Lexicon

Defined By FIRE

  • 401k/403b = employer-based retirement savings account
  • 457 = it is a number, the one after 456. A 401k on steroids or a deferred compensation account
  • 72t/SEPP = when you want to eat the ice cream before it melts, substantially equal periodic payments.
  • AF = Annual Fee on a credit card, not the other meaning
  • AGI = Adjusted Gross Income = income less tax deductions
  • Arbitrage = the simultaneous buying and selling of securities, currency, or commodities in different markets or in derivative forms in order to take advantage of differing prices for the same asset.
  • Asset Class = type or category of investment. The big three are paper (stocks), real estate (like your house), and business (like if you owned Apple, BTW if you do, you are already FI)
  • Barney Fife = PTF…ug, you are such a millennial do you really not know who that is? Do yourself a favor, squeeze your fingers very tightly into your palm and run into it as fast as you can with your face.
  • Big ERN = the man, the myth, the legend from  earlyretirementnow.com. One day I am going to go head-to-head in a full-frontal retirement optimization-off-a-ton-ism with this juggernaut. It will be like Garry Kasparov meets Deep Blue.
  • Blogoholics = millennials that have a healthy reading addiction and recognize the world wide web offers endless free-content to design any lifestyle you can imagine.
  • BRRR = Buy Renovate Rent Refinance. It is a real estate investment optimization strategy to maximize the leverage of yo’ hard-earned dollars.
  • Buffer assets = assets outside of your portfolio, not correlated with your portfolio. ex. cash, reverse mortgage, whole life insurance policy, etc.
  • BWS = broke wage slaves.
  • Car = a mechanical bank account that you put thousands into and one day can get hundreds back out of. If you are the kind of person that can enjoy a guttural, maniacal laugh while shoveling piles of cash into a blast furnace I recommend you collect several of these cars and shiny new ones too!
  • Centurion’s = people that have lived an entire century (those over the age of 100.) If they talk you should listen.
  • CPC = Cost Per Click
  • CPI = Consumer Price Index
  • DCHSA = Dependent Care Health Savings Account
  • DINK – Dual Income No Kids
  • Discipline = Freedom
  • Dividend = the distribution of some of a company’s earnings to a class of its shareholders, as determined by the company’s board of directors. Common shareholders of dividend-paying companies are typically eligible as long as they own the stock before the ex-dividend date.
  • EF = Emergency Fund
  • Effective tax rate = the actual number of scoops Uncle Sam steals off your ice-cream cone or the combined percentage of tax you pay on your income. Also known as total tax rate or combined tax rate. Example: if you make the US median household income is $59,039 (the median American income in 2016) with the Trumpolicious Tax brackets of 2018 that means 22% federal tax + 7.65% FICA + 7% State (you state may be slightly different)  your effective tax rate is 38.65%…ouch, right in the face. The average taxation rate for a corporation or individual. The effective tax rate for individuals is the average rate at which their earned income is taxed, and the effective tax rate for a corporation is the average rate at which its pre-tax profits are taxed.
  • ER = expense ratio, the reciprocal of savings rate.
  • ERE = EarlyRetirementExtreme.com
  • ETF = exchange-traded fund. This mutual fund with better tax options.
  • FI = Financial Independence
  • FICA = Federal Insurance Contributions Act, FICA tax is the money that is taken out of workers’ paychecks to pay older Americans their Social Security retirement and Medicare (Hospital Insurance) benefits. It is a mandatory payroll deduction.
  • FIlosopher = a philosopher, a regular Mustachian FI Guy or Gal. Those that practice FI/RE. A FIRE walker. Someone that practices “stealth wealth.”
  • Financial Hack Stacking = is an advance financial independence strategy to use multiple dynamic variables to compound the results of your effort. Multiple individual financial hacks (financial short cuts) compound together to be synergistically more effective than the independent constituent components. In other words, you effectively save or produce more wealth by combining individual strategies together.
  • FinCon = it’s Comicon for financial bloggers, it stands for Financial Conference, get it?
  • FI/RE or FIRE = Financially Independence Retire Early
  • Fire Breathers = Apostles of FI, People that create proselyte in FIRE.
  • Fire walker = see Filosopher.
  • Forensic accounting = going back into your financial history to uncover where the money went.
  • FSA = Flexible Spending Account. Use it or lose it.
  • FU = Freedom Unlimited Fund, and other things. It is the amount of money needed to not take crap from anyone at the office with financial confidence that you will be just fine.
  • FWOTW = Frugal Win Of The Week
  • GC = Gift Card
  • Geo-arbitrage = moving to a new location to take advantage of the lower cost of living and/or lower tax rates.
  • Geo-scholastic-arbitrage = taking advantage of different university cost in different locations to get the most prestigious degree at the lowest tuition cost
  • Habitudes = habits + attitudes, gosh even Barney Fife got that one.
  • Happiness = Wealth + simplicity + health + happiness + freedom + time + Generosity.
  • HCOL = High Cost Of Living
  • HENRY = High Earner Not Rich Yet
  • HELOC = Home Equity Line of Credit
  • HRA = Health Reimbursement Arrangement
  • HSA = Health Savings Account
  • InFIdels = Yes I am hijacking that term back from the Jihadists. InFIdels are Kool-Aid drinkers that are plugged into the matrix. They often chose to wait until their 60’s to retire.
  • Investor Policy Statement – Traditionally an investment policy statement (IPS) is a document drafted between a portfolio manager and a client that outlines general rules for the management of funds. This statement provides the general investment goals and objectives of a client and describes the strategies that the manager should employ to meet these objectives. Specific information on matters such as asset allocation, risk tolerance, and liquidity requirements are included in an investment policy statement. However, for those that manage their own portfolios this can be a premeditated strategy to be fallowed in any economic conditions to stave off the wrong emotional behavior when fear or greed pollute the most rational reaction to market conditions. This is a way to proverbially tie Ulysses to the Mast.
  • Kool-Aid drinkers = people that drone through life with the mindset that they need to work in corporate America their entire able-bodied and healthy years.
  • LCOL = Low Cost Of Living
  • Life = adapting to things that don’t go according to plan.
  • Luck = Preparation + Education + Attitude + Opportunity + Taking Action
  • MAGI = Modified Adjusted Gross Income
  • Matrix = Corporate America
  • MMM = Mr. Money Mustache
  • MS = Manufactured Spend
  • Passive income is income resulting from cash flow received on a regular basis, requiring minimal to no effort by the recipient to maintain it.
  • Pod-a-holics = WRT the content consumption ratio these millennials are like Mario’s when he eats the mushroom and levels up. blogoholics that discovered the 2x button and like to binge on intellectual life benefiting content.
  • Progressional = Progress Journal
  • Pseudonym = a fictitious name, especially one used by an author.
  • Pyros = People that live playing with FIRE.
  • RE = Retire Early
  • Refined = the enlightened, the Mustachians, Gentiles, Lords and Ladies, the unplugged. Those that hear in high fidelity, that see in HD full color. Those that have cheated a system who’s tax code could not conceive of a class of upright walking hominids that are capable of forgoing greedy consumerism to live within their means on a greater than 50% Savings rate, reject consumeristic lifestyle, get the tax rate in the single digits and not buy stuff they don’t need with money they don’t have to impress people they don’t like. …American doll…. eat my 25₵, flee market Babie’s heart out.
  • RIRA = Roth IRA
  • RMD = Required Minimum Distribution
  • ROI = Return On Investment
  • ROR = Rate of Return.
  • Roth = post-tax retirement vehicle/account
  • Security = Securities most often refers to stocks and bonds which are certificates that are sold to raise money for starting a new company or for expanding an existing company. To be more precise the term “security” refers to a fungible, negotiable financial instrument that holds some type of monetary value. It represents an ownership position in a publicly-traded corporation via stock; a creditor relationship with a governmental body or a corporation represented by owning that entity’s bond; or rights to ownership as represented by an option.
  • SEP = Simplified Employee Pension
  • Sequence-of-Returns Gains, or sequence gains, analyzes the order in which your investment returns occur. When gains are early on in portfolio growth they have a dramatic effect on the lifetime growth of the portfolio due to the exponential growth of compound interest.
  • Sequence-of-Returns Risk, or Sequence risk, analyzes the order in which your investment returns occur. It affects you when you are periodically adding or withdrawing money from your investments. Timing can have a significant impact on the long term performance and balance of a portfolio. In retirement, it can mean that you earn a much lower internal rate of return than what you expected.
  • SFR = Single Family Residence
  • SINK – Sink Income No Kids
  • SWR = Safe Withdrawal Rate = aka 4% rule
  • Tax Optimization = gaming taxes. let your neighbors pay those not you, cuz you are no inFIdel. “Wait, what? You mean I have a choice not to pay them?”…that is correct, you have just leveled up.
  • TIRA = Traditional IRA
  • UMGA = The Uniform Gifts to Minors Act (UGMA), developed in 1956 and revised in 1966, allows individuals to give or transfer assets to underage beneficiaries—traditionally, parents and their children, respectively. The amount is free of gift tax, up to a certain amount. The assets are usually placed in UGMA accounts on behalf of minors, eliminating the need for an attorney to establish a special trust fund. UGMA funds are also subject to special tax treatment.
  • UTMA = The Uniform Transfers to Minors Act (UTMA) allows a minor to receive gifts—such as money, patents, royalties, real estate, and fine art—without the aid of a guardian or trustee. A UTMA account allows the gift giver or an appointed custodian to manage the minor’s account until the latter is of age. UTMA also shields the minor from tax consequences on the gifts, up to a specified value.
  • VUCA = Volatile Uncertain Complex Ambiguous
  • YOY = year over year

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