Month: December 2020

For the young generation of working people, generation Y, the millennials, and the generation currently entering the labor market, generation Z, I find the creation of Fuck You Money more important than ever.

Some of these generations might have the notion that it is difficult for them to make ends meet with their money. They don’t see how you can have a nice life and still not spend everything that comes in. Or how it is possible to save and build something for later. However, it is clear to these generations that they will be more responsible than previous generations for their own financial health, while it is unclear how things like pensions will work for them.

I want to tell these generations that you have all the time you need to work on your financial health. You are not yet (or not too much) bothered by the lifestyle creep in which you think that all kinds of luxury and perhaps superfluous things are essential to you. Many people of generation X seem to be in the middle of this and although they are used to make more money they easily spend it all, every month. My message is that creating Fuck You Money is more important than ever.

It seems more difficult for the current generations to earn enough income to be able to save enough to buy their own house and build up capital. Let alone to build up financial buffers, create Fuck You Money or think about the idea that you might not always want to work, or perhaps never work again. When you start working and making money it is quite challenging to get your life in order. Your income isn’t very large yet and your expenses are growing faster, or at least as fast, as your income. And that’s what it’s all about.

Try to paint a more realistic picture of your desired lifestyle and the corresponding money behavior. When you were a student you probably went on vacation, with friends to a bar or to festivals. Now that you’re making money, why can’t you keep doing this? You can if you spend as much, or as little, money on it as you did when you were a student, and not suddenly two or three times as much, more often and for longer periods of time. You have acquired a number of responsibilities and expenses in this new phase of your life and you want to set aside money for all kinds of goals you never had to think about in your previous phase of life.

As a starter in this phase of life you actually have a number of advantages over older generations. First of all, you are aware of both the challenges and the opportunities early in your life, many people simply realize too late that they want to do something with money they don’t have at that time. If you start saving right away, you can let your money grow for a longer period of time. You can start small and make a habit of ‘just not spending all your money’. Secondly, you already have more experience with flexible forms of working and living than the previous generation. You are less attached to old-fashioned, rigid, contracts and relationships with employers and the government. As generation X we think we need to own everything and above all we gather a lot of materialistic stuff in our lives. For millennials it’s more possible to share things and more about having experiences instead of collecting things.

The red pill and the blue pill in the film ‘The Matrix’ propose a choice between taking either a ‘red pill’ that reveals an unpleasant truth, or taking a ‘blue pill’ to remain in blissful ignorance. The red pill is described as the solution to find out the ‘real truth’ in life. Morpheus, a character in the film, explains that you have to dive into the famous ‘rabbit hole’ to learn about the lies of the world, so that you can break free of these lies and achieve freedom. The ‘rabbit hole’ we’re talking about comes from the story ‘Alice In Wonderland’, where Alice literally falls into a rabbit hole and ends up in Wonderland.

In the book ‘from F*ck You Money to FIRE’ I present to you the red pill. Fuck You Money (FYM) is a way of thinking, as a tool, as an attitude and a means by which you can learn about the bullshit in the world that prevents you from achieving personal financial freedom (or ‘wonderland’). You can do things with your life that matter to you. If you choose the red pill, you might choose to temporarily stop working or to stop working altogether. If you take the red pill I will show you that it is much easier than you think to create enough FYM and do the things you find important and want to do.

FYM is also literally the money you need to say ‘Fuck You’ to your boss, or your bank or your landlord. With FYM you can have a different attitude and relationship with people who think they hold power over you. From the moment you are no longer afraid of threats and pressure because you know you have enough FYM, you participate differently and you can put things into perspective.

Does your manager disagree? Fuck you! If you have decided that you need time for yourself, for something really important and this can’t be done within your company’s leave guidelines and sabbatical rules: ‘Fuck You! This is simply the principle of FYM.

• What do you want for yourself, your family or your children?
• Why do you need FYM to achieve this?
• What is your dream?
• Why do you want to become more financially independent?
• Why do you want to retire early?

Buying your first property might be your dream but this is made difficult by government and financial institutions. You need enough FYM so you can enter the real estate market to buy your home anyway.

Going on a bucket list trip around the world with your family might be your wish. You need enough FYM and there you go.

Retiring early might be your ambition. You start building your FIRE capital, let it grow and make it happen.

Everybody has his or her own dreams, wishes and ambitions in life. Many people find it difficult to have the amount of money available at the moment it’s needed to fulfil these dreams and wishes. This is Fuck You Money. Have enough money available to do what you want at the moment you desire, independent of an employer or government.

Many are struggling with their lives trying to fit into society and meet the demands they think are imposed on them. They are trying to live up to an ideal image of a successful father/mother, partner, friend, son/daughter, co-worker, entrepreneur and tax paying citizen.

I want to draw people’s attention to the possibility of making a plan of their own, of making their own journey, of daring to be different, of daring to be smarter and of daring to make choices. I encourage (younger) people to start choosing for themselves earlier and to take care of themselves sooner. It is better to be sorry for having tried something than to be sorry for not having tried it.

I don’t think retiring early is what everyone needs in their life. I do believe that there are moments in everyone’s life you have to be able to say ‘Fuck you, I will do that!’ and then have money to pay for the consequences. Also, or especially, if the government or your employer doesn’t provide for, or doesn’t support, your decision.

When you become financially independent, you will no longer be dependent on a job, salary, government or family to provide for you. You become self-reliant and therefore have the opportunity to do something for yourself or give something back to the world.

I think if you make smarter, conscious choices you don’t have to be stuck in a job you don’t like. You don’t have to burn yourself out to earn the amount of money you spend each month on things that, if you think about it, don’t really matter.

It’s my ambition to show everybody a simple approach that is easy to follow. I give a lot of attention to behavior, lifestyle choices and the fact that we let ourselves be influenced by others. I provide simple questions, answers, directions and tools to define your goals, to make your plan and to start a change in your life. I provide explanations of the things you need so you can immediately start saving and investing the money you don’t spend.

I have been writing this book for my younger self, the person I was twenty-five years ago. I wrote it for my brother or friends as ‘brotherly advice’.

If I can give my younger self a piece of advice, this would be it:

‘Don’t care too much about what others think of the choices you make. As soon as you make money, start keeping track of what you spend it on, and become aware of whether you think it’s worth it. Don’t compare yourself to others, neighbors or friends to see whether you have the same, more, better, nicer stuff but consider how you can handle your money smarter than them and save a larger part of your income. Put some of this money in your FYM jar and do the most fantastic things later on. Also keep some of your money separate and put it in your FIRE jar, which you invest smartly, so that you become more financially independent of a wage.’

I am writing this book for anyone who, for whatever reason, does not always want to be dependent on a job, an employer or the government and who wants to decide for himself or herself what he or she spends money on.

I want this to be a book you can give to your partner. If, as you read this book, you agree a lot with what you read and find yourself nodding and thinking “Yes, that’s what I think too” or “Yes, that’s what I do” but you have the feeling that your partner needs a little nudge or information and inspiration, then this is your chance.

The book ‘from F*ck You Money to FIRE’ is about happiness, money, bullshit, Fuck You Money and FIRE.

The book is especially about how to get more freedom in your life and inspiration about what you can do with it. This book is about getting a handle on your own life. Live life differently. I want to show how you can start with investing easily and cheaply even without understanding investment strategies.

You will learn how insight into your spending pattern can lead to a change in lifestyle and escape the ‘lifestyle creep’.

It is about setting FIRE goals and choosing a direction of your journey. You can start now.

• This book is not about IRA, ISA or 401K. It is about YOU. It is about how you can easily start not spending all your money.
• This book is not about choosing the best ETF for you to reduce portfolio costs with an extra 0.1%. It is about changing behavior and choosing the best lifestyle for you to reduce your spending to a level that allows you to save and invest.
• This book is not about needing millions of dollars, pounds or euros to pay for a luxurious materialistic retired lifestyle. This book is about defining what you think is important in life and how much money you really need to achieve your goals.
• This book is not about reaching FIRE in your thirties after making 6 figure income and working yourself half dead for a few years. It is about understanding why you might want to work less or not at all and finding out when and how you can achieve this.
• This book is not about scaring you with financial terms, percentages and technically difficult things you need to do. It is about how you can easily start investing and set up your portfolio of low-cost diversified funds. It is about making small and fun steps so you can start directly.
• This book is not (really) about money. It is about better living by making smarter choices. In this book I want to show that freedom and independence can be bought with FYM.
• This book has no ambition to be about bullshit. Where this book is about bullshit, it is to show how to become smarter with brands, marketing and financial advice. And that if we can make authentic choices, it will result in less bullshit.
• This book is about insights from books and practical experience where I dare to say: the soft issue, often is the hard issue. The soft issues are the less tangible human issues – the attitudinal, cultural or mindset issues of people. Addressing the soft issues means talking and thinking about values, culture and behavior.
• This book is not (only) about FIRE (Financially Independent, Retire Early). Where this book is about FIRE, it is mainly meant for people who want to use the principles and insights of FIRE.

How this book is built up

Get, Keep, Grow, Achieve

Get, Keep, Grow and Achieve are four parts that together form your strategy to achieve your ambitions and realize your dream.

• Get – you somehow generate or earn money. It is interesting to explore if there are ways to increase your income now or in the future.
• Keep – you put a part of this income aside. You will save more money if you spend less. Someone who wants to become financially independent makes sure that he or she does not spend all the income that comes in. This can mean that you have to make smart choices about your lifestyle: where/how you are going to live, how you are going to transport yourself, entertain, feed yourself, and so on.
• Grow – you make good choices with the money you have left over. The unspent income you can invest somehow and by doing this you let your money grow. You deposit the money in a savings or deposit account, in investments or invested in a company, your own home, in several houses you rent out, or in relatively safe cheap widely spread ETF’s (Exchange-Traded Funds) or index trackers.
• Achieve – once your FYM or FIRE jar is sufficient and FI (Financial Independence) has been achieved, you can decide to finance the choices you make in your life from this. You have reached your goal. You have enough FYM which can be either a well-stocked bucket list jar or a situation where you are completely financially independent to retire early. Achieve is about celebrating that you have achieved this but also about replanning and recalibrating everything.

Why, What, How

The main reason I have divided this book into three parts ‘Why’, ‘What’ and ‘How’ is because the importance of a beautiful dream, a good ambition or a clear vision is often underestimated. We are inclined to step directly into the ‘How’, to start acting immediately, full of devotion but often with a lot of trial and error and sometimes completely in the wrong direction. By first paying attention to the ‘Why’ and then the ‘What’ I want to prevent you from making a false start at the beginning of your journey by going straight into the ‘How’.

Why

Why is all about dreams and ambitions. You can’t reach a goal without a vision and you can’t climb a mountain without ambition. You can’t change your lifestyle or your own behavior without making your aim clear to yourself.

• Becoming aware of the ‘Why’: formulate your dream and answer the questions ‘Why do you want to create FYM? What do you want to do with your FYM? Why do you aspire FIRE?’
• Become aware of what money is currently coming in, what is going out and why there isn’t enough left over.
• Dreams and inspiration about ‘Get’, ‘Keep’, ‘Grow’, ‘Achieve’.

What

You can’t build a house without a design and you can’t develop a website without a framework. You can’t start making changes to your life without being clear on what choices and decisions to make.

• Designing a lifestyle that suits you and your ambitions. Plan how to adapt your behavior to your desired lifestyle, come up with ideas on how to save money.
• How much money do you want, when do you want to stop working, how long do you want to stop working and what do you want to be able to do?
• Formulating Get, Keep, Grow & Achieve ambitions and making plans based on these ambitions.

How

Finally, you can’t build an airplane in the sky and you can’t start building the roof of a house before the foundation is solid. You can’t just start doing all the actions and expect to save a lot of money right away. This requires some organization. You can achieve your ambitions by cutting them up up into smaller manageable goals and tasks, through experimenting, evaluating and changing your course when necessary.

• What will your new lifestyle be like? Can you increase your income stream? Experiment with consuming less or in a different way and unlearning habits in order to save money. Start investing, learn, evaluate and adapt.
• How do you manage and monitor your (passive) income?
• How do you redesign your lifestyle?

From the moment I started making money (1999) I immediately started creating Fuck You Money. I started to explain the concept and my experience to friends. Some people picked up on it, others thought I had gone crazy.

Travel

During my studies I went on a long trip to Central America of about twelve weeks. After graduating I went on a trip to South America for four months. Immediately after my trip I started working, without a penny in my bank account and a (not shockingly high) student debt.

Work (in employment)

My first job was at a large well-organized company where I got the keys to my first lease car on the first day. International introduction weeks and training sessions were a great start to a promising career.

My department was all about Management, Control & Finance. Like my colleagues and customers I wore a suit and gray was the dominant color. The problems we had to solve were interesting for my colleagues but I noticed that I was more attracted to what colleagues in other departments were doing. It became clear to me what my future career would behold in the MC&F department. It could be neatly mapped out from beginning to ending up with a Financial Director position at a large company. The future was bright indeed but all was neatly colored within the lines, every step predictable and accompanied by utterly boring training.  I soon decided that this was not for me.

Very different direction, work hard play hard

I kept working at the same company but in a department where it was all about Creativity, Innovation, Strategy & Collaboration. There weren’t just men working, the suits weren’t just gray and my colleagues and clients were diverse in terms of background and interests. It was much more fun. I started a totally uncertain career which was discouraged by the more serious people around me and I loved it. I started as a junior but I got opportunities, I learned a lot and worked hard.

It was a comfortable life I was living in Amsterdam from where I drove my lease car to the office or a customer somewhere in the country every day. I worked absurd hours (very regularly >100 hours a week) and during some periods I more often slept in a hotel next to the office than in my own bed at home. But I loved it. Working with an enthusiastic team of professionals on complex issues and solving them with creativity and innovation was great. I didn’t suffer from stress but my colleagues and I struggled a bit with the tenability of such a high-pressure situation.

My FYM account grew steadily. I put money aside every month.

Short sabbatical, travel and divemaster training

After a couple of years I realized that there were a few things that I didn’t get around to in my life. I wanted to become a divemaster (DM). I had done the Rescue Diver training in my limited evening hours. Combining the DM training with my work schedule wasn’t going to fit. Also, I found out that trying to fit traveling to far away destinations within the maximum number of vacation days from my job was quite impossible. I came up with a sabbatical of four months in which I could travel and do my DM training in Indonesia. I told my manager my plan and had my Fuck You answer ready in case my manager said I couldn’t do it. I was actually expecting the answer that it didn’t fit the rules or that I had to have had X-number of years of employment first. I was expecting my manager to say that there was no space in the plan, that I couldn’t be missed and that customers were counting on me, but that didn’t happen.

What I learned was that if you have FYM at your disposal you are strong in every possible negotiation. I did not ask my manager for permission. Instead I told my manager what I was going to do, why and when.

A few months later I traveled through Sri Lanka, went diving around the Maldives, did my divemaster training in Sulawesi, Indonesia and enjoyed backpacking life in Thailand.

One insight I gained was that it pays to find out what kind of regulations and arrangements there are. I had withheld money from my gross salary every month for a couple of years and deposited it into a tax-free savings account. I didn’t have to pay taxes on this money as long as it was in that account. I agreed with my employer that the amount in my savings account would be paid out spread over four months during my trip. I paid less tax on this because I went on unpaid leave and had no further income. With the money paid into my account during the months of ‘unpaid’ leave I was able to travel comfortably, pay for a week of live-aboard diving and even finance my entire divemaster training.

With renewed energy I went back to work. I did some fun and useful training and education that I had chosen for myself paid for by my employer. I worked hard again. I saved up overtime and got paid for it. I deposited it all into my FYM account.

A real Fuck You! moment and letter of resignation

A few years later I was held back from a well deserved, I thought, promotion. My manager had different ideas about my career than I did. I was instructed to do specific types of training that I did not like in order for me to develop in a direction that I did not want to go. I was supposed to meet sales targets while I thought I was doing great things for my customers.

I was told that a promotion wasn’t going to happen, again, because of all the
bureaucratic bullshit rules but that I would be financially compensated. This was a very clear signal. The universe was trying to make something clear to me. I couldn’t ignore this. I waited until the bonus was transferred into my account and the day after, the last day of the month, I resigned. Without wasting too many words I told my manager that I was going to do all the things I hadn’t been allowed to do within the company.

14 months solo world tour

A month or two later I travelled over land and sea, across the Sahara, on ‘public transport’ to Dakar. It was the beginning of a 14-month solo trip through Africa and Asia in which I spent quite a bit of my FYM. It was the best destination for my hard-earned money.

During this trip I gained a number of insights:

• If you don’t make any money, you don’t pay taxes. I even got money back from the tax office during this trip.
• Someone was living in my rented house in Amsterdam so I didn’t have to spend a single euro of my FYM on something that wasn’t of use to me during that time.
• I was able to deregister from the Dutch health care system. I didn’t use it for more than a year and I didn’t have to pay any health care contribution. I took out a long-duration travel insurance for an amount of which I can only pay a few months of health care contribution in the Netherlands.
• I spent little during my travels. I had saved quite a bit and I had a reasonable budget but it doesn’t cost that much if you organize things well. In the countries I visited, the cost of living is so low that I could do anything I wanted for less than €1000 (US$1200) a month on average. I spent my money on sometimes sleeping in a cheap cabin on a beach, sometimes relatively expensive wildlife safaris, almost always extremely cheap food and sometimes an expensive flight.
• From the budget I had set for myself I could travel longer than I thought.
• I had less and less need for stuff. I replaced some essentials a few times. I got rid of more and more stuff so my backpack was less heavy.
• I kept track of every expense I made, every single euro. This gave me a lot of insight. I started to convert money I did not spend into extra travel days. I was able to see exactly how many more days I could travel (extra) with my set budget because I paid (more) attention to certain expenses and kept an eye on my daily average.

Working for myself

The second part of my Fuck You Money I spent on starting to work for myself. The week after I got back to the Netherlands I registered at the Chamber of Commerce and started doing things that I enjoy, am good at, that other people appreciate and want to pay me for. As a starting entrepreneur I was not entitled to any benefits, while I had no turnover and no income, so my FYM was keeping me afloat.

It took me some time to get paid assignments and I certainly doubted my decision from time to time. Just before I hit the bottom of my FYM account things turned around. I was able to sell and soon I worked almost full time, earning more than when I was an employee. I put this money aside for harder times. I was no longer interested in owning an expensive car, laptop or phone as a consequence of my long travels and I now had to pay for it myself as a self-employed entrepreneur. I bought the things I needed for my work with a focus on functionality instead of looks, image or other bullshit reasons.

Life happens

I met the woman who would later become my wife and we enjoyed the good life as DINKY – Double Income No Kids (Yet) in Amsterdam, where she came to live with me. We bought the house that I had been renting since I was a student. We financed it with a mortgage based on her salary because my income and assets did not count according to the rules of the banks in the Netherlands due to my self-employment.

We were quite capable of not spending all that came in and we put it in a savings account. We didn’t invest any money in the stock market because we didn’t want to lose our FYM. We traveled low budget for a month (to the Andaman Islands) and I asked her to marry me on a deserted island that we had to swim for half an hour to get to.

We completely renovated the apartment and paid for it without an extra loan. We got married, my wife resigned and we went on a four month honeymoon to Japan, Vanuatu and New Caledonia.

Work pressure, stress increasing

We both worked pretty hard. Me with my own company. My wife in one corporate job after another. We lived well and didn’t spend all our money. I had enough money left each month to keep topping up my FYM account. By now my wife had (also) got her motorcycle license and she bought her dream bike, a red Ducati. She did end up in work situations that didn’t work out well. We had enough income enabling us to pay off extra on our mortgage.

Living abroad

We had said to each other that we wanted to leave the Netherlands and live and work somewhere else. I got an assignment in India and was negotiating with Australia for a job. My father became very ill. Our plans were shelved and I decided to spend a lot of my time with my dad during the last months of his life. I wasn’t working at the time and I didn’t need to. It was very important to me to be able to support my father. After his death we stayed in the Netherlands to be there for my mother.

During a vacation we decided to move to London because the large company where my wife worked moved its headquarters there. I got an assignment in London and within a month it was all organized.

London, more, faster, tougher, more expensive

London was fantastic and expensive, hectic and hard work but a lot of fun. We had rented a cool apartment in Camden with an extra bedroom and bathroom so friends and family could visit us, which happened a lot.

Investing in our real estate

We kept our apartment in Amsterdam and rented it out within a month to an expat family. In between we paid extra off of the mortgage and we invested in mortgage refinancing to lower the interest rate. Our monthly charges went down (significantly) and the rental income went up a few percent each year. Additionally the increase in value of the apartment is a bonus but does not directly increase our passive income.

We invested in an extension, we added 30 square meters for an extra living room and an new master bedroom. By doing this, our apartment became an even more attractive proposition for rental to expats. We paid for this out of our FYM pot, in cash, without a loan.

It’s time for plan B: We are leaving

After a few years, and another semi burn-out for my wife, we discussed our state of affairs on the Mediterranean island of Formentera. How are we doing? How are we feeling about our life in London? How do we want to proceed? Do we want to stay in London and live this life? Barefoot on the beach at sunset and with a beer in hand we decide to pull the plug.

It turns out, once we think about it a little longer, that this is the moment for Plan B. Ever since I returned from my long journey and certainly since we got to know each other, Plan B is: ‘Off we go, on a long journey, just the two of us’. Within four months everything had been arranged and we were on a plane, one-way to South America. With a FYM account of around €80K (US$95K) we will see where we will end up.

After a year and a half of travelling, we come back to the Netherlands for four weeks, mainly to see our family and friends, and we leave again. After another year of traveling we do this again and leave again. We learn to spend less and our traveling is getting cheaper. We visit cheaper countries and travel slower and our Burn-Rate, the average we spend every day, is getting lower and lower. More often we are in a country where our expenses are lower than the passive income we receive.

From Slow Travel to Nomadic FIRE

After 3.5 years of travelling we take stock again. We want to do things differently. We don’t want to go back home but we want to travel less. We agree that we will look for a nice cheap place somewhere in the world where we can stay for a long time. We don’t want to work and depending on the Cost Of Living of the countries where we live we can continue this lifestyle for a long time. My FYM account is not depleted. We decide to reserve $10K of this as an ‘Emergency fund’ to cover our first months of living if we want, or need, to return to the Netherlands. We also decide to change our lifestyle, wherever we end up, to make our Burn-Rate lower than our passive income. In short, we are FIRE.

We meet an entrepreneur on the Maldives and agree to help him to manage a guesthouse next season, on one of the beautiful islands where manta rays and whale sharks swim. We let him know that we don’t expect any form of wages and agree that he will pay us a part of the profit, if there is any.

Locked Down in India

We return to India, which we find a wonderful country, and my wife joins a yoga teacher training course. Later we move to Goa and are increasingly confronted with Coronavirus/COVID-19. We decide to stay and move into an apartment with a kitchen and end up in the first lockdown. We have lived the lives of retirees since then and we love it (I am 46 years old at the moment). We cook for ourselves and go out for dinner every now and then. We don’t have a car, motorcycle or scooter. We walk a lot and we bought bicycles for longer distances. We spend very little money.