FatFIRE vs FIRE vs LeanFIRE? Both my wife and I came from working class backgrounds (See our journey so far). We grew up in lean households where frugality, saving and investing were burned into us (i.e. my Dad retired in his mid-50’s). But through our parents sacrifice and dedication to us, we became upwardly mobile and ultimately middle class:
- House in the Suburbs
- Two cars
- Kids in Private School
- Luxury Holidays
- Gadgets and Gizmos around the house
- Organic Food where possible
I know that this is Blasphemy for Moustachians , but too much has moved on in my life for me to start reversing. If I discovered FIRE 15 years ago, I may have thought differently.
Lets say we were to cutback, these are things that we could cut down to make a meaningful impact on our Savings Rate:
- Downsizing to a smaller home further away in the country
- Getting rid of one of the cars
- Take kids out of their Private Schools and send them to a good state school in the country
- Reduce the number and quality of holidays (This is happening naturally due to COVID-19)
- Sell all the tech in the house and stop buying more
- Stop buying Organic Food
I think I can only really execute on two of the items (in bold) and they make a decent bump in my savings rate, but not enough to be LeanFIRE / FIRE.
Kids / Schooling
The biggest issue for us vs. LeanFIRE / FIRE is that we don’t want to go to a level of frugality that negatively impacts on the kids. Mainly their schooling and associated activities. I went to a state comprehensive (a really good one) and so did my SO but due to the lack of good state primaries and secondaries in the area we live in, we committed to send them private. And I want to do as much as we can to stick with it (even though recently we have been struggling to balance the books after changes to our financial situation as a result of COVID-19).
We live in a small (it really is – you don’t get much for your money in the London Suburbs) four bed detached house with a driveway, garage and tiny garden. The neighbourhood is quiet and kid friendly. Lots of young families and family friendly amenities nearby. Plus, Central London (where I work) is minutes away on the train (no tube down South). If we were to downsize or move further away it would be a pain and disrupt too many things.
I work in Tech and I’m a geek. We have a lot of robots and automation in the house. We cannot get rid of them as they are part of our FIRE journey. Having a robot do the house chores means that you are saving time that can be spent with the family doing enriching activities. It’s a way of reaching mini-FIRE moments before we hit our FIRE numbers. More of that in later posts.
So in summary, we are happy with FatFIRE approach even if it takes a little longer to achieve. Find out more with how to budget with luxury in mind and how to work out your FatFIRE number. To recap our FatFIRE numbers are…
Our FatFIRE Numbers
The 4% drawdown income we are trying to hit for FatFIRE is £100,000 per year which means that we need £2,500,000 invested. But with Property Investment and other side hustles it will reduce the amount invested across Stocks and Property to £1,500,000.
All this by the age of 47 in 10 years – lots of assumptions and caveats in this model! See our FatFIRE numbers for more info.
Why are we doing all this? Go read our FatFIRE Journey to find out more.
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