The popular definition of “F#ck You Money” is that you have enough money that when your boss asks you to do something you don’t want to do, like take a pay cut, you can say “F#ck You.” Following is a simple formula for creating “F#ck You” money.
Save 1/2 of what you make and invest it.
The nice thing about this formula is that the more you use it the longer you can say “F#ck You.” To make my point. Let’s say you get paid $200 every week. If, with your next paycheck, you take $100 and invest it at 5% interest you can tell your boss “F#ck You” for 1.05 weeks or 1 week and about 8 hours. If you do this on your first pay check you’ll probably be looking for a job, so I wouldn’t suggest it. But look at what happens if you do it for a year. Investing $100 a month at 5% compounded monthly will give you enough money to say “F#ck You” for 1.115 years or one year and 4.5 days. Having a year and 4 days to find a job before you run out of money is better than only having a week don’t you think?
Now look what happens if you do this for 5, 10 and 20 years.
5 years: “F#ck You Money” = 5.797 years or 5 years, 9 months and 17 days.
10 years: “F#ck You Money” = 13.131 years or 13 years, one month and 17 days.
20 years: “F#ck You Money” = 34.621 years or 34 years, 7 months and 14 days.
What do you think having the ability to say “F#ck You” for 5, 13 or 34 years is going to do to your presence of mind? I’m thinking it’s going to make you a hell of a lot more confident, less likely to take shit from anybody, make you a better employee and definitely allow you to negotiate your pay better. It makes sense doesn’t it? If you want to work out your own scenario go to the savings calculator on dinkytown.net.
The trick is saving half of what you make and investing it in something that will give you 5% interest. As for saving half of what you make check out my other blogs on how to save money: Affordable Nutrition, Buying Used, and Buy Local.
To get a consistent 5% return on your money you’re going to have to educate yourself on investments and there is plenty to trip you up especially the lure of higher returns. All I can say about the lure of higher returns is beware. If it sounds too good to be true it most likely is. A good place to start your education is with index funds. The other thing you can do is find a good wealth manager. But again, you’re going to need to do your homework. I would suggest against wealth managers at investment banks. There is something about that combination that stinks “conflict of interest” to me. Also, you don’t want a manager who gets paid commission on what they sell you. Instead pick one who gets paid on the value of your investments. That way they get paid more when your investments grow. So the incentive is to grow your investments. In the mean time start socking away the cash.
As an addition to saving money look at the ways credit cards and gift cards pay you back. Some grocery stores offer discounts on gas for every dollar you spend on groceries. Some even give you double points when you buy gift cards. If you shop regularly at a specific store it might be worthwhile to buy one of those stores gift cards. And, if you use a points earning credit card to buy the gift card you could be saving two ways. One, you earn points by buying the gift card with the points earning credit card. Two, if you buy it at the grocery store you can earn twice the cash per gallon off gas.