Why you need F-you money

Shortly after 9/11 my company kicked me to the curb.

Six months earlier our division president had taken me to a congratulations lunch for a record breaking year.  We were explosively growing and embarrassingly profitable.  Over a bottle of fine wine we discussed my very bright future.

It was the best job I’ve ever had.  Great team, great leadership, great fun.  Great money.  I had just cashed a bonus check for more than I had ever made in a single year before.

A year later my little girl and I were sitting on the couch watching a news broadcast.  The concerned news crew was filming people standing in a depression era style bread line.  They were, the reporter said, the newly poor suffering from job loss in the dismal economy.  I was still unemployed and licking my wounds.

“Daddy,” said my eight-year-old, “are we poor?”  She was gravely concerned.

“No,” I said, “we’re just fine.”

“But you don’t have a job,” she said.  Thinking, I’m sure, just like those poor souls on the TV.  Who even thought she knew what a job was?

‘That’s no problem, honey.  We have money that’s working for us instead.”

That’s what I said, but what I was thinking was:  This was exactly why I worked hard to be sure I had F-you money.  In fact I’d been working on it long before I heard the term.

If memory serves, it comes from James Clavell.  In his novel “Tai Pan” (highly recommended BTW) a young woman is on the quest to secure 10 million dollars.  She calls it her “F-you money,” although the F-word is spelled out in the book.  So you can look it up in case you’re wondering just what word it is.  And 10m is far more than it takes, at least for me.  http://jlcollinsnh.wordpress.com/2011/06/02/the-monk-and-the-minister/

I may not have known what it was called, but I knew what it was and why it is important.  There are many things money can buy, but the most valuable of all is freedom.  Freedom to do what you want and work for whom you respect.

Those who live paycheck to paycheck are slaves.  Those who carry debt are slaves with even stouter shackles.  Don’t think for the moment their masters don’t know it.

This guy, one of my favorite bloggers, even says home ownership is a form of corporate bondage.  Check out point “E.”:

http://www.jamesaltucher.com/2011/03/why-i-am-never-going-to-own-a-home-again/

I first accumulated the modest amount I needed around 1989.  Not enough to retire on perhaps, but enough to say F-you if needed.

The timing was fortunate.  I wanted to take some time off to pursue business acquisitions.  When I found myself one morning with my boss in the office hallway screaming at each other, it occurred to me perhaps the time had come.  Never did a guy more need to be told….

I may never own a Mercedes but I’ll always be able to say what needs to be said when it needs to be said.

Oh and it turned out I was unemployed for three full years after 9/11.  I’m really lousy at job hunting.

 Care to comment?  Just click on the circle on the top right of the post.

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43 Comments

  1. Posted June 8, 2011 at 10:01 am | Permalink

    Thats a great post Jim. I’m still trying to figure out the number myself but the realization we all get as we get older and deal with real life and real happiness is that its never as high as we thought.

    Although, one story:

    Was having breakfast with someone a few months ago and he told me he had just had breakfast with Steve Schwartzman, CEO of Blackstone. Steve is, of course, a billionare. But my friend told me he was VERY UPSET. Because Sergey Brin and Larry Page had more money than him. “Those fucking kids,” he said, “deserve shit compared to me.”

    And that’s a guy who never have the magic of enough.

  2. Jess
    Posted June 9, 2011 at 9:11 am | Permalink

    hah wow look at you dad!! congrats it looks great! unfortunately i didn´t have time to read all of your posts but i did read the one about f-you money and i cant wait to see what some of your readers have to say about that topic. and the layout itself is very impressive, very proffesional. im impressed. looks like you´ve been busy while i´ve been away. can´t wait to hear all about it when i get back :) see you on friday!!

    love you

    jess

    • Posted June 9, 2011 at 12:40 pm | Permalink

      Hi Cutie….

      Great to see you here and reading this. Finally, a way to get you to listen! ;)
      Thanks for the kind words. you’ll have to keep reading now. never know when I’ll be talking about you. :)

      See you Friday. How about lunch over the weekend?

      Love Daddy

  3. Posted December 31, 2011 at 10:50 pm | Permalink

    Hey man, Great post I would be fine with $10m, I Just want to be able to wake up and have that freedom that money brings. Nothing Else. You should post more often your posts are quite addicting and you write well. Thanks.

  4. Posted May 9, 2012 at 10:22 pm | Permalink

    I love your wisdom Jim. “I may never own a Mercedes but I’ll always be able to say what needs to be said when it needs to be said.” — that’s the definition of wealth in my dictionary.

  5. Corey
    Posted September 20, 2012 at 10:20 am | Permalink

    Great blog, I also came via mmm and similarly enjoying your writing very much.

    One minor point (only because I love his books) – If I recall correctly I believe the term Clavell used was “screw you money” and it was in his book Noble House.

    I don’t mean to correct you, just make sure that people read the right (awesome) book. Although “Tai-pan” is a great one too.

    Cheers!

    • Posted September 20, 2012 at 10:43 am | Permalink

      Thanks Corey…..

      and no worries on the correction. It’s been a long time since I read Clavell and my memory’s not what it once was.

      Still, I remember enough to second your praise of his books.

    • DaveKL
      Posted February 12, 2014 at 4:54 pm | Permalink

      Not trying to correcting you. this is for someone wants to read up more on this topic. Corey is correct about the source is from Clavell’s Noble House. Casey wants her ‘screw you’ money so she can lead the life she wants and having the luxury of being able to tell anyone to “S-U” if she needs to do it. If memory serves, she think she needs about $2MUS (~in 1966, so it would be much more in 2014$).

      BTW, this is a great blog. Thanks to MMM for introducing it to me.
      DKL

      • jlcollinsnh
        Posted February 12, 2014 at 5:12 pm | Permalink

        No worries, DKL.

        Noble house it is.

        Glad you found your way over here!

  6. Blair
    Posted September 27, 2012 at 11:29 pm | Permalink

    Collins,
    Where would you suggest one to accumulate FU money? Me and my wife are doing a good job of saving in retirement accounts (401k and roth iras). I know I could access principle from the Roth, but how does someone determine how much to keep in taxable accounts versus retirement accounts. I have a strong desire to acquire FU money, but also want to take full advantage of tax savings etc…. Any thoughts or suggestions? love the blog.

  7. Posted March 11, 2013 at 11:14 am | Permalink

    Obviously I’m going to click on a post with “F-you” in the title! I know exactly what you mean, though. I save my money for the same reasons. If I ever need to stand up and walk out, I know I can do it without feeling instantly stressed out.

    • jlcollinsnh
      Posted March 11, 2013 at 11:42 am | Permalink

      Ha!

      My plan worked!

      This post has been one of the best read since the blog launched. Maybe it’s the title, maybe its just strikes a cord with people.

      Money can buy lots of things, but nothing more valuable than freedom.

      As you clearly know, it’s not about quitting your job. It’s about knowing you could.

  8. Carol
    Posted March 11, 2013 at 9:07 pm | Permalink

    Came to you from MMM and find myself bouncing around the site of another kindred spirit. You are a very clear communicator!

    This post really resonated. When I was in my mid-twenties and just starting my first “real” job after engineering school, I read a book during the presentation on retirement plans because I was so ignorant that it might as well have been given in Mandarin. Later my boss took me aside and introduced me to the concept of a F-you fund which he felt was in both our best interests. Someone else recommended the Vanguard website to me and thus began a lifelong self study and passion. Having that fund was empowering! I ended up leaving that very job (amicably) four years later, debt-free and with enough saved to take a short sabbatical and figure out the next phase. 20 years later I am financially independent (thanks to frugal living). Here’s hoping you’ve inspired others similarly.

    I add my voice to yours and others about the freedom that comes from following these very simple principles and am in violent agreement about the choice of Vanguard. Thank you for your sharing.

    • jlcollinsnh
      Posted March 12, 2013 at 1:23 am | Permalink

      Wow, Carol!

      Great story! Congratulations!

      Thanks for your kind words and especially for adding your voice to the conversation. For those just starting out it is incredibly important to hear from those who’ve walked the path. Just knowing it can be done is huge.

      BTW, I love your phrase “in violent agreement.” I’ve never heard it before and just may have to steal it. ;)

    • Josh
      Posted September 4, 2013 at 2:24 pm | Permalink

      Carol,
      I read your comment and found myself on a similar path. I graduated from engineering school and have been working for a little over 5 years. I’m almost debt free and in the process of figuring out that next step. I’d love to pick your brain on how you chose your next journey.
      Thank You!

  9. Posted April 6, 2013 at 3:08 pm | Permalink

    “I may never own a Mercedes but I’ll always be able to say what needs to be said when it needs to be said.”

    This is a great perspective, thanks Jim. I think the day I realized I no longer needed the job, my value to my employer went up. Being able to say what needs to be said, tactfully of course, can add a lot of value to employers. My pay rose quite substantially in the following years partly as a result of this

    Eventually when job satisfaction wasn’t as high as it used to be, being able to get the F outta there was worth more than any number of Mercedes

    • jlcollinsnh
      Posted April 6, 2013 at 8:24 pm | Permalink

      Well said, Jeremy…

      …and well played. Congrats!

      I still find it remarkable that most people prefer the Mercedes to their freedom. To each his own….

  10. Posted April 26, 2013 at 1:05 pm | Permalink

    I just re-read this post, and still love it! It’s one of several that helped me get serious about early retirement / financial independence. I’m now well on my way!

    • jlcollinsnh
      Posted April 28, 2013 at 9:53 pm | Permalink

      Thanks, GP-FI…

      …AND CONGRATS!

      That makes my day!

  11. Posted June 21, 2013 at 6:31 pm | Permalink

    Why can’t you write the word “fuck”?

    • jlcollinsnh
      Posted June 21, 2013 at 6:38 pm | Permalink

      I can and sometimes do.

      But I consider words like “fuck” the same as hot peppers. Great in small doses to focus the palate, but used excessively they just kill the taste buds and lose their bite..

      • Posted June 21, 2013 at 6:59 pm | Permalink

        Yeah, it goes from adding emphasis to completely trashy in about 5 seconds when overused.

  12. Loyal Follower
    Posted July 10, 2013 at 7:17 pm | Permalink

    Jim,

    Love the blog! Have been a follower since MMM introduced me to you. Today I had an experience at work that confirmed the need to have F-U money. The wife and I are well on our way to having it, but at 27 still have a few years. Truth is I could say F-U and look for another job, but I would like my current job to be my last. Tomorrow should be an interesting day.

    • jlcollinsnh
      Posted July 10, 2013 at 9:12 pm | Permalink

      Welcome LF…

      You don’t have to be all the way there for it to have a powerful positive effect. It always kind of amazes me that it’s not #1 on everybody’s wish list.

      Good luck tomorrow. I’d love to hear the story if you care to share it.

  13. Paul
    Posted September 17, 2013 at 10:14 am | Permalink

    Back in my 20′s I decided that the work that I was cut out to do was not something that I could nor wanted to do my entire life. Lots of physical exertion, stress, and poor working conditions. But the money was good. My father gave me similar advice, and I followed most of it. And retired at age 49. And yes when I left the job I basically said ‘phuck you’ and walked out the door and never went back, even though 2 VP’s and the Prez of the company personally called me and asked for my return. I didn’t burn the bridge, but I essentially said what needed to be said. Right now and for the past 4 years since I walked I haven’t been happier. Sure, I could pay cash for a new Mercedes right now. But that may mean the ‘W’ word later on. People, you can do it too! Go for it!

    • jlcollinsnh
      Posted September 19, 2013 at 8:07 am | Permalink

      Well played, Paul!

      Basically everybody has a choice:

      They can buy things like the Mercedes or
      They can buy their freedom.

      This was always an easy choice for me.

  14. Posted September 19, 2013 at 12:28 am | Permalink

    Jim,
    We just moved and my husband’s job has been very unstable. But guess what, we are just fine and not stressed about it. It is all because of the FU money I have been saving.
    Thank you so much for everything, because this FU money was saved due to the mind opening posts from you and MMM.
    Keep up the wonderful work Jim.
    Paris.

    • jlcollinsnh
      Posted September 19, 2013 at 8:09 am | Permalink

      That’s awesome, Paris! Congrats!

      It is a great feeling, isn’t it?

      F-you money not only opens up options, it makes engaging the world far less stressful.

      BTW, thank you for your recent comment here: http://jlcollinsnh.com/go-ahead-make-my-day/

  15. Posted October 26, 2013 at 3:10 pm | Permalink

    I hope to make it to having a decent F-You stash in my bank account in the next couple of years. However, we first must work to pay off my wife’s student loan debt. After that, we’ll be putting our excess mostly into savings and retirement accounts to build up that F-You stash.

  16. Peter
    Posted January 20, 2014 at 6:16 pm | Permalink

    Hey Jim,

    After reading through the whole series, I’m not sure I ever quite caught this:

    My first question is easy->

    Does F-you money live in taxable investments, so that it can be easily accessed?

    My second question, maybe not, and it might not even be answerable->

    Going along the lines with what Blair asked, how do you determine the ratio of taxed/tax-advantaged investments.

    Unlike Blair, I’ll be specific.

    I imagine most of you readers–as well as ERE, madfientist, and MMM readers–want to either retire early or accumulate enough F-you money to quit the grind and do what they love. Let’s say the goal is age 35. And let’s say this person can live on 30,000 a year. How much does he or she need in a taxable account to either get them to retirement or be able to safely say F-you to their own Lumbergh? And how much in their tax-advantaged to not run out during retirement?

    (Here, I’m assuming tax-advantaged is for post 59 and taxable is for pre. I may be wrong).

    Thanks!

    • jlcollinsnh
      Posted January 20, 2014 at 10:29 pm | Permalink

      Hi Peter…

      Since my reply to Blair, the Mad Fientist has opened my eyes to some cool new strategies for accessing retirement accounts before 59.5. He even did a guest post for me on this: http://jlcollinsnh.com/2013/12/05/stocks-part-xx-early-retirement-withdrawal-strategies-and-roth-conversion-ladders-from-a-mad-fientist/

      So now my advice is to max out your tax advantaged accounts first, then build your taxable investments. Since the amount you can contribute to tax-advantaged accounts is limited, and if you are saving at the 50%+ rate it takes for truly early retirement, you should have plenty of money in the taxable accounts anyway when the time comes.

      Oh, and your F-you money lives in both. At least mine does. ;)

  17. Posted February 6, 2014 at 10:55 am | Permalink

    Just a quick note to say thanks for taking the time to put together all the information on this site. It takes a lot of effort to put out the kind of content that you do and I really appreciate all your insight regarding Vanguard funds, as well as other items. I’ve been a reader since you first were mentioned on MMM’s blog way back.

    I’m turning 32 in June and in the next couple months will be heading into early retirement (whatever THAT means) around then. I prefer to think of it as F-You Money or financial independence and the freedom to choose how to fill my time – even *gasp* IRP-be-damned if it makes money. Regardless, I will be doing whatever I please thanks to investing and building a business over the past 5 years that will sustain us.

    Your help with where to direct cash has really helped calm my jitters with investing. Auto-deposits into Vanguard, set and forget… Hard to stay on that true line with so many easy ways to divert assets and fritter away hard-earned dollars, but I am (most days at least) convinced. I view your site as the in-detail complement to MMM’s – keep up the great work!

    • jlcollinsnh
      Posted February 6, 2014 at 11:02 am | Permalink

      Thanks for the very kind words, Dakiar. It is always good to hear something I’ve written has been of help.

      Congratulations on your pending retirement, whatever THAT means. :) Beats me, but it sure is fun!

  18. Posted February 23, 2014 at 11:48 am | Permalink

    JL,

    You are correct in that “F-you” money is needed for freedom, but the harder part is getting the money together – thats the real trick.

    Best,

    James

  19. Posted April 4, 2014 at 7:17 pm | Permalink

    Hi Jim,

    I’m a huge fan, thanks so much for your amazing articles on financial freedom! Your writing has really shaped how my wife and I are planning our own retirement strategy.

    I mentioned this in one of your blog comments, but your blog has actually inspired me to blog myself. I wanted to give you a heads up that I published an article today about calculating your F-You number and cited you many times: http://lifeafterliquidity.com/2014/04/04/f-you-money/

    Thanks again for all the inspiration. You’ve really changed my life. Wishing you well!

    Eric

    • jlcollinsnh
      Posted April 4, 2014 at 9:58 pm | Permalink

      Hi Eric…

      Thanks for your kind words. Glad my ramblings have helped!

      Nice post!

      • Posted April 7, 2014 at 9:40 am | Permalink

        Thanks again Jim! Definitely give yourself some more credit for these fabulous essays!

  20. Zol
    Posted May 26, 2014 at 3:41 pm | Permalink

    I had never heard the word(s) “f-u money” until about 6 months ago when my corp was going through major changes. From my first line boss no less (mind you they have little real power).

    In the last 2 weeks i’ve read it by happenstance on atleast 4 websites. I’m wondering if this a sign as things degrade at the office hehe. I’ve switched my label from E-Fund in ING to FU-Fund in my savings account in honor of this post.

    • jlcollinsnh
      Posted May 26, 2014 at 4:58 pm | Permalink

      Sometimes terms and other stuff arrive as we need them. ;)

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