The 5 Types of Financial Independence Retire Early (FIRE)

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The five types of financial independence retire early if you’re a personal finance nerd like me you’re probably familiar with fire financial independence retire early but if you’re new to this world you might be wondering what fire discussion is about and what it means it’s not that fiery orange glowing thing that can burn you but before moving ahead you’re welcome

To fire the best youtube channel about finance and money so please take a brief moment go down and click the like button and if you have not subscribed to our channel yet go subscribe to stay connected fire financial independence retire early is a movement of people who are committed to a program of high savings and investing to retire far sooner than traditional

Budgets and retirement plans would allow for many millennials and older generations wanting to make big changes in their money and way of life fire has become a lifestyle option over the last decade or two the movement has also become more mainstream other types of variations of fire have sprung up as the fire movement has progressed today i’m going to explore these

Types what they mean and a bit more the types of fire many variations will inevitably pop up over the community with any popular movement or lifestyle the financial independence retire early movement has experienced just this other people who are actively pursuing fire are likely to have their own variations and this list is sure to increase over time hopefully the

Variations don’t become too dense which can be a nuisance anyway what types of fire do we have now let’s see number one fire regular or traditional the regular or traditional concept simply stands for financial independence retire early as stated in the introduction the goal of this lifestyle is to bring up an income generating asset portfolio that pays enough to

Meet your current living expenses typically you save cut spending simplify your lifestyle and invest vigorously to achieve financial independence in your 30s or 40s which would cover reasonable living expenses you no longer rely on a paycheck from a job once you’ve achieved financial independence paid work is now an option allowing retirement from regular labor far

Sooner than the normal retirement age from doing some research the concept of fire started back in the early 90s with your money or your life but it’s been brought back to life even further in the last 10 years or so number two lean fire so here we have a new fire type called lean fire you might be able to guess how this differs from traditional fire but i’ll go

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Over it in further detail the best comparison is a fire that is on a far more limited budget the idea is to live a lot cheaper than you normally would or than the average person does you may be leading a simpler lifestyle but being economical will play an important role in your life you’ll also need to learn budgeting cost cutting and finding methods to streamline

Your living without sacrificing comfort this is according to the popular lean fire reddit community if you’re interested in lean fire some wonderful threads and material there will help you get started number three fat fire so if lean fire is all about saving money and decreasing costs fat fire must be the exact opposite yes in a way fat fire is a plan for people

Who want to retire early and yet have a considerably greater annual budget or higher costs rather than living on less than 40 000 or more in a modest range of traditional fire you will be looking at more living expenses many people in this category are high earners who can afford to live with higher expenses because they have more money to spend i see this as a

Fire on steroids where you can achieve financial independence and retire early while also living a little more luxuriously after doing some internet research the typical annual household expenditures are between fifty thousand dollars and sixty thousand dollars so many people who consider themselves fat fire or are chasing it will potentially spend twice as much as

The average person i’m not sure how many folks who pursue fat fire have larger budgets and spend more because of where they live and whether or not they pursue it to enjoy finer things in life or a combination of the two they may change their annual budgets friends do you have any questions so far and if you want to add more to the list please comment below your

Thoughts mean a lot to us keep watching and we’ll discuss the fourth type which is very helpful to get financial freedom number 4 barista fire as the fire movement progressed another popular variation popped up called barista fire when i first heard of this term i immediately thought of starbucks it’s also related to it in some way let’s discuss barista fire is

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About accumulating enough money only to need a small amount of income from work each year it’s almost like doing fire part-time this eliminates the need to do work full-time allowing you to live your ideal lifestyle without spending 40 plus hours per week i’ve also seen people talk about barista fire and mention that they’re taking money out of the portfolio but

Supplementing it with that part-time income you can work at a coffee shop participate in the gig economy or work a few hours per week instead of working in a corporate environment the advantages don’t include working yourself to death to reach fire achieving financial independence sooner and possibly getting health coverage so that you won’t have to pay completely

Out of pocket this is also a better solution for those who are unsure about early retirement and would like to try it out it also allows you to pursue more of your passions side hustles or find something you’d like to do full-time number 5 coast fire finally there is a type known as coast fire it’s very similar to barista fire but there’s some minor differences

Coast fire is about having enough money invested at a young age so that you don’t need to invest any more because compounding will meet your lifestyle before you stop you’ll need to conduct some math to figure out how much you need to save or invest a check your savings and spending to see how much you’ve already saved b to achieve financial independence your

Figure must be at least 25 times your annual expenses c next compute a conservative compound interest investment return five to six percent you’ll see how many years it’ll take to get from the number from step b without adding another penny if you have a longer term horizon you can save and spend more aggressively in the start to reduce downtime it’s not simple

But if you can have a significant amount of money invested in your late 20s or early 30s you’ll be well on your way to financial independence since saving and investing are no longer factors you merely need to make enough money to cover your expenses this may provide you with greater freedom in terms of employment options allowing you to choose something that is

Easier or less stressful furthermore this allows you to have a little more freedom sooner without being completely fired so guys is fire the right choice for you is the movement or variations right for you now that you’ve learned about the different types of fire there is so much information from both fans and opponents that it might be difficult to know what to do

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The trouble is that fire may only provide a brief period of bliss in your life something more to consider is that fire is not for everyone there is a common belief that simply increasing revenue and reducing expenses would get you there however having a huge income early on can undoubtedly give you an advantage that doesn’t mean that median salaries won’t win out

But fire will be far more difficult to achieve setting realistic expectations knowing your life goals understanding the why and what fire means for your life researching the pros and cons being familiar with both sides of the fire debate and carefully running the statistics are all things i believe are important these types of fire provide you with some options

To consider such as barista fire which allows you to test the tides before going full fire fire in my opinion is about wanting more out of life and experiencing new things or passions on your own terms perhaps you have a huge vision for something you will want to accomplish or pursue and working into your 60s will prevent you from achieving it what’s fascinating

About all those types of fire is that some of them go beyond the original core fundamentals as a result these types may attract you more and ultimately it is up to you to decide originally i was enthralled by the concept of fire but when i was more focused on my personal finances passions and professions i realized that none of those fire options were right for

Me it simply stands for enjoy what you do which is having joy in your work and life while also working towards financial freedom so what are your thoughts on fire are any of these types appealing to you are you on your way to achieving fire or your own variation of it please let me know in the comments section below if you have not subscribed to our channel yet

Then subscribe and hit the notification button to get notifications with our latest content if you want to make money and enjoy financial freedom then fire is for you thanks for your time be happy you

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The 5 Types of Financial Independence Retire Early (FIRE) By FIRE