- Debt Snowball
A debt reduction strategy, whereby one who owes on more than one account pays off the accounts starting with the smallest balances first, while paying the minimum payment on larger debts.
- E-Fund: Emergency Fund
Money set aside to handle unexpected expenses not normally budgeted for in daily life. The consensuses opinion on the amount ranges from three months to one year of funds for expenses saved in this fund. This should be separated from your normal living expenses.
- ER: Early Retirement
This is the idea of retiring before the traditional sixty five to sixty seven age for full retirement with Social Security. This can also apply to drawing on retirement accounts or pension plans earlier than age 59 1/2.
- ERE: Early Retirement Extreme
The extreme early retirement group are those who have typically saved a majority of their income for many years. It is not uncommon to see people in their twenties and thirties that have achieved this goal.
- FI: Financial Independence
The point where your sustainable income is more than your actual living expenses.
- FIRE: Financial Independence and Retiring Early
This is a combined term to indicate that you have enough income to cover your living expenses and you quite working for an employer.
- Google Law Professor © :
A Google Law Professor © is someone who thinks they are a legal expert, but in actuality only have a cursory and often inaccurate grasp on the law because their entire knowledge of it comes from a quick couple of Google searches that brought up results posted by random Internet users who got their information from the same Google search. Attributed to ARB.
- Hedonistic treadmill
During the late 1990s, the concept was modified by Michael Eysenck, a British psychologist, to become the current “hedonic treadmill theory” which compares the pursuit of happiness to a person on a treadmill, who has to keep walking just to stay in the same place.
- Lifestyle Creep
A situation where people’s lifestyle or standard of living improves as their discretionary income rises either through an increase in income or decrease in costs. As lifestyle creep occurs, and more money is spent on lifestyle, former luxuries are now considered necessities.
- OPM: Other People’s Money
The use of debt or credit to leverage purchases of investments, thereby earning a higher percentage of return on the actual cash investment. This is a key secret to buying rental properties and building net worth through due diligence and patience.
- PF: Personal Finance
The study of finances and how they impact your household living expenses. This typically cover topics such as budgeting, saving, retirement planning, and vacationing.
- ROI: Return on Investment
A typical business term that measures how quickly your investment (money spent) will pay back the full cost of the purchase.
- YOLO: You only live once
The idea that because life is short we better live all our dreams now, while we can.
- YOLO Bender: You only live once bender
A term coined by Luke @ FinanciallyFitz to describe someone who goes to the extreme temporarily in living a YOLO lifestyle.