Barista FIRE vs Coast FIRE: Choosing the Right Method for You

The struggle between choosing the right FIRE method for you is tough. Multiple different factors are affecting you, and you don’t know whether the FIRE model you are about to dedicate your working life to is the right one.

If that is a problem for you then we are going to help you. We will take two of the most popular FIRE (Financial Independence Retire Early) methods and find out which one is better for you and would fit you more.

What are Barista FIRE and Coast FIRE?

Barista FIRE and Coast FIRE are two of the most well-known methods for financial independence, they both share tons of similarities and are also different in their ways. So, before diving into the differences, let’s find out what the two FIRE methods are all about.

Barista FIRE

In Barista FIRE, you save up enough money for your necessities, so that you can retire early with it. Afterward, you work a part-time, low-stress job for additional money or to cover other expenses. A low-stress job can include being a barista, just like how the name signifies.

Coast FIRE

In Coast FIRE, you start investing your saved-up money, so that after a while it grows you can retire. Through investing, you can make up enough money with which you would not have to work anymore afterward.

The Thing About Income Level

The first factor in deciding whether Coast FIRE or Barista FIRE is better for you is to take into account your income level.

Barista FIRE

If you have a higher income, then Barista FIRE is the way for you. It focuses on you retiring as early as possible and then working another low-stress job for more income. Through the higher income, you can retire early from your traditional high-stress job and then work at a part-time job for the rest of your expenses and additional income.

Coast FIRE

While the difference in income levels between Barista FIRE and Coast FIRE is not that high, in Coast FIRE you can have a substantially lower amount which you can grow through investments. However, you would have to work with your current job for more time until your investments grow up to a point at which you can retire.

Saving is the Essence of the FIRE Movement

Saving is essential for both of the mentioned FIRE methods. However, both have a different amount of savings required to retire.

Barista FIRE

The savings barrier in Barista FIRE is lower than in Coast FIRE. In this method, you need to save less money to reach early retirement. You only save enough money to retire with your necessities and up the rest of the additional income through your part-time job.

Coast FIRE

Coast FIRE requires a higher saving rate. As in Coast FIRE, it is essential to grow your investment portfolio so that it can lead to a higher nest egg. In this method, one has to work more with their traditional job until you invest enough so that your return on the investment is high enough for you to retire through it.

To be Luxurious or Not to be

While you can achieve a comfortable lifestyle in both methods, it is still significantly different how and when you will be achieving that lifestyle.

Barista FIRE

If you are hoping for a more luxurious lifestyle, then Barista FIRE might make you work for it more. As, when you retire from your traditional job, the idea is to have only saved up enough money to live on the necessities. While anything above it, you will have to earn through your low-stress job. So if you want to afford something luxurious, you would have to have a higher-paying, low-stress job which could be tough to find and might probably lead to the same stress as before.

Coast FIRE

Coast FIRE might turn out to be a better solution if you are hoping for a more comfortable lifestyle after your retirement. As in Coast FIRE, if one has a higher income and invests thoroughly and actively, one can achieve a better lifestyle. However, generally to achieve a luxury lifestyle in this method, one would have to compromise on their early retirement as a luxurious lifestyle would require a higher amount of funds invested to grow your portfolio.

What are Your Future Goals?

Depending on what you want for your future, the right model for you might differentiate a lot. Both Barista FIRE and Coast FIRE lead to a substantially different future.

Barista FIRE

If your future goals are comfortable with you working a low-stress job after your early retirement, then Barista FIRE is probably the method for you. It will also allow you to gain additional income through that low-stress job. Through Barista FIRE, you can leave your traditional higher-stress job much earlier as well, which is a key factor for most people who are pursuing FIRE. While a low-stress job might not be ideal for everyone wanting to fully retire, it does hold employee benefits such as health insurance for the one working and their family. One can also pursue a business afterward retiring their traditional job.

Coast FIRE

The ideal FIRE goal is to retire as early as possible and live a comfortable lifestyle afterward. While Coast FIRE, might not be able to provide an early retirement to everyone following it, it can provide you with a comfortable lifestyle after retirement. Through your growing investments, you can gain enough money to retire without working afterward, though you might have to work your traditional job for a longer period as a compromise.

Finally,

These are the points that you must take into consideration before choosing the answer for the questions Barista FIRE vs Coast FIRE. In the end, it all aligns with what you want from your life. As always, these methods are not a one-size-fits-all, be sure to customize these in the way you want and how you require, only then can you find the perfect early retirement strategy for yourself.