Warning: this post uses the word Fuck a lot. This is not my typical style of writing but I promise it’s for a reason. If you are sensitive to this kind of language you can always read some of my other posts.
The first time I came across the concept of Fuck You Money I knew I stumbled upon some golden wisdom.
This concept was originally mentioned in the movie ‘The Gambler’:
He talks about putting yourself in a position of Fuck You.
The main idea is to build up enough Fuck You Money to be financially free and eliminate money as a regular need to do whatever you want.
In the scene, he specifically mentions earning enough money to buy yourself a stable home and invest the rest at 4-5% in a system that will put you in a steady reliable financial position for life.
So what does this mean really? How would it work?
Let’s break it down and show you how to get your own Fuck You Money number.
Step 1 – Add up all your expenses in a month.
First, add up everything you spent last month. Include your bills, groceries, gas, utilities, etc. This is your base number.
Step 2 – Multiply it by 1.3 as a Buffer.
Next, we multiply our base expense number by 1.3 to give us some buffer room for any miscellaneous expenses or things that may occur. This concept was borrowed from Tim Ferris at The 4-Hour Work Week. He has a neat calculator to help you calculate your expenses here.
Step 3 – Add on any lifestyle goals you have.
Now, we want to add on any monthly expenses for dream or lifestyle goals of things we would like to have. This is called Lifestyle Costing, again borrowed from The 4 Hour Work Week. For example, if you want to drive a BMW that cost $300 a month and live in a house that cost $2000 a month you would add that to the total we have so far. If something is paid annually just divide it by 12 to get your monthly cost for that thing.
Step 4 – Multiply your monthly expenses by 12
Now, we want to multiply our total monthly expense number by 12 to get our annual lifestyle costs. This larger number is what we need every year to live our desired fuck you lifestyle.
Step 5 – Divide that number by 4%
Last, we want to divide that number by 4%. Why 4%? You can learn more about this specific number here. This is a very conservative safe withdrawal rate number that if you invested in a money system would provide you a return on your invest of at least 4% each year. I won’t get into what to invest in specifically here, but there are plenty of things such as real estate, IRA’s, stocks, low-index funds, etc that would help you get you at least 4% on your money each year. Mr Money Mustache has some great ideas on this.
Let’s do a simple example for Jane Doe who is a doctor trying to achieve her own financial freedom using the fuck you money concept.
Her expenses are $3000 per month.
Her expenses with a buffer are $3900 per month ($3,000 x 1.3).
Her dream lifestyle goals are to drive a brand new BMW and travel Europe 3 months out of the year. This will cost an extra $1000 per month.
Her total monthly lifestyle cost is now $4900 per month.
If we multiply it by 12 we now get her total annual lifestyle cost of $58,800.
Now, we can multiply by 25 or divide that by 4% to get her Fuck You Money total of $1,470,000.
So our buddy Jane will need to save and invest $1.47 million dollars in her lifetime to have complete and total financial freedom to do whatever she wants. She could retire from being a doctor and travel the world as she wanted.
What’s great about the fuck you money concept is how simple it is and how you can make a few tweaks to get you there faster.
Using our Jane example above, if she wants to hack the process more, she could find investment opportunities that yield her more than 4%. If she bought a few real estate rental properties that yield her a 7% return on her money she now only needs $840,000 total.
If she found an investment that yielded 10% she would only need $588,000. This is not unheard of either in real estate and various other investments.
How do you get there?
This is where the real challenge lies for most people. How do you get a million dollars or whatever your Fuck you money goal is?
Win the lotto – This is one way to get there, but not very likely. If this is your plan you may be waiting a long time.
Inheritance – Maybe you’re part of the lucky sperm club and your parents or grandparents are already very rich. In this case, you may be inheriting lots of money. If this is the case you can invest that money wisely and live off of it forever using the fuck you money concept.
Work hard and save – In the book The Millionaire Next Door, Stanley Thomas explains how average people with average jobs are becoming millionaires every day through hard work, diligent savings, and living below your means. It’s a slower process, but it’s still possible.
Start a business – Another approach is to start a business. This is the approach I am taking personally. Starting a business is a lot of work, but can help you get to your goal a lot faster than penny-pinching for 30-40 years. Instead, you can put in hard work and reach your goal in about 10 years or less. There are plenty of books and resources to help you start a business. One of my all time favorites is The Millionaire Fastlane by MJ DeMarco. You can also learn proven business principles at the PersonalMBA.com for free.
Next Steps? Go Make Fuck You Money.
While we used the word Fuck a lot in this post hopefully it helps you remember something important.
Working and earning money, whether it’s a job or a business, is not about just earning money to achieve baller status like the rappers do.
The goal is getting in a strong financial position of freedom through being smart and investing. There are plenty of rappers and celebrities that end up on VH1 specials because they made a ton of money, never invested a dime, and now are bankrupt.
Instead of wasting it all on fancy cars and houses, if they invested it first, they could have used the fuck you money interest each year to buy the same cars and houses and still have their freedom.
Freedom is the real goal. At least to me.
So, how much money do you really need to retire forever? You may realize you don’t need much after all, or you can try minimalism out and achieve happiness with less. Then your fuck you money number get’s much lower.
Whether you want to have rapper money and live in a mansion or you prefer to live in a tiny house and ride a bike to work, hopefully, this article gets your brain going about how to get your own position of fuck you and achieving financial freedom. It’s something I think about and I am working toward every day.
(Check out this cool Fuck you money calculator created by Neville over at the Kopywriting Kourse.)