FatFIRE Frugal

I have never tried to position this as a frugality blog. Though I want to spend reasonably, my path has been full of what some would call luxury expenses. My journey to FI has been more paved with high earnings and less with cutting back. With a little bit of luck and lots of hard work, I have felt privileged to not only reach financial independence, but to do so comfortably. I think I fit most people’s definition of FatFIRE. Whether I am, or not, really is not the purpose of this post. While frugality is not top of the mind for many large W2 wage earners, for those higher on the net worth ladder there is a tendency to be very careful in how money is spent on the bigger purchases. There is such a thing as being fatFIRE frugal.

In order to truly understand this phenomenon, one must realize that these habits are long ingrained before wealth is attained. Not only did these individuals reach high levels of wealth by garnering strong W2 wages, they also knew how to avoid the lure of being all hat but no cattle.

While they may have paid little attention to frugality in their day-to-day life, they were fatFire frugal when it came to the expensive stuff.

House Rich

A main pillar of the fatFIRE frugal lifestyle is that you don’t over buy on your primary residence. Financially savvy people see their home more as an emotional and less financial investment. There is nothing worse than sinking one’s wealth into an asset that often will not grow as fast as the stock market or some business venture or another. They see better avenues for their wealth. Therefore they usually put their residence in the cost column and not the investment.

The fatFIRE frugal practitioner will likely own a nice house. But, they bought it in foreclosure. Or they targeted the cheapest house on the block. And they paid in cash or ditched their mortgage in half the time expected.

Once settled into a house or neighborhood, they tend not to upgrade.

Even if they are the wealthiest on the block.

Just Beater

For the most part, cars are a depreciating asset. So the fatFIRE frugal crowd is very particular in how they spend on this important purchase. They often buy used. It is not uncommon for them to have the oldest, most mangy looking vehicle in the parking lot of the highly successful business that they own.

They also drive their cars into the ground. Odometers race past 150K miles. They tend to buy trusty vehicles and maintain them flawlessly.

Travel Hacking

FatFIRE frugal does not preclude vacationing. In fact, it is a central tenet to enjoying the finer things in life. But they tend to do it in more economical fashion than their not so wealthy counterparts.

They use points and miles every chance they get. The benefit of owning a business or living in a high cost of living area is that you can really run up the credit card with necessary purchases. This allows for a maximization of benefits.

They travel during slow periods when prices are better . They schedule flights during inopportune hours when deals are the best. Because they often own their own businesses, they take advantage of last-minute deals and push the schedule around to accommodate some fun.

Final Thoughts

Their are many of us who reached financial independence not strictly by deploying diverse economic life hacks, but by earning high wages and saving. You won’t see this group stressing over grocery bills or studying ways to cut cell phone costs.

Yet, if you look closely, you will see a world of fatFIRE frugal habits that have boosted their wealth. The concentration on large expenses and modest lifestyle created the path to high net worth.

In other words,

They got the big things right.