InvestingFIRE glossary
Defined termCompound Interest
Earning returns on your previous returns. At a 7% real return money doubles every ~10 years — the engine that makes FIRE possible.
Did this definition help?
Related terms
More from Investing
Dollar-Cost Averaging (DCA)
Investing a fixed amount on a regular schedule regardless of price. Smooths out volatility and removes emotion from timing decisions.
Asset Allocation
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.
Real Return
Investment return after subtracting inflation. A 10% nominal return with 3% inflation is a 7% real return — what actually grows your purchasing power.
Treasury Bills (T-Bills)
Short-term U.S. government debt (4-week to 1-year maturities). State-tax-free and one of the safest places to park cash — often beat high-yield savings rates.
Need another definition?
Jump back to the glossary index to search every FIRE term, filter by category, or keep browsing alphabetically.