The Fat FIRE (FIRE “fat”) it's a variant of the FIRE movement.
While traditional FIRE aims to save enough money to be able to stop working before normal retirement while maintaining an average lifestyle, Fat FIRE aims to save you an even greater amount of money, in order to be able to live a life of luxury and extravagance once retired.
What is Fat FIRE?
Fat FIRE is an investment strategy that aims to enable people to retire from work at a young age and live an above average lifestyle.
To reach the Fat FIRE, people typically aim to accumulate a high net worth, generally several million.
This allows them to generate a high level of income from their investments, which can be used to cover living expenses and maintain your desired lifestyle.
The amount needed to be considered Fat FIRE depends on your individual circumstances and the lifestyle you are aiming for.
In some cases, the term “Chubby FIRE” (FIRE “plump”) is used to indicate a stage halfway between traditional FIRE and Fat FIRE.
The concept of Fat FIRE is opposite to that of Lean FIRE (FIRE “lean”), which preaches the achievement of financial independence through a frugal and dedicated lifestyle voluntary simplicity.
Fat FIRE vs traditional FIRE
Fat FIRE differs from traditional FIRE because its goal is to save large amounts of money, in order to be able to live a life of luxury once retired.
Compared to traditional FIRE, the financial target is much higher, usually several million euros.
However, this also means that there are greater financial sacrifices to be made during the capital accumulation phase and that there is a higher level of risk in investing the money saved.
Those who pursue Fat FIRE often have an expensive lifestyle and try to earn and invest as much as possible during the capital accumulation phase, in order to be able to live on the fat of the land with a very high budget once financial independence has been achieved.
Who is Fat FIRE for?
Il Fat FIRE is suitable for those who have very high salaries or other high sources of income, and who are willing to make financial sacrifices during their working career in order to be able to live a life of luxury in retirement.
In Italy, reaching Fat FIRE is very difficult due to the relatively low salaries, those who pursue this variant of FIRE often work abroad or own their own company.
Although difficult, however, it is not necessary to have a very high salary to be able to reach the FAT Fire.
Often, the expenses of those pursuing Fat FIRE are already higher than average, because those who follow this movement tend to have a higher standard of living in terms of housing, vehicles and other possessions.
However, this may vary depending on individual circumstances, e the definition that everyone gives to the word "luxury".
How much do you need to be Fat FIRE?
Fat FIRE advocates often aim to save too 50-60 times your annual expenses during the capital accumulation phase, during which many decide to focus on their work in order to maximize earnings.
To calculate how much a person should put aside to achieve FAT FIRE in Italy, It is important to consider the cost of living in different cities and your individual income.
For example, in Milan, city with one of the highest costs of living in Italy, the average annual income for a person is approx 36.000 euro.
If this person wishes to reach FAT FIRE, you should set aside at least approximately 2-2,5 million euros, so you can live beyond your means.
In a less expensive province like Crotone, the average annual income for a person is approx 12.000 euro. Anyone who has a million euros saved could already consider themselves Fat FIRE.
It should be noted that these are just examples, and that the cost of living and individual income vary considerably in Italy. In media, the individual annual income in Italy in 2022 it was approx 21.000 euro, but to live a life of comfort this may not be enough.
In fact, There is no “limit” for Fat FIRE. An individual or family who wants to live in unbridled luxury might well set your goal to live on income a 10 million euros, regardless of the average cost of living where he lives.
After all, they exist even for those who live in luxury huge differences in lifestyle, there are those who love to take holidays in 5-star hotels, those who prefer a villa by the sea, who has a passion for yachts and big cars, those who simply love buying high quality clothes and accessories, or everything I listed and more.
The FIRE philosophy – Fat o non Fat – has one's own well-being as its ultimate goal, regardless of individual needs.
Said this, to reach the FAT FIRE, they generally serve as minimum several million euros, million more, million less.
Fat FIRE in breve
- Fat FIRE is a variant of the FIRE movement that aims to save an extremely large amount of money to live a life of luxury and extravagance after retirement.
- Compared to traditional FIRE, Fat FIRE requires a much higher financial goal, often several million euros.
- A “shortened” version of Fat FIRE is sometimes called “Chubby” FIRE.
- Those who pursue Fat FIRE have an expensive lifestyle and try to earn and invest as much as possible during the capital accumulation phase, in order to be able to live on a very high budget once financial independence has been achieved.
- There is no hard limit for Fat FIRE, as it depends on individual needs and circumstances. Some people might set a goal of 2-2,5 million euros, while others might point to 10 million or more.
The Italian community of the FIRE movement (Financial Independence, Retire Early) to stop working and retire young.