How your portfolio is split across asset classes (stocks, bonds, cash, real estate). The single biggest driver of long-term returns and volatility — pick one you can actually stomach in a crash.
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Related terms
Earning returns on your previous returns. At a 7% real return money doubles every ~10 years — the engine that makes FIRE possible.
Popular Vanguard tickers for the US total stock market (VTI, VTSAX) and S&P 500 (VOO). Commonly held core positions in FIRE portfolios.
Investment return after subtracting inflation. A 10% nominal return with 3% inflation is a 7% real return — what actually grows your purchasing power.
A fund that passively tracks a market index (like the S&P 500). Low fees, broad diversification, and the core holding for most FIRE investors.
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