Fat FIRE – Fat FIRE is about retiring early, but also still living on at least $100,000 per year as an annual income. So really, Fat FIRE is the most luxurious route to financial independence. And some argue that it is the ULTIMATE route to financial independence because it allows you to live a life with more choices. After all, the more money you have, the more choices you have in life.
Money doesn’t solve all problems, but it certainly does solve some of them.
So what does it take to be able to withdrawal at least $100,000 as an annual income from your portfolio? Well that really all depends on your withdrawal rate. If you are retiring early, you may be best suited to go with a 3% withdraws rate in your retirement to ensure that your portfolio will last throughout your entire very lengthy retirement. However, if you are retiring more at a traditional age of around 60 or so, you are probably just fine to stick with a 4% withdrawal rate.
The longer your retirement horizon the more conservative you are going to have to be.
If you are going with a 3% withdraws rate, you are going to need a nest egg of around $3,333,333, but if you are going with a 4% withdrawal rate, you are looking at a portfolio more around $2,500,000. So yes, your withdrawal rate really does matter!
Now who is Fat FIRE best designed for? Well that would primarily be high income earners – like those who have an annual income of at least $150,000 per year or more.
Fat FIRE is really designed for those who really don’t want to be all that frugal and budget every last dollar. They want to live a bit more freely on an income of AT LEAST $100,000 per year.
Being that they want to live on at least $100,000 minimum per year, you have to consider that they are going to have to have a higher income to start with if they every hope to successfully save up such a large nest egg.
And again, as I said, an annual income of $100,000 per year in retirement is generally seen as the minimum for retiring and living out the Fat FIRE lifestyle. There are many individuals who pursue the Fat FiRE route and actually plan on living on annual withdrawals of $200,000 or $300,000 per year.
Fat FIRE allow you maintain a higher standard of living in your retirement. You can living in a metropolis and enjoy all that goes along with that higher cost of living, you can travel, help your kids with college, help your aging parents, afford the very best medic care, and the biggies – you an afford to never work again if you so choose.
Fat FIRE is. definitely a unique approach to FIRE. It’s not attainable by all – but it certainly comes with a great man perks.
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Sweet video!! I'm investing $3k/monthly through roth, 401k, and after tax accounts. 12% growth for 15 years… I should have at least $10 million by the time I'm 45. I grew up lower middle class too. It's amazing how we can jump classes so easily in America
Hmm.. What you say is true. However if you're frugal (and literally cannot spend), well you can end up as fatFire anyway. My salary when i first came over here was $53k at age 36. Then side hustles, maintaining my own vehicles etc, not to mention a huge bull market and here we are with a withdrawal rate of less than 1% last year…:)
Interesting FIRE names. Going to watch them all.
Unclear why your assuming an 8% compound interest. Also, I think the summary of your talk was basically it’s nice to become wealthy and not possible for <150k earners. Not a lot of application for either if the later fails to create that 8% compound.
I've been living on 10 grand a year for so long that I wouldn't even know what to spend 100k a year on in retirement, I'm just gonna lean fire as fast as I can.
I guess I’m shooting for FAT FIRE then…didn’t even know that was a thing. Good video.
Amazing video. I'd like the morbidly obese fire though
Wishing everyone watching success in fatfire. Great video.
If you’re making $100k, you probably only need $60k to maintain the exact same lifestyle. For us, the hardest part is pulling the trigger. We have enough for fat fire (in our mid-40s now), but it feels too soon to stop working when we are at our peak salary years. Maybe we need obese FIRE lol
Thanks for sharing this video! Just subscribed, I'm also a PF/FIRE youtuber too!
the plant is distracting.
Erin is so beautiful
Fat FIRE is my plan! If you focus on increasing your income and savings rate it's definitely possible.
I'm all about the FAT FIRE journey. My goal is set at $20K per month, if not more. My leg up is my military retirement and that pays me $80K per year and at 47 that will grow with inflation and it's paid until I expire. My fire goal, without retirement income, is $2.5M. We currently save between $75-$85K a year. We could do more, but I will not forgo today for a better tomorrow. I still fly FC, take vacations, etc. We work hard for that we have, but also like to enjoy it. Great video!!
I totally agree. I’m planning to have 2.5 to 3 million before I retire at the age of 55. I have been saved and invested all my working career ☺️
Fat Fire can be reached by living on a budget while working making a good income, then retiring on a less limited budget. A couple that works together can achieve the same thing on more modest incomes. I started saving 20% of my 50 to 60k / year income in my 20's then increased my savings rate to 25% starting in my 40's with an almost doubled income and I'm about 5 years away from Fat Fire with 17X my income invested and will likely retire at the age of 55, or 59.5 if more time is needed.
thank you for sharing, great content as always!! I really just want to achieve LeanFIRE and semi retire, so I can take the leap to business owner… Maybe once I have my own business. I will readjust my plans to then achieve fatFIRE, it is definitely the ultimate goal.
Very interesting concept. I don’t earn enough to strive for FAT FIRE. Although I’d like to retire feeling that independence of being FAT.