Glossary
This is a growing list of commonly used terms in our community. Please suggest more terms not listed here!
Boglehead = A follower of John C. Bogle’s financial philosophies and investing strategies.
COL = Cost of Living
LCOL/MCOL/HCOL/VHCOL = Low/Med/High/VeryHigh Cost of Living
DCA = Dollar Cost Averaging; the strategy of investing money into the market over many regular intervals of time (as opposed to lump sum investing).
DINK = Double Income No Kids
FI = Financial Independence; the ability to live off savings and pay living expenses without needing to be employed.
FIRE = Financial Independence & Retire Early
Coast FIRE = having enough money already invested so that it is not necessary to invest more to achieve FI at the desired retirement age.
Barista FIRE = having enough money to retire at the desired retirement age and also getting a part-time job for additional income and health insurance.
Lean FIRE = achieving FIRE without having much safety nets for luxuries/children/major health costs during retirement, usually only spending on necessities such as housing, food, and transportation.
Fat FIRE = achieving FIRE with the ability to cover unexpected expenses during retirement while living in equal or greater lifestyle as before retirement.
HENRY = High Earner, Not Rich Yet
HYSA = High Yield Savings Account
NW = Net Worth
PITI = Principal + Interest + Taxes + Insurance
PMI = Private Mortgage Insurance
SWR = Safe Withdrawal Rate
- CAGR - Compound Annual Growth Rate; basically the average growth rate that gets you from the start to the end of a period; better than a simple average because a simple average will give the wrong number depending on sequence of returns
- MM - Money Market (fund/account); alternative to HYSA, is SIPC insured instead of FDIC insured
- FDIC - Federal Deposit Insurance Corporation; insurance protection for assets at a bank; usually $250k per SSN per bank
- SIPC - Securities Investor Protection Corporation; like FDIC, but for brokerage accounts; the main difference is that FDIC insurance claims are automatically filed, whereas SIPC requires the account holder to file a claim; however, due to the nature of brokerages, it’s not as big of a risk in many cases since the brokerage doesn’t usually hold your money, a fund does
- MMM - Mr. Money Mustache; prominent FIRE blog focusing on frugality
- SORR - Sequence of Returns Risk; risk of poor returns (e.g. a market crash) early in retirement that derails your retirement plans
