Future me meets past me in a bar OR how I came to discover F-you money / Conversations with my younger self about financial freedom.

Image by Mobilos / Wikicommons

FM: Here, sit down. I poured you this glass of ice-water. 

PM: What? Who the hell are you and where in God’s name did you suddenly appear from?? 

FM: I’m me. Which is to say you. Future you. You can call me FM. That’s future me. And you are past me. So I’ll call you PM. But never mind all that. Have a sip of water. I don’t have very long. But I do bring you some pretty damn good news!

Though, in return I need you to do something you are not very good at while I’m here. And that is to listen very carefully for a few minutes.

Do you think you can you do that for me? 

PM: No. And I don’t understand what’s going on here either. You do look just like me, only wrinklier… And grey… How can you be the future me though? And how on earth did you get here? 

Wait, will I be able to time travel in the future??

FM: Yes. No! Never mind that. Listen up kid. There’s a super-power I need to equip you with urgently. And then I’m gone forever and you’ll never hear from me again. Until you become me that is.  

PM: Dude…

FM: Look, I know how crazy this all is. But this is serious. It’s our life we’re talking here, and how you remain free throughout your days to focus on what truly matters. All those goals that you want to achieve? Finding lasting happiness? Arriving at the gates of purpose?

I want to show you how you could – if you only put your mind to it – enable yourself to better focus on what truly matters to you. Free of worrying about the mundane. Non important matters like money for example. Not to mention wasting precious time doing stuff you shouldn’t have been doing in the first place. How about that? 

PM: OK… This whole thing is a bit bizarre. But I’m listening…

FM: Look young man, I’ll make it as brief as I can. You already got your priorities set right. In theory at least. And you have been right about your main goal all along. No matter what ‘they’ said. The nay sayers. The pessimists. Especially them.

You know how you always felt there must be more to all of this? That work for the sake of work can’t be the meaning of life?

Well, you were right all along! And I’m here to help you make sure you can channel your most precious resource, your time, towards finding out what is. Freeing up more time for you in the process… And time… Especially those hours you spend awake… Well, that’s one non-renewable incredibly precious natural resource you don’t have that much of, and which you just might be about to auction to the highest bidder in the free markets before you know it…

But it doesn’t have to go exactly in this way. There are plenty of alternatives. And you can still buy your future life hours back and keep them to yourself. 

PM: Buy my life hours back? From whom? How? I’m afraid you are not making any sense FM… 

FM: Hold on. We’ll get to it. 

PM: I hope so… Where are you heading with all of this old man from the future? 

FM: Well. Here comes the Matrix moment of decision.

Now…What if I told you, that a lot of what they taught you since very pre-school was a sideshow. An indoctrination. A beating onto a cookie cutter shape. A story you chose to believe. A distraction. And that all those teachers and lecturers, they were just ‘professional’ story sellers. Placed there by design to steer you towards the post industrial era machine. Away from the true nature of who you could’ve otherwise become.

What if I told you that there is this one very important lesson, that they kept hidden from you all these years. And that knowing it, and acting on it, would give you a special kind of F-you superpower, which will allow you to remove yourself from the sideshow and focus on the real McCoy.

PM: F-you superpower… You are saying I’m trapped somehow but… My life is good. I’m free as a bird you snake oil salesman! 

FM: You are right to be suspicious. But… What makes you so sure you are so free, and free from what exactly, and if indeed you are free, what compels you to believe you may remain so for much longer?

See… Your whole life you’ve been carefully, gently placed onto societal chains. A system of thought that goes by the name consumerism. It’s what much of modern economy is based on.

In your case, having just graduated, you have entered an advanced phase of the journey, having learned how to become a ‘professional’. Specialising without necessarily realising, in mortgaging your future away.

Sleep walking if you ain’t careful, towards a ‘career’ of a voluntary state of slavery. With your only ‘reward’ being a monthly salary. This sum of cash, however large or small, that may or may not come with a title and some so-called benefits, however ego flattering or soul crashing, designed to sustain your dangerous addiction, and keep you in the wheel of slavery and consumption, for as long as you are of use.

This dangerous addiction, keeps you constantly just tipsy enough, to keep buying mostly unnecessary consumer junk and services. It compels you to trade your very finite amount of life hours, whilst trapped together like an insect, with billions of other similarly minded monthly salary addicts, all tightly packed together in a labyrinth of flashing bright lights, gadgets and carbohydrates shoveling diners. And like lab rats endlessly running around, over and over in their maze, with maybe just a 2 week “break” here and there, during which doing pretty much the same activities of consuming unnecessary stuff and services, only in some other maze. And of course for a much much higher cost. And then return… Back to the grey lab maze again.

These things you might shortly come to believe “you deserve” for being so professional and hard working at maintaining your addiction, like expensive holidays or just ordering a taxi whenever you don’t feel like walking, will often become your worst soul destroying poison. Consumerist hard core junkies, a surprisingly large portion of society, will willingly borrow money that they don’t have to buy things they don’t need, from faceless soulless loan sharks who are eager to flood the markets with cheap credit.

And all the while as many of these consumers keep no emergency savings and believe the fairy tales sold to them by story tellers such as politicians or financial advisors, their accumulating debt will work against them like a silent killer. Slowly crashing them through the destructive energy created by negative compound interest of 20.77% on the average UK credit card, forcing them to slave away in the lab, for their remaining hours, days, weeks, decades with no relief in sight.

Until there is nothing left of their amount of life hours, their health gone, and the finite resources of our only home, Planet Earth, are all depleted.

Such an acceptable addiction this behaviour has become in our consumerist society, that the junkies even get gamified by the loan sharks with a ‘credit score’ measurement. A points system of sort, where the highest score is given only to highly trusted consumer-junkies willing to mortgage every available life second that they have left whilst keeping perfect record of doing so available to the loan sharks to leverage against them.

(Stephen Frink/Corbis)

And all this for what exactly?

Only so they can boast with their highly leveraged fine golden diamond crusted syringes and hand made hamster wheels of ivory and precious stones. Selling off sometimes even their time asleep, by dreaming not their own dreams, but the dreams of the machine. Dreams of fairy-junk.

So thoroughly institutionalised, they actually feel empowered by trading their remaining hours away in return for even grater volumes of more of the same just slightly different packaged junk and golden lettered titles.

And once the junkies near their expiration date, their eventual removal from the shelves. All is left for them, is sitting on their golden armchairs in front of the screen, for an average of just a few more years of ill health, to watch in horror as the world they left behind them to their children grows ever more polluted, rivers dry, ancient forests in ashes, and entire ecosystems, vital to the survival of our species, collapse before their eyes live on TV. 

PM: Woah… That’s a pretty dark picture you just painted there… Like seriously, did you come all the way here from the future just to depress the hell out of me, because let me tell you, I’m not sure I want to even know all this future stuff! 

FM: No. Wait! Look, I’m trying to make a point here. Perhaps I got just very slightly carried away there… Always had this sense of drama, you should know. Ehem…

But I’m here to show you that it doesn’t necessarily have to go that way! I’m here to teach you how to play the system by its own rules. To allow you to focus on which truly matters, instead of on just accumulating stuff. There is a method and it’s a simple as it gets. 

But I warn you… Once you know the way to F-you money, there is no unknowing it no more. And the responsibility for your future liberties, is as always yours alone. For if you won’t change course right now, you’d have surrendered your dreams away to the machine, and become the old man in the golden armchair before I’ll know it. 

PM: And so I should choose between a blue pill and a red pill right. Look, I’ve seen the movie. Hand me that red pill urgently and get on with it, what do you want me to do…? 

FM:  No need for any pills here young man. Quoting the famous Southpark episode you haven’t seen yet, “there is a time and a place for everything and that is college”. M’Kay?

PM: Oh yeah…? (lighting a cigarette…)

FM: Oh, dear. Still smoking ha. Thank god you’ll at least have the brain to quit at 40. 

PM: 40…? I can quit tomorrow morning if I want… And you were saying…?

FM: Yes… Sure you can… I was saying. Oh, the superpower! To acquire it, all you need to do is whatever you were planning on doing anyway. Go out there, find a girl, live as the true world citizen that you are. Enjoy your time being young in the sun. Try your hands in all sorts of work and adventure. Travel the world. Have tons of fun! 

Just add the following little tweak into your habits. Whilst you are working to pay the bills and accumulate wealth, instead of mindlessly buying the latest iPhone or drinking your hard earned cash away on weekends, just save however much you possibly can. Ideally at least 50% of your income. And as per the advice from the Oracle of Omaha, who himself started investing aged 11, invest every last dime in cheap index tracking funds.

And before you know it, you will have accumulated a good amount of superpower F-You money. Which basically means you won’t have to take shit from anyone ever again. The societal consumerist chains around your soul will be removed. Your potentially fatal future monthly salary addiction gone. Your consumption of resources optimised and efficient. The planet saved. And your most precious resource, your remaining life time hours, they will all be back in your pocket, for you to use however you see fit. Capish?  

PM: I think so… F-You superpower money ha? I like the sound of it… So, in essence if I follow your advice, I would be relieved from being forced to work out of dependency to a monthly salary. I could then use all of my time doing work I’m truly passionate about. I won’t have to think and speak as I’m ordered by some sociopath boss or be left starving if I don’t. And on top of that I’ll be saving the human race and Planet Earth? Is that what you are saying? 

FM: I knew you’ll get it. That is exactly the freedom that F-You money gives you. It frees you from money (!!) and from all sorts of s*** you would otherwise spend your time dealing with. We could also just call it Financial Resiliency or Financial Independence to keep our language clean. 

Look, I gotta say this one thing though, you don’t get to use your new superpower in all its glory right away. You need to build it up slowly… Like all good things in life, it takes time, patience and extremely hard work to accomplish. Depending on your savings rate ratio, So not how much you earn but how much you save, you could accumulate your f-you money in anywhere between 5 years if you save 80% of your income, or it might take you 66 years if your savings rate will only be only 5%. That’s up to you.

Rest assured though, this isn’t a science fiction story like my time travel thingy here. Albeit it might resemble one. The F-you money superpower I’m here to tell you about is based on some seriously sound academic probability based retirement research. It does have a Matrix like name though. The Trinity Study. And an important principle derived: the 4% safe withdrawal rate(SWR).

PM: Interesting… How does this academic 4% SWR helps me find freedom from worrying about money exactly in real life though?  

FM: Glad you asked. Here’s the simplified version of it actually works out. 

First. You need to figure out the annual cost of your essential needs. Like housing, food, medical bills etc. And you can easily do that by monitoring your expenses. All of them. Just keep record of every penny you spend in an excel sheet or a notebook, and a few months later you’ll have a solid idea. 

Second. Once you know how much exactly you need in order to cover your annual expenses, you multiply this figure by 25. And this becomes your freedom providing nest egg of F-You money magic number you work towards. 

Third. You invest this F-you money of yours on a minimum 50/50 asset allocation split of equity/fixed income, but ideally not much more than 75/25 split. How exactly would depend on your appetite for risk. Remember: the point as always, is not to ever lose sleep over such mundane things as money.

And you can choose for the purpose of this theoretical exercise ETFs tracking the S&P 500 and intermediate term US govt bonds. Which is what the Trinity Study folk used. And when all of your invested hard earned cash, go into those cheap index funds, you get to keep their cost as low as possible. And this is important!

In the UK, it’s Vanguard‘s ISAs and SIPPs that work pretty well for me, as these instruments are designed to allow investing cheaply and tax efficiently. But there are plenty of other options of course for you to choose from!

And lastly. Check this one out! With a rather conservative 50/50 asset allocation of S&P 500 / Intermediate term US Govt Bonds, as the Trinity Study so thoroughly tested and proved, you could safely withdraw 4% of your invested funds, every year, come rain or come shine. So this means you can keep withdrawing your 4% whether the markets are up or whether they are down. And yet, without the money theoretically speaking, ever running out or even growing in a best case scenario, OR in a worst case scenario still having a 96% probability of the nest egg lasting you at least 30 years. There are even calculators out there, made just for people like you. And me.

And if 96% chance of success doesn’t feel safe enough, you can opt for the 3% rule, which based on the revised Trinity study, has virtually never failed.

But look, the 4% SWR was designed to be so safe, that chances are your heart will fail sooner than the 4% SWR will fail you… Not that it will anytime soon young man!

Now, let’s look at a real life example, shall we? 

Say you need on average £1,500 every month to cover for your essential needs. 

Your annual expenses are therefore £1,500X12= £18,000

In the UK, this should amount to ca 1/2 of the average pre tax full-time salary.

This means PM, that your F-You money magic number would be £18,000X25=£450,000

PM: OK. Mathematically speaking this sounds pretty simple. £18,000 is 4% from my presumed F-you number. And I can safely withdraw this 4% from my £450,000 invested nest egg every year. Theoretically this could go on in perpetuity without the £450,000 ever running out. So kind of like buying a rental, and renting it to tenants forever, so the money keeps coming in without the flat ever disappearing into thin air? 

FM: Kind of. Not exactly though. We can talk about rentals on another blog post. Now write this thing down so you won’t forget! 

PM: Where?

FM: Anywhere! In that notebook over there. Never mind, I’ll write this conversation down and publish it in the past on my future blog so you can review it however often you need. I’ll make sure to embed links all over the blog post so you can access some pretty mind blowing content, written by these absolutely incredible bloggers, that are so much more clever than I am when it comes to the science behind F-you money! No need to reinvent the wheel you see my young me… It will all be there for you whenever you may need it!

PM: Bloggers ha… I’ve heard of this new thing called ‘blog’. I think… Anyhow, £450,000. The math is clear. But wait… £450,000!?!?

I knew there would be a catch… There is just no way that I could ever get this sum together unless I rob a bank… Bring on that blue pill after all. Like seriously. How am I ever going to be able to save and invest £450,000, and I’ve only just finished my studies…?  

FM: I’m glad you asked. And relax. Don’t give up so quickly. You don’t really have to save the whole £450,000. If that is even your F-you number.

PM: I don’t?

FM: No. See here comes rushing to your help this incredible mathematical magic formula, that Albert Einstein himself called the world’s 8th wonder. And in plain English, compound interest. Or even more simply put, interest on interest. And here’s how it works…

Take the S&P 500 index that we touched on earlier, and which the Trinity Study used in its research. Historically, as you may remember, it delivered over the past 100 years, on average, 8% growth year on year. And mind you, this historical period of time included 2 world wars, the Vietnam war, the oil crisis in the 70’s, the abolishing of the gold standard by Nixon, the 1987 Black Monday horror show, and much more. So a pretty turbulent ride and yet, 8%!

S&P 500 Index - 90 Year Historical Chart
S&P 500 Index – 90 Year Historical Chart

Now picture this. Say you bought the S&P 500 index today with a modest £100 by opening an investment account with Vanguard and leveraging a saving you made by cooking a healthy amazingly delicious meal at home, instead of buying it on credit like an ass, only to be served like the lord you ain’t, in some fancy pants restaurant. One year from now the 8% interest on the £100 investment would’ve delivered you a modest £8. Not much to brag with, right? 

However, say you forgot about the £100 investment account that you opened… Until let’s say 40 years from now. When you hit 60 years of age. And then you suddenly remembered. And rushed to check your investment account. Well, due to the magic of compound interest of 8% over 40 years, you would’ve found the £100 ugly little duckling turned onto a £2,172.45 beautiful white swan!!

And what’s best, without you having had to do a thing about it. In fact, there is even a study that was made by Fidelity that proves, that the most successful investors in their books, are those who forgot about their portfolios. The other group of successful investors was those that died. And I’m pretty sure the dead make no investment decisions!

And so my point here is, to save £450,000 over a period of time, depending on your savings rate, you may only need to actually invest a portion of the sum, and then just let compound interest take care of the rest for you…

Now, that’s pretty amazing, right? See for yourself!

PM: Wow. You were right. They really didn’t teach us any of that in school did they…

FM: Wait. There is more! 

Like check this one out: once you’ve got your nest egg sorted, whatever your number may be, you are covered for your annual expenses, potentially forever. And what’s best, you don’t even have to ever really worry about the stock exchange behaving erratically or even crashing as it sometimes naturally does before forever going up again


In fact, as long as you keep an emergency fund around for a rainy day, and which can last you at least 3-6 months of your expenses, you are protected from sudden changes to your circumstances or from even having to sell any shares whilst the markets are extremely volatile.

And when the stock exchange crashes, as it does periodically, you just do absolutely nothing about it. Or as the legend investor John Bogle once said, ‘Don’t just do something, Sit there!’ Or better still, go to your yoga class. Or meditate the SE crash stress away with another legend, JL Collins.

That is how the superpower F-you money works my friend. And in fact, it can even allow you to get so relaxed, you just say F-you to it all, and simply retire early from the rat-race. Like this other legendary blogger Mr Money Mustache did at age 30. Or Jacob Lund Fisker, the Danish ERE wizard who retired at the age of 33. And like many other FIRE movement folks do all the time.

PM: Wow! So… If I do all you just said, I could just go traveling indefinitely? Work on whatever projects I’m truly passionate about? Focus on what truly makes me happy without the fear of not being able to put food on the table or being left with nothing when I’m old? I could actually do whatever I feel like without ever worrying about going broke ever again? 

FM: That is exactly what I’m telling you my dear old young self. Although nothing is sure in life except of course for death. So play it safe, keep your plan flexible, have your defence lines all figured out, aim for settled work instead of doing nothing with your days. Keep yourself sharp and educated!

For there is one last thing you need to know… And it’s about the kryptonite that robs you off your superpowers. 

PM: Oh? 

FM: Remember: You have to always stay the course. And do what the one and only legendary Bogle did. Stick to your plan. Never ever panic sell during a market crash. No matter what it says in the newspaper. No matter what sort of ‘this time it’s different’. Whatever ‘Black Swan’.

It’s an ‘apocalypse now’ every single day in the media when market volatility strikes. You keep your emergency fund at hand for those uncertain days! You stick to your plan, keep investing as normal and ignore the noise. Hell, tie yourself to the mast if you must when the sirens call you with their deadly songs. And ride the storm!

For if you jump into the sea after them sirens, the F-you magic will all be gone for you Cinderella. The kryptonite will radiate your superpower away. And you’ll get shipped back to the lab and straight into the maze again. Or at least you’ll just write off lots of hard earned cash for no good reason.

PM: OK. I’m all in. Is this definitely everthing? Don’t I get like a spider bite to go or a cool mask? 

FM: Are you serious??

PM: No. Of course not. This is life changing and INCREDIBLY mind blowing. Please tell me that this is something that you did and that I’ll have this superpower in the future!! 

Hey… Are you OK…? You look like you are fading away…?

FM: That is the one thing I will leave you to find out for yourself… And yes, I fade away as I’m being beamed back to the future!

I’ve Gotta go kid… Be good past me… And always stay the course!   

Michael J Fox and Christopher Lloyd in Back to the Future II. Photograph: Moviestore/REX Shutterstock

*Disclaimer: Sabbatilife is not a certified financial advisor. Nothing in this post or website should be taken as investment advice to act upon. You are the only person responsible for your own actions and funds, which could be placed at risk.

One thought on “Future me meets past me in a bar OR how I came to discover F-you money / Conversations with my younger self about financial freedom.

  1. Pingback: The Story of Poor Thirsty Grasshopper & Rich Ant Barista / Killing the Coffee Bill for Good Vol 1. – Sabbatilife

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