Our buddy Commander Zero brought this phrase into my vocabulary. Today I got bored and googled it. Basically Fuck You money is an amount of cash where you would never have to work again. Not do anything you want forever but live at a certain income level without needing to work.
Obviously what constitutes fuck you money is based on a multiplication of your desired annual income so it depends on the lifestyle a person wants to keep. Fuck you money for a guy who lives in a trailer in the desert on 20k a year would be a lot less than for me in a fairly average middle class income. What would be F U money for me would be a kind of bad weekend at the tables for Dan Blizerian.
We could calculate this a couple of ways. One would be strait years X dollars but realistically unless you are pretty old we are talking about living off of interest. So you need a chunk of cash sufficient to pay interest at the level you would be planning to live at. We could debate this realistic interest number on a balanced portfolio (I have seen 8% a lot) but lets say .05 so some rolls over for inflation protection. Say you want to make 50K a year and figure your money can make .05% so you would need an even million dollars. A smart person would realize inflation exists so to keep the same relative lifestyle it will obviously cost more in the future. So say you keep some interest rolling into the principle.Or if we want it to be 100k annual income we are talking like 2 mil.
Now 1-2 million dollars is a lot of money. It is not like crazy Warren Buffet/ Bill Gates money though. Not unrealistic if you have an OK income and a good savings plan or the ability to get a couple of big, but not insane, pay days.
That got me to thinking.
In Dave Chapelles recent comedy special on netflix, which you should check out if you like that kind of thing, Dave describes Kevin Hart as having “Shut the Fuck Up Money.” Like he could tell a partner to STFU an they would deal with it because he is ridiculously rich. Dave then says that “he has please be quiet money at best.”
So in this spirit I got to thinking about what would be a short term goal on the way to FU money? I realized I already knew the answer.
I quit money. Not a place where you can burn every bridge an never work again but one where you can decide you do not want to take the transfer to Los Angeles or that you are tired of putting up with a terrible boss and want to just find another job. Or maybe there is a major life event going on and you are going to take a month off, whether the boss likes it or not.
Then I realized this is simply a good emergency fund. The smart money people say 3-6 months expenses is a good emergency fund. Some in this market where people, especially upper middle class older people say 50+ can be unemployed for a long time, say 6-9 months. Obviously your individual situation matters. How vulnerable you think your situation is, how much back up you have (does the Mrs have a great job or is she a stay at home mom) an how easy it is to replace a job where you are all matter.
I think a fully funded emergency fund in cash (bank or safe) or items that can be immediately converted to cash like silver and gold gives you a lot of options. Also it is a reasonably attainable goal for most people with some savings and maybe increased earnings.
Preparedness and normal life event benefits aside being able to politely tell your boss you quit or not take that new client/ contract an know you have some wiggle room to find something else sounds pretty darn nice. Also this seems like a good motivator to save and earn to stash that cash.
Got emergency fund?