If you asked 20-year-old me what “fuck-you" money is, I would have said, “Having enough money that you could throw away (literally burn) an amount valuable to a middle-class American.”
My 20-year-old self was not financially secure. I had a growing pile of student debt, had never made a budget, would compare my finances to others, and ignored financial issues until an actual debt collector came to find me (I owed the US Air Force thousands of dollars - that’s a story for another time). My premature definition of “fuck-you money,” i.e., having much more money than the average person, would theoretically solve all these problems.
My early definition of “fuck-you money” is enticing because, whether we like it or not, money directly correlates to our life satisfaction. But we need to understand why and how money and happiness relate to each other.
Kind of.
When your net worth is negative, every increase in cash will have a massive impact on your happiness and well-being. Remember how happy you were when you got your first allowance? If enough money to pay off my student debt would make me 10x happier, wouldn’t millions of dollars make me 100x happier?
The actual relationship between money and happiness is very different. Money is necessary to meet our basic needs. Food, water, shelter, and healthy relationships have a minimum financial requirement. But once those needs are met, money is one of many tools to improve our lives.
For decades, the widespread consensus has been that money and life satisfaction (among other factors like perceived happiness, anxiety, etc.) have a logarithmic relationship. The average American needs an income of $50k-$70k to meet all their basic needs, with a little left over. After that, a higher income only leads to diminishing returns.
Doubling your net worth from $5,000 to $10,000 while living paycheck-to-paycheck will exponentially increase your life satisfaction, but doubling your net worth from $150,000 to $300,000 will only gain you a few happiness points.
Understanding this relationship is how we can create a path to earn fuck-you money.
But…
Before we discuss what fuck-you money actually is and how to get it, let’s talk about why anyone would want fuck-you money in the first place.
Why do people choose to fast? Why do successful executives keep working? Why do elite athletes wake up at 5 a.m. to train? Why is the grass always greener?
The ability to choose is one of the most potent mechanisms in our biology. Not having enough money to pay for dinner is horrendously stressful; skipping dinner to learn what ketosis feels like is empowering. The only difference between these two situations is the power of choice.
I must create a system, or be enslaved by another man's. I will not reason and compare: my business is to create.