Short answer
FIRE means the portfolio can cover the spending gap without salary. Lean and Fat FIRE change the spending target; Coast FIRE asks whether today's portfolio can grow to the later target without more saving; Barista FIRE keeps some ongoing earned income and asks the portfolio to cover only the rest.FIRE explained
FIRE, Lean FIRE, Coast FIRE and Barista FIRE – what changes?
The names describe different ways to split the same job between a portfolio, future growth and ongoing earned income. They are not different investment products.| Variant | What it changes | Portfolio it asks for |
|---|---|---|
| FIRE | Nothing – the whole gap | €900,000 |
| Lean FIRE | A lower spending target | Less |
| Fat FIRE | A higher spending target | More |
| Barista FIRE | Earned income covers half the gap | €450,000 |
| Coast FIRE | Stop saving, let growth finish | Enough today to reach the target later |
All on €3,000 monthly spending at a 4 percent rate, and all of them before tax on the gain. The calculator adds that back.
One formula sits underneath every FIRE label
Annual spending minus reliable annual income is the amount the portfolio must supply. Divide that gap by the chosen withdrawal rate to get the simple target portfolio. At €3,000 monthly spending and a 4 percent rate, that arithmetic gives €900,000.
That figure is what the portfolio has to pay out, not what you necessarily get to spend. A sale returns some cost basis and may realise a gain or loss; only a positive taxable gain is taxed. Under this page's German equity-fund, basis and allowance assumptions, the calculator asks for about €1,004,700 rather than €900,000. Change the basis or asset type and the tax gross-up changes too.
Lean FIRE and Fat FIRE move the lifestyle, not the arithmetic
Lean FIRE uses a lower spending target and therefore a smaller portfolio. Fat FIRE uses a higher target and a larger buffer. Both still need an honest budget for irregular costs, tax, healthcare and repairs rather than one unusually cheap month.
Coast FIRE moves the saving obligation
Coast FIRE asks how much must already be invested today so market growth alone could reach the later FIRE target. You still need income for current living costs, and the answer depends heavily on the years remaining and the real return. For example, a €900,000 target in 20 years needs about €410,748 today at a smooth 4 percent real return, before tax and fees, with no further contributions.
Barista FIRE moves part of the income obligation
If reliable part-time work supplies €1,500 of a €3,000 monthly budget, the portfolio gap is €1,500. At 4 percent, the simple target falls from €900,000 to €450,000. The trade-off is that the plan now depends on that income continuing - and the Barista FIRE calculator puts a date on that dependency.
What the simple target leaves out
A target derived from one rate does not model bad early returns, changing tax basis, a pension that starts later or spending that changes with age. Use it to orient the plan, then run the retirement phase month by month.