#015: What is FatFIRE and How Much to FatFIRE

You may have heard of the FIRE movement, which stands for Financial Independence, Retire Early. But have you heard of FatFIRE? Read on for your ultimate guide to achieving fatFIRE.

If you are intrigued by the idea of retiring early than age 65, but you don’t want to limit your lifestyle and spending to achieve that, then FatFIRE is for you.

What is FatFire?

FatFIRE is a variation of the FIRE Movement (Financial Independence, Retire Early) that emphasizes accumulating a substantial amount of wealth to retire early while enjoying a luxurious lifestyle. It has been popularized largely by the r/fatfire community on Reddit, and is one of the largest subreddit communities in the FIRE category.

For comparison, the subreddit has 373,000 subscribers whereas the main FIRE Movement subreddit (r/financialindependence) has 2,000,000 subscribers (as of August 2023).

FatFIRE enables individuals to achieve financial independence without sacrificing comfort, luxury, or life’s pleasures, catering to those who desire a more lavish retirement. As the Reddit community eloquently put it, it is about “retiring with a fat stash”. Let’s break it down.

Key Differences from Traditional FIRE

There are several key differences between fatFIRE and the traditional FIRE movement:

• Higher Savings Target: You’ll need a much larger financial cushion than traditional FIRE to maintain a higher standard of living. More on this in a moment.

• Increased Income Generation: You’ll need to focus on building additional income streams through investments or other ventures. Without a high income, achieving fatFIRE is very improbable.

• Flexibility in Spending: You are likely seeking higher expenditure in retirement. Maybe you want to live in a VHCOL city. FatFIRE makes no qualms about lavish spending and wanting to earn more money.

• Pursuit of Personal Passions: Perhaps you want more time and resources for pursuing hobbies, travel, or charitable causes that bring you joy and fulfillment.

So you might be thinking – how does one achieve this? And how much money does fatFIRE require?

How Much Money to FatFIRE?

While there is no strict definition as to how much money one needs to achieve fatFIRE, there is general agreement that your savings amount needs to be significantly more than your FIRE number.

Here at Wealth Potion, we recommend taking your FIRE number and multiplying it by 10x.

If your FIRE number if $10,000,000 then that means your fatFIRE number is $100,000,000. For sake of simplicity, we believe $100,000,000 net worth is a healthy definition for achieving FatFIRE.

Similarly, the reddit community r/fatfire does not have a strict definition for fatFIRE:

What does your dream life look like?

How big is your home? How many homes do you own?

What car do you drive? How many cars do you own? What about boats? Planes?

How much do you want to be able to give to your children, your family, or to charities?

Use these questions to assess what your fatFIRE number would look like. Dream big.

How to Achieve FatFIRE

Now that you have your dream life in mind, you need to work backwards and design your life so that this wealth is achievable.

Spoiler alert: it’s not going to be easy.

• Learn High Value Skills: To maximize your income early on, you’ll want to pursue a career in a field that pays very well. Sales, software engineering, finance are just a few examples.

• Build Multiple Income Streams: Once you’ve optimized for your W-2 income, start building additional streams of income. Start a side hustle. Invest in real estate. Buy stocks. And so on.

• Keep Expenses to a Minimum: This seems counter-intuitive, since fatFIRE is about living luxuriously… but the more you can sacrifice your living standards today, the faster you’ll be able to enjoy even greater rewards tomorrow.

• Start a Business: Most of the ultra-wealthy among us got rich in one way – by having their own business. Owning equity in a business is how you build wealth exponentially over time. More on this in future Wealth Potion articles.

• Take Calculated Risks: Risk doesn’t guarantee rewards, but taking zero risks guarantees mediocrity. Take more risk, especially while you are young.

Put simply, if you want extreme outcomes, you need to be an extreme person. You are no longer an ordinary person. You are extraordinary.

Conclusion

FatFIRE isn’t for everyone. Many people would be more than happy with achieving financial independence and retiring early.

For some, however, they want more. They want to live life to it’s fullest, to be able to do and give more with their lives. This may mean working harder and for longer than FIRE movement proponents, so that your wealth can compound for longer.

FatFIRE diverges from the frugality-focused mindset of traditional FIRE, offering financial independence while allowing individuals to enjoy a more abundant and indulgent retirement.

Choose your path.

To your prosperity,Wealth Potion

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