FIRE Basics
What does the acronym FIRE stand for in personal finance?
What is Financial Independence Retire Early?
This type of tax-advantaged account is commonly used to invest for retirement in the U.S.
What is an IRA?
This budgeting method assigns every dollar a specific job.
What is zero-based budgeting?
This tax-advantaged retirement account is offered by many U.S. employers, including JPMorgan, and often includes a matching contribution.
What is a 401(k)?
This lifestyle, popular in FIRE circles, focuses on optimizing life for happiness, not just wealth.
What is minimalism?
The FIRE movement emphasizes a high __ rate to reach financial independence faster.
What is savings?
The total stock market index fund championed by FIRE enthusiasts is often referred to by this ticker symbol.
What is VTSAX?
FIRE followers often track this ratio, which is calculated as savings divided by gross income.
What is the savings rate?
A Roth IRA allows your investments to grow tax-free as long as you withdraw funds after this age
What is 59 ½?
This type of real estate strategy, where you live in part of a property and rent out the rest, is popular in FIRE.
What is house hacking?
The 4% rule is commonly used in FIRE to determine this.
What is the safe annual withdrawal rate?
The Bogleheads investment philosophy, commonly followed in FIRE, is named after this investing legend.
Who is John Bogle?
This financial rule suggests you should save at least 20% of your income.
What is the 50/30/20 rule?
The tax bracket system in the U.S. is this type of system, meaning different portions of income are taxed at different rates.
What is progressive taxation?
This geoarbitrage strategy involves moving to a lower-cost country while earning in a stronger currency.
What is international geoarbitrage?
The formula to calculate your FIRE number is your annual expenses multiplied by this number.
What is 25?
The sequence of returns risk is most critical during this phase of retirement.
What is the early years of withdrawal?
This budgeting app, abbreviated YNAB, helps users give every dollar a job.
What is You Need a Budget?
What is the level of 401k match that JPMorgan employees with 1 or more years of service receive?
What is 5%?
This health savings vehicle is often referred to as a stealth retirement account due to its triple tax benefits.
What is an HSA (Health Savings Account)?
This method of FIRE focuses on extreme frugality and cutting costs to the bare minimum.
What is Lean FIRE?
A backdoor Roth conversion allows high-income individuals to contribute to this type of account.
What is a Roth IRA conversion?
The Latte Factor, coined by David Bach, suggests that small daily expenses can have a big impact on this.
What is long-term wealth?
The 457(b) plan is a special tax-advantaged retirement account available to employees of these types of organizations.
What are government and non-profit organizations?
This FIRE strategy involves slowly reducing work hours instead of abruptly quitting.
What is Barista FIRE?