What Is Barista FIRE? Experience Early Retirement By Working Part-Time

Much has been published about the FIRE movement in the blogosphere and on YouTube. (FIRE stands for financial independence, retire early.) But did you know that there is more than one way to accomplish FIRE status in your life?

One of them is Barista FIRE, which is something of a hybrid of the concept. And it’s worth knowing about for anyone interested in a lighter version of FIRE.

Table of Contents
  1. What is Barista FIRE?
  2. The Benefits of Barista FIRE
  3. The Disadvantages of Barista FIRE
  4. Barista Fire Pros & Cons
  5. Who is the Ideal Candidate for Barista FIRE?
  6. Bottom Line

What is Barista FIRE?

I like to think of Barista FIRE as early retirement light. In the classic version of FIRE, you come to a point in life where you have a large enough investment portfolio to generate sufficient income to cover your living expenses for the rest of your life.

Succinctly put, the FIRE concept is based on two numbers, 4% and 25.

The 4% refers to the safe withdrawal rate, which suggests that you can withdraw this percentage from your portfolio each year and never run out of money.

If you expect to need $40,000 to reach financial independence and retire early, you’ll need 25 times that amount to support a 4% annual withdrawal rate. $40,000 times 25 means you’ll need a portfolio of $1 million to achieve FIRE. 

Barista FIRE is an option if the $1 million target doesn’t seem realistic (or whatever your number will be). So, why the name “Barista?” It most often refers to the fine folks who do the coffee brewing in coffee shops (like Starbucks) around the world. 

Hence, the term has become a cliché way to describe part-time or gig work, which fits right in with the concept of Barista FIRE. FIRE “Baristas” will largely rely on portfolio income supplemented by some sort of part-time income-generating activity.

For example, let’s say you expect to have a $750,000 portfolio in the next 15 years. At 4%, you’ll be able to withdraw $30,000 per year, which will leave you $10,000 short of income (based upon a $40,000 income goal.)

That’s where Barista FIRE comes into the picture. It requires a source of income to make up the retirement income shortfall.

The Benefits of Barista FIRE

Probably the biggest benefit of Barista FIRE, at least when compared with a full-blown version of FIRE, is that it‘s easier to achieve.

For example, following a traditional FIRE model, a $50,000 income goal will require a portfolio of $1.25 million.

If that will take, say, 25 years, you may decide you don’t have the time or patience. It may not seem possible.

But let’s say you have a part-time venture in mind that can provide an annual income of $25,000. In that case, your portfolio requirement drops by 50%, down to $625,000. It’s a much more achievable goal and one you can reach in a lot less time.

Barista FIRE can also provide other benefits. For example:

It may give you an opportunity to do work that you actually like or love to do but won’t provide enough income to cover all your living expenses.

Certain part-time work arrangements do hold the possibility of getting employer-sponsored health coverage. If you plan to retire from your full-time job before reaching 65 and become eligible for Medicare, Barista FIRE may offer that opportunity.

Maybe you will reach your full FIRE portfolio. You can still use Barista FIRE to enhance your lifestyle or avoid having to completely rely on your investments.

Barista FIRE may enable you to semi-retire much earlier in life than full-blown FIRE will. 

The Disadvantages of Barista FIRE

For many, the most significant disadvantage of Barista FIRE is that you never fully retire. You may end up spending a lifetime continuing to work in some capacity. While that prospect might not bother everyone, some may view it as defeating the purpose of retirement.

Another potential disadvantage is deciding what type of work you will do. While it may be possible to continue a variation of your current work, certain occupations don’t easily translate into part-time or gig work arrangements.

That may lead you to question what you will be doing when you reach your FIRE target date. You may need to create a new venture from the ground up. That can take years, and there’s no guarantee it will work.

Perhaps the biggest disadvantage is the possibility that your part-time income gig morphs into a full-time venture, just like your current occupation.

FIRE will give you options, but it’s easy to fall back into the pattern where work becomes perceived as an absolute necessity.

Barista Fire Pros & Cons


  • Barista FIRE requires a smaller portfolio, which will be easier to achieve.
  • The smaller portfolio requirement may also enable you to downshift out of your current occupation much earlier in life than the full version of FIRE.
  • Even with part-time work, you’ll have more time than you do right now.
  • Maintaining some sort of work keeps you involved in the community.
  • Continuing to work can alleviate boredom and any sense of worthlessness that can form after retirement.
  • The extra income makes it less likely that you’ll drain your portfolio early.
  • When the financial markets are down, you can rely more heavily on your earned income source and reduce the withdrawals from your portfolio.
  • You can do work you truly love, even if the compensation is low.


  • Barista FIRE may not feel like retirement.
  • If you plan to rely on the income, there will be at least some level of stress accompanying the work.
  • You could fall back into old habits, turning the part-time gig into yet another full-time occupation.
  • You may not be able to maintain a part-time occupation if you develop a serious health condition.

Who is the Ideal Candidate for Barista FIRE?

Barista FIRE will be most appealing to someone who wants to achieve financial independence but not full retirement. There will be an opportunity to work in something you truly enjoy, without the burden of being entirely dependent on the income it provides.

But if there’s an ideal candidate, it’s the person who builds a portfolio large enough to sustain the full version of FIRE but uses the barista version to enhance their lifestyle.

If this is the version of FIRE you want, your portfolio will provide the income needed to cover your basic living expenses. The barista element will provide additional income to cover luxuries in life.

If you won’t need to rely on the income barista FIRE will provide, you’ll be free to choose work that you like. Perhaps you’re an aspiring artist who never made any money from your artwork. That won’t be a problem since you can create your art without any concern for its revenue. And if it does produce an income, that’ll be a bonus.

Bottom Line

Statistically speaking, few people reach millionaire status before turning 50. That speaks volumes about how difficult it is to achieve that level of net worth. But even if you never become a millionaire, you may still be able to enjoy at least a partial life of FIRE. If so, Barista FIRE will be the way to go.

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About Kevin Mercadante

Since 2009, Kevin Mercadante has been sharing his journey from a washed-up mortgage loan officer emerging from the Financial Meltdown as a contract/self-employed "slash worker" – accountant/blogger/freelance blog writer – on OutofYourRut.com. He offers career strategies, from dealing with under-employment to transitioning into self-employment, and provides "Alt-retirement strategies" for the vast majority who won’t retire to the beach as millionaires.

He also frequently discusses the big-picture trends that are putting the squeeze on the bottom 90%, offering workarounds and expense cutting tips to help readers carve out more money to save in their budgets – a.k.a., breaking the "savings barrier" and transitioning from debtor to saver.

Kevin has a B.S. in Accounting and Finance from Montclair State University.

Opinions expressed here are the author's alone, not those of any bank or financial institution. This content has not been reviewed, approved or otherwise endorsed by any of these entities.

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