Many have joined the FIRE movement with the aim to achieve “Financial Independence, Retire Early.” And, it has gained even more popularity over the last decade with its followers saving a larger portion of their income for retirement. However, the FIRE movement doesn’t always account for all the potential risks. Here are 3 reasons why you should care about Fat FIRE.
Why Should You Care About Fat FIRE?
The FIRE movement has many strong tenets at its core. It helps people save more and eliminates wasteful spending. Additionally, it also teaches people to prioritize their expenses and learn to live well below their means. But, there are some risks that are overlooked. So, many people are turning to Fat FIRE instead with even more ambitious savings goals.
Here are 3 reasons you may want to consider this approach as well.
1. It’s better to err on the side of caution and save more than you need.
No one can predict how the stock market will perform or what tax rates will be in the years to come. Furthermore, you can’t anticipate what healthcare costs or other unexpected expenses you will face in the future. Therefore, it’s better to have more than you need than to outspend your retirement savings.
2. It doesn’t require you to live a minimalist lifestyle.
Although the elimination of wasteful spending is an important aspect of FIRE, you don’t have to take it to the furthest extremes. For example, many people still choose to become homeowners instead of living in a van or tiny home. With Fat FIRE, you can still keep a minimalist mentality without sacrificing every comfort and expense.
3. The Fat FIRE method will better withstand market fluctuations.
Many followers forget that the movement is still young and has only survived through bull markets. While the optimistic approach to saving has many positive effects, it overlooks how financial needs change during economic downturns. Since you are saving more, you will have more resources to help you get through the lean times.
How Can You Attain It?
Although living on a barebones budget now may be feasible, you must account for major changes in your life and health. These factors will have a huge impact on your longterm financial planning.
Therefore, you must realistically assess your situation and determine what you need to do to have the type of lifestyle you want in retirement. This starts with an estimate of how much you should save and what it will cost to maintain it. Then, you will have to choose savings and investing strategies to earn as much as you can now.
To help you attain Fat FIRE, you should also look for ways to generate passive income that will continue to increase your wealth, even after retirement. While difficult, it’s possible to achieve these lofty goals. But, it requires consistent efforts and a commitment to the future you want. But as with all important financial decisions, you should always discuss it with your partner and personal advisor to see how it could benefit your retirement plans.
Read More
- You Can FIRE at 35 if You Do This
- Fat FIRE, Lean FIRE or FIRE- What Kind Of Retirement Do You Want?
- 7 Simple Steps to Financial Independence
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Jenny Smedra is an avid world traveler, ESL teacher, former archaeologist, and freelance writer. Choosing a life abroad had strengthened her commitment to finding ways to bring people together across language and cultural barriers. While most of her time is dedicated to either working with children, she also enjoys good friends, good food, and new adventures.
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