FU money is money that makes you feel financially invincible against anyone else. If your boss doesn’t make you feel good, you can easily just walk away and not care about the consequences. It’s a financial level in which you don’t feel like you are controlled by anyone else.
Everyone’s got a number that will convince them to walk away from the rat race altogether. A number that they are comfortable walking away from working too much because it will provide them permanent financial security for life. For me personally, that number is $1.5 million. At that point, if I get laid off, I will be OK with it.
However, the number is different for everyone. Life is getting monumentally more expensive with the March 2022 inflation numbers hitting 8.5%. That is a very significant amount of inflation that can’t be ignored. The FU money number may be adjusted due to changing circumstances such as these.
Some are living in a LCOL city while others are living in a HCOL city. Some have a family with kids, others do not. FU money will make someone feel so financially comfortable that if they wanted to, they could do nothing for the rest of their life. Whatever the number is, figure out what it is for you.
We all have a number and a price that will convince us that walking away isn’t such a bad option. That doesn’t mean once you reach that number treat everyone badly. It means once you reach that number, life becomes significantly better because working becomes a choice rather than a necessity.
What is FU Money?
FU money is money that makes you so financially comfortable that you don’t mind walking away from the pressures of society. It could be putting in your immediate resignation notice because you no longer care or want to work as hard for your boss.
It could be cutting off contact from everyone in society because you don’t want to deal with everything else. Whatever it means, it’s money that you are so comfortable with that it sets you up for your entire life. Not just your life, but for your future family’s life as well.
It could mean that you’re giving up on having kids or giving up on having a family. Or it could mean that you’re giving up on buying a house. Whatever sacrifices you’re willing to make, you’re willing to do because you have FU money. However, this doesn’t mean treat everyone you met badly because it no longer matters.
Not only might you need them later down the road, it’s just not the right things to do. The right thing to do is not be so rich and become a bad person. The right thing to do is become rich and still be nice to everyone you meet because you’re a good human being.
That’s true FU money. At the end of the day, you are still human. You’re not some corporate company who coldly wants to win at every expense. You care about the people you’ve met, the people who’ve helped you out, and the people you’re going to meet down the road. It matters to you.
Who Needs FU Money?
EVERYONE needs FU money, but the people who need it the most are employees who are miserable. Approximately 41% of employees are miserable and want to get out of their 9-5 at some point. Bosses do not understand their underlings are not happy with their jobs and want to leave for greener pastures.
Financial security isn’t just for the select few. It’s for everyone looking to better their lives. It just doesn’t feel good to worry about money. To worry about where your next meal might come from or to worry about if you can make rent this month. In the early days of my personal finance journey, I penny pinched.
However, it felt so bad. I felt so powerless every paycheck because so much of my money was going towards investments. Then the leftover money was for food, rent, and all the other costs of living. Let me tell you, this is no way to live. People shouldn’t be living this way.
Life is meant to be more than working just so you can exist and live. Life is to have comfort while you’re going through the day to day troubles of life. Everyone needs FU money because it makes a huge difference. In your quality of life and in the relationships you can build.
Why Do You Need FU Money?
One reason why you need FU money is so you can SMASH that social share button and post to your favorite social media! Your friends might not know the meaning of FU money and this article just may help them. If anything please share the article for me.
So with that said, let’s go over the reasons why!
1) Choices
The number one thing that FU money gives you are choices. You have more choices as a rich person than as a poor person. You can say no to more projects if they don’t interest you and you can choose to say yes to projects that interest you. You can be picky.
Personal interest will matter to you most. Take, for example, Jacob Lund Fisker. After he retired early, he took a job as a quantitative analyst out of personal interest. Not because he needed the money but because he wanted to work that particular job.
When you do things because you want to and not because you have to, your happiness levels just shoot up. You are in control of your own life and no one tells you how to live your life. This is the number one benefit to having a large chunk of money that you can rely on.
2) No Stress
It just doesn’t feel good not knowing where your next meal is going to come from. I recently got into a car accident in which the person ran a stop sign, causing me to run into the person. I paid for another car with cash that I had in the bank. When you have FU money, events such as that just doesn’t phase you.
I’m not saying that I have anywhere near FU money. I don’t. However, I do have a good amount of savings in order to protect myself in outlier cases such as these. I am not at the mercy of the other insurance company. There’s a little bit of a breathing room for me to continue living my life as normal.
Having money that you can use to protect yourself allows you to have less and even no stress. That’s a huge benefit to life. The rich worries about things much less than the poor do. Their basic needs are going to be taken care of the next day, anyway. It makes a huge difference when living life.
3) No Dependence
You’re not dependent on anybody else but yourself. If the government doesn’t give you the promised social security, it doesn’t matter to you because you stand on your own two feet. There’s less dependence. FU money means you don’t rely on anybody else but yourself.
Do you think billionaires like Mark Cuban care if he doesn’t get social security at the end of his life? He doesn’t. He’s not dependent on anybody in order to live out his life. When you’re not at the mercy of the other person is when you are living a great life.
The other person WILL renegotiate their needs and wants right back at you. It doesn’t feel good when you are at the mercy of someone else. It’s the equivalent to when you were a kid and your parents pulled the “you live under my house, you live under my rules” on you.
4) Feeling of Being in Control
FU money gives you that feeling of control. You don’t want to spiral out of control. There’s been many times when I didn’t feel like I was in control of my life. When all the hard work that I put in was all for naught and I am no longer in control of my own destiny. That feeling doesn’t feel good.
You feel like there’s no way out of the hole that you’ve dug for yourself. Then people say that you’re too negative and want you to be more positive but it just doesn’t feel that way. FU money puts you right back in the driver’s seat because things just doesn’t faze you out anymore.
You know everything will be fine tomorrow, the day after that, and the day after that. When all of your and your family’s needs are taken care of and you know you’re going to be safe tomorrow, that’s when you feel in control. You’re in the driver’s seat and no one can take that away from you.
How Much Money is FU Money?
The general rule of thumb in deciding how much FU money is enough is when your passive income pays for all of your monthly expenses and then some, using the 4% rule. If you only spend $40,000 per year and you have a $1 million investment portfolio, then that’s a general rule of thumb in that it meets FU money.
The number is certainly different for everybody and their lifestyle choices. Some people say they need $10 million in order to say they have a good amount of money in reserves. Some people can live on much less. For me, personally, I only spend approximately $30,000 per year.
Therefore, a ~$800,000 portfolio will be enough for me to say I reached FU money status. However, I recently realized that I want more. I want more money to combat the effects of inflation. I have no idea just how much worse it’s going to get going forward. Additionally, I heavily discounted just how hard bear markets can hit.
When you can safely withdraw 4% that covers all of your expenses, that’s a general good rule of thumb in that you’ve reached FU money status. That’s when you’re not beholden to anyone else. You’re working because you want to, not because you have to.
You don’t need to have a billion dollars in the bank in order to say that you reached the status. If that were true, not even the top 1% can say that have that level of wealth, money, and power. You just need to get to a point of enough where your life is completely paid for regardless of what happens.
How do I Get FU Money?
There’s a way for everyone to get FU money! Even the ones who have low income. It may be harder for some than others but there’s always a way.
Here is how:
1) Save as Much Money as You Can
One of my friends make $300k per year and lives with his parents. Imagine just how much money he’s saving on rent! Save and invest as much money as you can. Many people are going to make fun of you in that journey. They’re going to call you cheap, miser, and every other name you can think of.
Save and invest as much money as you can because that’s how you grow FU money. No one is going to grow it for you, you’re going to have to grow it yourself. You can’t make money without having money. And the first start to that is by saving as much money as you can. It can be from a 9-5 income.
Or it can be from a side hustle income. Whatever it is, the key is to make as much money as you can and save a vast majority of it. This is completely out of the norm and that’s completely OK. You’re not trying to become the masses, you’re trying to be someone different than them.
2) Increase Your Income
Now that you’re convinced that saving money is the path to wealth, the second step is to make much more money. It’s just much easier to save money when you’re making $200k than when you were making $100k. I recently increased my income by a cool 30% from 2021 to 2022.
I know that I’m going to be saving and investing much more money in 2022 than I will in 2021. Then I know just how much that effort compounds into bigger results later down the road. The key to having FU money is to save as much as you can and increase the savings every year by increasing income.
$100,000 salary just isn’t a lot of money these days. After taxes, rent, utilities, food, and the like, the money evaporates quite quickly. There’s so many opportunities for you to increase income these days. The gig economy is here to stay and it’s only growing more by the day.
Increasing your income is a great way to get ahead. Not by saving $5 here and there but by increasing your income by thousands per year.
3) Avoid Lifestyle Creep
It’s just such a shame when I see people making $250,000 throw it all away on $50k cars and the like. You can’t have FU money if you don’t avoid lifestyle creep that comes from making more money. The idea is to keep your expenses the same and maybe increase by inflation every year.
But increase your income to the maximum that you possibly can. Widen the spread between income and expenses and then you’ll really have some fun with compound interest. Lifestyle creep is what traps so many high income earners in their jobs. They have no other choice but to work for their employer.
They have no choice. You don’t need to buy new clothes every year. Clothes last a solid 5 – 10 years. In fact, I recently threw away 2 boxes worth of clothes and kicked myself for spending that much money in the first place on them. I can’t imagine what would’ve happened if I just kept that money instead.
4) Ignore the Joneses
Not even the Joneses can keep up with the Joneses. The Joneses mansion actually got listed at auction on a bankruptcy sale! It’s a truly bad idea to keep up with the Joneses because doing so provides you with no real tangible benefit. You get nothing out of it.
There’s no reason for you to one up someone else. You just need to one up yourself. When I go out, I go out in a t-shirt and jeans. I personally do not care what anyone else thinks of my clothing choice. I’m sure there were many people who took pictures of me in the grocery store and captioned with unpleasant things.
However, that’s completely OK with me. As long as I’m happy with my choices, that’s all that matters to me. The Joneses is not someone you want to try and beat because they will be better at making bad financial decisions than you. It’s a surefire way to avoid having FU money.
5) Invest Your Money
Now that you’ve saved and made as much money as you possibly can, it’s time to invest your money. Putting your money in a savings account does not count as investing it. It’s losing value to inflation every year. You don’t want that to happen. You want your money to work hard for you just as you worked so hard for your money.
In fact, you even want your money to work harder than you. It’s the best employee you’ll ever have. There’s nothing wrong with investing your money in a broad market based index fund such as the S&P 500. That’s when your money starts making you money and when you’re on your way to financial independence and FU money.
$100 in extra income all for investing your money just feels different than $100 from your 9-5 job. Once that dopamine hits you, you’re never going to go back to a 9-5 income ever again for your hit of dopamine. It’s even more exciting that it can even grow even further than that.
A great place to start is to follow these 9 investing rules.
FU Money will Change Your Life
There’s few better feelings in the world than having FU money in order to feel secure in your own footing. That’s when no one really controls you, and you are in full control of your life. I am about a decade away from reaching the FU money status and I will gladly wait that long in order to get there.
I fully understand that no one built their net worth up overnight and it will take an obscene amount of time before I reach my goals. It is like that with everyone. Aside from people born into wealth, you will be working hard and over years and years in order to get to where you want to go.
You should be saving and investing as consistently and as much as you possibly can be. Investing $100 per month doesn’t make a difference, until one day it does. Until one day you realize that your hard work saving and investing is making more money than a single paycheck at your day job.
It’s going to take a fair bit of work and effort over the long term in order to make it happen. No one is going to hand it to you. The good news is that you are in full control of making it happen. Effort takes no skill. It’s time to put your head down and put in the work so you can move up in life.
The difference between your ideal life and your life right now are your choices. The ones who think FU money is only for the ultra-wealthy are surprised when the average day people are making it happen every day. They are the ones who are rewarded by getting ahead.
