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Have you ever wished you could say no to your employer? Or that you could ask for something like a pay raise or more holiday without fear of getting laid off? Fear of not being able to pay the bills at the end of the month or of being unemployed. By having I Won’t Money, money you could live off for months or years to come, you can do these things! You can live a life where you set the rules. And this guide will show you how.
What is I Won’t Money?
I Won’t Money (also more vulgarly known as FU money) is money that you have saved up, and have accessible, that you can use to live off for a period of time. Money that allows you to say no to your employer.
It is not the money in your pension pot, the equity in your house or any other asset that would be difficult or take time to access. It is money that is so readily available that if you quit your job today, you could take it out and live off it. That you can use to pay your bills and living expenses.
It is money that makes you free to change employer, or even take a longer period of time off, without the fear that comes of not having a steady pay check.
It is money that make it possible to say I won’t when your employer asks you to do something that really don’t sit well with you.
Why is I Won’t Money Important?
Most of us feel that we are dependent on our employers. We rely on them to pay our mortgage and get food on the table. We feel we should be grateful for our jobs. For the opportunity to work there, for the fact that they hired us.
And we are really scared to not be wanted any more. To do something that upsets the view of us as the model employee. So when we are asked to do something we are unhappy with, we keep our head down and get on with it.
We miss an important family event because of a work emergency.
We lay off employees to increase company profit margins.
Have you ever had to have a conversation with a client or co-worker that you personally disagreed with but that you had anyway? Because you had to.
What if you don’t have to? What if you had the financial stability so say I Won’t?
I Won’t lay off my staff.
I Won’t miss this family event.
I Won’t have this conversation that I think is fundamentally wrong.
What if you had the power to do your work, and do it well, but to not feel pressured into something that goes against your core values?
With I Won’t Money you can. Because you know that even if the worst-case scenario happens you will be fine. You have enough money available to last you while you look for a new job. Or maybe even to take a good holiday before you start looking!
How Much Money do I Need?
How much money you need to have I Won’t Money depends on your core expenses and how long you want to be able to go without an income. Let’s look at these parameters in more detail.
You will often hear that you should have 3-6 times your expenses in an emergency fund. This is absolutely a good start but when we consider I Won’t Money it’s worth considering if you will have the same expenses when you are not working.
Consider the following expenses:
- Do you have commuting costs that you will no longer have if you are not working?
- Do you have other work-related expenses such as special clothing or buying lunch out?
- Have you got expenses that you could quickly cut out if you didn’t have a job such as subscription services or memberships with a short cancelation time?
- Could you temporary reduce other expenses such as shopping, entertainment or even any regular investments you are doing?
- What about childcare costs?
Then consider if not working would add any expenses to your life:
- Is your company paying for your car, internet, or other necessities?
- Would you want some more money for entertainment when you’re not at work all day?
- Would you take the opportunity to travel or do something else that would incur costs?
Sit down with your current expenses and consider them in the light of not working. What would be reduced and where would you like to spend more. Understand what your expenses would look like when you are not working.
These are your core expenses.
How Long to Be Without Income
How long you would want to be able to live off your I Won’t Money is dependent on your tolerance for risk, how long you are expecting it to take to get a new job, and if you want the option of some extra time off.
If you are in an environment where there are more job openings than skilled professionals, getting a new job can be fairly simple. If however, you lose your job in the middle of a global crisis (like getting laid off in the beginning of a global pandemic), you would need to be able to ride it out before the job market opens up again.
The answer to how long you should be able to be without income is, in the end, an emotional one.
How long runway do YOU need to be able to say I Won’t to your boss?
What is your comfort level?
This is how much money you need to have I Won’t Money.
Full Financial Independence
When we talk about I Won’t Money we usually talk about having a runway from a few months to a few years. At some point however, I Won’t Money start becoming full financial independence. At this point, we no longer talk about having the amount of money we need to pay our expenses for a few year but for the rest of our lives.
When we consider longer time periods (5+ years) we can invest the money and include the return and compound interest into the calculation.
The Trinity Study shows that we can live of 4% of our invested capital without running out of money. That means that if you have 25 times your annual core expenses you can’t only live for 25 years, but you never have to work again!
Let’s take a look at what this means with actual numbers. Let’s say that your core expenses are £3 000 a month, taking into consideration above.
For a 3-month runway you need: 3 months * £3 000 = £9 000
For a 2-year runway you need: 24 months * £3 000 = £36 000
Full Financial Independence
To never having to go back to work again (unless you want to) you would need:
12 months * £3 000 * 25 = £900 000
There is a big difference between these numbers. If you are comfortable with a 3 month runway, you will get the freedom that comes with having I Won’t Money at £9 000, if you however would need to be at the point of retirement before you consider disagreeing with your employer, you need to save up 100 times as much money!
How do I Get I Won’t Money?
If you’re not used to saving, even saving up £9 000 can feel daunting and I wish I could tell you there is a simple way of doing it. And there is! However, as many things in life, what is simple is not always easy.
The secret: Spend less than you earn. Save or invest the rest.
Take a look at the exercise you did looking at your core expenses. Are any of those negotiable? Did you find any memberships or subscriptions that are not necessary?
Can you reduce your insurance costs, food bill or shopping budget?
Think about the power of having I Won’t Money. What would that be worth to you? Is there something on that list of expenses that you would trade against that security? The knowledge that you could be laid off or walk away from your job and still be able to pay your bills?
What Should I Do When I Have I Won’t Money?
You did it! You saved up the money you need to be able to say FU to your employer! (Or maybe you already had them but had never thought about them that way). What now?
The best part of no longer being completely dependent on your employer is the ability to say I won’t take this. I won’t live my life like this. And in addition to be able to walk away if things get too bad, you are now also in a position to ask for things!
So ask! If you are lucky, you will get it. If you are unlucky, they say no. If you are really unlucky and get punished for asking – you can walk away and find an employer that’s a better fit.
What would make your life better?
Working from home?
Working part time?
Taking an extended holiday?
Now it’s time to dream! To design your life. To find an employer that lets you work in a way that works for you. And if it’s not this one, you have the power to step away and find someone who will.
You now have the power.