Friday, September 8, 2017

F You Money, or Maybe Just I Quit Money

I am going to curse in this post. If that offends you I am sorry.

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?


Aesop said...

Fuck You Money is problematic. Nothing is paying interest, and adjusted for inflation and taxation, even what interest income you can find is a negative amount, in real terms.

I Quit Money is far more doable.
And having been there,
3 months' reserve is the minimum in your 20s;
6 months' reserve is a minimum in your 30s
9-12 months' reserve in your 40s and beyond.
Because as you get older, your income rises, your job portability shrinks, and your obligations usually grow (kids, mortgage, etc.)

The first 30-60 days has to be in cash, not in a bank, that you can grab and go with. Think bank run, economic collapse, whatever. That's your on-hand SHTF float, in a mayonnaise jar under the porch, or whatever.

Day 61 and beyond is up to your best estimate. Look at countries that have had meltdowns, and decide if leaving one to ten months of your life savings emergency fund in a place where the .gov, or the bank, can decide what's yours is theirs, and you're SOL. Venezuela, Greece, Zimbabwe, Argentina, wherever. It can happen here, at the speed of electrons.

At some point, PMs come into play. So does arable land you can live on that's paid for.
And gold and silver do not appreciate, ever. Currencies drop.
Gold and silver just give you a means of exchange that holds its value, over millennia.
But you can't eat it, cook it, or shoot it.

Like mutual fund managers will tell you: diversify, diversify, diversify.

Where your nest egg is spread is about the only place in humanity or recorded human history where diversity really is a virtue.

Suz said...

The other piece of I quit money is not only to have 3-6 or 12 months of cash emergency fund money, but to also not have any bills. The house is paid off, the car is paid off, the visa is paid off, etc. Then it becomes much more doable.

The side benefit of actually doing this is you realize how much less you really do need when you are not playing the games, and how little you need to reduce stress in the form of alcohol, smokes, dinners out, etc when you have little to no job stress.

BTDT. It was GREAT!!

Anonymous said...

I've got "fuck you money" from my military retirement and medical. I figure the government may make a lot of cuts, but cutting military retirement would get too many experienced triggers pullers pissed off.

At about $2000 per month, it would take a million dollars in savings at 2.4% to get the same monthly amount or what is more realistic today is 4 millions dollars in a savings account at .6% to equal my $2000 per month military retirement. Add that to my semi-free medical, and my regular income from my post retirement business, and it works great for me and my family.

Aesop said...

" I figure the government may make a lot of cuts, but cutting military retirement would get too many experienced triggers pullers pissed off. "

Maybe Google "Bonus Army" sometime.

Any government pensions and benefits become imaginary the moment they're inconvenient or simply undoable for the .gov.
So with the governments debts headed for the moon, do you figure that makes things for you more secure, or less?

Imagining that you're some special case, secure from them cutting you loose like someone in the water hanging on the liferaft the minute things get tight, is just whistling as you walk past the graveyard, telling yourself you don't believe in ghosts.

By all means, take all the GI benefits you're entitled to while they're available; but imagine they're an endless gravy train?
Sh'yeah, as if.

Anonymous said...

-> Aesop Truth spoken harshly enough to break through the self-delusion of Anonymous ?

Anonymous said...

cost of living is jumping, creeping, then jumping, and checks stay the same. but the feds say 2% inflation... kinda like items that were 60oz, now at 40oz and 20% higher in msrp. everything is fine. my ACA was 175pm, now 375pm and going higher. everything is fine. I had 8 months liquid, money goes fast when hard times come, remember that. my plan, cut down every expense possible. makes it easy to save and less owed when hard times come. live simple. most important, live in area that still helps one and another.

Anonymous said...

This is Anonymous from 9/11:

To Aesop - Maybe you should Google "Bonus Army"... They won, so I don't know what you're talking about

Also, the topic of the TSL post is "Fuck You" money.

Nobody said that military retirement was a "endless gravy train", I just said it is my "Fuck You" money and pretty secure. More secure than state pensions, airline pensions, railroad pensions, or any other business retirement plans that I know of. Mostly as an encouragement to TSL to continue his military career, as the best part of the military is when you finally get out.

If the Federal Government cancels military pensions, you can bet that everyone's "Fuck You" money, pensions, 401ks, stock market accounts, gold, silver, etc. will be on the chopping block, and I don't believe they'll ever cancel them, they'll just destroy the currency until the military retirement and everyone else's money will be worthless.

And I don't know what the rest of your rant was about, because it didn't relate to anything my comment actually said.

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