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Alena Bodnar

Apr 17, 2023 • FIRE

Embracing Lean FIRE

The Minimalist's Path to Early Retirement

Embracing Lean FIRE

In recent years, the FIRE (Financial Independence, Retire Early) movement has gained significant momentum, encouraging people to pursue financial freedom and retire earlier than the traditional age of 65. Within the FIRE community, there are different approaches to achieving this goal, with Lean FIRE being one of the most popular. This article will delve into the concept of Lean FIRE, its principles, and how it differs from other FIRE approaches.

What is Lean FIRE?

Lean FIRE is a minimalist and frugal approach to achieving financial independence and early retirement. The main goal of Lean FIRE is to maintain a relatively low cost of living while building and maintaining a sufficient investment portfolio. This allows people to retire early, often in their 40s or even 30s, while living off their investment income and savings, without the need for a traditional full-time job.

The Principles of Lean FIRE

Frugality and Minimalism: A key component of Lean FIRE is living frugally and embracing minimalism. By cutting unnecessary expenses and focusing on essential needs, Lean FIRE followers can allocate more resources towards their investments, accelerating their path to financial independence.

Budgeting and Tracking Expenses: Diligent budgeting and tracking of expenses are crucial to the Lean FIRE approach. By staying within a strict budget and monitoring spending habits, individuals can make informed decisions on where to cut costs and how to allocate their income.

Building a Passive Income Stream: Lean FIRE followers aim to create a passive income stream from their investments, such as stocks, bonds, and real estate, which can sustain their lifestyle indefinitely without the need for a traditional job.

Financial Security: The ultimate goal of Lean FIRE is to achieve financial security, allowing individuals to enjoy their early retirement without the constant worry of financial strain.

Lean FIRE vs. Fat FIRE

While Lean FIRE focuses on minimalism and frugality, Fat FIRE is another approach within the FIRE community that emphasizes a more luxurious lifestyle during early retirement. Fat FIRE followers aim to accumulate a larger nest egg, which allows them to maintain a higher standard of living in retirement. This often means saving more money and working longer to achieve a larger investment portfolio.

How to Pursue Lean FIRE

Determine Your Retirement Needs: The first step in pursuing Lean FIRE is to determine your desired annual expenses during retirement. This will help you establish a target for your investment portfolio.

Calculate Your Lean FIRE Number: Next, calculate your Lean FIRE number, which is the amount of money you need to save and invest to sustain your desired lifestyle during retirement. A common rule of thumb is to multiply your annual expenses by 25 to account for a safe withdrawal rate of 4%.

Develop a Savings and Investment Plan: Develop a plan to save and invest consistently, focusing on low-cost, diversified investments such as index funds or ETFs. Automate your savings and investing to ensure you stay on track.

Cut Expenses and Boost Income: Look for ways to cut expenses and increase your income, such as taking on side hustles, downsizing your home, or reducing discretionary spending.

Stay Disciplined and Flexible: Lean FIRE requires discipline, commitment, and flexibility. Be prepared to adjust your plan as your financial situation evolves or as market conditions change.


Lean FIRE is an attractive approach for those who value financial independence and early retirement, while embracing minimalism and frugality. By following the principles of Lean FIRE and staying disciplined, individuals can achieve their goal of retiring early and living a fulfilling life without the constraints of a traditional job.

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