What would be a good way to calculate "fuck-you money"?

September 28, 2006 7:27 PM

What would be a good way to calculate "fuck-you money"?

I've been re-reading the excellent Neal Stephenson novel, Cryptonomicon. In it, there's a passage alluding to "fuck-you money", which has since come to be defined by UrbanDictionary as "any amount of money allowing infinite perpetuation of wealth necessary to maintain a desired lifestyle without needing employment or assistance from anyone."

The original passage from the book is as follows, reprinted from the publicly-available excerpt on the Cryptonomicon site:
"We look for places where the math is right. Meaning what? Meaning that pop. is about to explode---we can predict that just by looking at age histogram---and per capita income is about to take off the way it did in Nippon, Taiwan, Singapore. Multiply those two things together and you get the kind of exponential growth that should get us all into fuck-you money before we turn forty.

This is an allusion to a Randy/Avi conversation of two years ago wherein Avi actually calculated a specific numerical value for ``fuck-you money.' It was not a fixed constant, however, but rather a cell in a spreadsheet linked to any number of continually fluctuating economic indicators. Sometimes when Avi is working at his computer he will leave the spreadsheet running in a tiny window in the corner so that he can see the current value of ``fuck-you money' at a glance."

So then...
Assume I'd like to create the fictional spreadsheet Avi has created. How would I go about it? Which 'economic indicators' would be a good way of measuring this sort of thing?

Bonus points for:
a) Making it self-updating/providing instructions on how to do so.
b) Examples of the kinds of things this money could buy, or of people that have this kind of money.
c) Originality in choosing economic indicators.
d) Actually following through, making the spreadsheet/program, and making it publically available.

posted by ElfWord to grab bag (30 answers total)

This is terribly subjective, as the definition of fuck-you money is variable from person-to-person. "Wealth necessary to maintain a desired lifestyle." That's two totally different amounts to, say, Gordon Gekko and an Amish farmer.
posted by frogan at 7:31 PM on September 28, 2006

Which 'economic indicators' would be a good way of measuring this sort of thing?

To compute a lower limit, all you really need is a historic low for long term interest rates.

The average american family makes a little less than USD$40k a year. Assuming that you can always find a low-risk investment that returns 2% annually, then you need USD$2M of capital in order to make $40k a year, forever. Some years, you'd make a lot more than $40k, but you should be able to get at least $40k a year with this much capital.
posted by b1tr0t at 7:36 PM on September 28, 2006

Would an Amish farmer want "fuck-you" money?
posted by ElfWord at 7:43 PM on September 28, 2006 [1 favorite]

I usually try to keep enough money to sustain my lifestyle for 6 to 8 months in a liquid account. I call it the very same thing, "fuck you money". It is so I can drop my current situation at a moment if I need to or want to.

Even financial planners I have worked with suggest this as a way to start a portfolio. First have enough savings for a 6 to 8 month drought of unemployment. Then put into the 401K, then a diverse index fund, then market specifics (like biotech, or whatever).
posted by YoBananaBoy at 7:57 PM on September 28, 2006 [3 favorites]

"any amount of money allowing infinite perpetuation of wealth necessary to maintain a desired lifestyle without needing employment or assistance from anyone."

Isn't that retirement? There are a zillion retirement calculators on the web. They'll all be happy to tell you that, depending on your anticipated lifespan, you need from $1 million to $5 million saved. Or more.

Better than "fuck-you money" are businesses that generate the equivalent of "fuck-you money".
posted by jdroth at 7:58 PM on September 28, 2006

I think $30 million (after taxes) would give you as good a lifestyle as could be asked for. This would give you a million/year in income (at a conservative 5%) and 10 million with which to do whatever.
posted by null terminated at 8:10 PM on September 28, 2006

Thanks for the quick responses guys, but most of them don't really seem to be in the same flavor as the inspiration for the question. I'm not really looking for retirement planning, business ideas, or financial advice.

Cryptonomicon is a great book with a very dry sense of humor, and the concept of "fuck-you money" is less about having enough money to get by for the rest of your life comfortably, but more about having enough money to do what you want, when you want, with no worries. At the same time, in keeping with the tone of the book, it's controlled craziness in the sense of being represented by an actual calculatable number, rather than just saying, $100,000,000 and you're set for life!

Maybe I shouldn't have posted the Urban Dictionary link.

What I'm specifically looking for is the "economic indicators" I would need to use to calculate the current value of "fuck-you money".
posted by ElfWord at 8:26 PM on September 28, 2006

From my experience this ain't a really well-formed question. For over ten years I have been living on half my take-home pay trying to bank something akin to "fuck-you money", and I am not there yet.

For a regular working person with any money anxiety, you are unlikely to ever get to a level where you can tell the whole human race "fuck you". That just is not a realistic idea.

A million.five is not even close.

If and when null terminated ever got thirty mil, he or she might be totally flabbergasted how not-far that quantity takes him or her.
posted by bukvich at 8:26 PM on September 28, 2006 [1 favorite]

I don't think you understand the term "economic indicators".
posted by SeizeTheDay at 8:54 PM on September 28, 2006

I agree with bukvich.

Take the case of Larry Ellison, a multi-billionaire and one of the top 10 richest people in the world. Does he have fuck-you money? Yes...but then there's this article..about how his accountant worries about Ellison's overspending!


According to documents unsealed by a judge in the shareholder lawsuit, Ellison habitually pushes his credit limit of more than a billion dollars to its maximum to finance his yachts and homes. And that's not even counting some $20 million a year he burns through in miscellaneous lifestyle expenses.
posted by vacapinta at 9:53 PM on September 28, 2006

and the concept of "fuck-you money" is less about having enough money to get by for the rest of your life comfortably, but more about having enough money to do what you want, when you want, with no worries.

Then you are asking two diferent questions:

(1) how much money do you need to live the lifestyle that you want, on a per-year basis?

(2) what investments do you need in order to return that amount of money?

The answer to quesiton (1) depends a lot on the particular person. The hypothetical Amish farmer gets everything he needs from his farm. Jim Clark is happy with a few billion dollars. Bill Gates needed close to a hundred billion before he could relax.

Where do you place yourself on the amish farmer - bill gates spectrum?
posted by b1tr0t at 9:54 PM on September 28, 2006

Elfword, from your clarification, it still sounds as if "fuck-you money" is the same as a proper retirement figure. Seriously. Don't dismiss the suggestion so casually.

That aside, there is no one magic number. It depends on the sort of lifestyle you want to lead. It's not about economic indicators. You are the only important economic indicator involved. It's about you and your spending habits and what "doing anything you want" means to you. This number is going to vary from person to person.

You might want to research the concept of Financial Independence, too. Which, again, is merely a sort of retirement. Retirement isn't just for old folks.
posted by jdroth at 10:04 PM on September 28, 2006

In general "fuck-you monkey" is fiction because virtually everyone will grow to spend what they have. It's a concept, not an actual number.

About a year ago I calculated my fuck-you monkey at about $1000 a day. However since I got a raise I'd probably revise that upwards to about $5000 a day (I travel a lot, eat good food, and pay other people to do things that I find tedious.) So that comes to about $2.3 mil a year pre tax. (Forget about investments, etc. That falls under "tedious"). So if I want to live to a nice old age, say another 50 years, I'm looking at $115 million. Plus some to make up for inflation and fall of governments and lets say $200,000,000 USD. I'll call that my September 2006 FU$.

Where did I get that number? It's a gut feeling based on what I would (And do) do with my money.
posted by Ookseer at 10:16 PM on September 28, 2006

Inflation, Cost of Living Index, Interest Rates, Average ROI on Stocks and/or bonds.

Figure out how much you need a day to live in a style you're comfortable with. Now, what will inflation do to that number, what will other cost of living factors do to that number.

Now, how much can your money earn for you in various investment options.

Figuring all of that, what is the amount you need to get to your desired end result.

I imagine that's the kind of stuff Stephenson had in mind.
posted by willnot at 10:25 PM on September 28, 2006

you can expect to make eight percent on wisely invested income. once you have around 400k ready to invest, personal wealth managers will suddenly be very happy to talk to you and it's a chat you should have. most will promise returns around ten percent, which is doable but for sake of the markets I prefer dealing with eight.

so the question then is how much money do you require to live off interest alone?

let's say you had US $10,000,000 and let's assume the average annual inflation rate to be 4%. you need to cancel out inflation in order to preserve capital. that means you have around $400,000 to live on that year. sounds doable but let's face it, we all want our standard of living to go up every now and then and who would want to live off $33,333.33 per month for long? the trouble is you get used to money terribly quick.

so let's do the math for # 30,000,000. that's, you guessed it, $1,200,000 per anum or a cool $100,000 per month. certainly comfortable and if you're frugal enough, you should be very well able to build capital and withstand eventual economic downturns.

so.
technically speaking I could put my number somewhere between those two numbers. but why stop? making more out of what you already have is actually fun. rich people aren't in it because they need it but because it feels so fucking good. do you really think your favorite band is doing it after their first platinum record because they need the dough?

(sidenote: if you have a job that you would quit the day you could, I feel sorry for you. that must be the worst.)
posted by krautland at 10:32 PM on September 28, 2006

I suspect that $FU would increase once you had it. Not just in terms of "growing to spend what you have", as Ookseer put it, but in terms of leisure time. Once you have that money, and presumably quit working, you suddenly have a whole lot of extra time on your hands. How you spend that time could easily increase your spending.
posted by spaceman_spiff at 10:34 PM on September 28, 2006

I want one of Ookseer's fuck-you monkeys.

First heard the actual term about ten years ago defined very differently, and I imagine that whichever way you first heard the phrase is the 'right' definition.

Ergo, the one true right definition of "Fuck You Money" is whatever sum required to enable you - should the need arise - to shout "Fuck You" in the face of your employer and flounce out of the building, without running the risk of wishing you hadn't in the morning.

Or, in other words, six months' after-tax salary as a minimum, nine better, twelve ideal.
posted by genghis at 10:44 PM on September 28, 2006 [2 favorites]

Just picking some figures out of the air...

Let's say I could live pretty comfortably on $50,000 a year.

And the kind of house I'd like to live in costs $500,000.

Let's say the interest I can get on invested money is ten per cent. So I need half a million in the bank. Add in another half a million to buy that house -- I'd be pretty happy with a million bucks.

But of course the bank rate isn't ten per cent. That's a variable. And the cost of living might change and $50,000 might not be enough, so that's another variable. And the price of the kind of house you prefer to live in might be way more than half a mil. And you could change your mind and decide you need 60 grand a year.

But there's your basic spreadsheet. Annual cost of living your preferred lifestyle in one cell, annual interest rate in another, price of your preferred home(s) in another, and sum of money calculated based on those two cells in a fourth cell.

HOME     | LIVING/year   | Interest rate | Total      |------------------------------------------------------$500,000 | $50,000       | 10%           | $1,000,000 |

posted by AmbroseChapel at 10:57 PM on September 28, 2006

Okay, if I wanted to make a spreadsheet for fuck-you money, this is what I'd put on it:

Interest Rate
Rate of Inflation
1 year, 5 year, 10 year S & P 500 performance
Dollar/Euro exchange rate
Dollar/Yen exchange rate
Treasury rate

Basically, everything that you'd get from Yahoo Finance.

I think the concept of a retirement calculator can only be loosely applied here- retirement is really a long-term goal. Fuck-you money is something where you get up in the morning, grab a cup of coffee, go look at your spreadsheet and say "fuck YEAH!"
posted by unexpected at 11:03 PM on September 28, 2006

once you have around 400k ready to invest, personal wealth managers will suddenly be very happy to talk to you

Why at 400K? What is special about that number?
posted by randomstriker at 11:21 PM on September 28, 2006

Having read Cryptonomicon, I'd want to get into the spirit of things and throw pretty much everything, including the price of a new kitchen sink. The value of Fuck-You-Money acts like a bar. If you're above the bar, you're in Fuck-You territory. Any lower and you're just wealthy, but without any real power to say Fuck-You.

The problem is that you'd have to somehow account for everything that relevant in your life. Getting married? That'll eat into fuck-you-money. Getting divorced without a prenup? There's goes 1/2 of your fuck-you-money. Got some crazy 1 in a billion liver disease? Have a child or have 11 children?

If you want to do a spreadsheet, you'd have to have a method to include/exclude factors that apply to you.

For instance an indicator I'd add in would be the cost of another college degree.

Why?

Because fuck-you-money implies being able to walk out on your boss and/or career at a moments notice. For some people, they'd hate their boss, for others it would be the job itself. So if you have fuck-you-money to walk out on a career, then eventually you'd think about going back to school to learn about another field. (Or at least I would.) So a new college degree should be factored into fuck-you-money.

So what I think I just said was put everything in there, add and subtract as needed.

Sorry...it all sounded better in my head.
posted by Cog at 1:35 AM on September 29, 2006

One thing that noone has mentioned so far is taxes. Inflation is the other factor that people usually forget to plan for, but I see it's been well addressed above (esp. krautland).

When you're trying to live off of your investment interest, remember that the first thing you'll have to pay is the capital gains tax. Sure, it's only around 20%, but that's enough to shrink the $80,000 you got from 8% of a million down to $64,000. Next, you can deal with inflation.

You could try to put the gains into tax shelters instead, but then you're not really spending the money in the same free spirited manner that "fuck you money" implies.
posted by ceribus peribus at 4:13 AM on September 29, 2006

Previously: How much do you need to retire young?
posted by Boobus Tuber at 5:29 AM on September 29, 2006

You want a simple formula.
($ spent to be comfortable in a year) * 25 = FYM
This formula uses todays dollars. Then you remove 4% of the total each year. The money you withdraw each year should increase, if decently invested.
posted by fhqwhgads at 7:53 AM on September 29, 2006

The average american family makes a little less than USD$40k a year. Assuming that you can always find a low-risk investment that returns 2% annually, then you need USD$2M of capital in order to make $40k a year, forever. Some years, you'd make a lot more than $40k, but you should be able to get at least $40k a year with this much capital.

I don't think you can necessarily calculate it that way. You're assuming the repayment of a mortgage in there (as most families have to pay).. but to save the most money you'd buy outright with your 'fuck you' money and save on the interest payments. That family doesn't need $40k per year if they have no mortgage to pay. They might only need $25k per year + a lump sum.

I calculate my 'fuck you' money all the time because ultimately it's what I want to do and I have assets I may, one day, be able to sell for that amount. For me it works out at price_of_property + price_of_other_fixed_assets + lump sum required to meet estimated annual expenses (with inflation and interest taken into mind) to be depleted at age 85. For me that works out at about $800k (property) and $3.5m lump sum.. so about $4.3m all told.

(I assume an extremely conservative 4% interest and 3% inflation, giving just 1% return per year, and then 30% taxes on the profit each year. 10% returns are absolutely insane, if you're European, as I am.)
posted by wackybrit at 9:05 AM on September 29, 2006

randomstriker: that was around the time bank of america private bankers and morgan stanley wealth managers started showing interest. the lady I spoke to at greath length told me later that this was what they required people to have as an investment for them to accept the business.

AmbroseChapel: you would want to retire once you'd have 50k/p.a. for living expenses? isn't that shooting a bit low?
posted by krautland at 9:38 AM on September 29, 2006

Heh, I've had this conversation a few times. Guess I know too many dotcommers.

Lots of practical (er, boring) early retirement advice above ;->

I think the first step would be try to break down what "living comfortably" means to you and associate those bits with indicators.

Housing costs for example, are easy. But, lets say, I really really need a house with a moat. I'd like a good indicator for the approximate costs of moat maintenance. Average cost of Italian made liter class sport bikes. Maintenance costs for heavy duty earth moving equipment. All those things that I might just need.

Various indicators that might be useful:

- costs for legal staff and court costs (I for one, would definately need it once I had real FU money)
- health insurance/medical costs (I would be far more likely to need it post FU than currently. Falling into a moat perhaps).
- Personal security costs
- island rental fees
- Disneyworld weekend rental costs
- Race track rental fees
- Cost of a 10TB a month bandwidth fees

Perhaps a viewing of "Brewsters Millions" is called for?
posted by alikins at 10:32 AM on September 29, 2006

I guess everybody's definition of "fuck you money" is much different. I calculated mine to be under $20,000 and I saved it in about five months. Then I quit my job and started this.
posted by atomly at 10:54 AM on September 29, 2006

atomly: But.. it's not 'fuck you money' (in the definition within this post) if you have to end up working some day. You're having / going to have a killer time, I'm sure, but eventually that money will probably dry up and you'll have to do some work. (Of course, I think this is generally a good thing.. if we could do what we wanted all day, society would go quickly downhill.)
posted by wackybrit at 11:20 AM on September 29, 2006

Elfword, I believe the farmer would prefer "fuck thee" money.
posted by wryly at 1:11 PM on September 29, 2006 [1 favorite]