Chubby FIRE: Be Chunky The Right Way
Do you envy watching your grandfather live the life of his dreams, even though you are happy for him, while you are struggling to get out of the job market as fast as possible? Do you hate seeing the old, smug uncle you never liked, go to your favorite club every Sunday? While you are just sitting in your room wondering when will your job end, you will be able to enjoy your retirement without stress. Well Chubby FIRE is here to save the day for you then.
Chubby FIRE is a new Upper-middle-class way of FIRE (Financial Independence Retire Early). It is the middle ground between Lean FIRE and Fat FIRE. It starts where the former ends and ends where the latter begins. So while it is not as elegant and luxurious as Fat FIRE, it surely has some benefits through its own decently luxurious lifestyle.
How to Attain Chubby FIRE?
Attaining Chubby FIRE depends upon different factors. Your income, the place where you live, your average spending, and more, all decide at what level will you reach Chubby FIRE.
To know how much you would want in Chubby FIRE, you can use the 25x Rule. Decide the amount you want to spend in a year and then multiply it by 25. This amount is what you have to reach for Chubby FIRE. In the United States, it’s generally agreed that you reach the status of Chubby FIRE at around $2.5 Million to around $5 Million. If we follow the 4% Rule of withdrawal, which states that you would want to withdraw 4% of the total portfolio money every year after retirement. It would allow you a spending limit of $100,000 to $200,000.
After you have decided what your goal to reach is, it is time to start saving up. You can use the following ways to work your way toward your goal:
Investing
You can invest your money and see it grow. The right investing decisions can lead you further into Chubby FIRE. This is a great tool if you know what you are doing, but beware, as it is risky and could also lead you backward.
Cutting Down Expenses
To save up, you need to cut down on your expenses. Find out what you are spending on and try to reduce it. If you spend too much money on Starbucks coffee every day, try only drinking it once a week.
Create a Budget
Creating a budget can help you big time, as it will allow you to know how much you should spend in a day and will let you know what some of your expenses you can cut down on. It will help you balance your spending on your needs and wants while saving money along the way.
Passive Income
You can also pursue other jobs or hobbies for some passive income. The already mentioned investing, doing a side business, freelancing, or other online methods of earning an income could make you a great deal.
Who is Chubby FIRE for?
Chubby FIRE, while not as luxurious as Fat FIRE, still allows you to afford many luxuries. Here are some general pointers for who Chubby FIRE is for:
Wants Luxuries
Everyone is looking for a life of luxury, but if you are someone who is willing to work for it, which might include living a thrifty lifestyle, then consider this method. This model allows you to live a life of ease without worrying about money as much. It lets you spend more money on what you want.
Has a Great Income
While a lot of people might want to attain Chubby FIRE, it might not be attainable for everyone. To reach the levels of Chubby FIRE, one must have a huge household income so that they are able to save up as much.
Owns a House
While this one might not entirely be true, if you already own your own house, then it would be much easier to obtain Chubby FIRE. However, if you are able to afford your house afterward, that would be fine as well.
No Debts
As with owning a house, having no debts is not entirely true as well. If you do have no debts, then that is great, and it reduces your expenses and would increase your savings, taking you closer to obtaining Chubby FIRE. However, if you have enough of an income to pay back your debt without a big compromise, then that also works just as well.
What Does Chubby FIRE Allow You to Have?
This method of FIRE, allows you to have various kinds of luxuries which some other methods of FIRE would not. Some of those luxuries include:
Emergency Fund
Having an emergency fund is a big step in the right direction. Some FIRE methods would not be able to consist of emergency funds, which could result in having to enter into the job market once again after retirement.
College Fund
If you have children, you must especially consider this factor to be important. College funds do take a sizeable amount of your income, and having the funds for it would allow you to not have your children be stuck in debt.
Owning a House
Generally in Chubby FIRE, you own a house or have enough of an income to own a house. This is a big factor, as owning a house will reduce your worrying about whether your landlord might just kick you out. This factor is essential to consider as it gives you the safety and reliability of not having to be dependent on someone to have a place to live.
Luxuries
You want the new iPhone, well now you can get it. You can afford a lot of luxuries compared to other traditional FIRE methods. Furthermore, you will be able to afford to go out with your friends, travel the globe, and play some golf. While you cannot afford everything, some luxuries are just open to you now.
So as you can see, Chubby FIRE gives you a safer financial portfolio. It provides you with a ton of getaways and allows you to retire in peace.
The Bubbly Conclusion
Chubby FIRE is surely an interesting method. It provides you with a way where you can retire with ease. While it may be harder to achieve for some people, there are tons of other methods that allow you to live a lifestyle of peace without caring about money after your retirement.
Remember, before starting your way toward Financial Independence, research all other methods thoroughly. If none of them fits your criteria, try changing them to when it does. All of these methods are just models made to give you a general idea of your journey through Financial Independence, they are not going to be able to work for everyone.
During your journey of Early Retirement, you can visit some forums such as r/chubbyfire. You can meet like-minded people which might help in your journey. You can also comment down your questions below, and we will help you as best as we can. Good luck on your journey towards FIRE.
