from Hacker News

Savings for 5 Years Living Expense: Is It Enough FU Money to Quit My Job?

by blitzball on 5/10/23, 2:25 AM with 26 comments

• by armchairhacker on 5/10/23, 2:34 AM

  My understanding is "FU money" doesn't mean you don't work again: it means you can quit a job you don't care for, and not worry about finances before finding a new job.

  And that's what I'd recommend. Nobody knows what the future will hold so I'd be a bit worried relying on money I've already saved up for the rest of my life. Plus, not working may cause stagnation and motivation issues. But you seem to have enough money where you can push back on your company without worrying about being fired, and search for an easier, more flexible job even if it pays less.

• by NtochkaNzvanova on 5/10/23, 2:34 AM

  Only you can answer that. Depending on how risk-averse you are, you would look at the worst case scenario where you quit your day job, all of your consulting firm income dries up the next day, and you get hit by a bus, survive, but can no longer ply your trade. Would your 5 years of living expenses cover that?

  Alternatively, if you're confident that you could have no income for 5 years and go back to the rat race without any difficulty, then sure, go for it.

• by fogzen on 5/10/23, 4:10 AM

  You’re conflating FU money with financial freedom.

  FU money is being able to quit without worrying about expenses before finding another means of living.

  Financial freedom is reaching retirement threshold (financial escape velocity): having enough money to not work anymore based on your desired expenses. That means having enough money invested in index funds such that you could withdraw the annualized return each year and live on that for the rest of your life (typically 4%).

• by clay_the_ripper on 5/10/23, 7:52 AM

  There will never be enough. As an entrepreneur, 5 years runway sounds like a dream :) It all depends on your level of risk tolerance.

  In my personal experience, I have found that waiting for “enough to do x” never really pans out how I thought it would anyway so just go for it, back yourself and figure it out on the way down.

• by segmondy on 5/10/23, 1:35 PM

  Yes it's good enough to quit your job. But to quit the rat race for good? Probably not. Your consulting firm indicates you have to work. What if you get seriously sick, that suggests your consulting income will go to $0. FU money means you never have to work again for a lifetime. Let's assuming your consulting firm is passive, so you have hired folks, you own the firm. You don't have to do anything, but collect income. It's still risky. Whatever you consult on might not be relevant in a decade in which case you must work to pivot or income goes to $0. Good luck, you will figure it out. Think through it.

• by solumunus on 5/10/23, 10:34 AM

  > I already have a consulting firm that gives me income double that of my job pay.

  Then obviously yes...

• by admissionsguy on 5/10/23, 5:22 AM

  In my view FU money is a state of mind more than a set amount of money. If you still worry despite having a profitable business, you probably aren't there.

• by GianFabien on 5/10/23, 7:55 AM

  I don't understand your question. If your consulting firm generates double your current income, then even lesser savings taking the leap would be preferable.

  Since you claim to be very risk averse, then you need to consider how robust your consulting firm income is and the effects of inflation on your savings. But no job is guaranteed either. Sometimes you have to go with your gut. Analysis paralysis can lead to worse outcomes.

• by motbus3 on 5/10/23, 3:54 PM

  I have a bit more than that in FU money. Still I think it is worth checking for another job instead of stopping at all.

  Said that, despite working in a cool organizations, I think I might need sometime for myself. Also said that, I have family, so I need to keep going because things are getting insanely expensive and my FU money which was suppose to be worth a decade, is not worth it about 5 years.

  The "6%" inflation is terrible because as we all noticed, nothing has increased only 6%.

  This is the case in the country I am from. It is like that since I was a kid, every 10 years everything got at least 5x more expensive, including buying a house and food.

  Now I moved somewhere else and the situation here is about the same. I used to spend 30 per week in groceries now I spend almost 60. Electricity bills went up about 80% when compared to previous year. The rent in the place I lived before raised about 30% but I ended up living somewhere closer to the office so it is even higher.

  In summary, I am not filling the FU pot as fast as I want and expenses are increasing much higher than I expect.

  All this situation of layoffs and etc make it worse. At least I had a conversation some days ago with some friends that work more close to the guys with money and they are already preparing the pockets for hiring again.

  I have 2 buckets for my FU money One is a reservation for serious emergencies that should remain untouched while I have other resources. Then I have my true FU bucket which I hold in an investment easy to get it back. Unfortunately, I pay for liquidity with low ROI, but I feel safer this way so I consider it as taxes for my own sanity.

• by bluehorseray on 5/10/23, 2:36 AM

  If you spend less than or equal to 2/3 of your current income right now you should be able to quit with 0 years living expenses covered. If you spend all of your current income right now, and your 5 years living expenses assume 0 income than you essentially have 15 years of runway. Seems fine to me if your math is right

• by gt565k on 5/11/23, 1:38 AM

  If you already can work remote on side gigs for your consulting firm consider moving to a low cost of living country in south/Central America, Thailand, or Eastern Europe.

  No point paying living expenses in the west if you can generate a western salary remotely.

• by danwee on 5/10/23, 12:43 PM

  On my book, sufficient money to quit the rat race is: I own a place to live. Renting/mortgage is my biggest expense. As long as I don't own a place to live, I need to continue working.

• by nubinetwork on 5/10/23, 11:26 AM

  I was ready to leave with only 6 months of expenses... that was before companies started firing everyone... 5 years is probably enough though.

• by ksherlock on 5/10/23, 5:08 PM

  Have you looked into health insurance without $dayjob subsidizing it?

• by ano88888 on 5/10/23, 2:25 AM

  how much is it in dollars? if my side gig is making double of my salary , i would definitely quit my job as i value freedom of being able to manage my time and my attention on what i want to do.