InvestingFIRE glossary
Defined termReal Return
Investment return after subtracting inflation. A 10% nominal return with 3% inflation is a 7% real return — what actually grows your purchasing power.
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Rebalancing
Periodically selling overweight assets and buying underweight ones to return to your target allocation. Forces "buy low, sell high" mechanically, without prediction.
Compound Interest
Earning returns on your previous returns. At a 7% real return money doubles every ~10 years — the engine that makes FIRE possible.
Tax-Loss Harvesting (TLH)
Selling losing positions in a taxable account to bank the capital loss for tax purposes, then buying a similar (not identical) asset. Can offset up to $3,000/year of ordinary income.
VTI / VTSAX / VOO
Popular Vanguard tickers for the US total stock market (VTI, VTSAX) and S&P 500 (VOO). Commonly held core positions in FIRE portfolios.
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