Save To Retire Early Even If You Won’t

I listened to a good bit of the James Comey hearing last week.  I don’t follow politics closely but Mr. Ms. Liz does so it was on the TV while I was working.

I kept wondering–does he have F U money?

We haven’t talked about F U money before because I find it to be a bit vulgar and I know some of my readers are sensitive to such things.  But I haven’t found a better way to express this concept.

Jim Collins, one of my personal finance heroes, coined the term.  If you haven’t read his stock series yet, do it right after you finish this insightful post :).

Does James Comey have enough money to move on to something else without worrying about how he will keep his family afloat during the interim?  He’s 56, could he retire?

Fortunately, few people see their jobs implode like James did.  But layoffs are common, companies sell, bosses move on, economies falter etc.

In my last job, we had two major downturns that affected people’s ability to pay an obscene amount of money for ski vacations.  A few of my colleagues lost their jobs–at a time when good jobs were not plentiful.

Most were not prepared.

My approach was to save as if I would retire early, even if I didn’t. 

I wanted to have F U money before I even knew what F U money was.

I’m a worrier, a planner and a control freak.

There are many worries that I have little control over–car accidents, health crises etc.

I have a lot of control over my dependence on a job. 

I reduced my need to worry by reducing my spending and increasing my savings . 

About 15 years ago, my boss’s boss asked me how I could get by with one less accountant.  I think I had a team of seven at the time so the loss of one would have been significant. I immediately replied, “well it better be me because I couldn’t do it”.

I wonder what my response would have been if I didn’t have F U money–maybe I would have worked 80 hours a week rather than the 60 I was already working.  I’ll never know.  Fortunately, I never heard another word about this suggestion.

The value of having F U money isn’t just that you have the ability to leave.

F U money allows you to shape your job throughout your career.

It allows you to ask for more flexibility because there’s less risk if they say no.  It allows you to stand your ground if you’re asked to do something unethical or not aligned with your values.  It gives you more control–now we’re talking my language!

I was a world class saver–saving over half of my take home pay for the last decade I worked.

When I turned 30, my net worth was about 1 times my gross earnings; at 40, it was 7 times; at 50 it was 13 times.

More importantly, when I turned 30, my net worth was 2 times my annual spending; at 40, it was 22 times; at 50, it was 53 times.

I saved this money even though I didn’t have a burning desire to retire. 

I loved my job 95% of the time.  I didn’t have a lot of hobbies and I didn’t have anything to retire to . . . until I found something to retire to.

Once we bought our retirement home in the desert, I wanted to spend my winters there.  BAM – I suddenly had something to retire to.

Fortunately my husband and I were on the same page though he still isn’t fully retired.

We researched what we needed financially, did a bunch of long-term projections and decided we had enough.

I mentored my staff so my work transition could be as smooth as possible.

Then I took the leap–on leap day no less!

Don’t put off saving until you have something to retire to.  It may sneak up on you like it did me or, like James Comey, it may not be your choice.  Start preparing yourself–gather your F U money, invest it, and watch it grow. And, in the meantime, shape your career into something that works well for you–you’re in control.

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Author: Ms. Liz

A CPA, I retired at 51 and I am helping people create their fantastic futures!

2 thoughts on “Save To Retire Early Even If You Won’t”

    1. Well said Tim! I agree that he won’t have any trouble finding a job–I just hope he gets some time to detox before he has to think about it.

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