Barista FIRE with Hybrid Investing and Savings

Barista FIRE with Hybrid Investing and Savings

Are you looking for a fast way out of your career? Are you sick of the rat race and want an exit plan fast?

Or maybe you want to make a major career change but feel like you can’t quit your full-time job.

Barista FIRE (Financial Independence, Retire Early) might be the framework you need to enable you to live the life you choose.

Barista FIRE is the easiest and fastest way to achieve financial freedom and retire early.

Barista Fire movement followers reject the beaten path, carving their own route.

This article will cover the ins and outs of Barista FIRE, what it is, and how you do it. We’ll talk about why it’s such a popular option, especially in the U.S.

Finally, we’ll delve into how it compares to other FIRE movement variations, so even if it’s not for you, you might find a framework for financial independence with early retirement that fits you like a glove.

What is Barista FIRE (Financial Independence Retire Early)?

Barista FIRE is a variation of the Financial Independence, Retire Early (FIRE) movement, but where you don’t fully retire.

You generate passive income streams like you would with regular FIRE, but you supplement this income with a part-time job.

You don’t have to work at a coffee shop, though. The name “Barista FIRE” comes from Starbucks’ health insurance policies for its part-time employees. That might sound a little bit bizarre— we’ll explain this later.

The bottom line is: Any part-time job works with Barista FIRE.

By continuing to work a part-time job, you can drastically lower the age at which you can retire. Also, since you’re only working part-time in your retirement, you’ll have plenty of time to make room for the things that matter to you.

Barista FIRE isn’t true financial independence because you will still rely on your part-time income. But it is the fastest way out of the corporate rat race and offers you a healthy dose more freedom than you’d find in full-time employment.

What is Barista FIRE (Financial Independence Retire Early)

How Does Barista FIRE work?

The first step of Barista FIRE is to calculate your FIRE number— that’s the amount of money you need to save before retiring. We’ll delve into the specifics of how to calculate this further down.

Once you know your goals, you’ll work full-time and sock as much money into a nest egg as possible.

This part of the process is no different from any other FIRE movement. During these years, you must be intentional and disciplined about your money. You need to be patient and keep your long-term goals in mind.

Once you’ve hit your FIRE number, you could drop down to part-time hours if that’s an option. You could also quit your current job altogether and get a lower-paying part-time job.

If you take the latter option, it’s essential to make sure that you choose a part-time job you enjoy. If you hate hospitality and customer service- don’t take a Barista FIRE job as a waiter.

Many choose to pursue a passion that earns enough money but isn’t highly profitable. Others simply choose something low-stress.

They say that by turning a passion into a job, you lose that passion, and you’re just left with a job. But the power of Barista FIRE is that there’s far less pressure on you to do well, making it much easier to stay passionate about whatever you choose.

Once you’re at this point, you can take your foot off the gas for many years. However, you likely want to retire at some point in your life. You don’t want to have to work part-time forever.

For this reason, the Barista FIRE lifestyle is considered by many to be a temporary phase. At some point, you will want to begin building wealth again and eventually retire.

How Does Barista FIRE work

How does Barista FIRE help address health insurance concerns associated with being Financially Independent?

As we mentioned earlier, Barista FIRE is named after Starbucks’ health insurance policies for its part-time workers.

Because of the importance of health insurance in the U.S., many citizens who had the option of retiring early chose instead to quit their day jobs and take part-time jobs at a Starbucks coffee shop.

This is because Starbucks offers health insurance to part-time employees who work an average of 20 hours per week in any rolling 12-week period.

Health insurance is a major expense in the U.S., but without it, you run the risk of moderate health issues seriously impacting your personal finance goals.

Medicare is a form of health insurance available for those over 65, but there’s nothing like it for early retirees. You could purchase health insurance yourself, but that’s not easy. Figuring out what health insurance you need and trying to find a good value option is a lot to wrap your head around.

So much so that many would rather stay in part-time work purely for access to health insurance.

Keep this in mind. This is only a major concern for citizens of countries like the U.S., where there is no universal healthcare and healthcare costs are eye-wateringly high, which makes health insurance a major benefit.

How does Barista FIRE help address health insurance concerns associated with being Financially Independent

How Do You Calculate a Traditional FIRE Number?

First, let’s take a quick look at how regular FIRE works, then we’ll look at the specifics of Barista FIRE.

The easiest and most comprehensive way to calculate a FIRE number is to use a FIRE Age Calculator. Doing so can help you get a truly accurate picture of when you could realistically FIRE.

But there is a simpler way to roughly calculate your FIRE number. This is merely napkin-math, but it can be a handy and quick tool to begin exploring your options.

The foundation this method is built upon is called the 4% rule.

The 4% rule dictates your “safe withdrawal rate.” You can withdraw 4% of your investment portfolio each year after interest accrues and never be at risk of the wealth in your retirement accounts deteriorating.

4% x 25 = 100%

The value of your 4% must be enough money for you to live off. So, if you know your yearly expenses, you can quickly determine what value 100% of your nest egg must have.

Long story short, the typical method for calculating a FIRE number is:

Yearly Expenses x 25 = FIRE Number

You live a lean, frugal lifestyle, and your yearly expenses are $40,000. You need enough money in passive income to match that.


40,000 x 25 = 1,000,000

Your Traditional FIRE number is $1 million.

How Do You Calculate a Traditional FIRE Number

What About Calculating a Barista FIRE Number?

Now with Barista FIRE, it’s not so simple because you also have to factor in the extra income you’ll receive from your part-time job.

Instead, you should use these two simple formulae:

Yearly Expenses – Part-Time Salary = Supplemental Income Needed

Supplemental Income Needed x 25 = Barista FIRE Number

Your Barista FIRE Number is the amount of money you need in invested assets.

Let’s plug in the numbers we looked at earlier, assuming the following:

  • Annual expenses of $40,000
  • A part-time job working 20 hours a week, at the national average living wage of $17.46 per hour. That works out to $18,158 per year.

40,000 – 18,158 = 21,842

21,842 x 25 = 546,050

By practicing Barista FIRE, you’ve reduced your FIRE number from $1 million to $546,050.

Once you hit your Barista FIRE Number, you can withdraw 4% of your investment each year after interest has accrued and never be at risk of your wealth deteriorating.

What About Calculating a Barista FIRE Number

The Benefits of Barista FIRE

The benefits of Barista FIRE are as follows: 

  1. Exit the Corporate Rat Race

For many, early retirement age isn’t as desirable as escaping the rat race. If you’re not invested in another 30-40 years of the career track you’re on, Barista FIRE is the fastest off-ramp.

  1. Stay Active and Social in Early Retirement

If you don’t know what you’d do in traditional retirement, Barista FIRE might be an option to help you keep your mind and body occupied.

Work doesn’t always have to be a grind. It can be a positive and enjoyable experience— especially when you’re not shackled to your current job.

  1. You Can Always Change Your Mind Later

Barista FIRE doesn’t have to be forever. Nothing stops you from rejoining the full-time workforce to pursue a new career or continue building your wealth.

Many who achieve Barista FIRE use it just this way— as an interim off-ramp from their current career so they can explore new passions and hobbies before they build a new career.

  1. Make Time for What Matters Most

Barista FIRE is the fastest way to make room for the things you truly want to be spending your limited time and energy doing.

“When I became a dad, I decided to spend more time with my wife and daughter right now rather than wait until I achieve complete financial independence at some future date,” writes personal finance writer Anders Skagerberg. “So, I quit a six-figure per year job that demanded anywhere from 50 to 60 hours per week. I traded that in for a seasonal position as a tax preparer that would pay significantly less but only came with a 20-hour-per-week minimum and left me in complete control of my schedule.”

  1. Hedge Your Bets Against Market Crashes

When market crashes occur, retirees who depend entirely on passive income from investments are disadvantaged because, in many cases, their entire wealth is affected by the crash.

Under Barista FIRE, the impact of market crashes is much smaller on your wealth. A portion of your income (your part-time salary) is untouched by changes in the market.

The Benefits of Barista FIRE

The Downsides of Barista FIRE

The biggest downside of Barista FIRE is that many don’t consider it “full FIRE” since you still rely on the monthly income from employment. They believe that to truly achieve financial independence. You have to have enough money invested that you’re work-optional. This is a valid criticism, and it’s not the only one. Here are a couple of other things to consider:

  1. Career Growth Stalls

If you’re invested in your career progression, you might find that taking even a temporary break a la Barista FIRE sets you back.

One commonly reported challenge of Barista FIRE practitioners is reintegrating back into the workforce after they retire earlier through Barista FIRE.

  1. You May Miss Peak Earning Years

Barista FIRE is the quickest way to reach financial independence and retire early. As a result, most Barista FIRE practitioners begin their early retirement during the years other FIRE practitioners would consider “peak earning years.”

Suppose Barista FIRE is just a temporary measure for you, and you eventually want to strive for full retirement. In that case, you lose out on some of the power of compound interest by spending any amount of time not contributing to your retirement savings in your earlier years.

Different Types of FIRE

If you’ve read this far and feel that Barista FIRE might not be your solution, worry not. There are many other variations of FIRE that you might find align with your goals more closely. Let’s look at a few:

  1. Lean FIRE

Lean FIRE isn’t as easy to achieve as Barista FIRE, but it is the fastest way to retire early without supplementing your income with part-time work.

Lean FIRE is suitable for annual living expenses of $40,000 or less. Your Lean FIRE number would be between $500.000-800,000.

However, Lean FIRE requires you to have disciplined spending habits and fully embrace frugality. Since your income will be low, you might struggle if unexpected events like market crashes reduce the amount of your wealth you can use.

This makes it a more suitable choice for those on a low income, couples without kids, or those who want to retire as early as 30 years old.

  1. Fat FIRE

Conversely, Fat FIRE is very hard to achieve. Fat FIRE is for those who anticipate annual living expenses of between $100,000 and $200,000 per year.

Fat FIRE is usually between $2.5 million and $5 million. To hit this number, you probably need to be a high earner and have one or two additional income sources.

While it is challenging to achieve FIRE this way, Fat FIRE offers financial security and a luxury lifestyle that other FIRE variations do not.

  1. Spouse FIRE

A very new term in the FIRE community, but an approach that has been around for decades. It was the norm until a few decades ago.

Spouse FIRE refers to families surviving on one partner’s income. This gives the other partner more flexibility and freedom.

This is a popular configuration among those with children, where one partner will opt to be a full-time parent.

  1. Coast FIRE

Coast FIRE is a different and slightly more complex beast than other popular variations of FIRE.

The idea is to front-load your investments, ferreting away as much as possible as quickly as possible. Once you reach a certain figure, you can leverage the power of compound interest to grow your wealth and stop contributing yourself.

For example, assume you have £1 million in investments and earn 5% interest a year. After 20 years, you’d have over $2.7 million, thanks to the power of compound interest. And don’t forget that for the 20-year “coasting” period. You didn’t have to invest a single penny in the stock market.

  1. Slow FIRE

Most FIRE practitioners have lofty goals to retire in 20, 15, or even ten years. In many cases, they’re motivated by their apathy toward their careers.

But not everyone feels that way.

Slow FIRE practitioners are those who do want to be work-optional eventually but aren’t in a rush to get there. “I like to think of Slow FI as the slow-and-steady, more sustainable approach to financial independence,” Anders Skagerberg explains, “while I think of traditional FIRE as an all-out sprint to the finish line.”

Slow FIRE practitioners likely enjoy their jobs and don’t want to retire early. But they know they can still benefit from the wealth-building framework of a FIRE lifestyle.

Remember that even retiring at 50 is much earlier than most people get to retire.

Different Types of FIRE

More Different Types of FIRE

We’ve covered some of the more popular types of FIRE, but many new terms pop up in the community— some more useful than others.

Let’s take a look at just a few to give you an idea of the other paths some people choose to take:

Obese FIRE

Sometimes called moFIRE (morbidly obese FIRE) refers to those with higher monthly expenses than Fat FIRE would cover.

Obese FIRE practitioners typically have annual expenses of $200,000 to $400,000. This is a lot more money than other types of FIRE, and it’s only realistic for a few.

moFIRE isn’t feasible if you have a regular job— you need to be a high earner. You probably also need additional income from another source.

For example, renting out property is a common way for moFIRE practitioners to generate extra money.

Flamingo FIRE

Flamingo FIRE takes key lessons from both Coast FIRE and Barista FIRE.

The idea is to calculate the number you need to achieve Traditional FIRE, save half of it, then semi-retire but not withdraw from your nest egg.

If you can cover your annual expenses in semi-retirement without tapping into your nest egg, you can let your money grow in the background, which makes full retirement an option for you in the future without you having to put in any more work.

Also, remember that keeping a day job makes it easier to manage the cost of health care.


Baby FIRE is very similar to Spouse FIRE, just built around the specific use case of planning to have a baby. Baby FIRE helps you plan for the extra cost.

The aim is to save and invest enough to cover your expenses during extended maternity leave so that you, your partner, or both of you can have a significant amount of time off work while your children are young.

More Different Types of FIRE

Jobs suited for Barista FIRE

Any part-time job can work with Barista FIRE, but depending on your needs, you might prefer certain jobs over others. Here’s a list of common choices among Barista FIRE practitioners:

Freelance Remote Jobs

  • Graphic design
  • Writing
  • SEO
  • Web-design
  • Software Development

Jobs where you earn tips

  • Barista
  • Waiter/Waitress
  • Bartender

Gig Economy jobs

  • Ride-sharing
  • Food delivery


  • Creating and selling crafts on sites like Etsy
  • Running your own business

Jobs suited for Barista FIRE

Wake Up and Smell the Coffee with Barista FIRE

Barista FIRE is the fastest way to achieve financial independence and retire early (FIRE). It’s the fastest off-ramp from the conventional career path. If it sounds like the lifestyle that might suit you, consider taking your first steps by running the numbers in our FIRE Age Calculator.

Even if you don’t want to Barista FIRE, it still makes sense to build towards a Barista FIRE number because it’s the lowest and easiest-to-reach of all popular FIRE numbers.

If your ultimate goal is to pursue Traditional FIRE, it’s worth having your Barista FIRE number figured out as a milestone. It will help make your Traditional FIRE number a little less daunting.

And it will give you an option that you didn’t know you wanted in a few years— you might not be the same person you are now.

A little retirement planning can go a long way, so don’t wait. A life you’re happy to wake up to might be closer than you think.

Learn How to Retire Early