Introduction to F-You money
Having F-You money brings your stress level down and makes you happier. Once you have enough of it, you can say F-You to your boss and do nothing for the next couple of months. Or say F-Everyone and retire when you are half the age of other retirees, but getting there takes longer. Just don't say F-You too often, most people don't like it.It’s a big beautiful world out there. Money is a small part of it. But F-You money buys you the freedom, resources and time to explore it on your own terms. Retired or not. – Jim CollinsBy having F-You money, you are becoming one of the bad rich guys: your savings help some companies create new jobs, expand or innovate. While doing that, you are refraining yourself from consumption and helping our poor planet.
How do you do it?
Forget your bank's mutual funds where you get a worse product for higher price. Real (wo)men buy cheap index fund ETFs on the stock exchange. Every couple of months I take some money and buy ETFs on Berlin or New York stock exchange, while ignoring the price. I also own some bond funds. I buy mostly Vanguard. I never sell and I don't keep an eye on the stock market. Trying to outsmart a random walk is very risky.The most bulletproof strategy for saving each month is to take money from your salary on the pay day and move it to an account that is not connected to a debit or credit card. You might have been told that you have already made a good investment by buying your house, but that might have been a huge mistake.
When talking to my friends about saving some F-You money, their most common excuses are "I have a girlfriend" or "I can't downgrade my lifestyle". Well, you can talk to your spouse and you should know that luxury is just another weakness. You don't need the new iPad. While changing your mindset, you can go further and upgrade your philosophy and become happier in the process.
For all the Slovaks
One of the typical Slovak pastimes is complaining. Slovaks are so poor that when you go to any shopping mall, it's always full of people. And for them I have one message: as shocking as it sounds, the only way to get richer is to save. The politicians tell you the opposite – they tell you the economy needs more consumption. But what they mean is that they get richer from your consumption through taxes. What your (and my) country needs is capital. So instead of complaining, go ahead and do something about it; save 20% of your salary each month, that's a good start.Further reading
- A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, by Burton G. Malkiel. The stock market behaves like a biased random walk, so outsmarting it is futile.
- Mr. Money Mustache, a blog with a lot of philosophical and frugal advice. Very entertaining.
- Jim Collins' stock series, although he talks about many more things than just stocks.
- Spend 'Til the End: Raising Your Living Standard in Today's Economy and When You Retire, by Laurence J. Kotlikoff and Scott Burns. A book claiming that most of the advice linked above is too simple and that you need to use a computer to optimize your retirement savings.