The original financial independence movement spawned a host of spin-offs. People pursue fat fire, lean fire, barista fire, coast fire, passion fire, and unique variations on these types of fire.
Barista fire is one of the most common fire types and a stepping stone to true financial freedom. Here’s everything you need to know about barista fire, from what it is, how to achieve it, and the subtle differences between barista and coast fires.
Find out if barista fire is your ticket to the fire movement.
What is Barista Fire?
Barista fire is a form of financial independence where you don’t actually quit working. Instead, you quit your high stress-high pay job and work part-time in a laid-back, less stressful position.
When you reach barista fire, you have a nest egg big enough to pay for most of your living expenses. The job provides a way to fill in any gaps, extra pocket money, or a chance to relive boredom.
It got its name because many people want to quit their jobs and work in a coffee shop for a few days a week (though I’ve been to Starbucks, I don’t see how that isn’t stressful!). I consider Barista fire a step between being financially independent and being tied to a job. It’s one step closer to true financial independence than coast fire.
What is Coast Fire?
It’s important to briefly describe coast fire to highlight the sublet differences. Coast fire is another step on the journey to financial independence. It means you have enough money for a secure traditional retirement but need your regular, high-stress job to pay the bills. It’s a critical milestone on the journey to freedom, so knowing how to calculate your number is essential. However, it’s not the same as barista fire, regardless of what the big names in finance want you to think.
Barista Fire vs. Coast Fire
The most crucial difference between coast fire and barista fire is that you still need that stressful job with coast fire. You can’t pay your bills without it.
When you get to barista fire, you can quit that terrible job and do something a little less stressful. If you don’t hate your job but just don’t want to be there all the time, you may also be able to cut your hours and start working part-time. Barista fire is a step past coast fire on the journey to true financial independence.
Advantages of Barista FI
Some people don’t want what I like to call “true financial independence,” – which is quitting your job and never working again. People want to work for the social aspects or for the benefits. The advantage of barista fire is that it offers both – and gives you a little bit of pocket money.
A massive advantage to Barista FI is the benefits. Unfortunately, the healthcare system in the United States is still a joke, and most insurance is tied to employment. Getting sick is a huge privilege; a healthcare emergency can derail even the best early retirement plans. Some people decide to keep working so they can keep health insurance.
Unfortunately, most companies don’t offer benefits to part-time employees. However, some do. You can find a short list of these companies here. This is a great place to start if you only hang onto your high-stress job for the benefits.
Other benefits include increasing your social security benefits, a possible pension, or a company-matched 401K plan. Even if you’re at barista fire, it never hurts to keep investing for your future retirement. The financial benefits of working part-time can help add extra cushion to all of your retirement investments.
Another benefit is that you keep money coming in. Even with solid investments, it can be terrifying to quit a high-paying job and not have any income. Barista Fire can help you bridge that gap. It can give you a little peace of mind.
You won’t be making as much as you did before (that’s the whole point, right?), but having a little bit of income coming in would be a great way to ease your worries about the next financial downturn. The additional income might help you pay for special treats, like dinners out, your coffee habit, or other non-essentials.
A big reason why many people chose to pursue barista FI is the social interactions. Often, retiring from a job causes you to lose out on the social connections you’ve built. It’s hard to transition from seeing people every day to never seeing anyone. Often you will find that the coworkers you labored with for years aren’t really your friends, and you will never hear from them again upon leaving your job.
Barista fire bridges that gap and offers people the social engagement that they crave, without the stress and deadlines of the job that they left.
How to Achieve Barista Fire
Achieving barista fire isn’t easy. It takes dedication, financial planning, and perseverance to retire early with any type of fire. However, it is attainable. Here is what you need to do to achieve barista fire.
Make a Plan
The first step to achieving any type of financial independence is to make a plan. Those who fail to plan are planning to fail, after all.
Your financial plan needs to include your monthly expenses, sources of income, investment accounts, retirement accounts, expected inflation, and any other information that can help you achieve your goal of barista fire. Calculate how much money you need in pre-retirement investment accounts to cover your expenses. Set a realistic timeline for achieving this number, and set incremental goals along the way to check your progress.
Don’t expect to achieve financial independence overnight. Depending on your current financial situation, it may take five to ten years to complete the financial security you need to retire early. That’s okay. It may seem like a long time, but it’s far shorter than the 30-40 years it would take to reach full retirement.
Pay Off Debt
Part of your plan should include a goal to pay off debt. Imagine how much money you would save each month if your paycheck weren’t going to credit card debt, student loan repayments, and car notes. Now, consider how much less money you will need each month if you don’t have any debt to pay. That’s the amount you will need for your barista fire life.
Paying this debt off is imperative if you want to achieve your early retirement goals. Debt is like a ball and chain hanging over your shoulders that prevents you from doing the things you want. Make getting out of debt a top priority when developing your financial plan.
Some experts will tell you to pay off all of your debt before investing. Those experts are wrong. You must start investing as soon as possible, even if it’s less than $100 a month.
Investing works due to the power of compound interest. The longer your investment horizon, the more money you will make. Time in the market beats timing the market every time. So start now.
My favorite investment vehicle is low-cost index funds. Index funds are diversified and track specific market sectors, so they carry less risk than individual stocks. Of course, no investment is 100% free of risk, but index funds are the best option for growing your money.
Supplement Your Income
If you don’t have enough money to save, invest, and pay off debt, you may want to consider making extra money. This can be achieved through a side hustle or picking up extra shifts if your current job pays overtime. Adding additional sources of income will help you pay off debt faster and invest more money every month.
Another perk of a side hustle is that it gives you a backup plan in case you lose your primary job. Although it may not be enough to sustain you, having a little bit of money will help you stay on your feet while looking for new employment.
Find Your “Barista” Job
The next step to achieving barista fire is determining what you want to do after quitting your stressful job. Consider why you want to keep working before you decide. If you need healthcare, you will need to find a part-time job that offers benefits. If you’re bored and want something to do, you might consider working in an industry you enjoy. For example, if you’re a hobby artist, you may want to work in a craft store to get discounts on art supplies.
Your reasons for choosing the barista fire path are your own. Choose a post-career job that aligns with your personal and financial goals.
Is Barista Fire Right for You?
You need to consider many factors before deciding whether barista fire is right for you. You first have to ask yourself whether or not you want to work in retirement. Some people don’t want to work, and there is absolutely nothing wrong with that. Some people like working, and that’s fine too.
Another thing you should consider is how badly you need to quit your job. If your job offers a high income in return for a terrible work/life balance or is detrimental to your mental or physical well-being, you may want to quit sooner rather than later. Money isn’t everything, and if your job is hurting you, Barista fire might be a better option.
On the other hand, if you hate your job because you hate the entire idea of working, barista fire probably isn’t right for you. Why trade one job you hate for a lower-paying job you also hate? In that case, it might be better to stay at the high-paying job long enough to achieve financial independence in the traditional sense.
If you aren’t sure about being financially independent, Barista fire might be an excellent option for you. You get to dip your toes in, but you don’t have to dive in if you don’t want to. It’s an excellent way to bridge the gap between working full time and taking the plunge into financial independence.
Many Paths to Financial Freedom
Barista Fire is just one of many paths to financial freedom. Some people may have no plans to retire early, and that’s okay too. The FIRE movement provides strategies for building wealth and achieving your goals. Take the parts that speak to you and apply them to your life, and leave the details that don’t apply.
There is no right or wrong way to live your life. Take the path that speaks to you.