How much money do you need for f*ck you money?

emonseo21

I like to talk about the life philosophy, investment strategies and business models that, in my humble opinion, lead to fuck you money and financial freedom.

I have written about lonchafinismo, personal finance management, expense control methods, investing in index funds, the importance of earning more money, NECST businesses...


But you know what?

If I had to choose the key factor to achieve financial freedom, without hesitation, I would choose the savings rate .

Today I'm going to talk to you about her.

And, to do so, I'm going to draw inspiration from one of the most devastating articles I've ever read about financial independence.

An article that ma  India Email List  rked a before and after in my relationship with money. The first time I read it, being a total neophyte on the subject, my head literally exploded.



I dare say that this character before you, Nudist Investor, is the consequence of that reading.

The article I'm talking about (written by the great Mr. Money Mustache ) is this one , and I recommend that you read it.

Now let's get down to business.

The savings rate as a thermometer of your freedom
As you know, the savings rate represents the percentage of your income that you do not spend and, therefore, save.

If you earn , euros per month, spend € and save €, then your savings rate is %.

For those of us who aspire to achieve financial freedom, this seemingly harmless ratio provides us with very valuable information.

You will see.

If I were a live-a-lifer and a becauseyolovalguista who spends everything he earns every month, my savings rate would be a round %.

And with % savings, will there ever be a time when I can retire early?

The answer is simple: no, I will never be able to do it.

Like any good fool, my work career will last forever and ever . I will retire when the State, that superior entity to which I owe everything, decides that I should retire.

Never before; if anything, a little later.

On the contrary, if I managed to save % of my income, when could I retire?

Well look, in this case I could do it right now. Since I don't need to earn money to live, I have already achieved financial freedom.

The two previous cases point towards the extremes. I have done it on purpose to caricature and, at the same time, contextualize the situation.

Now let's do more serious numbers with an intermediate case. For example, a % savings rate .

If I manage to save half of my salary (which yes, I know, it is a lot), each month of work I can buy one month of financial freedom.

This means that with what I earn one month, I can live for two months .