When I was younger, my F.U. Money number was RM 2 million (~USD 460,000).
If you haven’t heard of the concept before, it’s having enough money to say “fuck you” to your job (or perhaps a boss you hate). No need to work another day of your life.
Enough money. Forever.
I used to track my path to F.U. Money, projecting I’d get there in my mid 40s.
Then I got married and decided we were gonna try for kids. Good luck retiring early if you’re planning to pay for uni education.
It turns out F.U. Money — financial freedom — isn’t a simple, static number. It goes deeper than that, touching multiple areas of our lives — like evolving goals, standard of living, and your career ambitions.
Inspired by Jack Raines’ recent viral article, here’s what I’ve learned about getting to F.U. Money.
Calculating Your Basic F.U. Money Number
The simplest way to calculate “How much do I need to retire?” is:
F.U. Money = Annual expenses x 25
So if I’m spending RM 7,000 per month (average household expenses in Kuala Lumpur, Malaysia):
F.U. Money = RM 7,000 x 12 x 25 = RM 2.1 million
(Roughly USD 483,000, using conversion rate RM 1 = USD 0.23)
This calculation is based on the 4% Rule — a guide for how much retirees can withdraw from their assets, and have the money last at least 30 years.
The original 4% Rule was designed based on USA markets, and for traditional retirement. Think someone who retires at 60, with the means to maintain their lifestyle till 90.
Who Wants to Work Till They’re 60?
Of course, today, nobody wants to retire at 60.
If you’re aiming to retire at 45, you want retirement money to last you >45 years. At least.
With a longer time frame, more can go wrong (e.g. wars, market crashes, inflation spikes). For a larger margin of safety, some financial advisers have suggested F.U. Money should be 33x annual expenses, instead of just 25x.
So if I’m spending RM 7,000 per month, that’s RM 7,000 x 12 x 33 = RM 2.8 million.
When I wrote about Financial Independence, Retire Early (FIRE) two years ago, using Malaysian historical data, I estimated a safe number should be 30x annual expenses.
Depending on how much of a math/finance/probability nerd you are, you could continue to dissect this number a thousand ways.
But that’s unnecessary, because this calculation actually has a critical “flaw.”
Especially for younger people.
To Live Is To Change
The calculations above assume you’ll continue to spend money the same way for 30 years1.
But older people actually spend less money after they retire. In Nick Maggiulli’s recent book, he shares how the 4% Rule actually 5x-ed many retirees’ investment portfolios.
As for someone like me, I first read about F.U. Money in my late 20s. I fantasized about reaching it at 30 and living an Instagram influencer’s life. But the number I calculated was based on my carefree bachelor days.
It told me nothing about how much money I’d need once I had kids.
Ask any parent and they’ll tell you two things: Kids are expensive, and kids change everything.
Factoring in private uni education for two kids, my financial advisers say my F.U. Money number today is actually RM 6.66 million.
That number is more accurate. It’s been calculated by professionals after months of analyzing my finances. But seeing the much larger number now, my real question is:
Will I ever get there?
Getting to F.U. Money
I know, the big numbers sound terrifying.
How do people actually get to F.U. Money?
The good news is, with the magic of compounding and sensible investing over long periods of time, it’s possible.
It requires a level of privilege though: Valuable skills that lead to high income. Access to financial education and investment opportunities. A support system — friends and family — that allows you to save money instead of draining it away.
And luck2. Not getting into medical/financial emergencies for decades.
Getting to F.U. Money needs a large number of variables to go right for you. Realistically, not many of us will get there — especially when we’re young.
F.U. Money is possible, but it’s not probable.
What if You Never Reach F.U. Money?
This might sound weird coming from a finance blog, while other writers spam “How I retired in my 30s and traveled the world.” (Implied message: YOU CAN TOO!)
But I’m trying to offer a realistic perspective.
Looking back on my journey, I was obsessed with F.U. Money when I was unhappy at work.
“Fuck this shit. I’m gonna get enough money and leave work forever.”
F.U. Money was my escape path.
But what if you actually don’t need to escape?
If you’ve got a reasonable job, there’s nothing wrong with working a traditional career.
My role model for a meaningful career is my dad — who at 78, still runs his clinic six days a week — enjoying work on his own terms.
Did he ever get close to F.U. Money?
I suspect not. But I’m certain he found his reason for being. His Ikigai.
I might never get to F.U. Money. But if I play my career cards right, I won’t need to.
The Problem With Projections
On the 24th of February 2022, Russia invaded Ukraine.
Like many people around the world, I was shocked. “Surely it couldn’t happen to a modern democracy in today’s globalized world?”
Until it did.
Reading about people dying senselessly made me question many things:
- Could it happen here?
- Is this how it all ends?
- Why do large numbers of innocent people have to suffer because of a few assholes?
And the selfish one:
“What if I toil all my life for F.U. Money, only for a Black Swan event to take everything away?”
F.U. Money is cool, but doesn’t mean anything when you’re dead.
Remember To Live in the Present
This doesn’t mean you should YOLO 100% of your money away. There’s wisdom in financial planning — every baby step gives you a bit more security for the future. A bit more independence.
But understand that even the best projections are not perfect. Things change and shit happens. Besides, life is short.
You don’t need to reach some arbitrary number before you can love, and be loved.
You don’t need X — whatever that may be — to happen before you can feel happy.
And you don’t need to wait until you’re a multi-millionaire to say F.U. to something that’s dragging you down.
Why not today?
– – –
- The 4% Rule does account for inflation. Meaning it assumes you spend inflation-adjusted money the same way for 30 years. Example: if I’m spending RM 100,000 in Year 1, and inflation is 3%, it assumes I’ll spend RM 103,000 in Year 2 and so on.
- If you’re religious, God’s will.
Pic from Pexels: Travis Saylor