Decoding the Different Paths to Financial Freedom

Hello my friends, my warriors of wealth, and seekers of financial freedom! Haha! I thought it might be good time to go back to basics, and start to provide some fundamental definitions of FI, or Financial Independence. I had recently talked with some newer people to the community. Upon our introductions and initial conversations I felt that there may have been some misconceptions, or understanding of what financial independence meant or the different types of Financial Independence paths they may have heard in the mainstream media or through the community. So I wanted to quickly run through some of the basic, or common paths for some clarity.

The Anthem of FI and FIRE

Financial Independence (FI) is all about taking control of your money, setting yourself up so your investments and passive income cover your living costs, forever. FIRE cranks it up to 11! This encourages you to save more aggressively, invest more strategically, and allows you to retire years, or even decades earlier than the average headbanger. But like any great metal genre, FI comes with sub-genres! lol Have you heard of Progressive Alien Deathcore Metal?! There some flavors of financial independence that is tailored to different lifestyles, ambitions, and financial strategies.

Let’s explore the main types of FI you’ll hear shredding through the personal finance community: Coast FI, Fat FI, Lean FI, Barista FI, and a few other brutal riffs you might encounter.

Lean FI: Bare-Bones Freedom

The first one we are gonna look at is Lean FI. This is the rawest, most stripped-down version of financial independence. You cover just your basic of expenses. Think of the basic needs like food, shelter, and healthcare. So you’ll be earning an absolute minimal passive income from savings and investments. We are talking no frills and virtually no luxury in early retirement.

Lean FI typically appeals to more of the hardcore minimalists out there. Those peeps that really crave super simplicity. So, If you find joy in fewer possessions and a simple and streamlined life, Lean FI may be what you are looking for.

Example: If you live on $25,000 per year, hitting Lean FI would mean having saved or invested up around $625,000 and by then following the classic 4% withdrawal rule. It’s the quickest path to freedom but demands some crazy-serious dedication to frugality.

Continue reading at Heavy Metal Money!

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