Lean FIRE

Lean FIRE, standing for Financial Independence Retire Early, is a lifestyle and financial movement that is seen as a subculture of the broader FIRE movement. It emphasizes extreme frugality, minimalism, and a simple lifestyle to achieve financial independence and, optionally, early retirement.

Understanding Lean FIRE

1. Definition and Philosophy:
   • Lean FIRE advocates aim to achieve financial independence by maintaining a minimalist lifestyle before and during retirement, reducing expenses to the bare necessities​. This approach enables individuals to retire earlier than the conventional age as the financial threshold required is significantly lower due to minimized living costs.
2. Origins:
   • The term “Lean FIRE” was coined in 2015 by a Mad Fientist blogger, marking a strand within the FIRE community that takes frugality and expense minimization to the next level.
3. Lifestyle and Strategies:
   • The lifestyle necessitates a high level of focus and sacrifice in the short term to reap the benefits in the long term. It may involve downsizing living spaces, minimizing transportation costs by opting for public transport or cheaper vehicles, cooking at home, and generally cutting down on discretionary spending.
   • The objective is to minimize expenses as much as possible to reduce the size of the nest egg needed to retire, speeding up the journey to financial independence​.
4. Budgeting:
   • The common definition is living on $40,000 per year or less, which is achieved by living off savings and investments but with a lower balance than what’s traditionally expected for someone financially independent​.
5. Investment and Savings:
   • Individuals following the philosophy focus on aggressive saving and wise investing to build up a nest egg that allows for early retirement. The basic idea revolves around living frugally and investing as much extra money as possible.
6. Community:
   • There are various online communities and resources where individuals interested can share experiences and strategies and learn from each other.

Sources:

• The FIRE University – Understanding Lean FIRE
• How To FIRE – How Does This Work?
• Money Optimist – Lean FIRE: The Fastest Way to Retire Early
• Financial Samurai – What Is Lean FIRE? The Minimalist’s Way To Retire Early
• Partners in Fire