What is FU Money?
I first read about FU money in this post by Jim Collins a few years ago and a light bulb went off in my head that is still glowing brightly. The entire concept is that money equals freedom, independence, and personal autonomy. No, money will not buy you happiness beyond a certain modest income level, but it will give you options.
The option, for example, to simply walk away from your job that has caused you to age prematurely from all the unnecessary stress. The option to stand up to your pushy, overbearing, condescending manager and defy him to his face or even publicly. The option to stand up for what you know is right in complete defiance of your company’s nonsensical, dogmatically dishonest, politically correct orthodoxy. That is the beauty, power, and secret of FU money.
The truth will set you free, but freedom is not free. The general tepid advice most so-called financial experts give is to have at least six months worth of living expenses saved up. That is an excellent and most basic of starting points. However, I would say that real FU money starts in the 6-12 month range and only increases in weight as you start measuring your financial independence in years.
My Experience with FU Money
I have saved up FU money on two separate occasions over the course of the past decade. Both times I started from a position of having to pay off debt I had incurred, but within 3-5 years I amassed enough dough to quit my irritating job and to take time off to complete an MBA. And no, I did not flip properties, day trade, or inherit a small fortune.
I solely lived within my means and did not spend my hard-earned money on superfluous non-essentials, such as a fancy car, an overpriced piece of real estate, or the latest unnecessary Apple gadget. I should have been better at maxing out my 401k and contributing to an IRA, but there is always something that we can strive to improve on in our lives.
I never tried to pick stock winners and took the market return by investing in the Vanguard Total Stock Market Index (VTSAX) fund. I also accepted that if the majority of actively managed stock mutual funds―run by highly intelligent, experienced, and capable people with impressive-sounding degrees―are unable to beat the market over the long term, then what chance do I have? And don’t forget to add a bond index fund to your portfolio as well, but I will save my basic investment advice for another time.
My first round of FU money allowed me to take a year and a half off from the corporate grind to pursue an entirely unneeded graduate degree and do a bit of traveling and relaxing. After blowing through this batch of FU money, I returned to the office rat race to begin my post-MBA work life to build my second bundle of FU money. I was able to stockpile the latest round of FU money in three and a half years, which afforded me the opportunity to flee from my most recent dire job predicament and the People’s Republic of California for the oasis of civility that is Tennessee and the warm embrace of Seriology.
The Position of FU
The very last thing I’m trying to do here is to toot my own horn. I have included these personal anecdotes to illustrate that anyone with a decent middle-class salary, some discipline, and a bit of good fortune has the chance―in this country at least, but probably in much of the developed world―to accumulate their own FU money.
The attitude behind FU money―along with his investing philosophy―is brilliantly summed up by Jim Collins in the video below. The scene is an adaptation of John Goodman’s spiel to Mark Wahlberg in the movie The Gambler. Warning: The video contains strong language, so I would advise against turning this one up in your cubicle.
There you have it, my friend. I hope that you are reading this in your twenties because the earlier you begin to save that bread the sooner you will have your escape route in the form of FU money. Safe travels on your journey to financial independence and freedom to live your life on your own terms. Remember the wise words of Confucius: A journey of a thousand miles begins with a single step.