Do You Have Enough “F You Money”?

The other day, I was having a conversation with an old coworker I haven't spoken to in a while. In the middle of the conversation, he used the phrase "F You Money", and it was the first time I heard that phrase.

This phrase essentially represents the amount of money you need to have to tell others to "F off" without fearing the repercussions.

For instance, if you have enough money to retire, you would not mind telling your supervisor to "F off" when you have had it with him. You have enough money to not worry about being fired or caring about getting a promotion.

This is essential to know for anyone trying to achieve financial freedom. So how do you calculate your F You Money number?

First, you need to calculate how much you spend on overall expenses every month (you should have that calculated already if you started a budget).

Then, multiply your monthly expenses by 12, which will equal your annual expenses. That number is how much you will withdraw from your F You Money fund every year.

Lastly, you will multiply your annual expenses by 25, which will equal how much money you should have invested in your F You Money fund.

Alternatively, you can also divide your annual expenses by 4% and that will give you your F You Money number.

Your annual expenses should be about 4% of the overall value of your F-You Money Portfolio. Assuming that the stock market grows at an average of 8% annually, withdrawing 4% will therotically allow your money to continue growing year-over-year and not run out.

For example, if your annual expenses are $100,000, this is what your calculation should look like:

So, if you're sick of your 9-5 job, don't quit until you've determined your F You Money number.

Once you have figured out your end goal, start saving and investing to reach that number faster.

Have a great week!

Muhamed

📖 Quote of the Week

Workers work hard enough to not be fired, and owners pay just enough so that workers won't quit.

From Rich Dad, Poor Dad, by Robert Kiyosaki