WTF is F.U. Money (How to Calculate Your Freedom Price-Tag)
This letter is for those who want to escape the rat race.
Most people spend their lives trading time for money, never realising they can opt out of the rat race.
All it takes is knowing your F.U. number — and a plan to reach it.
But before that, WTF is F.U. Money?
F.I.R.E. Number
F*UCK YOU Money
Financial Utopia
Different names, but same meaning. Your FREEDOM price-tag.
The dollar ($) amount that once achieved — allows you to live off your investment & NOT HAVE TO WORK ANOTHER DAY.
Another way to put it — be WORK OPTIONAL.
Let’s break down exactly how you can calculate your F.U. Money Number.
The ultimate figure that lets you design a life on your terms.
Why Most People Struggle to Achieve Financial Independence
Financial independence feels like a distant dream. The goal itself is vague and overwhelming. How much money is enough? What does freedom even look like?
Without clarity — you stay stuck in the cycle of earning and spending.
But there’s good news: with the right tools and mindset, financial freedom becomes a clear and achievable target.
Clarity Brings Freedom
When you know your financial freedom number, everything changes.
You can plan backward, break it into achievable steps, and work toward a life where money is no longer — a source of stress.
Here’s how you calculate your F.U. Money Number step-by-step:
Step 1: Define Your Desired Lifestyle
Start by estimating your annual living expenses in today’s dollar terms.
This should reflect your dream financial freedom scenario.
Think about everything:
Housing
Food
Travel
Insurance
Hobbies
Here is where tracking your expenses becomes absolutely crucial. The more accurate your estimates, the better your plan.
(Pro Tip: Use my Free Finance Tracker to track your spending habits and get a clear picture of your living expenses)
Quick Note: There are different types of FIRE (Financial Independence, Retire Early):
Fat FIRE: Luxurious (champagne at the beach) lifestyle.
Lean FIRE: For a minimalist (cycle to get around) lifestyle.
Barista FIRE: For partial financial freedom, supplemented by part-time work.
Decide which aligns with your vision.
Step 2: Factor in Inflation
Inflation eats away at the value of money over time.
So it’s important to adjust your annual living expenses (inflation adjusted).
You don’t want to end up sipping batch-made Mocktail when you planned for Mojito by the beach. Trust me.
Assume a safe inflation rate of 2–3% annually.
Or visit official sites like Bureau of Labor Statistics (US), the Reserve Bank of Australia, or Eurostat to get accurate inflation data.
Here’s the formula:
Future Annual Expenses = Current Annual Expenses x (1 + Inflation Rate)^Years
Use this future value calculator to make your calculation easier.
Step 3: Subtract Other Income Streams
Do you have passive income sources like rental properties, pensions, or side hustles? Subtract these from your annual living expenses to refine your target.
For example:
Adjusted Annual Expenses = Future Annual Expenses (Inflation Adjusted) - Future Annual Passive Income
This updated figure gives you a clearer target for your F.U. number.
Step 4: Calculate Your F.U. Number
The classic formula for your F.U. (a.k.a FIRE) number is:
Annual Expenses x 25 = F.U. (a.k.a. FIRE) Number
This is based on the 4% Rule, which stems from the Trinity Study.
Conducted in the 1990s, the trinity study analysed historical stock and bond market data to determine — how much retirees could withdraw annually without depleting their savings.
Some key assumptions:
Balanced portfolio of 50% stocks, 50% bonds
30-year retirement horizon
More recently, some financial experts recommend a 3% withdrawal rate for greater security, especially in volatile markets or longer retirements.
This approach reduces the risk of outliving your money but requires a larger portfolio to sustain the same lifestyle.
Example:
Annual Expenses: $50,000
FIRE Number (4% Rule): $50,000 x 25 = $1.25 million
FIRE Number (3% Rule): $50,000 x 33.33 = $1.67 million
I personally use the 3% rule to calculate my F.U. number. It’s better to err on the conservative side. You don’t want to end up having to craft a resume in your silver years. Trust me.
Step 5: Set a Savings Goal
Once you know your F.U. number, work backward to set a savings goal.
Ask yourself — how many years do I have until my target retirement age.
Next, incorporate an expected annual growth rate (e.g. 5-7% for a diversified portfolio) into your calculations. Use a savings goal calculator to project how your savings will grow over time, reducing the required monthly or annual contributions.
Example:
F.U. Number: $1,250,000
Years until retirement: 20
Expected annual return: 6%
Compounding frequency: Annually
Monthly savings target: $2,831.72
Feeling overwhelmed already? Don’t stress.
My upcoming Findependence Navigator Guide is your roadmap to financial freedom. With a powerful Notion template, you’ll stay on top of your finances, confidently navigate towards Financial Utopia.
Launching soon — use the code [First100] for a 20% discount.
Step 6: Invest Wisely
You know your F.U. number.
You know your monthly saving target.
This step is where the rubber hits the road.
Don’t let your $ sit in the bank (for god sake)!
Inflation will eat away your purchasing power — you want +6% (or more) not -2%.
Investing is key to growing your wealth. Follow these basic principles:
Diversify: Spread your investments across asset classes to minimise risk.
(i.e. 20% ETF, 20% Bonds, 20% Real-Estate, 20% Metals, 20% Alternative)Manage Risk: Align investments with your risk tolerance and financial goals.
Low/No Fees: Choose low-fee investments to maximise long-term returns.
(i.e. VOO ETF)Compounding: Start early to harness the power of compounding growth.
(Compound interest is the eight wonder of the world — Albert Einstein)Dollar Cost Average: Invest consistently over time to reduce the impact of market volatility.
Take the First Step Today
The only thing standing between you and financial freedom is — clarity.
Sit down. Calculate your number. Start your journey toward Financial Utopia.
Take control. Chart your course. Become Work Optional.
Start Here: Free Finance Tracker to help you understand your spending habits. Use it to calculate your annual living expense. This is your first step. Do it for yourself. If you’re serious about financial freedom. Your chance to escape the rat race.
By the way.
I’m creating a beginner-friendly Financial Independence Course. My goal is to help you take control of your financial destiny. The first 100 followers will receive an exclusive discount at launch — this is my way of saying thank you.
Stay tuned for more updates. That’s all for now.
Stay optimised folks.
- Alfred