living expenses in retirement, factoring in the increased cost of a luxurious lifestyle.
  • Choose a safe withdrawal rate (SWR) for your retirement nest egg. While a common SWR for traditional FIRE is 4%, a more conservative rate of 3% is often chosen for Fat FIRE to accommodate a higher spending level and increased financial security.
  • Divide your estimated annual living expenses by your chosen SWR. The result is your Fat FIRE number.

Example: If you expect to need $100,000 per year during retirement and choose a 3% SWR, your Fat FIRE number would be $100,000 ÷ 0.03 = $3,333,333.

2. Increase Your Income

The path to Fat FIRE requires growing your income so that you can save and invest more money. Consider the following strategies to boost your income:

  • Enhance your skills: Invest in education and training to acquire in-demand skills that can improve your earning potential.
  • Negotiate for raises: Regularly negotiate for raises and promotions to ensure you're fairly compensated for your work.
  • Diversify your income streams: Create multiple income streams through side businesses, freelance work or other entrepreneurial pursuits.
  • Invest in income-producing assets: Acquire appreciating or income-generating assets like real estate or dividend-paying stocks.

3. Optimize Your Spending

Reducing your expenses is crucial for achieving Fat FIRE, as it frees up more money to save and invest. Here are some ways to optimize your spending:

  • Budget effectively: Closely track your income and expenses and create a budget you can stick to.
  • Eliminate high-interest debt: Pay off high-interest debts, such as credit cards or personal loans, to reduce your interest expenses.
  • Focus on value: Seek high-quality products and services at a fair price, rather than solely focusing on cost-cutting.
  • Leverage tax-advantaged accounts: Make use of tax-advantaged retirement accounts, like 401(k)s or IRAs, to reduce your tax liability and boost your savings.

4. Invest Wisely

Investing intelligently is the key to accumulating wealth for your Fat FIRE goals. Follow these investment principles to grow your net worth:

  • Diversify your portfolio: Build a well-balanced investment portfolio with a mix of asset classes, such as stocks, bonds, and real estate.
  • Minimize fees and taxes: Choose low-cost index funds, ETFs, and tax-efficient investments to reduce fees and taxes.
  • Adopt a long-term perspective: Stick to a long-term investment strategy to ride out short-term market fluctuations.
  • Automate savings and investments: Set up automatic deposits into your investment accounts to maintain consistency and reduce emotional decision-making.

5. Track and Adjust Your Progress

As you work toward your Fat FIRE goals, it's important to regularly evaluate your progress and make adjustments as needed:

  • Monitor your savings rate: Calculate your savings rate periodically to ensure you're saving enough to reach your goals.
  • Reevaluate your expenses: Assess your spending habits and see if there are areas where you can optimize your expenses further.
  • Adjust your investment strategy: Continually refine your investment strategy to align with your goals, risk tolerance, and market conditions.
  • Stay informed: Keep up-to-date with financial news, best practices, and any relevant changes to tax laws or regulations.

Fat FIRE Lifestyle Considerations

When planning for a Fat FIRE retirement, it's essential to carefully consider the lifestyle you want to lead, as this will influence your FIRE number and strategy. Some important considerations include:

  • Geographic location: Research the cost of living in your desired retirement location to ensure your FIRE number supports the lifestyle you expect.
  • Housing choices: Decide whether you want to own a home in retirement and its potential costs, such as property taxes and maintenance.
  • Healthcare: Investigate health insurance options and budget for potential medical expenses, considering the possibility for increased costs as you age.
  • Travel and hobbies: Assess how much you plan to allocate for travel and hobbies in retirement, since these can be significant expenses.
  • Giving back: Determine if and to what extent you want to support charitable causes or help family and friends financially in your retirement.


Achieving Fat FIRE requires a combination of strategic financial planning, disciplined savings, efficient spending, and wise investing. By setting a clear goal, increasing your income, optimizing your expenditures, and investing prudently, you can reach financial independence with a high net worth and enjoy a luxurious retirement. Take the time to reflect on the lifestyle you desire and plan accordingly to make your Fat FIRE dreams a reality.

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