Money Expert Vivian Tu: The Financial Number That Gives You the Most Personal Freedom
Written by
Laura Bogart
Edited by
Kristen Mae
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Whenever you’re dealing with a toxic boss, a cruel partner, or any kind of living or work situation that no longer serves you, you probably daydream about escape. Of course, escaping costs money — perhaps more than you have on hand. If only you had a straight-talking, financially savvy pal to coach you in earning what you need to get out.
Fortunately, Vivian Tu, a financial expert who goes by Your Rich BFF, is here to give you the smart advice that only a true bestie could. Her recommendation? You need an “F You” fund. While you can probably guess what the “F You” stands for — and it’s not exactly anything a family-friendly publication can print — it’s basically the amount you’d need to leave everything behind and still be able to support yourself. The language you use when you do so is entirely up to you.
The “F You” Fund Formula
In a hilarious skit, a particularly pompous boss (played by Tu, complete with a fake mustache) informs his employee, Kendall (also Tu), that she must work yet another weekend. Kendall promptly unloads on him, tendering her immediate resignation in terms that would make even the most avid fan of “Office Space” smile.
Later, two officemates (played by Tu, in a clip that could also double as an SNL audition) marvel at their bold co-worker. One opines that she must have reached her goal for her “F You” fund — the amount of money you’d need to live comfortably for one year, divided by 0.04.
What’s So Special About 0.04?
You might be like one of Tu’s characters, wondering why the calculation involves dividing by 0.04. As Tu explains, 0.04 represents 4%, which is considered a conservative annual return on investments. This formula assumes that your money would generate enough returns at that rate to support your lifestyle indefinitely. Or, as Tu put it: “Your money would be making enough money for you to live on while you do whatever you want.”
Tu uses a hypothetical $100,000 annual living expense. According to the Rich BFF “F You” equation, you’d need about $2.5 million invested to generate that amount consistently. That’s not a small sum by any stretch, but it’s a far cry from the $100 million one of Tu’s characters initially guesses.
You’ll Earn It Over Time
If your “F You” number feels impossibly high, remember: you don’t have to make it all at once. You can achieve your “F You” fund through disciplined saving and investing, which requires time and persistence.
In her book “Rich AF: The Winning Money Mindset That Will Change Your Life,” Tu encourages you to start engaging with banks the way rich people do — with the mindset that financial institutions are tools to help grow your money. Wealthy individuals aren’t afraid to shop around or diversify their accounts, and neither should you.
“Rich people are engaging with banks early in life, shopping around, and building a straight-up Avengers-level team of accounts. They are shamelessly in long-term relationships with multiple financial institutions: they keep savings at Bank A for the killer high-yield savings product, but do checking with Bank B because they get unlimited ATM fee reimbursements,” she wrote.
Finding the most competitive rates for a high-yield savings account or CD is a great first step toward building your fund. Once you’ve saved three to six months’ worth of living expenses, consider investing within tax-advantaged accounts like 401(k)s, IRAs, or HSAs. These accounts provide opportunities for growth while offering significant tax benefits. Within these accounts you can invest in exchange-traded funds (ETFs) or other broad-market investments. ETFs often track entire indexes like the S&P 500, offering lower costs and less risk than individual stocks.
Using tools like high-yield savings accounts to start your “F You” fund, alongside tax-advantaged accounts and investments, can help you plant the seeds for greater, long-term independence.
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