Weekend Reading – is Fat FIRE realistic?

Weekend Reading – is Fat FIRE realistic?

Hey Everyone,

Welcome to a new Weekend Reading edition, questioning: is Fat FIRE realistic?

Weekend Reading - is Fat FIRE Realistic

Image Source: Pexels, Gantas Vaičiulėnas

I have a few thoughts on that but first up, a few reminders and recent posts:

This post was very popular this week: watch out for RRSP and RRIF taxation.

Watch out for RRSP and RRIF taxation

Recently, I wondered if we are headed towards a mortgage amoritization crisis.

Probably not, but…many households will struggle in the coming years. Read on for that take, why and watch to watch out for.

Weekend Reading – is Fat FIRE realistic?

Before my answer to that question, for those outside the personal finance, devout FIRE (Financial Independence, Retire Early) bubble, a primer based on what I know…

What is FIRE?

I would like to provide a universal definition from the personal finance community today but there isn’t one. There are however, some general thoughts/themes when it comes to FIRE and those who follow the philosophy around it:

  • Financial Independence, Retire Early (FIRE) is a movement related to extreme/aggressive savings rates and investment tactics that allow individuals to retire sooner than potentially any traditional budgeting or retirement planning approach might permit.
  • When it comes to savings rates: in some circles, by saving up to 70% of your annual income, some FIRE enthusiasts aim to retire early (and live off small portfolio withdrawals from their accumulated assets).
  • When it comes to portfolio withdrawals: in some circles, by withdrawing a small % of the accumulated assets (e.g., 4% of the portfolio), said FIRE enthusiasts may expect their portfolio to last a lifetime without fear of running out of money. 

You are welcome to revisit if any 4% rule makes any sense for you or not… 🙂

The FIRE movement – new term, old concept

The FIRE movement takes direct aim at some traditional retirement ages, such as age 60, 65 or even later on but there is no consensus on what is / is not a retirement age of course.

The theory and movement goes: by dedicating the majority of your after-tax income to savings and specifically saving for retirement, well, you could “retire” sooner than most. Probably true. 

From this perspective, FIRE is not a new concept even though the moniker is somewhat newish. 

I’ve written multiple times about the FIRE movement and my thoughts on FIRE.

I’ll link to those thoughts here for additional reading as well.

I’m hardly anti-FIRE, this movement/approach/philosophy has always resonated how I live for the most part:

  • To live within your means or slightly below what you make as income.
  • To save early and often.
  • To avoid long-term debt that is not used for wealth generation.
  • To optimize your investing (i.e., keep your costs low and diversified, and avoid money managers).

Several FIRE retirement variations have emerged over the years to frame a particular lifestyle expectation that could come with FIRE. I’ll rank them in order of cashflow significance although these terms also vary based on the FIRE enthusiast you’re talking to:

1. Lean FIRE

As the first word suggests, lean is a strict adherence to a minimalist lifestyle. Many Lean FIRE adherents live on $25,000 per year, or less per year. Here are a few examples:

Jacob Fisker – Early Retirement Extreme. How he used to live on just $7,000 per year. Not a typo.

There is Jessica from Financial Mechanic who spent less than $20,000 in 2020

In more recent years, A Purple Life, wrote about a nomadic life earlier this year, living off less than $25k USD.

These are certainly jaw-dropping low numbers…

2. Barista FIRE

Not that you have to become a barista, rather, the term is used to highlight a combination of work-life balance can be juggled – a form of semi-retirement if you will. 

Barista FIRE is a type of semi-retirement whereby you can consider part-time work or work on your own terms, and still enjoy the benefits of some income and workplace benefits. (The term was coined as such since Starbucks offers benefits to part-time workers…something to consider for your semi-retirement plans!?)

I’ve read emails and reviewed literally 100s of comments on this site over the years that point to a desire, like me a bit, to work on your own terms more – and many folks have done just that. Contract work. Seasonal work. Temporary work. Occassional work. All in the name of staying busy, remaining engaged with others, and earning a bit of income too. For the most part, any job that you enjoy could put you in the Barista FI category of semi-retirement…it’s a very loose term. 

This Barista FIRE term should not necessarily be confused however with any Coast FI concept. 

Coast FI is when someone no longer needs to continue to save for traditional retirement and instead, continue to work and coast to that destination. Coast FI advocates have saved and invested enough, for the most part, to never save for retirement again. They could consider working full-time at what they love, take a leap of faith to work part-time, or simply scale back earning income as they please. Coast FI could offer the chance for FIRE enthusiasts to devote time to hobby or passion projects they would otherwise have no time for.

3. Fat FIRE

Last up, in my list of terms and defintions list before I answer the question of the week, is Fat FIRE.

Fat FIRE, goes exceedingly beyond Barista FIRE and is really the total opposite of Lean FIRE. This is for individuals who can and do save substantially more than the average worker but doesn’t want to reduce their current standard of living in retirement. In fact, they might want a higher standard of living in retirement.

Lean FIRE and Barista FIRE, to some degree, both require delayed gratification to realize your retire early goals. You either have to reduce your spending in extreme ways (Lean FIRE) or continue working (Barista FIRE) in order to retire early. In contrast, Fat FIRE is about building a large enough nest egg that you don’t have to worry about either approach. Fat FIRE has the objective to live it up in retirement. In some circles, this is not about saving and having $1 million or slightly more invested at any point for retirement. It’s about having millions…


Back to the question for this Weekend Reading edition…

is Fat FIRE realistic?

For most, heck no. 

Remember, unless you are ruthless with spending or have very modest needs, FIRE is generally restricted to higher income earners in the first place. This is not to say FIRE principles do not have merit, they do, they simply don’t translate to everyone as much as the marketing might suggest.

On Nick Maggiulli’s site Of Dollars and Data this week (well worth the follow BTW), Nick wrote about the comprehensive guide to Fat FIRE and your ability to “unlock the secrets to a comfortable early retirement“.

Understanding Fat FIRE: The Comprehensive Guide to a Luxurious Early Retirement

Those secrets are either:

  1. Earn a very high income and invest in a diversified portfolio of assets, and/or
  2. Start a successful business and sell it.

Nick will be the first to say, there are no secrets – to high net worth and asset growth. There is hard work, skill and to be honest an awful lot of luck. 

But his article this week did have me reflecting once again on the sheer power of financial marketing and just how much rarefied air there is for high net worth individuals compared to the rest of us. 

What’s your take on Fat FIRE? 

More Weekend Reading – beyond is Fat FIRE realistic?

Rob Carrick highlighted this article….apparently at RBC, one-quarter of customers use points for mortgage, credit card payments. Wild. Do the math before using credit card loyalty points towards your mortgage payment.

My wife and I will never reach Fat FIRE but that’s never been our goal either. When it comes to change, a reminder small, simple steps matter over time. With thanks from Behavior Gap for the visual:

Change small to big - Behavior Gap

This MoneySense weekly column always seeks to try and make sense of the markets – including the recent interest rate hike. Is our Bank of Canada done now? I suspect they are until the end of this calendar year – that’s my hunch right now anyhow?!

Making sense of the markets this week: July 16, 2023

Dividend Growth Investor reminds us to think like a business owner and ignore short-term noise. 

Finally, on the dividend investing front, blogger and author Henry Mah shared the results of a dividend income poll on his site. I was surprised by the data if true/factual by respondents:

“Those earning $90,000 or more represent about 17.7%. This group would very likely never have to sell capital, unless they wish to do so. They are also in the enviable position of likely never needing to worry about dividend cuts, or any other factor which others believe might affect their portfolio.”

Great stuff to those that have realized that…very well done indeed. 

Deals – Playing portfolio offence with Qtrade

Building on my playing portfolio offence with some defence post, thanks to my DIY investing approach, I’m very fortunate to have partnerships and deals shared my way from many companies…offering low-cost solutions and promotions quite frequently.

I enjoy passing on those saving, investing and earning opportunities to you…

Well, one such new offer is with Qtrade.

Right now, get up to $150 cashback when you invest with one of Canada’s low-cost online brokerages: Qtrade. Their cashback promotion starts now and ends later this year. 

Sign up here for that!

You can also access my link below to take advantage of the offer and learn more:

As always, there are Deals to be had on that page – always good to save, invest and earn more where you can.

Need help with any retirement income drawdown order or projections for your retirement? Contact me here over the summer!

Enjoy your weekend and stay well. 


My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

19 Responses to "Weekend Reading – is Fat FIRE realistic?"

  1. Nice to be reading an article from Mark and comments from Henry, two of my favorite financial writers. I am not quite in the 90K+ dividend boat just yet, but hope to be there in a few years. I retired about three years ago at age 60. I worked in high tech all my life and started saving early. I suspect there are many couples in the Ottawa area who have dual income and high savings that could be candidates for fat FIRE. Hopefully they read some of Henry’s books and learn about dividend income investing.

    1. I would agree, Howard. There are likely some folks in my city that are Fat FIRE – having a few million invested beyond their house, etc. Certainly government workers who have worked 30+ years each, dual income, lower spending habits, no debt, etc. could have $2M-$3M invested/assigned to their pensions by ages 55 or 60. Pretty good lifestyle I would think for any semi-retirement. 🙂

      Yes, Henry is a passionate dividend income investor and I invest that way a bit as you know but I also have some growth assets in my portfolio too. For example, I continue to own QQQ ETF. Up 40% YTD. We’ll see how much higher (or lower) it goes!

      Have a great weekend,

  2. I think Nick Maggiulli is only 32, and not even close to Lean FIRE, let alone Fat FIRE as a working guy with a $600K net worth.

    Why wouldn’t you highlight the people who are actually Fat FIRE who have been writing about it and living it for years instead?

    Fat FIRE is realistic for those with big investment returns and high incomes.

      1. I think it’s important to differentiate between a marketer and someone who has credibility when it comes to money. Nick is a marketer first. I’m sure he’s a nice guy, but he doesn’t have the wealth or experience to be an authority and what he is writing about. But I notice nowadays that marketing trumps credibility, a lot of times with TikTok videos, podcasts, and other things.

        1. I don’t know Nick at all, to be honest, I read dozens of personal finance columns and articles per week but he seems to do a decent job at marketing – I would agree.

          This is not about Nick, but there are lots of folks getting wealthy and getting press on social media that have no idea what they are doing when it comes to offering subject matter expertise but that’s the way our world works these days. A sigh from me 🙂

          All my best,

          1. Hi Derek,

            I won’t comment on Nick but I agree with you that his credibility is limited.

            He lost part of it with me when saying:
            “Work is about much more than money. It influences your identity, your relationships, your health, and much more.”

            While I had the chance to meet and work with very nice people, I never identified with my work. People who do tend to become depressed during retirement, especially if it was a forced one due to a layoff.

            Until the housing price bubble of the last 10 years, it was quite possible to be Fat FIRE with a household income of $140K+. Note that I consider early retirement any age before the traditional age of 65.

            Hi Mark,

            While for Nick (New York City) and Sam (San Francisco) $3M might be a minimum, you can have the same quality of life in Ottawa with $1.5-2M.

            You are already at $42K in dividends now. If you work full time for the next two years (house completely paid in about 18 months, IIRC) and then 50% until you are 60, you’ll surely get more than $90K in dividends then.

            You’ll be Fat FIRE despite not aiming for it!

            1. Nice to hear from you, Alex.

              “Note that I consider early retirement any age before the traditional age of 65.”


              As for NYC and Sam in SF, yes, $3M is a bundle but certainly not needed in Ottawa unless you’re a big spender. I would be thrilled with $1.5M+ invested (excluding my workplace pension of course) entering full retirement.

              I won’t get to Fat FIRE myself since I don’t intend to work full-time until my 60s. Just how I want to live.

              You? 🙂

              1. Thanks Mark!

                I guess you are excluding your workplace pension (defined benefit, IIRC?) since you won’t touch it before you are over 60 years old.

                On the other hand, you present yourself (on your main page) as a 7-figure investor, so you might be getting close to $1.5M in the next 2 years.

                Maybe I didn’t express myself clearly enough. I estimated your $90K+ dividend income based on you working full time for the next two years and part time after that until you are 60 years old. Based on the information you already provided on your site, I assumed you were around 45, so 2 years of full time and 13 years of part time (50%) accumulation. If you intend to work much less than 50% part time, these estimates are no more valid.

                Regarding myself, once our rental property is sold and proceeds reinvested in our non-registered accounts, we expect to cross 6 digits dividends mark in 2024.

                1. Good estimates, Alex 🙂

                  Yup, 7-figure portfolio with my wife. I don’t include the commuted value of my pension, too mess and hard data to get sadly…

                  No, your comment was clear. The challenge is I will need to spend/live off dividends so highly unlikely the value will double in the coming decade or so to age 60 but you never know!

                  Full-time work is possible but not likely for us. We’ll see but we’d rather work part-time sometime starting 2024 if we could.

                  I’ll keep ya posted.

                  (You: “Regarding myself, once our rental property is sold and proceeds reinvested in our non-registered accounts, we expect to cross 6 digits dividends mark in 2024.” Impressive!!!)

                  1. Hi Mark,

                    I think the misunderstanding comes from the fact that I assumed your part time work would suffice to cover all of your expenses (since you won’t have any mortgage). If you need to spend some of your dividends, it’s another story!

                    If you start working part time as soon as 2024 and spend a portion of your dividends, then my estimates are no longer valid.

                    I’m still convinced that you’ll be Fat FIRE in your mid 60s!

                    1. As a follow-up, a longer post but the nuts and bolts:

                      1. 50s = “Live off dividends” + part time work during 50s to cover all expenses, including needs and wants. (Do not touch pension, too young for CPP, too young for OAS, avoid tapping TFSAs)
                      2. 60s = spend RRSP/RRIF capital with dividends, start taking OAS? maybe take CPP, etc. Take my workplace pension age 65 or so.
                      3. 70s+ = deplete RRSP/RRIF, leaving the following income streams: CPP x2 + OAS x2 + taxable dividend income stream + workplace pension $40k? per year + consider withdrawing x2 TFSAs.

                      Would love your take 🙂

                    2. Hi Mark,

                      By “avoid tapping TFSAs”, do you mean also avoiding touching their dividends? If reinvesting them, that would mean a 12% to 15% dividend increase per year during your 50s.

                      If using all of your dividends (including TFSA), you can expect an organic dividend growth about 5% (+/- 1%, depending of your holdings).

                      With your starting dividend of $42000, that means an increase of at least $2000/year (it should be more like $2500-$3000 later on). You should be at more than $70000 at 60.

                      After that, it will be tax optimization territory (like RRIF income splitting)!

                    3. Correct, “avoid tapping TFSAs” = not touching assets at all inside both TFSAs and letting all assets compound away for the next 20 years or so.
                      All dividends and distributions would be reinvested. No idea of returns but thinking total return of 5.5% annualized is realistic over a 20-year period.

                      Time will tell if my plans shakes down OK!

                      All my best,

  3. The concept of retiring early has much merit, we did it and thousands upon thousands do it . It pretty well becomes a mockery when every Tom, Dick and Harry start blogs, websites, write books about it in the pursuit of marketing. Ya, colour me a tad bit cynical of this type of financial porn.

    1. I’m with you Lloyd. I do recall you retired early and have no regrets. Imagine, you did it all on your own without someone telling you what FIRE is? Ha.

      Have a great weekend,

  4. Thanks for posting a link to my dividend income poll Mark. I do know that there are people, actually many, who earn more than $90k, but they are not in the FIRE group. Most probably worked till at least 65, lived modestly, saved, and invested to earn a growing income (a lot are followers of Tom Connolly).
    Regardless whether the poll is accurate, or not, obtaining a meaning income is achievable (as you have done), and should encourage those just beginning to consider the strategy.

    1. Thanks Henry. Not citing your poll is not demonstrating some power in saving over time, just that, when it comes to any online poll including anything I share it cannot be deemed statistically accurate without fulfilling certain criteria. I know a bit about polling/survey practices from my day-job. 😉

      I do personally know a few folks that are earning $80k+ per year, from dividend income from their portfolio, without any government benefits. Pretty impressive stuff.

      Have a great weekend,


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