What is Lean FIRE?

The FIRE (Financial Independence and Retire Early) movement is growing rapidly in recent years. The original and most traditional version of this is Lean FIRE.

Lean FIRE is generally considered the extreme version of the FIRE movement. It is suited to a minimalist who is comfortable living on a lower income and retirement number while sacrificing a few guilty pleasures to have financial freedom and retire earlier than most.

It is suited for those who can live on a lower than average annual spending.

Lean FIRE Principles

Lean FIRE can be achieved quicker than other methods of FIRE such as, Barista FIRE and Fat FIRE. It is easier to achieve your retirement age due to the lower investment portfolio required.

Think of it as the first goal towards financial freedom.

Typically, a Lean FIRE retirement would target an annual spending in the range of $40,000 to $60,000 AUD. Basically, covering your living expenses with a few small splurges here and there.

To live lean doesn’t mean you need to live an unhappy life though. There are plenty of stories of people living happy and fulfilling lives on $50,000 or less. Thinking back to my University days, I was living at home and earning maybe $200-250 a week (less than $15,000 a year) but I was completely content and happy.

Due to this limited salary I was spending money only on the things that bought me the most joy and finding things to do for cheap or free. Fast forward a few years and I am earning 10 – 15x the amount I had before, but I am definitely not 10 times happier.

The key is to understand what makes you happy and spend money doing those things and cut out all the things costing you money that bring you little to no joy.

“Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like”

Will Rogers

The FIRE movement is about reducing waste, focusing on what is important in life and ultimately retiring early to live the life you want, doing the things you want to do.


  • Lean FIRE can be achieved quicker than other styles
  • Teaches you the value of frugality


  • Due to the lower spending levels you need to watch your expenses and can’t afford a heap of luxury items
  • Can be risky to retire too early with a lower savings, especially during a market downturn
  • Harder to achieve with a family

How much do you need to save for Lean FIRE?

This will vary based on peoples circumstances and what they consider to be their “Lean” FIRE number. You can quickly work out how much you need to save for retirement using the 25x Rule.

If you can retire on $40,000 a year you will need roughly $1,000,000 in assets based on the 25 x Rule.

This is a very simple method to get a rough idea but doesn’t factor in all the variables. If you want to do a more in depth but also simple calculation I recommend using the Engaging Data calculator.

How to get lean

An important aspect of FIRE in general, but more specifically to Lean FIRE, is that you need to be able to live off less and be minimalistic and frugal. Kristy Chen talks about this in detail in her book Quit like a Millionaire and offers some examples of how you could do this below:

  • Eliminate costs that don’t make you happy (e.g. subscriptions and bank fees)
  • Eliminate baseline costs that hurt a little in the short term, but in the long term you will get used to (e.g. buying food out and gym memberships)
  • Reduce expensive things you own that cost a lot (e.g. cars and housing)
  • Add in splurges (e.g. new surfboard and travel)

If you can do a combination, or all of the above points then these little savings will help to reduce your overall expenses, both helping you reach your FIRE goal earlier while also learning to be more frugal and smart with your money.

When you can spend less money every month, you will require less money to fund your lifestyle or your basic needs during your retirement period. If you can reduce the total basic needs you have every month, you will have more money to save to build your retirement portfolio.

Are you aiming for Lean FIRE or already achieved it? Let me know in the comments below!

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