Compound InterestInterest calculated on both the initial principal and the accumulated interest from previous periods, creating exponential growth over time.FIREFinancial Independence, Retire Early — a movement focused on saving and investing aggressively so that work becomes optional.FI NumberThe portfolio value needed to fund your retirement spending indefinitely. Calculated as Annual Spending ÷ Safe Withdrawal Rate.Safe Withdrawal Rate (SWR)The percentage of your portfolio you can withdraw each year in retirement with a low probability of running out of money. The most common guideline is 4%.4% RuleA guideline from the Trinity Study suggesting that withdrawing 4% of your portfolio annually (adjusted for inflation) has historically sustained portfolios over 30-year periods.CAGRCompound Annual Growth Rate — the mean annual growth rate of an investment over a specified period longer than one year, smoothing out volatility.401(k)An employer-sponsored retirement savings plan that allows employees to make pre-tax contributions. Many employers offer matching contributions.Roth IRAAn individual retirement account funded with after-tax dollars. Qualified withdrawals (including growth) are tax-free in retirement.Traditional IRAAn individual retirement account where contributions may be tax-deductible. Withdrawals in retirement are taxed as ordinary income.HSAHealth Savings Account — a triple tax-advantaged account for healthcare expenses. Contributions are tax-deductible, growth is tax-free, and qualified withdrawals are tax-free.Expense RatioThe annual fee charged by mutual funds or ETFs, expressed as a percentage of assets. Lower expense ratios (e.g., 0.03-0.20%) preserve more of your returns.Index FundA mutual fund or ETF designed to track a specific market index (like the S&P 500) rather than trying to beat the market through active management.Dollar Cost Averaging (DCA)Investing a fixed amount at regular intervals regardless of market conditions, which naturally buys more shares when prices are low and fewer when prices are high.InflationThe rate at which the general level of prices for goods and services rises over time, reducing purchasing power. The US Federal Reserve targets approximately 2% annual inflation.Nominal ReturnThe total return on an investment before adjusting for inflation. For example, a 10% nominal return with 2.5% inflation yields a ~7.5% real return.Real ReturnThe return on an investment after subtracting the effects of inflation, reflecting actual purchasing power gained.Asset AllocationThe distribution of investments across different asset classes (stocks, bonds, cash, real estate) to balance risk and potential return.Lean FIREAchieving financial independence with minimal expenses (typically under $40,000/year). Requires less savings but demands a frugal lifestyle.Fat FIREAchieving financial independence with a higher standard of living (typically $100,000+/year). Requires a larger portfolio.Coast FIREHaving saved enough that compound growth alone will fund retirement at a traditional age, freeing you to earn only enough to cover current expenses.Barista FIREPartial financial independence supplemented with part-time work, often chosen for healthcare benefits or social engagement.Sequence-of-Returns RiskThe risk that experiencing poor market returns early in retirement will deplete your portfolio faster than average returns would suggest.Trinity StudyA 1998 academic study (Cooley, Hubbard, Walz) analyzing sustainable withdrawal rates from retirement portfolios. The foundation of the 4% rule.Net WorthTotal assets (investments, property, cash) minus total liabilities (debts, mortgages, loans). A key metric for tracking financial progress.Savings RateThe percentage of your income that you save and invest. In FIRE planning, a higher savings rate dramatically reduces the time to financial independence.