As news trickled in about massive layoffs at Lifesize yesterday, I was struck by many emotions. Sadness for those impacted. Sadness for those that are left. Acceptance that this was the right thing to do for survival of the company as it continues the journey of reinvention ... again.
An afternoon discussion with a friend prompted me to write this quick post. We got to talking about the topic of F-You money and we have quite a different perspective on it. There are 3 categories of money caches for me: Emergency, F-You and FI (Financial Independence). There is no reason why anyone can't achieve all 3 at any income level! Of the 3, F-You money is the most empowering because it truly gives you the freedom to pursue the life that is true to your core values.
My buddy and I had alternative views on 2 parts. First, on the amount of money that constitutes F-You money. Second, on the ability of normal people to achieve it. I'll tackle both of these.
First, how much is enough for all three money caches?
1. Emergency - 6 months of living expenses. It's about survival and bridging to the next gig.
2. F-You - 5 years. OK, maybe it's only 2 years, but I think it's more like 5.
3. FI - Never have to work again. Take monthly expenses x 12 x 25 and that's what you need.
Second, anybody can do it. I had F-You money at 31, long before Lifesize, long before Alchemy & AMD. In the middle of Apple. No giant windfall at Apple either. It's not like I was an early employee (employee #13747). Even more impressive is that my niece has F-you money right now and she probably doesn't even know it. She's only 25. I'm not easily impressed, but that's impressive. Great job R ... now you need to invest some of it instead of hoarding it under the mattress.
Go watch this video right now on the importance of F-You money. I'll wait.
So how did I do it? Really quite easy looking back on it. It all started in January 1983.
1. Invest 10% in 401K (often yields more than that with any employer match)
2. Save 10% In ESPP (yields more than that with the 15% discount. Don't hold it. Roll into your control every 6 month period)
3. Save another 10% (or if you want it faster, then save more)
4. Spend the rest & have fun & no guilt
5. Wait for 5 - 10 years and you will have F-You money.
If you don't have F-You money, no worries. No shame, no blame. But get started today.
A couple other sites to look at:
http://jlcollinsnh.com - attribution to where I recently saw the Goodman movie clip