I’ve occasionally come across people that refer to financial independence (FI) as ‘fuck you‘ (FU) money. While if you hate your boss that might sound appealing, in my case I won’t bother…I like my boss. Yet that did get me thinking, what are the benefits of going for financial independence before you ever get there. In my short journey, this is what I’ve learned.
- Open Your Month Money – Imagine for a moment that you had a 7 year worth of income emergency fund, do you think you would speak up more at work? Well hell yes, that is exactly what happens with me. I’m still respectful of others, but I always speak my mind now. Why? What’s the worst thing that can happen? I get fired and I’ve got seven years of cash before I need to have another job. The reduces my stress about speaking up hugely.
- I Can Walk Away Money – In negotiations the one party that can walk away from the deal holds most of the cards. Which is why I was always schooled to never fall in love with a particular house, I can walk away from the deal. Now could you do that with a job offer? If you have lots of bills to pay, likely not. Yet if you are on your way to FI, then you can start playing a little more aggressive negotiations. Ask for a raise before you start? Sure. An extra week of vacation? Why not. What can they do? Say no. Then you can decide if you still want that job with out the extras.
- Can Earn Less Money – Could you handle a 20% pay cut if you were told you would lose your job otherwise? How about 50%? I could handle either if I wanted to, since my expenses are much lower than my income. In fact, for three different jobs now I’ve chosen to earn less money than I could make. Why? In some cases, what I wanted out of the job wasn’t money related. One job I picked because of the geographic location (I wanted to move closer to my extended family), another I wanted the free time to pursue a personal interest and the last one I picked because I really wanted to work for a particular person.
- Stress Free Money – People are somewhat surprised when I tell them I never worry about money, but it is true. I like to talk about money, think about where to invest it, run projections on when I will be FI, but I never worry about it. How? My bills will be paid regardless of if I get up and go to work this morning because of my savings. If I get hit by a bus, my family will be fine (financially speaking) without me. I know exactly where my mortgage payment could come from if my paycheck was late a week. Do you?
- Take the Extra Risk Money – Starting a small business can be a gut twisting exercise because of the risks involved. In most cases the worries tend to focus around getting the startup cash and being able to afford to put in some time to get the business off the ground while you don’t take any profit. With a large pile of savings, neither issue is a problem anymore. You can take a unpaid leave from your work if you need to, you can finance the business startup costs if you want. In summary, you can take more risk in other areas of your life since you have a financial buffer.
So what you have you learned on the your trip to FI? Does FI = FU for you?