Money Glossary

Every term defined by the calculation behind it, with the figure our own calculators produce.

Marguerite Deane·Editor-in-chief·Updated 20 Aug 2026

Key takeaways

Every term here is defined by the calculation behind it, with the figure our own calculators produce on our published defaults.
Where a definition is an assumption rather than a fact — a withdrawal rate, a real return — it says so.
Each entry links to the page or calculator where the site actually uses it.

The terms

Alphabetical. The figures come from our published defaults: $48,000 of annual spending, a 4% withdrawal rate, a $90,000 salary over 40 hours and 48 paid weeks, $90,000 already invested, $24,000 saved a year, 7% nominal returns against 2.5% inflation. Change any of them on the calculators and every figure below moves with it.

Coast FIRE

The balance that reaches your target on growth alone, with no further saving. It is a division, not a milestone: your target discounted back by your real return over the years you have left.

Where we use it

Effective hourly rate

Your salary divided by the hours you actually give up, commuting included. On a $90,000 salary at 40 hours over 48 paid weeks it is $46.88; add a 60-minute daily commute and it is $41.67, because the commute adds 240 unpaid hours a year.

Where we use it

Fat FIRE

Financial independence at a spending level well above your current one. Same arithmetic, larger numerator — and on our published defaults, nine more years than standard FIRE.

Where we use it

FI target

Annual spending divided by your withdrawal rate. $48,000 of spending at 4% is $1,200,000. Every other FIRE number is downstream of this one.

Where we use it

Lean FIRE

Financial independence at a deliberately low spending level. $32,000 a year at 4% is $800,000 — a third less than the standard case, because the target moves with the spending.

Where we use it

Real return

Your nominal return adjusted for inflation, as a ratio and not a subtraction: 7% nominal against 2.5% inflation is 4.39%, not 4.5%. Every projection on this site uses the ratio.

Where we use it

Runway

Months you can cover before the money runs out — spendable cash divided by monthly burn, where burn is your costs less any income that continues. It is the number that turns leaving into a date.

Where we use it

Safe withdrawal rate (SWR)

The share of a portfolio you draw each year. It is an assumption, not a fact, and the choice is expensive: moving from 4% to 3.5% raises a $1,200,000 target to $1,371,429.

Where we use it

Savings rate

The share of take-home pay you do not spend. $72,000 take-home against $48,000 of spending is 33.3%. It is the single input that moves a FIRE date most.

Where we use it

Yield drag

What a quoted rate is left as after the platform's cut and inflation. A 4% gross yield less a 10% service fee is 3.6%, and 1.07% once 2.5% inflation is taken off.

Where we use it

Method. Every figure on this page is one division, one multiplication or one loop, run by the same code as the calculators. None of it is an estimate, and none of it is advice.