What Is FU Money?

What is F You Money? Well in short it is Fuck You Money... The level of wealth that allows true financial independence. That moment when you have enough money in investments that are generating enough return for you to live on.... For the rest of your life!  ...Even if you are in your 30's! If it sounds like a pipe dream, know that true financial independence and the ability to retire early is available to everyone... Including you. There is a new movement in the FIRE world (Financial independence Retire Early) where bloggers are documenting their path to achieving financial independence in their 30's, 40's and 50's. The best part? The 'process' to get there is actually incredibly simple... Especially if you can embrace a frugal lifestyle. It is all about frugal investing. Now, what follows is a very general overview of the concepts used by many people to retire early and achieve financial independence... This is not investment advice. I'm just someone who has been interested in and studying investing for several years and I'm just sharing some of the more interesting ideas I've found. That said, here is the investing strategy to achieve FU Money and financial independence fast. First, you learn to live on as little money per year as possible... This is the frugal part. Then, you invest the rest in a low cost index fund (Vanguard's VTSAX fund, for example and maybe some bonds to round out your asset allocation) and you simply don't touch it. An index fund is a collection of stocks... and the index fund mentioned above is literally every US based company that is publicly traded... So when you buy that index fund, you get a tiny piece of every publicly traded company out there...  Some companies' stocks go up, some go down, new companies enter the index and some companies go bankrupt. Right now, there are over 3600 individual stocks in that fund, so what you get is a ton of security through the 'strength in numbers' philosophy. The only way you could ever lose all your money is if all companies (all 3600+ of them) ceased to exist?! And honestly, if that happens, we are dealing with some crazy catastrophic global event and this will be the least of our worries... For more about what an index fund is, check this out: https://en.wikipedia.org/wiki/Index_fund You see... people lose money in the stock market when they sell... And over long periods of time, the stock market always goes up. Your goal is to just ride that wave... And every month, add more to your portfolio. Some months you buy when the market is up... Some months you buy when the market is down... The average becomes the dollar cost average and gives you a nice balance of highs and lows... And your portfolio will continually grow. So you habituate the process of #1 living on as little as possible (while still earning as much as you can) and #2 investing the rest in low risk, low cost index funds... That's it!  You stick with that long enough and reach the point where you have 25x your annual expenses sitting in your investment portfolio and according to the trinity study, you should be able to pull out 4% per year (this is how much you live off of now), every year for life. https://en.wikipedia.org/wiki/Trinity_study In fact, you may find that your portfolio grows while still delivering you a safe withdrawl rate and that, my friend is the power of compound interest.