🪜 The 9 Levels of Financial Independence

FIRE BTC #56 - A practical framework for measuring your path to FIRE

Through the course of FIRE BTC, I’ve focused very broadly on “pursuing FIRE” or “reaching FIRE,” which gives the impression that the journey is like an on/off switch.

And the traditional FIRE community talks about different “types” of FIRE: Lean FIRE, Coast FIRE, Barista FIRE, Fat FIRE. It’s usually presented like a menu of lifestyle choices, as if you simply pick the flavor that feels right to you.

I find these types interesting because they create space to imagine different ways of living and open up a range of possibilities not previously considered.

But neither the on/off framing nor the FIRE types is adequate for me.

The categories didn’t come from a clean, unified model. They emerged piecemeal over time, with blurry definitions and a lot of overlap. Depending on who you ask, Barista FIRE might come before Lean FIRE, or Coast FIRE might sit somewhere off to the side as its own thing entirely. None of it helps you understand where you actually stand financially or what your next step should be.

And the on/off approach doesn’t give enough credit to the progress made over the journey toward financial independence.

So I want to think about it differently by blending these concepts together: imagine these “types” as milestones on a spectrum of increasing expense coverage.

As your savings portfolio grows, it naturally unlocks different forms of autonomy. You move from fragility to stability, from stability to flexibility, from flexibility to full independence and, eventually, abundance. It’s not a menu of different lifestyles, but a progression.

This week, I want to give you a cleaner, more intuitive way to understand FIRE: The FIRE Spectrum — a set of levels that map directly to how much of your life your portfolio can support.

Hopefully this will help you immediately locate where you are today, what’s unlocked for you at this stage, and what your next meaningful milestone looks like.

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🏷️ The traditional FIRE types

Before introducing a new framework, it’s worth grounding ourselves in what the traditional FIRE community means by Lean FIRE, Barista FIRE, Coast FIRE, and Fat FIRE. These terms show up frequently, but their definitions vary depending on who you’re reading. Let’s simplify them.

Lean FIRE is the idea of reaching financial independence with a very low-cost lifestyle. The portfolio is large enough to support you indefinitely, but only at a lean level of spending—minimalism, frugality, geo-arbitrage, or a combination of all three. It’s full retirement, but with intentional constraints.

Barista FIRE sits between needing a full salary and being able to retire outright. Your investments cover part of your expenses—maybe 40% to 60%—and the rest comes from flexible, lower-stress work. The original idea was a job like working as a barista (hence the name), often because of access to health insurance or benefits, but it really applies to any kind of part-time or “light” work that closes the gap between what’s covered by your portfolio and your actual expenses.

Coast FIRE means you have enough invested today that, without contributing another dollar, your portfolio will naturally grow to your full retirement target by a certain age. Traditionally this has been framed around reaching full FIRE at 60 or 65. You still need to work to pay your current bills, but you no longer need to save for retirement at all. In practice, people interpret it differently, which is part of the challenge.

Fat FIRE is the highest-cost version of financial independence: the ability to retire with a comfortable or even luxurious lifestyle. You have enough to spend well above a basic or frugal budget, with plenty of room for travel, upgrades, and bigger life choices without jeopardizing long-term sustainability.

These categories do a decent job of describing broad approaches to FIRE, but they’re not structured as a progression. They float around independently, and they are treated like mutually exclusive lifestyle choices.

But I’m the kind of guy who likes structure. I think we can transform these styles into a more objective progression.

And that’s the idea behind the FIRE Spectrum.

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📈 The FIRE Spectrum

Once you strip away the lifestyle labels, your FIRE journey can be tracked by one variable: how much of your annual expenses your savings portfolio can currently support.

That single number tells you a lot about your level of stability, your degree of optionality, how close you are to full independence, and what doors are beginning to open for you.

With that in mind, The FIRE Spectrum is a set of well-defined levels, each represented by a multiple of annual expenses and anchored by the 4% rule. The goal is to gain a clear understanding of what your current financial position unlocks for you and help you track your progress to financial independence.

In case you haven’t read it yet, here are my thoughts on the 4% rule and whether it applies to bitcoin.

Now, let’s walk through the spectrum from bottom to top.