Jacques Mattheij

Technology, Coding and Business

The pros and cons of 'fuck you' money.

Resdirector on Hacker News asked a very interesting question: http://news.ycombinator.com/item?id=1511104, how did your life change after fuck-you money?

For the jargon challenged, fuck-you money is defined as the amount of money that allows you to maintain your lifestyle at some desired level.

Technically, I’m not currently in the posession of ‘fuck you’ money, but I do have an asset that allows me to ‘maintain my lifestyle’ and it has been doing so for more than a decade. Hurray for passive income. Of course, the difference is that my situation could change one day, but then again, someone with actual money in the bank will face similar trouble in case banks fold (and it turns out they had more than the insured amount in those banks) and so on. Life is risk, and post-fuck-you-money (from now on FYM) life in that sense is no different.

My luck changed somewhere in ‘95, I put two unrelated pieces of software together and called it something new, since then the jackpot has continued to pay out. It’s really weird because on a technical level is was probably the most insignificant thing I ever did, but that’s fate.

So, to take the questions one by one:

  • Has your life changed in unexpected ways?

Definitely. Every day I look around me and I see people get up and go to work or worry about what their food is going to be paid from next month, the fear of being laid off and so on. I don’t have these problems, and it has brought out one very unexpected trait, which is that I can be very conservative (don’t mess with the thing that makes you money) and very lazy (it works, today will take care of itself).

Now, if you know me even a little bit you wouldn’t paste the ‘lazy’ sticker on me any time soon, so maybe I should explain that better. With lazy I mean to say, able to spend days on end just reading, and in general being unproductive. Before the FYM stage I never ever had time to stay on top of the news or to spend time writing stuff like this or reading online forums. But now that I do I can sometimes waste away a whole day in the sure knowledge that the fridge is full. Being short on cash or hungry is a very good cure for laziness! A couple of years ago a close family member got seriously ill, lost their job and spent a year recovering. It was fairly easy for me at the time to simply pay out a living wage each month, something I would have never been able to do otherwise.

  • Has there been any change in the way you interact with strangers?

Yes, I’ve been screwed royally a couple of times and since then I’ve become much more careful about who I deal with, both privately and business wise.

A few people really knew how to push my buttons and I ruthlessly cut them off.

  • Has the number of things you have to endure increased or decreased?

First it increased, now it is steadily decreasing, the only thing that I seem to accumulate more and more of are tools. I’m an absolute disaster in a toolstore.

I’ve never been a snappy dresser, so no rolex or expensive suits for me, just jeans (likely work pants, so pretty dirty jeans :)) and a t-shirt (when it’s warm) and my 15 year old coat when it’s cold. So it’s not like I advertise that technically I’m retired and have been for quite a while now. That doesn’t stop me from going out in the world, but I’m reasonably circumspect about letting on about the assets that power my decade long vacation from ‘real life’. I’ve had a fancy car for a while, but I don’t need it for ego or status (it was fun to drive though), and it never felt quite right (like wearing a tuxedo doesn’t feel right to me) so I got rid of it. My house still has a mortgage on it (long story, which includes a divorce along the way somewhere) so I’m not even debt free and that surprises those that know a bit more about my situation (say my family).

If I have all these assets why don’t I pay off the house. But assets aren’t liquid cash, and I’d rather have cash-flow than cash any day. One of the businesses I own owns a building and I am paying off that mortgage at an accelerated pace.

I don’t like debt, I never did and I’d rather be completely debt free, but the business comes first, private life second. I have a pretty thick wall between the two and most of the money stays on the business side.

My favorite thing to do on any day is to tinker with something, build something. Right now I’m building a small RV, on a very tiny budget (basically the recipe is take a really old delivery van and convert it. It’s been a lot of fun to do I’m learning a lot and it’s really neat to see it come together. I’ll be driving it around Europe this summer, visit a few HN people along the way. I possibly could buy one outright, but this is cheaper in terms of cash outlay and in the end it feels more satisfactory. Pre-FYM I would have had to rent one or buy one outright, since I could not possibly afford the time out to do this. Of course I could go out and work for a few months, then buy one (and it would probably be a better one!) but it still wouldn’t feel the same.

So, in spite of not wanting ‘stuff’ it tends to accumulate, but it is mostly ‘useful’ stuff, not too much conspicuous consumption here, in fact I couldn’t think of a single thing that I own that isn’t functional.

  • And is “FU money” all its cracked up to be? e.g., is your life an order of magnitude more enjoyable now, or is it pretty much the same etc?

All the people I know work their asses of so they can spend some time (usually very little of it) with their families, I can spend as much time as I want with my family and I can go on holidays that last as long as I want (assuming I’m frugal). I never had a wealthy lifestyle, never wanted one. My monthly (private) budget is very low, near as I can tell net 1500 Euros, the website brings in a fair multiple of that. Another two years and all the debt will have been paid off, and I’ll be able to spend a bit more privately.

The most important thing the FYM has brought me I think is almost complete freedom to pursue whatever it is that my heart desires (in terms of time), and to buy tools to do whatever it is that I want to do. I would not trade that for any base salary+options package because my time is the only asset I’ve got that will only diminish and of which I have an unknown quantity to begin with. Having a steady passive income stream translates in to freedom the kind of which is hard to describe until you’ve experienced it, I’d fight pretty hard to maintain this life, even if it meant operating at an even lower level of income.

Freedom - in terms of time - is priceless.

Now for the cons: FYM has a downside too. You get less sharp over time because your survival skills are not being tested on a daily basis. Should your FYM run out (technically hard to do, but it could happen) then you have a real problem.

You also end up worrying a lot if you have actual cash in the bank (which is why I wrote I’d rather have cash-flow than cash). Cash tends to diminish over time, both due to inflation, mistakes and taxes. So in order to maintain a given amount of $ you have to work again, this time to invest your money in ways that are certain enough to not lose even more, yet risky enough that they bring a good ROI. That’s really really hard.

There are probably other downsides, but those are the main ones that spring to mind.