The best piece of financial advice I ever received

Summary

The article emphasizes the importance of saving a portion of one's earnings as a fundamental financial principle, illustrating the concept with a personal anecdote about building a "Fuck You money" fund.

Abstract

The author shares the best financial advice they ever received, which is to save a portion of what you earn, as highlighted in the book "The Richest Man in Babylon" by George S. Clason. The article recounts the author's experience working a job they hated and how they continued in the role due to financial concerns. Inspired by a scene from the TV show "Friends," the author began saving 10% of their income, which eventually provided the financial security to leave the job when the company faced financial troubles. The savings acted as a "Fuck You money" fund, offering the confidence to exit an unfavorable situation with pride. The author suggests that the amount one should save depends on individual circumstances but emphasizes that having such a fund is universally beneficial.

Opinions

The author believes that the lesson of saving money is timeless and underappreciated until one experiences its benefits firsthand.
They express regret for not learning to save money earlier in life, acknowledging it as common sense that was uncommon to them.
The author highlights the comfort of sticking with a familiar, albeit unsatisfactory, job due to financial dependency, despite the internal desire to leave.
The article conveys that even a modest savings fund can provide significant peace of mind during unexpected financial downturns.
The concept of "Fuck You money" is presented as a powerful asset that enhances one's ability to make bold decisions without financial constraint.
The author admires the discipline of saving and views it as a means to gain confidence and independence in one's financial life.
There is an expressed goal to save up to three years of living expenses, inspired by the story of a Texan welder who had achieved this level of financial security.

Stack up your Fuck You money!

Timeless wisdom. So timeless that like with all conventional wisdom, we tend to disregard it. We take it for granted until it may be too late to apply. I was never taught this lesson of paying myself first as a kid. It is tremendous common sense, yet it was uncommon to me.

I never realized the impact of this lesson until in my 20’s. I was working a brief stint as a telemarketer. I hated that job with a passion, and the management was shady. It was my fault for continuing to keep my self-inflicted misery, because the pain and irritation of staying there weren’t as intense as the comfort of sticking with something I knew, despite it being a shitty situation.

I eventually quit. However, it took me a while to leave because I was always worried about the money. I was making $10 per hour, and we would get $10 cash bonus for every five sales we made. Apparently, the owners were making a fortune, and we were earning a pittance, but to a single dude, no kids at the time and very cheap rent, I was able to make some decent coin. I use to spend what I brought in. Easy come easy go.

One day I was home watching the TV show “Friends, ” and the character Monica (played by Courtney Cox) was paid a visit by her father. As soon as she let him in her home, he hugged her and said (in a somewhat stern fatherly tone) “Monica… what do I always tell you about your money” and Monica, as she rolled her eyes because she must have been asked this a million times before, replied, “Yes dad, save 10 percent of whatever I earn”. It was a surreal experience because I felt like her dad was talking directly to me. So the upcoming week on my next paycheck I started to save 10% of my money.

I consistently saved the 10%, and it started to accumulate to a decent sum. By not touching that “meager” savings it came in handy. I had a modest amount saved, and three months to the day I started saving, that company went through financial issues.

It was crazy. While everybody panicked, I was calm and at ease. In fact, relieved because this gave me an avenue to breakaway. The company was bought out, and I offered an opportunity to stay on with the new owners, but I declined and felt proud of myself.

Having that discipline to pay yourself first is a tremendous asset. Whenever you are in a terrible situation, having that savings equate to a “Fuck you money” fund. Don’t think I have to elaborate on what that is, but saving up that “fuck you money” will benefit your confidence tremendously. If you can’t stand your situation, then you can evaluate your finances and take off with pride. If I had paid myself earlier on when I started that job, I would have left a lot sooner.

Don’t know what a good amount is for your fuck you money fund.

I would say gauge it from your situation. If you don’t need much then having a few months living expenses is adequate. I once met a welder from Texas who told me he had three years of living expenses saved. I was impressed by that and decided that will be my aim. One thing for sure this definitely will not hurt you having that money saved up.

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“Wealth like a tree grows from a tiny seed”- Richest Man in Babylon