“Somebody wants you to do something—fuck you. Boss pisses you off—fuck you… Did your grandfather take risks? I guarantee he did it from a position of fuck you. A wise man’s life is based around fuck you.”
So goes Frank (John Goodman) in the movie The Gambler, as he dispenses a profane mix of philosophy and financial advice—akin to what you are about to read.
One way to achieve “a position of fuck you” is by acquiring what is elegantly called “Fuck You Money.” Urban Dictionary defines it as “the exact amount of money required in order to tell an individual or organization to go fuck themselves without facing repercussions.” Without the f-bombs, it’s the amount of money you need to live the kind of life you want to live, without selling your soul to the man.
If you’re the kind of person who loves their job, you might be wondering why an idea like that would even exist. But at a time of growing existential dread, mass resignations, and pandemic-imposed pressure to live life right now lest the world go into lockdown again, it’s no surprise that it has crossed many people’s minds.
“It’s just people finding a way to get out of the system, and that system is usually the rat race—living paycheck to paycheck, being super dependent on money, that entire system that people want to go against,” said Nicole Alba, a personal finance content creator from the Philippines.
Alba has over 370,000 subscribers on YouTube, where she posts videos teaching people how to best choose banks and credit cards, get into investing, and manage expenses, among other topics on personal finance.
“You don’t have to be chained to a job that you don’t like… It’s good for you if you have a job that you really like, that gives you fulfillment, but for some people, it doesn’t—they really hate their jobs, and they just want to retire,” Alba said.
The concept of Fuck You Money is closely related to the FIRE movement, Alba explained. FIRE stands for “Financial Independence, Retire Early.” The all-too-familiar norm, of course, is that people work five days a week or more and retire when they’re 60 years old, when many don’t have the energy to do much of the things they would have liked to do at half that age. For followers of the FIRE movement, that simply won’t do. Instead, they believe there’s something they can do right now that will enable them to stop working and start living much earlier—like getting Fuck You Money.
Some people have made drastic sacrifices and lifestyle changes in order to save up enough money to retire early, like giving up their home to live in a trailer, buying meat that’s on sale because it’s about to expire then freezing it so it lasts longer, and moving to a place with a lower cost of living.
But for many people, the idea that there is a way to achieve financial independence and retire early could be difficult to grasp, especially in a country like the Philippines, where Alba is from.
While more Filipinos are beginning to save money in banks, many do it with low interest rates and no long-term planning. Alba explained that this is largely because of a mix of systemic and cultural truths.
The most obvious is that a lot of Filipinos don’t make enough money to begin with. That, coupled with the high cost of living in the country, prevents many from thinking long-term, or even thinking of retirement at all. Our collectivist culture also means that we’re meant to perpetually support not just our nuclear families, but also any extended family who might need it at any point in time. You might be able to say “fuck you” to your boss, but God forbid you so much as raise a finger—let alone the middle one—to your grandma’s cousin’s niece.
All this makes it difficult to figure out exactly how much money you need to no longer work, and even more difficult to actually get that money.
Yet some (usually more privileged folk) still believe that working towards Fuck You Money is a worthy exercise. So how do they do it? Many believe the trick is to have a certain amount of money invested into the stock market, bonds, real estate, or other investment vehicles that will grow that money at a higher rate than you’ll need to withdraw from it. Some use this calculator to figure out how much they need to invest to make this happen, but if you want to understand how the calculator arrives at that number, Alba explained that it’s all about how much money you can save—and later invest—out of the money that you make.
The first step in computing the amount yourself, she said, is knowing how much you spend in a month. That number, multiplied by 12, gives you your annual expenses, which is around the same amount you’re going to withdraw from your Fuck You Money fund every year. For the sake of computation, let’s say you spend 25,000 Philippine pesos (US$ 479) a month. That means you spend 300,000 Philippine pesos (US$ 5,752) a year.
The next step is to equate that amount—your annual expenses—to what is called the “safe withdrawal rate,” which is the amount that you can safely withdraw from your fund annually without it running out.
Alba said that the safe withdrawal rate is normally pegged at 4 percent of one’s retirement fund—meaning you can withdraw 4 percent of the fund every year. The stock market is typically said to grow at around 7 percent annually (there are, of course, peaks and troughs). If you’re only withdrawing 4 percent of your Fuck You Money annually, but the fund is growing by 7 percent annually as well, then money will never run out, in theory. Some experts have called this 4 percent rule outdated, and others have called to bump it up to a 5 percent rule instead.
Your annual expense amount—300,00 Philippine pesos in our example—is what you can safely withdraw annually to sustain your lifestyle without draining your funds. That annual expense amount is 4 percent of the fund, based on the rule above, so multiplying it by 25 gives you 100 percent of the amount you need to invest in total. Given our figures above, 300,000 Philippine pesos multiplied by 25 is 7.5 million Philippine pesos (US$ 143,798), so in this case, 7.5 million Philippine pesos in investments is your Fuck You Money.
But where do you get all that money?
“While you’re working to build up your Fuck You Money, you also keep it invested—so while you’re working to build it up, it also grows,” Alba explained.
Basically, you don’t have to invest that entire sum all in one go. You invest it in installments so that the growth rate ends up compounding the money and minimizing the amount you actually have to put in to reach your Fuck You Money goal.
Once you know how much money you need in your fund, you need to decide how much time you want to give yourself to get that money. Maybe you want to retire in 10 years, maybe 15. From there, you work backwards to figure out how much you need to put into your fund every year before your ideal retirement date. If your Fuck You Money is 7.5 million Philippine pesos and you want to retire in 10 years, then you need to put in at least 750,000 (US$14,352) Philippine pesos per year for 10 years, which means you need to invest 62,500 Philippine pesos (US$ 1,196) every month of those 10 years.
Alba said that it all boils down to what’s called a savings rate, or the amount of money you’re able to set aside from your income.
“Of course, it’s easier to save a lot more if you’re making a lot more money,” she said. One way, then, to speed up the accumulation of Fuck You Money is to, well, make more money. It’s easier said than done, but you can do this by multiplying your streams of income—getting another job, starting a small business.
“If you want to speed up retirement, then, of course, you need to speed up the rate at which you earn money.”
Alba noted that all of these concepts and computations rest on probability—the investment vehicles might not return as much as you hoped, there might be financial windfalls that hit you during your early retirement, you might have kids you didn’t plan for, and so on.
“The idea here is that it’s possible. When you do that math, when you adjust things in your finances, move things around, this is something that you can pursue,” Alba said.
She also pointed out that a common criticism of the FIRE movement and Fuck You Money is that it can be a bit too much thought, effort, and sacrifice, especially for people who have lives to live right now. Why are people so hellbent on retiring early? And what are people ready to sacrifice at the moment just to get their Fuck You Money sooner?
Alba thinks that any extreme is bad. There are some people, for example, who might only eat instant ramen noodles for extended periods of time just to get their Fuck You Money as quickly as possible. On the other end of that spectrum are people who don’t plan for retirement at all and just blow everything paycheck to paycheck. Alba said there has to be a healthy balance between planning for the future and enjoying life at the moment.
Another, perhaps healthier, way to look at Fuck You Money is to see it as Freedom Money, because it affords you the freedom to do things you want to do.
“When you have money, it gives you options, it gives you freedom, as opposed to when you don’t have it,” Alba said.
Again, none of this is to say that acquiring Fuck You Money should be everyone’s goal. For many, it’s not. For others, it can’t be. But a good takeaway from the concept of Fuck You Money is simply to start thinking about retirement before it’s too late.
“It really gets young people thinking about their finances now, much earlier, and I think that’s a good thing,” Alba said.
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