Unpacking Financial Acronyms

HENRY. FIRE. FIOR.

There are so many financial acronyms to become acquainted within our world! 

But what do these terms mean, and how do they impact your financial journey?

Unpacking HENRY

Many young people are considered “HENRYs” - High Earner Not Rich Yet. Although many couples and individuals who are 40 years old or under are currently stuck with a mountain of student loan debt, they’re actively working their way up in the world. If this is you, the following might be true:

1. You’re earning a high income and are growing in your career.
2. You’re steadily contributing to retirement savings.
3. You have some debt to manage - student loans, a mortgage, or a small amount of consumer debt.
4. You have big goals - education savings for your kids, a vacation home, and travel might come to mind.

Being classified as a “HENRY” is exciting! Although you may not have accumulated a mass amount of wealth, you’re well on your way so long as you build a financial plan and stick with it.

What is FIRE?

People in the HENRYs camp are often drawn to the FIRE movement - Financial Independence, Retire Early. The core of this movement is that millennials are working toward achieving financial independence in order to leave their jobs and pursue early retirement. Some individuals within the FIRE community are focused on achieving financial independence and retiring early at all costs. 

To do this, they keep expenses to a bare minimum and continue to spend minimally when they reach early retirement. However, for many, a more balanced approach may be necessary. 

FIOR

Considering early retirement, but not sure that fully retiring is the best fit for your lifestyle? Many couples or individuals who are nearing retirement age face this predicament. If you’re not sure whether you want to pursue traditional retirement, FIOR may be for you. FIOR stands for Financially Independent, Optional Retirement. If you’re financially “okay” to retire early, but are interested in pursuing an encore career or pivoting in your work life to a career path you’re more passionate about, FIOR may be for you!

Planning for Financial Independence and Defining Your Own Retirement

If you’re a high earner who wants to work toward financial independence and early retirement, you may be drawn to the FIRE movement - and with good reason! It’s appealing to be financially independent, and therefore not tied to a job or career that causes you stress or isn’t something you’re truly passionate about. However, you don’t need to sacrifice everything right now just to live an early retirement on a shoestring budget! 

Instead, it may be wise to work toward financial independence, and then determine what you want to do with the remainder of your career (and your life!) after you don’t need to work. What would you want to do with that level of freedom? 

Achieving financial independence might be the perfect opportunity to pursue consulting, start a business, or pivot to a different career or industry you’re more passionate about. Retiring early means you’ll have years, or possibly decades, to continue growing in your ideal career and living a life you love.

Working With a Professional

Financial independence is an admirable goal, but it can be challenging to achieve on your own. Working with a financial planner can help you to leverage your growing salary to achieve your career and lifestyle goals. Want to learn more? Get in touch with us today! 

Wood Smith Advisors, a woman-owned Registered Investment Advisor (RIA), is a fee-only financial services firm that partners with its clients to simplify their financial lives. We focus on women, entrepreneurs, and individuals with complex financial situations, providing objective and competent advice, education and services to help them develop and build their businesses and reach their financial goals. We can be reached by clicking here.

"Finance Made Simple" blog posts are intended for educational purposes and not for specific advice. Each person’s situation is different. Consult your financial advisor for advice relating to topics discussed.