FIRE Acronyms Defined

FATFIRE, Chubby FIRE, HENRY, DINK, what all these stand for and more

The world of Financial Independence is flooded with acronyms. New ones seems to get created each and every day.  While I am in the middle of a few longer pieces I thought I would quickly share what I think are the top FIRE acronyms specifically for the FAANG FIRE crowd as well as those I want to become a thing.

FIRE

• Financial Independence and Retire Early

• Having enough assets invested to fully cover your anticipated spending needs for the rest of your life.

FI

• Financial Independence

• You have enough assets invested where you can now make decisions without needing to heavily weigh the financial ramifications. Financial Independence gives you freedom. Sometimes referee to a “Fuck you money”; the amount where you can quit a job you are unhappy with without anything immediately lined up.

DINK

• Dual Income No Kids

• Dual income household without children. If both partners are aligned on goals this can be a way to drastically accelerate FIRE timelines. In a place like San Francisco, being able to split a 1 bedroom apartment alone in addition to all of the other economies of scale that comes with two breadwinners.

SINK

• Single Income No Kids

• Single income household with a single individual or when one of the two individuals isn’t earning income. Can be anything from school, lifestyle, disability, or just having all the needs met by the one income. Can also be part of a FIRE strategy for a couple where they stagger the retirement point. It could also be the case one partner really loves their job.

HENRY

• High Earner Not Rich Yet

• Henry’s are earning awesome money but don’t have the net worth that one would often associate with someone earning that much. Very common in early tech careers, particularly at FAANG+ where a new grad could be pulling in 250k+ after a few years but their net worth is still much more modest. The trajectory is there, just early on the curve.

Lean FIRE

• Lean Financial Independence Retire Early

• Typically associated with spend levels that are fairly minimal and very frugal. Being able to cover your basics but not splurging. Often these individuals have always lived on <$30,000 per year so aim their FIRE numbers on those lower spend levels. Often pulling the retirement trigger with <$700k even with a 60+ year life time left.

Coast FIRE

• Coasting to Financial Independence Retire Early

• This is all about investing heavy early on and then letting your investments “coast” the rest of the way until you FIRE. For example, saving aggressively your first 10 years of working, then for the next 10 years keep working but spending what you earn. Having a number where if you don’t touch the investments for X years it will grow enough without more savings to hit your FIRE goal.

Barista FIRE

• Barista Financial Independence Retire Early

• Saving enough assets to be able to hit your FIRE goals… as long as your are working at least a minimum wage or part time job. So you are not fully FIRE but you saved up enough where you want to dial back and take a more chill job. There is often this romanticized view of working at a coffee shop making lattes every day.

FATFIRE

• Fat Financial Independence Retire Early

• This is all about retiring early from a high income without sacrificing any lifestyle changes. Annual spend >$250k with net worth at FIRE regularly over $5 million and frequently over $10 million. This group isn’t stressing about the cost of experiences, they want to be able to have the best if they want it. First class flights, multiple homes, separate cars dedicated to each of their multiple homes. Anything less is viewed as a significant sacrifice and not worth it, they would rather put in a few more years of work.

Chubby FIRE

• Chubby Financial Independence Retire Early

• The “Chubby” spenders found themselves being called “FAT” by the typical Early Retirement crowd while not being seen as “FAT enough” by the FAT FIRE crowed. They carved out a niche that is all about being able to spend a higher amount on average each year; but not flying first class, owning multiple cars, multiple homes. Spend levels here are more varied by where they live but typically fall between $75-$150k per year.

AvocadoFIRE

• Avocado Financial Independence Retire Early

• This can be viewed as a subset of “Chubby FIRE” but also a more explicit life style choice. It is about being able to eat the millennial mainstay of avocado toast daily. Never thinking twice before ordering guac on your chipotle burrito. You have a higher quality bar for your purchases and life experiences… but are never above gaming credit card points to help fund those experiences.

LCOL

• Low Cost of Living

• Housing is often the single largest expense of any household. Low Cost of Living here refers to cities with generally very affordable housing when compared to other areas. This tends to be more rural, midwest, less fashionably desirable. Housing in the <$250k median range.

• Examples:

  • Akron, Ohio: Median Home Price $150,000

  • Augusta, Georgia: $169,000

  • El Paso, Texas $152,192

MCOL

• Medium Cost of Living

• If LCOL is cities with median housing <$250k, medium cost of living cities are those in the $250-$500k range.

• Examples:

  • Durham, North Carolina: Median Home Price $272,000

  • Nashville, Tennessee: $298,000

  • Portland, Oregon: $420,000

HCOL

• High Cost of Living

• Cities with median housing between $500k-$800k.

• Examples:

  • Los Angeles, California: Median Home Price $710,000

  • Seattle, Washington: $525,000

  • Honolulu, Hawaii: $605,000

VHCOL

• Very High Cost of Living

• This is a category that needed to be created as a few cities were significantly higher than what was commonly thought of as HCOL. Cities with median housing >$800k, you know the top 2 without thinking about it… and most the rest are adjacent to those two.

• Examples:

  • San Francisco, California: Median Home Price: >$1,000,000

  • Manhattan, New York: >$1,000,000

  • San Jose, California: >$900,000

  • International: Monaco, London, Hong Kong

FAANG

• Facebook, Apple, Amazon, Netflix, Google

• An acronym coined by the investment community in 2013 to identify some of the fastest growing large tech companies. The original definition is rather dated but it is very often still used to signal within the FIRE community the higher paying tech jobs. The reality is that there is significant variation between the pay scales at each of these. It is also notably missing Microsoft. Another consideration in 2022 is that there are many non-FAANG companies, particularly VC backed Bay Area companies who have started to very competitively beat many FAANG salaries. Rapid increases in start up valuations and IPO’s have also quickly ballooned the number of non-FAANG tech workers who are earning substantial amounts of income from equity grants.

Looks like this wasn’t actually a short post at all! Hope it helps you better understand all the lingo that gets tossed around and admittedly that I have been bad at always spelling out. I have a few posts in the works for you to be on the look out over the coming weeks. I am aiming to average 2 posts per month, but they may come in bursts as time permits.

FIRE articles I have been reading:

• https://earlyretirementnow.com/2022/01/03/ten-things-the-makers-of-fire-dont-want-you-to-know-swr-series-part-50/

• https://www.mrmoneymustache.com/2022/01/11/inflation-should-we-be-worried/