FlowTrack glossary — key terms explained

A comprehensive reference of personal finance terms used throughout FlowTrack. Organised alphabetically for quick lookup.

Asset

Anything of financial value that you own. In FlowTrack, assets include bank balances, investments (stocks, mutual funds, bonds), retirement accounts (EPF, NPS, PPF), property, gold, vehicles, and cash. Assets minus liabilities equals your net worth.

CAGR (Compound Annual Growth Rate)

The average annual rate of return on an investment over a specified period, assuming profits are reinvested. For example, if your portfolio grew from ₹1,00,000 to ₹1,61,051 over 5 years, the CAGR is 10%. FlowTrack uses CAGR to show investment performance over time.

Cash Flow

The net amount of money moving in and out of your accounts over a period. Positive cash flow means you earn more than you spend; negative means you are spending more than you earn. FlowTrack calculates this monthly and shows trends over time.

CIBIL Score

A credit score issued by TransUnion CIBIL, ranging from 300 to 900. It is the most widely used credit score in India. A score above 750 is considered good. FlowTrack uses your credit score as one of the 10 health indicators.

Corpus

A lump sum of money accumulated for a specific purpose, most commonly used in the context of retirement. For example, "a retirement corpus of ₹3 crore" means you aim to accumulate ₹3 crore by the time you retire.

Debt Avalanche

A debt repayment strategy where you pay the minimum on all debts and direct extra money toward the debt with the highest interest rate first. Mathematically optimal because it minimises total interest paid. Compare with Debt Snowball.

Debt Ratio (Debt-to-Income Ratio)

The percentage of your monthly take-home income that goes toward EMI payments and debt obligations. A ratio below 30% is considered healthy. Above 50% is a warning sign and most banks will not lend further.

Debt Snowball

A debt repayment strategy where you pay the minimum on all debts and direct extra money toward the smallest debt first. While not mathematically optimal, it provides psychological wins that help you stay motivated. Compare with Debt Avalanche.

Emergency Fund

A reserve of liquid savings set aside to cover unexpected expenses or income loss. Financial advisors generally recommend 3 to 6 months of essential expenses. FlowTrack counts savings accounts, liquid mutual funds, and easily breakable FDs as part of your emergency fund.

EPF (Employee Provident Fund)

A retirement savings scheme mandated by the Indian government for salaried employees. Both the employee and employer contribute 12% of basic salary. The current interest rate is set by the EPFO annually (historically around 8–8.5%). Withdrawals are restricted before retirement with some exceptions.

FIRE Number

FIRE stands for Financial Independence, Retire Early. Your FIRE number is the corpus you need to sustain your annual expenses indefinitely without working. A common formula is 25 times your annual expenses (based on the 4% safe withdrawal rate). For example, if you spend ₹6 lakh per year, your FIRE number is ₹1.5 crore.

Liability

Any financial obligation or debt you owe. In FlowTrack, liabilities include home loans, car loans, personal loans, education loans, credit card outstanding balances, and any other debt. Assets minus liabilities equals your net worth.

Lifestyle Creep (Lifestyle Inflation)

The tendency for expenses to rise as income increases. For example, after a salary hike from ₹80,000 to ₹1,00,000 per month, if your expenses also increase by ₹15,000, only ₹5,000 of the raise actually improves your savings. FlowTrack's lifestyle creep detector watches for this pattern.

Liquidity

How quickly and easily an asset can be converted to cash without significant loss of value. Savings accounts are highly liquid. Property is illiquid (it takes weeks or months to sell). FlowTrack considers liquidity when calculating your emergency fund adequacy.

Net Worth

The total value of everything you own (assets) minus everything you owe (liabilities). It is the single most comprehensive measure of your financial position. Unlike income, net worth captures your accumulated wealth and financial progress over time.

Nominee

A person designated to receive the proceeds of your financial account, insurance policy, or investment in the event of your death. Assigning nominees is not the same as a will, but it significantly speeds up the claims process and prevents your family from going through lengthy legal procedures.

NPS (National Pension System)

A voluntary retirement savings scheme regulated by PFRDA. It offers equity and debt investment options with tax benefits under Sections 80CCD(1), 80CCD(1B), and 80CCD(2). Partial withdrawal is allowed under certain conditions. A portion of the corpus must be used to purchase an annuity at retirement.

PPF (Public Provident Fund)

A long-term savings scheme backed by the Government of India with a 15-year lock-in period (extendable in blocks of 5 years). Interest is tax-free and currently around 7.1% per annum. Contributions up to ₹1.5 lakh per year qualify for tax deduction under Section 80C.

Savings Rate

The percentage of your take-home income that you save or invest each month. If you earn ₹1,00,000 and save ₹25,000, your savings rate is 25%. FlowTrack recommends a savings rate of at least 20% and uses it as one of the 10 health indicators.

SIP (Systematic Investment Plan)

A method of investing a fixed amount regularly (usually monthly) in mutual funds. SIPs benefit from rupee cost averaging — you buy more units when prices are low and fewer when prices are high. FlowTrack tracks your active SIPs and their performance.