Glossary
FIRE & investing terms, in plain language
The same definitions that power the (i) tooltips across Fire Finance — short, honest, and with an example where one helps.
- Dynamic SIP
- When enabled, your monthly SIP grows alongside your salary at the salary-growth rate. When off, the SIP stays flat in nominal terms.
- Emergency Fund
- Liquid cash covering 3–12 months of essential expenses. Aim for 6 months if your income is steady, 12 if it is variable. Sits in a savings or liquid fund — not invested.
- Expected Return
- The average annual rate of return you assume your investments will earn. Equity averages 10–12%, debt 6–7%, gold ~8%. Pre-retirement plans are usually more aggressive than post-retirement.
- Expense Growth
- How fast your expenses grow over time. Often higher than headline inflation because lifestyle creep (better housing, more travel, kids) outpaces price inflation alone.
- FIRE
- Financial Independence, Retire Early. The target portfolio size at which investment income alone covers your annual expenses, so working becomes optional.Example: Most FIRE plans aim for 25× annual expenses (the "4% rule").
- FIRE Target Corpus
- The portfolio size that, withdrawn at a safe rate, covers your post-retirement expenses for life. Defaults to 25× annual expenses; you can override it in the FIRE Calculator.
- Goal Feasibility
- Whether your current income, expenses, and investments can fund all your goals before their target year — and what it would take if not (more SIP, longer horizon, or higher return).
- Inflation
- The yearly rate at which the cost of goods rises. Future expenses grow at this rate even if your lifestyle stays the same. Defaults to 6% (a typical India-blended figure; use 3–4% for the US).
- Lump-sum Investment
- A one-time, fixed amount invested all at once (rather than spread over months). Best when markets are low or when you receive a windfall.
- Real Estate
- Property investments. Tracked here as a value, not an income stream. Treat appreciation conservatively (4–6%) and remember it is illiquid.
- Safe Withdrawal Rate (SWR)
- The percentage of your portfolio you can pull out each year with very low odds of running out over a 30-year retirement. Originated from the Trinity Study.Example: A 4% SWR on a $1M portfolio = $40,000/yr withdrawals.
- Salary Growth
- Your expected annual income increase from raises, promotions, and job changes combined. Realistic ranges: 6–10% in early career, 4–6% mid-career.
- Scenario
- A named snapshot of your full plan (profile, investments, goals). Save several to compare paths side-by-side: "aggressive", "career break in 2028", "house in 2030".
- SIP (Systematic Investment Plan)
- A fixed amount invested at regular intervals (usually monthly) into a fund. Smooths out market timing risk via dollar-cost averaging.
- Step-up SIP
- A SIP that increases by a fixed percentage every year — typically matching your salary growth. Pays the largest contribution in the latest, highest-earning years and dramatically grows your final corpus.Example: A 10% annual step-up on a $1,000 SIP becomes $1,100 next year, $1,210 the year after, and so on.
- Today's Money (Present Value)
- A future amount discounted back to its purchasing power today using your inflation rate. Helps you reason about a "$2M corpus in 2050" in 2026 terms.