The pros and cons of 'fuck you' money.

http://jacquesmattheij.com/The+pros+and+cons+of+%27fuck+you%27+money.

by jacquesm • 16 years ago

199 130 16 years ago

mcantor2• 16 years ago

Is camarades.com the project you referred to that you founded in 1995 and now produces a "FYM cashflow" for you?

jacquesm17• 16 years ago

Yep. It's been a steady producer for as long as I've had it with two major hickups, the first (of course) the .com crash, the second the death of iBill.

It has survived both, the first by changing from an advertising driven model to a subscription model, the second because I'm in close contact with someone that owns and operates and IPSP so I could switch on a moments notice.

I probably aged a couple of years for each of those.

Technically the period between '95 and '98 (the pre-camarades days) was license driven, I've written about that elsewhere: http://jacquesmattheij.com/content/story-behind-wwcom-camara...

mikumetz• 16 years ago

Looking at the crisis of social security and "performance" of my modest 401k funds I sometimes feel that my own successful startup (with a modest exit) may be my only way to escape extreme poverty at older age. I doubt that anyone will hire a 65 year old programmer and I just don't see how SS+401k will be enough to deal with living/medical expenses. In that sense I'm desperate: starting a successful project is matter of survival.

Is it just me who is having similar thoughts?

startuprules2• 16 years ago

Or, emigrate to another country where healthcare/living expenses are cheap (most of the countries in Asia) or where the government won't (likely) default on its healthcare/social security obligations (Germany, France, Canada, Australia, Northern European Countries), unlike the US.

chc3• 16 years ago

My impression is that most countries don't have as generous of immigration laws as the US does, and judging by the experience most of my immigrant friends have gone through, that's saying something. Have I been FUD-ed?

Tichy2• 16 years ago

I live in Germany, and healthcare is very expensive here. True, if you are on social welfare, the government will also pay for your healthcare. But that means you have to live on social welfare standard. Also, you can't really bet on social welfare being still as high in 30 years as it is now.

Tichy2• 16 years ago

Same here - I don't think a normal job would earn me enough to have a rent significantly above poverty level in 30 years. Especially not when accounting for inflation (1 million today won't be a million in 30 years).

patio11• 16 years ago

Hypothetically supposing your logic is accurate, there should be an army of unemployed talented 65 year old programmers desperate to run your business(es) for you while you sit on the beach, right?

ericd• 16 years ago

Well, the field hasn't been a popular choice of trade for very long - not sure there's an army of 65 year old programmers, period.

johnrob2• 16 years ago

A 65 year old programmer seems strange today because very few 65 year olds are even computer literate. I have to think that will change as time goes by (although I don't know far off 65 is for you).

That said, I'm pretty sure there are some CS professors that are 65; if they can hold that gig we should be able to crank out software (I hope)!

pgbovine• 16 years ago

That said, I'm pretty sure there are some CS professors that are 65; if they can hold that gig we should be able to crank out software (I hope)!

there's no concept of tenure outside of academia, though :/

MaysonL• 16 years ago

I'll let you know what it's like in a year {just turned 64 this month). I wrote my first programs in September 1963.

I don't have a great deal of money, but I do have enough coming in that most months I end with more than I started, and don't have to worry about starvation, foreclosure or eviction, and spend a fair amount on books and gadgets.

It's not a very exciting life, but I enjoy it most days, and it's been years since I had to listen to anybody telling me what to do.

billpaetzke2• 16 years ago

Yeah, I don't do 401k. Nor am I depending on social security. I plan to start my own business(es) and get wealthy that way. I don't care if it's "risky" to start a business. That's what I choose to do. Also, the more cash/liquid savings you have, the more once-of-a-lifetime invest opportunities you can seize. I've gleaned this info from existing millionaires such as Mark Cuban, the book "The Millionaire Next Door," and others.

natrius2• 16 years ago

So... you aren't saving for retirement at all? If so, relying on the success of a future business as your retirement fund isn't smart. If you're still saving elsewhere, that could be a sound plan as long as you don't sink it all into a business that fails.

If that's your plan, then you are depending on Social Security or whatever social programs are available when you retire.

tlrobinson• 16 years ago

Hey, I know you!

Seriously though, when are you going to start a company? There's at least 4 of us (Kevin M, John H, Dave N, me) working on 3 startups in SF. Join us!

MrFoof3• 16 years ago

I've a similar mindset, though where I'll deviate is I'm 28.

For me I think the reality is that I expect computer literacy to continue to increase, while some slick abstractions will be developed in the next 25 years. Granted, software developers will still be in demand, yet there'll be more labor available in the market, and much of it will be more accessible which will drive down salaries a bit as the labor supply starts to catch up with demand. I also lack a formal degree, though real-world experience and self-teaching myself most of a CS and Mathematics undergrad curriculum has prevented that from becoming a problem.

Also, I'm watching my 60+ year-old parents go through it. They sold their house to free up cash. I had to bail them out (for 18 months) when I was 22-23 for a non-trivial amounts of money, since no one else could've helped them out. My uncle and aunt are in the same boat. My sister is ridden with debt. Parents of neighborhood kids are going through similar motions (selling the house to free up cash).

My plan?

* Save at least 35% of my net pay every year. Already done, shooting for 40% now. Goal is 50% (at current income level/standard of living). Credit is a tool that I do use to my advantage at times, but it's rare. Most everything is cash, including major purchases (i.e. car).

* Develop something to provide a 2nd income stream of at least $850/mo that only can go into savings. That's real money over the long haul.

* Minimize purchases of durable goods. I expect 15 years out of the car (only buy a car that makes you smile every time you get in it). My furniture will outlive me. I get 5-ish years out of clothing (and don't own much). Electronics either need to last 10+ years or have high resale value.

* Plan to change careers in 17-20 years, especially if there's tangible demand in a new field. Mostly since I expect to be bored. Barring that, time to get a "real" engineering degree.

jacquesm17• 16 years ago

I think programming and teaching will eventually merge. That's a long way off though.

_cbsz• 16 years ago

> slick abstractions will be developed in the next 25 years.

Don't bet on it. There are tons of failed examples of attempts to enable plug and play programming (connecting pre-made components together), and it never scales. The devil is in the details.

drtse4• 16 years ago

Completely agree on your frugal approach and about the last point, one thing that anyone in our field needs to develop is the ability to eventually gain expertise in a new area if interesting opportunities arise.

rmanocha• 16 years ago

Reading your points 1-3 (4, I agree with, I think) reminds me of Keynes' "In the long run, we're all dead".

I'm not against planning for the future, but at-least for me, living as frugally as you say you are would simply be too boring/depressing/mundane/etc. given my current (or short term) salary. Perhaps I will feel the pinch of this later in my life, but I definitely want to "live in the moment" as much as I possibly can - and for me, that involves spending some money (I have no doubts that others can do so without money too).

Psyonic• 16 years ago

How's that 10 year old computer treating you?

SMrF• 16 years ago

If your startup projects have failed you, you don't think your 401k plus social security are enough, you are within two decades or so of retirement and you are still "just a coder" I know exactly what you should do:

1. Pick a company you don't hate 2. Get hired 3. learn their codebase inside and out 4. DON'T QUIT

Pretty soon you will be the only person around who knows about system "X" and they will be glad to keep you around past 65. My office is filled with COBOL programmers that took this path. Hell, we even recently hired a guy in his 60's, because that's just how old COBOL programmers are.

Alternatively you could get your MBA and go the CTO/VP of engineering route. This seems better to me, (as a backup plan to startup failure).

d2viant• 16 years ago

This is completely true. I'd say additionally that the smart COBOL programmers in their 60's "retire" and then return the following week as consultants making 50% more. That has been my experience working with them.

nandemo• 16 years ago

What is this talk of "extreme poverty"?

Let's assume for the sake of argument that Americans earning the minimum wage are living in "extreme poverty" (which is not true in my opinion, but let's be conservative).

The median household income in US is around U$50k.

http://en.wikipedia.or/wiki/Household_income_in_the_United_S...

So the median household is already living above poverty. You alone can earn more than $50k as a junior programmer. You probably have above average programming skills, and will eventually earn 100k if you get a job in a big company and stick to it.

You don't even need to live too frugally. You only need to pretend your income is $50k -- you'll still live at least well as the median household -- and sock the rest away in very conservative investments.

Retric2• 16 years ago

If your talented there is huge demand for 60+ year old programmers. The issue is expected salary increases with age, and if your skill's don't keep up it becomes harder to find a job.

PS: My father was a 63 year old programmer the day he died, and believe me he was well paid and in high demand.

mindcrime• 16 years ago

  Is it just me who is having similar thoughts?

Nope. I'm 36 (turn 37 in a week) and I have similar thoughts. There is definitely a sense of desperation at work.

I do believe that, at this point in my life, the only realistic shot I have at living out my dreams for the future is to build a successful startup. So you are definitely not alone. :-)

mikecane2• 16 years ago

>>>able to spend days on end just reading, and in general being unproductive.

I disagree that reading is being unproductive. You want to see what unproductive is really like, track down and watch an hour of "Maury" or "The Jerry Springer Show" on TV.

jacquesm17• 16 years ago

I got rid of TV a long time ago, I figured it took too much time while giving too little in return. Instead I read online news with an appetite that has me labeled 'news junkie'. It happens in waves though, sometimes lots of it sometimes nothing for weeks or even months. It usually depends on whether or not I have something interesting to do, or a lack of energy or inspiration, it's like a low-activity level thing to do that is still moderately useful because it at least keeps me informed.

JabavuAdams4• 16 years ago

I agree. Part of creativity and "thinking outside the box" is making your box bigger than others'. So really, you're just thinking outside their box.

megablast• 16 years ago

I disagree with that, unless you are reading something very specific, and for short periods of time. Reading can so easily become something that takes up a lot of time, no different to tv. And if you are not creating, then you are not being a producer, you are being a consumer.

mikecane2• 16 years ago

>>>And if you are not creating, then you are not being a producer, you are being a consumer.

Creating from what? What well of knowledge do you have to dip into if your mind hasn't been stocked by reading first? And if all you do is read for a goal, then you are cheating yourself.

mmaunder• 16 years ago

There's no such thing. You're always going to have to be nice to someone - even if you're Mel Gibson.

johnrob2• 16 years ago

There is a such thing as not having to be an employee anymore, and I think that's the general consensus here as to what FU money is.

jacquesm17• 16 years ago

Agreed, it's a weird term, but since it was used in the original I figure I'd keep it, but I did add a clarification as to what it means to me.

In fact, the people that have 'fuck you' money (that I know) tend to be pretty rude to people that are simply trying to make their lives a little easier, such as people waiting tables or running a store. You can instantly tell from the way they treat those 'below' them in stature (if there is such a thing anyway, my grandmother used to say about such people that they smell just the same on the toilet) whether they're nice or not.

As a rule, if people are rude to others that are in a 'lesser' position to them then you can do without them just fine.

wizard_2• 16 years ago

Meet some more people. I've saved 20+% for about 5 years now, I have over a year of FU money, and probably closer to 3 or 4 if I actually payed closer attention to my spending and cut back. I'm not rich, I just save before I spend and prolong the time before I give any of my money away (purchases, bills etc - its my money!)

It hasn't affected me much, I still work, I'm still kind to strangers and waitresses. You're rule is good, but something tells me those people you know would be the same in any situation.

nostrademons3• 16 years ago

"In fact, the people that have 'fuck you' money (that I know) tend to be pretty rude to people that are simply trying to make their lives a little easier, such as people waiting tables or running a store."

The people I know with FU money have generally been really nice - there was this one kid in college who was an asshole, but he's the exception, not the rule. Most will go out of their way to help people, and are always polite to waitstaff etc.

Maybe I've just been lucky. I've found that the comment someone made in the original thread holds pretty true. ("Whatever type of person you were before FU money, you'll be more of afterwards. If you were a jerk beforehand, you'll be more of a jerk afterwards, while if you were a nice person beforehand, you'll be a nice person afterwards.)

dieterrams3• 16 years ago

My concept of FU money isn't that you get to be an uninhibited jerk. Rather, if someone's a jerk to you, you can say "FU" and not worry about whether you're going to be able to pay the bills. The sort of thing you can't do if you're dependent on your employer to maintain your lifestyle.

nostrademons3• 16 years ago

But that's the case with nearly everyone who has >~3 months of savings. If it's just one isolated person that's being a jerk to you, quit and find another job. Hell, you can do that with no money in the bank if you find the other job first and then quit.

JabavuAdams4• 16 years ago

The most important thing the FYM has brought me I think is almost complete freedom to pursue whatever it is that my heart desires (in terms of time), and to buy tools to do whatever it is that I want to do. I would not trade that for any base salary+options package because my time is the only asset I've got that will only diminish and of which I have an unknown quantity to begin with. Having a steady passive income stream translates in to freedom the kind of which is hard to describe until you've experienced it, I'd fight pretty hard to maintain this life, even if it meant operating at an even lower level of income.

Freedom - in terms of time - is priceless.

Amen. That's my goal.

amichail• 16 years ago

I would like this freedom also. However, generally people do their best work when they are in adverse circumstances (e.g., they are broke).

Perhaps by the time one achieves this freedom, their best work is behind them.

jacquesm17• 16 years ago

> Perhaps by the time one achieves this freedom, their best work is behind them.

I think SpaceX is a great example to the contrary.

ajg1977• 16 years ago

"However, generally people do their best work when they are in adverse circumstances"

Bullshit.

Groxx• 16 years ago

So... abuse the creative types until they succeed, then drop them like a ton of bricks?

davidw• 16 years ago

I think what PG has done with YCombinator is pretty interesting, and a good "second act", although it's quite different from building something with code.

staunch2• 16 years ago

This isn't FU money. FU money means you're set for life. (Maybe >$5M in semi-liquid assets in the US or whatever).

Two outstanding mortgages and a single stream of revenue (that will certainly diminish over time) is hardly better off than just having a high paying corporate job where you don't have to go into the office very often.

zacharypinter2• 16 years ago

Regardless of the competing definitions of "FU money", I think the author's point was about the freedom that comes with not needing a job to maintain your standard of living from month to month.

staunch2• 16 years ago

I agree that is the author's point (which was excellent). I'm taking issue with his use of the term "FU money".

I don't think it's right to say there are competing definitions, as if they're both equally right. I think there's a correct definition a) "set for life" and a wrong one b) "set for now". These are two very different concepts, so using the same term is causing confusion.

Someone in this thread said "I have FU money for a year", which makes absolutely no sense. This shows how misusing the term can cause confusion.

leelin• 16 years ago

Maybe the perception of a huge safety net is more important than the actual assets.

The common theme among all definitions of FU money seems to be freedom from fearing we'll go hungry and relief from risk averse behavior like holding on to an unfulfilling job.

Is FU money more satisfying when we've earned it ourselves rather than winning it (inheritance, lottery, marriage, fraud)?

tokenadult• 16 years ago

Is FU money more satisfying when we've earned it ourselves rather than winning it (inheritance, lottery, marriage, fraud)?

I hear so, and anyway that is my only possible channel of ever having that much money. But as far as I know, people who inherit money, win the lottery, marry into money, or defraud people of money don't feel bad about having the money.

c1sc02• 16 years ago

"freedom from fearing we'll go hungry and relief from risk averse behavior like holding on to an unfulfilling job" By that definition being on unemployment in one of the friendly european social security states qualifies. Also makes me wonder why not more startups try to bootstrap it at the expense of father state, could work in Europe at least.

gaius3• 16 years ago

Earning it has the nice side-effect of freeing you from the need for external validation.

jacquesm17• 16 years ago

I did use the word 'technically', and I made it fairly clear why I think the situation is comparable.

Now, to point out why it is even more comparable than what you get out of it, I could liquidate those assets and have FU money (for want of a more elegant term) in a relatively short time, but as I wrote I'd rather have cash flow than cash so this is a conscious decision.

Weight Watchers and a few others have angled after the domain name for serious cash but I'd rather hold on to it for now since I'm better at managing my money and my free time when I have less of the former.

If I ever decide to change that I will probably arrange for an auction house (probably moniker) to sell off the domain and/or the rest of the assets.

That's a long way off though.

The value of those assets outweighs my debts 20 to 1 or better, in the mean time, by not liquidating the assets I've managed to make more on them than I would have ever made if I had sold out years ago. Sometimes selling is not the right option. The downside is that you have to maintain your assets, but in my case that is probably less work than it would be to maintain a pile of money.

Also, the single stream of revenues is the one associated with one website, in one corporation. I own three of those and quite a large number of websites and have a stake in a few others as well as some investments in reasonably successful startups.

On another note, I mentioned my divorce in passing, FYI, I left all the easily liquidated assets (two debt free houses and a bunch of money) with my ex wife (voluntarily) because I think my income potential is higher than hers if it should come to that. Our son lives with her, I figure if it makes his and her life more secure that's the right thing to do. So I already was out of debt and chose to go back in to it out of my own free will in the fairly sure knowledge that it would be a temporary situation.

Recently I bought back the half of the company that she got as part of the settlement as well so now the situation has slightly changed from the way it was before and I still need to work out all the implications of the change.

illumin8• 16 years ago

Thanks for sharing. There are ways to turn cash into cash flow very easily. For example, you could take $100k USD and buy a fixed annuity that would pay you approx. $650 a month for the rest of your life. That number is pretty low due to interest rates being very low, and there is a risk of inflation. You can get inflation adjusting annuities, and of course there are other secure cash flow vehicles.

I admire your ability to generate passive income. Very few can do that without actively working every day. Don't discount the benefits of cashing out should your revenue begin to dwindle. You can still get the benefits of cash flow vs. cash without owning a business.

ulfurk• 16 years ago

I loved reading your story. This is were I wish and strive to be and funnily enough your life sounds about exactly the way I hope mine can be some day.

I think I might even use your article as a reference in future because oddly enough a lot of people don't seem to quite get what I'm talking about when I try to tell them what me dream is. "What, not have a job? How? What would you do? You have to work" etc. etc.

revoltingx• 16 years ago

I think the problem is that people like junk in their house. I don't. My 'fuck you' money is $800 every two weeks. I pay $600 a month. I don't buy much, I spend a lot of time with my girlfriend. We go to the beach, park, etc. I spend my free time programming the game I always wanted. It's great.

btilly• 16 years ago

Have kids. That will reset your standards pretty quickly.

TGJ3• 16 years ago

Call me what ever you want, but I made it 3 lines into the article before I closed the tab and moved on. There's no need for that language. There is no need for that attitude. Grow up people.

ams6110• 16 years ago

Well the word that I presume offended you is in the title. Why did you click on it at all?

zacharypinter2• 16 years ago

Seriously? Sure, he used the term "fuck you" money a few times, but only to refer to an immediately recognizable financial situation that he wanted to talk about. Outside of that, there wasn't any foul language in the article and it was actually an interesting read.

I could probably see your point if it was a Zed Shaw article, but even then it seems that reasonable people should be able to look past any vulgarities if there's useful information to be found.

jacquesm17• 16 years ago

I wrote that in response to another HN article that used that term.

May I suggest: http://www.youtube.com/results?search_query=george+carlin+se...

rewind2• 16 years ago

"Fuck You Money" is a well-known and well-understood term. He didn't make it up.

Maven911• 16 years ago

I love it how TGJ gets downvoted for no apparent reason, other then respectfully stating his opinion on using foul words for every day language

mcantor2• 16 years ago

An essay on a site for programmers is not "every day language."

He said, "Grow up people," which is not very respectful.

Those are two apparent reasons.

chc3• 16 years ago

Respectfully stating his opinion? What post were you reading? He got downvoted for an uninformative comment that had essentially no content besides insulting Jacques by saying he has an "attitude" and needs to "grow up" — just because Jacques was responding to a question that used a term that offends TGJ's personal sensibilities.

vaksel2• 16 years ago

what was the fancy car? are we talking about something like a Ferrari? or something more like a BMW M3?

joshu3• 16 years ago

Don't knock the M3; funnest thing I've ever driven.

vaksel2• 16 years ago

wasn't knocking it, personally I think that the M and the AMG models are some of the best options if you like to be low key.

Just debadge them, and 99% of people won't know that you have the high end version.

Audi S line is kinda good too, but they really dropped the ball this generation. The S4/S5 are barely making enough power to compete with the 335i. The upcoming RS5 should fix that, but Audi is probably going to charge so much for those, that the $60K M3 will look like a bargain by comparison.

tricky• 16 years ago

If you get the chance, take an older M Roadster for a spin. They're silly fun and are getting really cheap.

jacquesm17• 16 years ago

slk. At 50,000 km/year they're a bit much to keep in good maintenance, eventually I sold it and put the money towards reducing my mortgage, I think that was the sensible thing to do.

mattmaroon• 16 years ago

I love how most of the opinions about how FU money changes your life start off with "technically I don't have FU money."

shin_lao• 16 years ago

I don't like debt, I never did and I'd rather be completely debt free, but the business comes first, private life second. I have a pretty thick wall between the two and most of the money stays on the business side.

I can't stress enough how this is a good business advice.

Never mix up business money and your money.

You'll eventually be able to pay yourself well when business does well. Don't take too much from it at the beginning. Cash flow is paramount to success.

JoeAltmaier• 16 years ago

The level that is FYM is a sliding scale. See http://yourmoneyoryourlife.info/

The pros and cons of 'fuck you' money.

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