“Fuck you” money
Adam, Andrew and I were having a discussion about Fuck You money on twitter. The idea is:
I have enough money to say “fuck you” to anyone I would normally have to work for, as I can live off the interest.
Adam worked it out to be about 4.5 million NZD, or about £1.9 million. Quite a bit of money, tho not a massive amount, really. This would net an income of around 200K/year, which in New Zealand is a very nice amount to live on.
I/we have a few questions:
First, how many people do you know who have hit this before normal retirement age? What percentage of the population would hit it before retirement age? And what about after/on retirement?
I’d say very few. Maybe <1% of the NZ population (or the UK one for that matter) before retirement, and 1% or so after. Thats not a lot.
But how much do you have to have to live if you take away your biggest expense: your house? If you are not paying a mortgage or rent (or credit cards for that matter), your required income is a lot, LOT lower. That 200K a year could easily become 100K without effecting lifestyle if you dont have to pay rent or the bank. To get that you could do it with 3 million NZD, easily, maybe less. And living somewhere cheap – small house in NZ, outside a main city (or even close to one?) – or in Andrew’s case Sri Lanka – could make a lot of difference to the amount needed to get rid of that huge payment every month.
So, how to get to the FU money amount?
- Build and sell a business?
- Shares?
- Property?
- iPhone app? (hrmm, yeah, right…)
Anyone notice that “working for someone else” isn’t in that list?
Maybe something to think about for all the people with large mortgages on large houses they maybe don’t need….
You should read/listen to some Dave Ramsey, he’s all about getting out of debt so you can do this very thing. If you have no debt, you have no payments, so you just pay costs.
I was living a happy life in NZ (Christchurch) with less than 100K and wife + two kids, and only a large house payment, thus cutting that house payment ~3K/month (36K/year after tax, 53K/year pre-tax @ 33%) out off the equation I could have lived in a freehold house on less than 40K a year.
40K needs 1M @4% return
100K needs 2.5M @4% return
Now I’d happily retire with 100K in asset based incoming. Then you could live, and enjoy the world also.
I’ll look him up, but we have no debt. and no payments. damn it feels good. Would be nice to have a house freehold tho…. Working on that one.
yup, I’m with you on that one – 100K is definitely a “good enough” amount. If you are not paying for a house, that
goes a LOOOOOONG way.
More on the how to get the money short of being awesome and owning a slice of an IPO hit.
30 years of 3K a month payment/savings equals just over one million, thus if you get any interest while savings, you should get there sooner, then be able to at least retire on 40K a year…
Good point. Now…. how many people save 3K a month? I suspect not many (I know we dont…. sadly.)
My point was, that if I didn’t have a house payment, then I would have been able to save 1 Million, without doing anything extra/special.
If your looking up Dave Ramsey, he has a daily podcast (available on iTunes), that’s quite good, you can learn all the valuable stuff off it if you listen for a week or two. Plus you can snicker at people with 30-80K in credit card debt.
There, I’ve repaid the debt of the ‘Tiesto’s club life podcast’ recommendation you did ages ago.
The first I heard of Fuck You Money was in ‘Black Swan’ (which I’ll bring for you in Rome – I think you’ll like it as per your other post).
Stats on income distribution in NZ: http://norightturn.blogspot.com/2010/02/some-facts-on-income-distribution-in.html
Only the top 1% earn over $165K. Not many.
[...] ago, I was following a discussion on twitter between Nic, Adam and Andrew on the concept of ‘fuck you money‘ (fum) and it got me thinking. I know I’m wierd when it comes to money, I dont use [...]