Are you tired of feeling like a slave to your job? Are you worried about losing your job during the next recession? Are you frustrated that you don’t have any money to invest?
According to a recent Gallup poll, 70% of employees are disinterested in their jobs, while more than one in five Americans fear they may lose their job. The Center for Disease Control estimates that 110 million people die every year as a result of stress. That is seven people every 2 seconds!
With finances being one of the top stressors among adults, it’s more important than ever to come up with a strategy that gives you the freedom you desire. Not just some freedom, but unlimited freedom. In this post, I’m going to share you the step-by-step guide to building a Freedom Unlimited (F-U) account, or as I like to put it stacking some F-U money!
When I was 18 years old, I was working a night shift for a deli inside a retail store. One night, I was the only deli employee working the shift, and it was closing time. As part of the close, I was responsible for breaking down and washing all the machines which took about 45 minutes to perform alone.
As I was ready to leave, a couple comes up to the counter and asks me to cut some meat for them, I told them we were closed, but this answer wasn't good enough for them. The couple proceeded to call the manager who I thought would have my back since it was past the deli hours. Unfortunately, to my surprise, he demanded that I put the machines back together to serve these customers.
Out of fear of losing my job, I pulled the clean equipment from the back and served these customers. Now, whether you agree with my manager's decision or not, I was incredibly hurt by the situation.
So, since then, I've always made I had enough money saved that if I felt the need to walk away from a situation respectfully, I could do so without fear of not being able to pay my bills. At that time I didn’t know it was considered F-U money, but when I first heard the term in "The Simple Path to Wealth" by J.L. Collins, it perfectly described what the money represented for me.
What Is F-U Money?
Now there are several definitions of F-U money, but the way I define it is a large sum of money you have saved up that covers your living expenses during a transition period.
F-U money lies somewhere between an emergency saving which is between 3-6 months of living expenses and financial independence, which is enough money to cover your living expenses for the rest of your life!
Therefore, as a rule of thumb, F-U money is about six months to 2 years of money saved for living expenses. Depending on how much freedom you want, it can be way more than that.
Why You Need F-U Money?
Mike Tyson once stated that "everyone has a plan until they get punched in the mouth." In 2008, 2.6 million got metaphorically punched in the mouth when they lost their jobs during the recession. Which is the equivalent to everyone employed in the state of Maryland losing their jobs.
F-U money shouldn’t be an excuse to quit your job, to be rude, or act completely reckless. What it allows you to do is get some of your power back and be prepared for anything that life throws at you while still being able to pay your bills.
How To Start Out With The F-U Money
1. Set a target
The first step to start saving for the F-U money is to set a target. Determine what your current living expenses are and find out how much you need to feel comfortable walking away from a situation that compromises your values. For some people, this may mean six months - 2 years of living expenses.
2. Create New Streams Of Income
Side hustles can help you obtain this power more quickly and build a bigger account than you originally planned. Check out my video where I talk more about side hustles in detail.
3. Pay Off Your Debt
If you have a ton of debt, I recommend paying that off so you will less monthly obligations and one less thing taking away your freedom. Continue to save, but be sure you're reducing your balances each month.
4. Aggressive Savings
Be sure to engage in aggressive saving. You want to build up this account quickly, then continue to build it over time. If it means cutting back for a few months, do so. It will be worth it in the end.
5. Change Your Relationship With Money
Before making any spending decision, I recommend pausing and thinking, is this purchase going to move me closer to having more F-U money or perhaps the financial freedom? If the answer is yes, then go for it. If the answer is no, know that you are robbing your future.
F-U money provides us the freedom as well as flexibility to make decisions with power. While this isn't your typical financial advice, I recommend everyone have this kind of money saved up. I've done so, and it has served me well.