Coast FIRE vs Barista FIRE: Choose Your Own Early Retirement

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Financial Independence and Early Retirement (FIRE) is an attractive financial goal. However, many feel daunted at the prospect of building a multi-million dollar investment portfolio in only a few short years in order to leave the workforce early.

Turns out, achieving FIRE is easier than you think, depending what FIRE flavor works best for you. Over the past couple years, both Coast FIRE and Barista FIRE have gained popularity as more attainable alternatives than original FIRE strategy. Here’s how they compare!

Coast FIRE vs Barista FIRE

Here’s how Coast FIRE and Barista FIRE strategies compare, as well as how they stack up against more traditional Lean and Fat FIRE:

Portfolio Value @ age 35~$100,000$250,000 to $500,000$500,000 to $1,000,000$1,000,000+
Early Retirement?NoPartialYesYes
Income RequiredAnyMiddle to highMiddle to highHigh

What is Coast FIRE?

Coast FIRE is my FIRE formula of choice because it’s the easiest and I’m lazy. It’s so easy to do I actually achieved it before I even knew what it was. We could almost rename it Accidental FIRE!

Coast FIRE consists of setting aside enough in savings and investments to ensure a comfortable retirement at your target retirement age (I use the traditional age of 65) and then leaving it on autopilot so you can “coast”.

Example: You need a $1.2 million dollar portfolio at age 65 to ensure a comfortable and secure retirement. You’re currently 25 years old and want to achieve Coast FIRE by age 30. You believe you can get at least 8% in the stock market, so need a portfolio of at least $81,162 by age 30 in order to ensure you’ll have $1.2 million at retirement.

Above is the numbers that show a $1.2 million dollar portfolio can be built by saving $81,162 by age 30, assuming an average rate of return of 8% in the stock market.

If you’re like me you saw that $81,162 and felt tremendous relief at how attainable it was. Especially over 5 years! If you’re exactly like me, you checked your retirement accounts and saw it was already over your target Coast FIRE number and you were in the clear. Phew!

Once you’ve hit this milestone in your investment accounts, you don’t have to worry about aggressively saving for retirement anymore and can just enjoy your life. You don’t get to retire early, but you do get to rest easy knowing your retirement is taken care of.

For many, hitting their Coast FIRE number means they can downgrade to part-time work or a less stressful job. For others like myself, you continue to add money to your retirement funds which will allow you to either retire with more money or take an early FIRE.

I really enjoy working and I really enjoy money, so I don’t think early FIRE is for me. If anything, I’ll retire after 65 or possibly never retire at all. But I love knowing that no matter what happens, I’ve already done the hard work and I can coast.

What is Barista FIRE?

Barista FIRE is somewhat similar to Coast FIRE but means taking an early FIRE with part-time work to supplement your income. Instead of amassing enough investments to pay all your expenses throughout retirement, you build up a portfolio that will cover your basics and then you work part-time to cover the rest.

Example: You can pay all your essential expenses like food, shelter, and clothing on $40,000 per year. Non-essential expenses like hobbies, entertainment, and travel cost an additional $20,000 per year. Your total living costs are $60,000 per year. To achieve Barista FIRE, you build a portfolio of $1 million which generates $40,000 per year for you to live on. You use this cash to cover all your essential expenses, and you work two days per week consulting at your old job for an additional $20,000 per year.

Barista FIRE is an attractive option for people who still want an early FIRE, but it would take a long time to build up the portfolio to do so and they value exiting the workforce earlier more than having a larger cash cushion.

The irony of Barista FIRE is while “barista” is traditionally a low-income job, high-income earners are most likely to be the ones who can afford Barista FIRE. Only people with very high incomes can generate enough extra cash to build up a portfolio that would let them exit the workforce early, as well as have the skills for a profitable enough side job to pay additional expenses.

Coast FIRE vs Barista FIRE

The most attractive thing about both Coast FIRE and Barista FIRE is they are extremely attainable. Virtually everyone with a middle class or higher income can hit their Coast FIRE or Barista FIRE in a reasonable amount of time if they start in their 20’s or early 30s.

Furthermore, because both Coast FIRE and Barista FIRE leave you with one foot in the workforce, you’re less financially vulnerable than someone who has exited entirely. You’re better equipped to deal with an unexpected expense because you still have cashflow coming in from a job. The drawback of course is that you’re not fully retired, which is why these are considered more gentle forms of FIRE than either Lean FIRE or Fat Fire.

When it comes to picking Coast FIRE vs Barista FIRE, it’s more a lifestyle choice than an income choice. If you hate working 40+ hours per week, then Barista FIRE is an attractive option. If you don’t mind working and just want peace of mind, then Coast FIRE is perfect. As with all financial decisions, you’re the only one that has to live with your choice so you need to pick what’s best for you!

What about traditional FIRE?

Both Coast FIRE and Barista FIRe piggy-back on the original FIREs: Lean FIRE and Fat FIRE.

What is Lean FIRE?

Lean FIRE is the OG of the FIRE movement. Even now, when most people talk about early retirement, Lean FIRE is what they’re referring to. Lean FIRE enthusiasts live extremely frugal existences in order to amass the bare minimum amount needed to leave the workforce. It’s ruthless and unglamorous and has a cult-like following.

The formula for Lean FIRE consists of saving up 25x your essential expenses and then retiring to live whatever life of leisure you can on an income that straddles the poverty line. If you currently need $35,000 per year to cover all your essential expenses, you would need a portfolio of at least $875,000 in order to FIRE.

The downside of Lean FIRE is you have to live like your broke forever. You scrimp and save and cut expenses as you build your portfolio, and then you stay that way after you retirement because it’s not large enough to sustain anything else. Financial secure? Sure. Fun? Not really.

Some Lean FIRE enthusiasts move to lower cost of living countries in order to make their retirement dollars go further. Others start extremely profitable blogs that generate thousands or even tens of thousands of dollars each month to supplement their income, effectively taking both “lean” and “retirement” out of their Lean FIRE strategy.

What is Fat FIRE?

If you’re cringing at the prospect of living of less than a million dollars beginning in your 30s, then Fat FIRE might be the alternative. It’s a lot like Lean FIRE, except you have enough money to actually enjoy your life.

Fat FIRE merely consists of saving and investing a much larger portfolio that can generate an income that will not only meet your basic needs, but allow you some joys as well. You may be able to afford luxuries like shopping, travel, and more. For many, achieving Fat FIRE is a matter of being extremely frugal for the years of wealth accumulation, and then loosening the reigns a bit when you actually FIRE. This is much different than Lean FIRE, which requires you to live on a strict budget both before you FIRE, and indefinitely after.

Choose Your Own FIRE

Which FIRE is best for you depends entirely on how you want your life to look now, and after you leave the workforce. The FIRE movement has gained a lot of popularity in the past decade because of the stellar performance of the stock market coupled with the ongoing frustrations of job insecurity millennials face in the workforce. For many young people, choosing FIRE is empowering and gives them control over their current circumstances and their future.

The only real downside to the FIRE movement is the fanatic culture of PF dudebros insisting on cold showers and shaming people for buying lattes instead of investing for retirement. However, the greater diversity of FIRE choices like Coast FIRE and Barista FIRE have let more people enter the conversation and are changing the narrative.

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