A fuller guide to this term is on the way. In the meantime, the related terms below explain the ideas around it.
Related MoneyPedia terms
- FIRE (Financial Independence, Retire Early)A movement focused on saving and investing aggressively so you can stop working decades earlier than the traditional retirement age.
- Passive IncomeMoney you earn with little ongoing effort, such as from investments, rentals, or royalties, rather than from active work.
- Savings RateThe share of your income you set aside rather than spend, usually shown as a percentage of your take-home pay.
- Net WorthWhat you own minus what you owe — the clearest scorecard of your financial progress.
- Financial FreedomHaving enough wealth and income that money no longer limits the choices you make about work and life.
- Safe Withdrawal RateThe percentage of your savings you can spend each year with low risk of running out of money during retirement.
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Plain-English education — not personalized legal, tax, or investment advice.