“If you really think about it, you technically reach FIRE twice in your life. One when you no longer rely on your parents for financial support. And one where your investments give you enough passive income to cover your expenses.”
I heard someone say that once and it made sense.
But here’s why reaching FIRE isn’t good enough.
Let’s say you reached a million dollars a year in investments and your dividends and withdrawals cover your expenses at the 4% rule.
Unless you’re an orphan, I assume at some point you’re going to have aging parents.
And hopefully you’re lucky enough that your parents’ social security income and 401k at retirement are more than enough for them to live on till they die and their life insurance can cover the cost of the funeral etc.
But what if that doesn’t?
What if you have parents who had poor financial habits and never saved anything?
Or, because of certain life circumstances, never had the opportunity nor education to save and invest for their retirement/financial future?
Or they didn’t make much money and social security and 401k can’t save them in their old age?
Your meager $1 million in investments is only good enough to support you but it most likely WON’T be good enough to support your aging and dying parents too.
What are you to do?
I don’t have a concrete answer for you.
But are you starting to see why reaching FIRE for yourself just isn’t good enough?
That’s where FatFIRE comes in.
FatFIRE is no joke.
It assumes you’re going to be having a higher end lifestyle where you’ll need minimum $3-4 million in investments so the dividends can support you.
But what if you keep living your meager FIRE lifestyle pretending you have your $1 million, and use the other $2-3 million to help support your aging parents?
After all, they did support you for 18-25 whole years until you were self-sufficient.
Our moral obligation (for some Asians, that’s your Confucian filial piety) thing to do would be able to support them for a few decades to return the favor.
Plus it’s good karma for yourself and the universe.
I’m not trying to put added stress, anxiety, or pressure on you.
After all, you might be up to your eyeballs in debt and don’t want another person telling you “whatever you’re doing isn’t good enough.”
I’m merely trying to open your eyes and show you that perhaps you should increase the amount you think you’ll need saved in investments.
And if you reach FIRE soon, chances are you can finally quit your job that’s most likely draining you mentally, physically, and spiritually.
With the time you have freed up, you could start looking into ways to make more income along the lines that you actually enjoy.
And you start saving up all of that income to reach FatFIRE status.
So by the time you reach FatFIRE, you have the financial ability to take care of your aging and dying parents with whatever they need (assuming their 401k’s and social securities don’t do that).
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