JLCollinsNH – The Importance of F-You Money

JLCollinsNH – The Importance of F-You Money

In this session of Financial Independence Podcast, I had the pleasure of speaking with Jim Collins from

Jim accumulated enough money to retire over 20 years ago but rather than pack it in and call it quits, he instead used his “F-You” money to work on his terms.

If you are interested in investing in the markets, this is the podcast episode for you. Jim has been investing since the 1970s and in the interview, he shares some of his biggest mistakes, stories from his time working at an investment company, and his investing recommendations.

Jim shows that reaching financial independence early in life is not as difficult as it seems and he describes the tools and techniques he used to get there.

Listen Now


  • The Importance of F-You Money
  • Surviving Black Monday
  • Don’t “Swing for the Fences”
  • Active vs. Passive Investing
  • Why Vanguard?
  • Three Simple Steps to Financial Independence

Show Links

Full Transcript

Intro: I’m blinding you with fience!

Mad Fientist: Welcome everyone to the Mad Fientist Financial Independence Podcast, the podcast that gets inside the brains of some of the most well-known fientists in the field to find out how they were able to achieve financial independence.

I’m really excited to introduce my guest today. His name is Jim Collins. And as the tagline of his website states, Jim writes about business, life and money over at

Jim has become one of my favorite personal finance writers. If you’ve read his stuff, you’ll know what I mean. He’s got an amazing sense of humor and he uses very interesting and entertaining stories from his own life to reinforce the lessons that he’s teaching in his article.
So I’m thrilled to have him here today. I can’t wait to dive into some of those stories. Jim Collins, welcome. Thank you for being here.

Jim Collins: Thank you, Brandon. It’s my pleasure.

Mad Fientist: So for those out there who haven’t heard Jim’s story – I get excited because it’s a very interesting one – he has been investing since 1974 and has been financially independent since around 1989. At this point, he said he accumulated his f-you money.

Jim, could you just describe f-you money and take us through your journey to financial independence?

Jim Collins: The term f-you money, which I noticed has become popular, I came across 25 years ago maybe by reading a novel by James Clavell. In fact, one of the readers of my blog just corrected me as to which novel it is and I will take their expertise. They’re telling me it was from Noble House. I thought I remembered it from Taipan. But in any event, both are great novels that I recommend.

The character in one of those novels was a young woman who was beginning her career and her goal was to accumulate f-you money. If you’re wondering what the F stands for, you can read the novel because they spell it out.

That, to me, that moment embodied what I instinctually drifted towards that I wanted to have that financial independence. I wanted to have enough money that I could chart my own course. That to me was more important than anything else that money could buy and coming across an actual term for it was a cool thing and it had been a focus for me.

Her target by the way was $10 million. I have done it a whole lot less than that and I know people who have done it on even less, so that shouldn’t be an obstacle.

Mad Fientist: Yeah. So would you say that you accumulated everything you needed to say f-you by 1989?

Jim Collins: That’s an interesting question. I would say by 1989 I probably could have hung it up permanently if I had chosen to and I didn’t choose to.

And 1989 is an interesting year because – actually, I think it was 1990 as I’m thinking about it. I actually quit the job I had and set about trying to acquire some businesses and that took me away from earning a salary for five years. Interestingly, in that five-year period, my net worth actually increased because the investments were faster than my spending. That was a little bit of an eye-opener.

It’s important to remember, Brandon that when I was doing this, the Internet didn’t exist. I didn’t realize that there were a ton of people who were doing the same thing and were interested in it. I didn’t know anybody. So I was kind of flying blind to a great extent.

But the first time I thought I had enough money – the point, I guess, that I’m trying to make here is that f-you money is a bit of a moving target. The first time, I figured I had enough to step away from a job, I had $5000. I was in my 20s and I’d save $5000 from my first professional job. I always saved 50% of everything I made and I wanted to go to Europe.

I petitioned them for a couple of months off to do that, a sabbatical, if you will. They said no. And I said, “Okay.” And then I thought about it for a week and I said, “Okay, I think I’m going to Europe anyway.” I certainly didn’t have enough to retire for the rest of my life, but it’s as much an attitude as anything else.

Mad Fientist: Yeah. And you did go to Europe?

Jim Collins: Yeah, it was an interesting thing, the way it unfolded. I write about this in the blog. I forget which post off the top of my head.

I went in, as I say, and asked for a couple of months off, a sabbatical because I wanted to go all around Europe. I was probably 26 at the time. My boss said no, which was typical at the time because this was mid ’70s and I didn’t know any different. You go, you ask the boss and he says no and that’s the end of it.

But I went back and I thought about this for a bit. I liked the job and I didn’t particularly want to leave, which is why I didn’t walk out and quit, but I wanted to go to Europe. I didn’t realize there was any middle ground. After thinking about it for a week, I decided, “As much as I like the job, I really want to go Europe.” I do have $5000. I didn’t know the term f-you at the time, but I do have this sitting here that allows me to go.

A week later, I went in and resigned and an amazing thing happened. He said, “Wait a second. Don’t do anything hasty. Let me talk to the owner.” Lo, and behold, we negotiated extra time off for me, so I didn’t have to resign.

That was an eye-opening experience becausef-you money not only allows you to step away if you choose to step away, but it also empowers you and gives you negotiating room that, at least in my case, I never knew existed.

Mad Fientist: Yeah, that’s a great point. That’s another benefit of pursuing financial independence that maybe some people don’t think about. Obviously being able to quit your job and not work again is a huge benefit. But being empowered while you’re still working is an amazing side-effect.
I’d even take it a step further and say that pursuing financial independence not only empowers you, but it also allows you to enjoy your current situation more.

For me, I was quite miserable on my job and the thought of doing it for the next 30 plus years was really depressing. But once I got on this path to financial independence and realized that within the next five years, without changing anything about my spending or savings, I could reach financial independence. It just totally changed my outlook on things.

I actually realized I didn’t hate my job. It was just the fact that I felt trapped. But now, I could be financially independent in five years. I didn’t feel trapped anymore, so I started to actually enjoy my job.

Jim Collins: Yeah, your point is well-taken. I did a guest post for Mr. Money Mustache back in the spring. He was nice enough to ask me to tell my story. A lot of the websites that I read are talking about – including his – early retirement and what have you. Too many people think of that as well. “Okay, I’m just done and I’m going to sit on the beach.”

For me, it’s never been about retirement. It’s been about having options. It’s been about being able to step away from a job I didn’t like or step away from a job I didn’t like to do something that maybe I wanted to do instead for a while. That may or may not include earning money in some cases. This is not part of my experience, but I know some people who have stepped from a high paying job to a lower paying job to pursue a passion they had. A few money smoothens that path.

You made an important point too I think. When you start looking around, you realize that it’s not really that hard to get there.

And when I was coming up, again, with no Internet and really no culture around this, I had no idea that what I was doing was even possible as they say. I didn’t even have a name for what I was doing until I stumbled on it in a novel.

I certainly didn’t have any coherent strategy from an investment. I always was a good saver. I pretty easily save 50% of my money. It just didn’t seem to make sense to do anything else. That was the big tool. In terms of investment strategy, I wandered around in the dark for decades. I made huge investment mistakes and yet, I still got there.

When I think about some of the commenters that come to my blog who are in their 20s and just starting and they’re beginning to do their homework and research and consider this, they’re beginning to commit to paying themselves instead of just buying stuff, I sit in awe. I’d say, “My goodness, these people are starting 25, 26, 35, 36. They are going to so surpass anything I accomplished and so much more quickly.”

Mad Fientist: That’s even more impressive that you didn’t have anybody to look up to and you still did it.

You mentioned Mr. Money Mustache. I interviewed him for the last Mad Fientist Financial Independence Podcast. He was the same. He was just doing what he thought was right. And then by the time he turned 30, he had enough money to semi-retire. He looked around and saw that none of his friends and colleagues was anywhere close to what he was. He didn’t understand it. That’s why he started writing about it.

So yeah, it’s very impressive that you got there without having all these amazing people to look up to that are out there now.

Jim Collins: Every geezer like me says the same thing. “Boy, I wish I knew what I know now.”

Mad Fientist: You mentioned investments. Obviously, you said that savings is the most important thing because you said you’ve made numerous investment mistakes over the years, but you’re still living the financial independent life even after those mistakes.

Reading your blog, I saw the Black Monday. You had taken out all of your – you had sold all your stocks. Is that correct?

Jim Collins: Yeah. That was one of my biggest mistakes, yes.

Mad Fientist: But then even so, in a few short years later, you have your f-you money to do what you like. Do you want to just briefly touch on some of your investment mistakes and then maybe talk a little bit about your recommendations?

That’s actually how we got in touch to do this podcast. I linked to one of your great articles on Vanguard on index investing, and we started talking. So here we are today. I think your investment approach is spot on. So it would be great to hear you talk a little bit more about it.

Jim Collins: It’s an interesting question to me because in fact, I have a post in the works that’s going to describe some of those mistakes. But we were talking a moment ago about how valuable it is and how lucky people are today that they have access to the Internet and some of these websites.

I would suggest that by virtually reading this to realize that it’s possible, that financial independence is not some remote goal that only the 1% can ever reach, that it’s possible for ordinary people making ordinary salaries.

I think probably the biggest strategic mistake I made – of course I had no idea at the time whether what I was trying to do was possible or not. But I had made the assumption – this is probably the biggest strategic mistake I made – that if I was going to get there from an investing point of view, it meant that you have a swing for the fences. It meant that from your investing point of view, you had to be willing to hit home runs or able to hit home runs. And of course, to carry the analogy further, in that process, you are going to strike out.

Nothing could be further from the truth. I mean successful investing is not at all about swinging for the fences. In fact, that’s a recipe for disaster. That’s what the investment community likes to see you do because they make the money on your trade-ins. They make the money on you buying when you’re swinging and selling when either you made it or, in more cases than not, when you haven’t.

The truth is that it’s a matter of winning in increments. And Warren Buffett is famous for saying, “Don’t lose the money. Rule one is don’t lose the money and rule two is don’t forget rule number one.” And that’s really not to say that Mr. Buffett doesn’t take risk because risk is inherent in life and it’s certainly inherent in investment. But that’s probably one of the key things.
And then secondarily is staying the course. You brought up Black Monday. For those on our audience who might not know – I forgot the exact date – I want to say that sometime in October of 1987, the stock market took the single largest dive that it has ever taken. That includes the Great Depression and the debacle we just lived through these past few years. It all happened on one day. It dropped 500 points at the time when the dollar was around a thousand. So it was just incredible.
Again, I was an inexperienced investor. I didn’t realize that market does these things on a regular basis. This was exceptional, but dropping in the stock market is nothing new. That’s a point, by the way, that I make in part one of my stock series.

If you’re a young person, if you are in your 20s and you’re going to be investing for the next 40 to 50 years, I’ll guarantee you right now that you are going to see several intense bear markets. And the question of course is what to do. In my opinion, because nobody can successfully time these things, what you do is you stay the course.

Well, that’s not what I did in 1987. I didn’t know any of this. The market plummeted. It scared me, along with everybody else, to death. I stuck it out for a few months while it continued to drift lower. And finally my fear overtook me and I sold everything. It almost literally turned out to be the bottom. It was exactly the wrong strategy.

And then over the next couple of years, as the market always does, it marched its own way back. Of course by the time I bought in, it was already back.

Now, as you point out, it still served me well. But if I had just avoided that one mistake, especially compounded over these last couple of decades since ’87, I would be so much further ahead.

Mad Fientist: Right.

Jim Collins: This experience by the way served me very well in the last debacle where it took a little longer, but the market got more than half. I will confess that I was biting my nails and beginning to doubt my own philosophy at one point, but I stayed the course. In fact, I pushed some more money onto the table at various times and as we all know now, the market is fully recovering.

Mad Fientist: Yeah, at least you learned your lesson. It was maybe costly, but I’m sure it served you well over the next 20 years.

Jim Collins: There are two lessons there. You don’t have to swing for the fences and you got to be tough. You got to be willing to ride out the storms because I guarantee you, you’ll have them.

Mad Fientist: For those out there that haven’t checked out Jim’s docs here, I highly recommend it. What is it up to, about 10 posts?

Jim Collins: I don’t know. I keep coming up with new ideas. I think I’m on number 10 or 11 at this point.

Mad Fientist: All of them are excellent, so I highly recommend it. I’ll link to that series on the show notes because like I said, that’s all you need to get investing and do it well.

Let me shift gears here for a second. You mentioned your frequent career changes and you also talked about how retirement was never really the point. That’s definitely something that I personally agree with.

I try not to use the word retirement on my site just because it carries with it images of golfing and crossword puzzles and things like that. I do enjoy work and I plan to continue work. But for me, I’ve invested all this time and money and things into college and training and my career. So, I feel like I need to be financially independent before I maybe think of another job for a quarter of the pay that I’m making now and something that I’m actually going to enjoy.

It seems like you were able to do that. You’ve had a very diverse set of jobs over your life. Can you just talk a little bit about the ability to keep changing it up and use your f-you money to switch careers and get a whole new job?

Jim Collins: I’m trying to remember the source, but I recall reading over recent years that young people coming out of college today or that have come out of college in the last decade or so are probably going to have five, six, seven different kinds of work.

Back in my parent’s era, there was a tendency for people to come out of school, they’d get a job, they’d work at that company for the next 40 years and they’d retire. And then for my generation, there was more where you came out of college and you picked a field and you probably worked for five or six different companies in that field and then you retire.

My understanding is that your generation is going to be much more flexible in that and I suppose for some people, that’s exciting. For you, it would be scary. For me, it would be exciting.

My career probably didn’t have as much as variety as you may think. I spent most of it in the publishing business. I stepped away from the publishing business in ’89 to join a financial firm. And then from there, I stepped away from that to pursue, successfully, as it turns out, acquiring some businesses of my own.

And then this, by the way, is an interesting point about success and failure of America because I failed on doing that. The price that I paid for failure was that it morphed into a consulting business. And then one of my consulting clients hired me to be a magazine publisher again.

Mad Fientist: Oh, wow!

Jim Collins: How bad is failure in this country?

Mad Fientist: Right.

Jim Collins: I wish I have been successful in doing that. Obviously, I invested for several years, but I can always look back and say I took my shot and I take some satisfaction on that. But that brought me back into the publishing business.

For me, it hasn’t been so much being in a variety of different fields. It has been having the opportunity to explore them. In your case (and maybe for some people in a similar case to you), I would suggest, going back to our earlier points, you have f-you money far before you have enough to hang it up and never work again. You would have it as soon as it makes you bold enough to say, “Okay, I’m going to go and try something different.” That something different might not work out, but that’s okay.

Mad Fientist: That’s a great point actually because it may take you 5 to 10 years to actually become financially independent and be able to live off of just your investments, but maybe it only takes a year to have all the f-you money you need to quit your job and start something that you don’t want to quit in 10 years and something that you actually enjoy. That’s excellent advice as well.

You mentioned the financial firm that you worked for. Just to give a brief description of your investment strategy…it’s to put most of your money into Vanguard index funds when you’re building your wealth, put it all into the total stock market index funds. And then, if you want to dial down the risk in later years, you can branch off into the total bond, index fund and REITs and then keep some in cash in the money market account or something like that.

So very passive investing. As I’ve just showed in my series on unique risk, it’s a strategy that works. And it has been shown to work and has been shown to beat actively managed funds.

It’s interesting that you worked at a financial firm. Are there any good stories from that? Obviously, you’ve seen people that devote their entire lives trying to beat the market, beat the index. As we know, 80% fail at that endeavor. Did you see that firsthand?

Jim Collins: I did see it firsthand. That’s a great question. To give you the whole background in answering it, through the ’80s, I was very much an active investor. I was out there swinging for the fences, trying to pick the stocks that were going to outperform. Secondarily, I was trying to pick the active mutual fund managers who were going to outperform.

One day in, I want to say ’88, ’89, I was in an airplane for a little business trip. I sat next to a guy who worked for a financial firm, the one that I want to go work for, as it turns out. And of course, I had an interest in investments, I always have and we got to talking. Because I believe in picking individual stocks in those days, I was always looking for the hot tip (which, by the way, is the recipe for disaster). So I asked Ron for his best hot tips and he gave me three stocks and we got to talking.

He said, “You ought to come to work for us.” I said, “Yeah, that would be fun to talk about.”
So the plane lands, we go on our separate directions and he talked to the guy who owned the firm. Long story short, I wound up going to work for them.

In the shorter time horizon, I went back and looked at these three stocks and I picked one of them. I still remember it was Lamson & Sessions. Lamson & Sessions made, among other things, plastic molders and they made plastic junction boxes that at the time we’re rapidly replacing the heavier and more costly metal junction boxes.

So I bought this thing at $6 a share and I sat back. And over the course of the next three months, I changed jobs. I went to work for the investment firm and I watched it triple in three months. It about doubled by the time I took the job with the investment firm and I thought I had found the Holy Grail.

I thought that not only had I found this one stock – and there is nothing like the rush of having buying a stock and watching it ramp up promptly for you. It’s a very dangerous and very seductive thing. Dangerous because the next ones don’t do that.

Mad Fientist: Right.

Jim Collins: But I figured I had found the Holy Grail. I went to work for this firm, thinking this is a great industry and something that I am inherently interested in. Moreover, I figured I’m going to be rubbing shoulders with people who really know how to do this.

In fact, the company I joined was filled with exceedingly bright people. And the analysts in that firm – this is typical, by the way, in investment firms – all focused on one industry and they all focused on a handful of companies, five, six, seven companies in that industry.

They knew their industries and they knew these companies as well as anybody who knows them. They knew the CEOs of the companies, they knew the senior management. They went and talked to the customers. They went and talked to suppliers. I mean it’s far more than any individual working their own job is ever going to be able to accomplish. And they still could pick the stocks. I was stunned at how frequently they would get the direction of the stock price.

And these were guys who were, on a regular basis, chosen as being analyst of the year by Institutional Investor, which at the time – I don’t know if it still is – it was a prominent trade magazine for analysts. So this is the cream of the crop.

Understanding a company and understanding its financials and understanding its business is a very, very different thing than being able to know when the stock of that company is going to move. That sounds very counterintuitive and I’m not sure I can entirely explain it, but I’ve experienced it. It cost me a lot of money to experience it.

At the same time I’m going through all of this, I had another friend who was taking his MBA from the University of Chicago and was an analyst for a different company who began telling me about index investing and Jack Bogle with Vanguard and how active investors, as you pointed out earlier, with disturbing regularity, underperformed just buying every stock in the index. That seemed so counterintuitive. I resisted that idea for years and at a great personal expense. I kept thinking you have to be able just to beat the market. If you just avoided the bad stocks, you will outperform.

Mad Fientist: Right. Exactly!

Jim Collins: But what today is a bad stock is tomorrow’s turnaround story.

Mad Fientist: There’s no way of knowing.

Jim Collins: Today’s hero is tomorrow’s collapse. And it is appallingly difficult to figure out which is which.

Now you have a handful of people who evidently could do it. You look at Warren Buffett. You look at Peter Lynch back in the day or Michael Price. It’s instructive to say, “Okay. Yes, there are people who can do it,” but they’re evidently so rare that they are famous.
Mad Fientist: Right. If you get a million people to flip a coin 25 times, there are going to be a few them that flip heads 25 times. It may just be statistics. There’s somebody at both far ends of the bell curves. So maybe they’re just…

Jim Collins: That’s a very, very insightful comment there, Brandon and it indicates to me that you’ve done your own homework. That’s even more counterintuitive to appreciate.

But there is a school of thought, with all due respect to Mr. Buffett and Mr. Lynch, that says their success is no more than random luck. And then, when you get that many people out there playing the game, statistically, a couple of them are going to win. That may not be because they have such wonderful skill. It may simply be the coin toss.

Even today, that’s hard for me to accept. But whether or not that’s true, what is true is that the chances of you or me or anybody listening to our voices being able to do what Peter Lynch and Warren Buffett have done on their own is vanishingly small.

Mad Fientist: Right! Even Warren Buffett, he had missed that. In the same post that I linked to your post, I linked to a YouTube video with Warren Buffett saying, “Everybody out there, you’re better off just investing in index funds and staying out of debt. This is a game that not many people win.”

Jim Collins: You’re absolutely right. He’s very keen about that. I’m not sure he’s taking anything away from his own abilities, but he doesn’t have to. He recognizes that what he has accomplished is not repeatable by the average guy. It’s certainly not repeatable for somebody who’s trying to do it on the side while working a fulltime job. It’s not even repeatable by the vast majority of professionals who have enormous resources at their fingertips and live it 24/7.

Mad Fientist: Right, exactly. I was lucky I got into index investing just because I hate fees. I didn’t want to pay any fees for putting more money in. I didn’t want to pay a lot of management fees. I just started pumping money into index funds, thinking that, “Okay, eventually when I have more time, I’ll be able to research companies and do all the due diligence that’s necessary before you actually pick a certain company to invest in. So I’ll just do this for now.”

But the more and more I read and the more and more that I see the results of index investing, there’s absolutely no point to even risk playing that game to beat the index by a few percent and have such a low probability of doing that. I’d rather save a few percent guaranteed off of management fees than roll the dice, seeing if I can beat the market by a few percent.

Jim Collins: Obviously, I agree. You touched on another incredibly important aspect to successful investing and that’s fees. One of the reasons that I’m a big proponent of Vanguard is that Jack Bogle who created the idea of an index fund and launched Vanguard built it around the idea of keeping fees to the absolute minimum. The reason being, even if you look at a fee of 1% a year, which seems insignificant, compounded overtime it becomes huge. It’s a drag on your wealth-building efforts.

A lot of investors pay not nearly enough attention to fees. In fact, there is an argument that is made that one of the reasons that index investing is so successful against active investing (that is a professional manager’s trying to choose stocks to outperform the index) could be traced directly to fees because if you are an indexer, there’s very little cost involved in buying the whole market. If you’re an active manager, there are all kinds of costs that are involved. And of course, before you can make any money, you have to make enough to cover those costs. That factor alone gives indexing a tremendous advantage.

Mad Fientist: Exactly! And the reason I linked to your post was because you described how Vanguard in particular is owned by the investors themselves. So all of the goals are aligned perfectly with your goals as an investor, which is a very important point.

Even index investing is already low fees. But then, you go and take it a step further to Vanguard and you can pretty much guarantee that you’re going to get the lowest fees in the industry just because they don’t have to make a profit for their shareholders because you are the owner as the investor.

Jim Collins: That’s great points there. And that is the reason that Vanguard is the only investment company I recommend doing business with, in fact, to a point where sometimes I have people coming into my blog that might think, “Oh, this is just a promotional arm of Vanguard.” By the way, that’s not true. Vanguard is completely unaware of what I’m doing as far as I know and they are much larger than anything that I am doing.

Vanguard does every unique ownership structure and this, again, goes back to Jack Bogle who founded it. By the way, I think Jack Bogle was the closest thing to a secular saint in the investment world we can have. He’s done more for people like you and me, for individual investors, than anybody else to come along the pipe.

When he created Vanguard, he was very focused on index funds as a concept and low fees that you could enjoy from those index funds. But he took it a step further in the way he structured his company. He said, “This Vanguard is going to be owned by the funds that operate it.”

What that means is that, in fact, you and I, the people who own shares of the funds own Vanguard through those funds. What’s important about that is every other investment company and, in fact, the vast majority of companies in general think of it as three tiers. You have the owners of the company, you have the company itself and then you have the customers of the company.

That company has two masters to serve in that scenario. It has to serve its customers so they keep coming back and that they’re getting value from whatever they’re producing. But it also has to charge those customers enough extra money to pay the owners because the owners are expecting to be paid. Well, Vanguard eliminates that.

Now the important thing and one of the questions that I get on the blog a lot is that not every 401K or 403B plan that people have access to (in fact, very few of them) utilize Vanguard funds. And there are other good fund companies out there like T Rowe Price and Fidelity. And due to competition from Vanguard, most of them have index funds and most of their index funds are also – again, thanks to our friends at Vanguard, they’ve been forced to price them at very attractive rates. So people have options.

I don’t recommend any of those fund companies if you have the choice though because they’re using their index funds and the whole fees on their funds as loss leaders to bring you into their family. Their other funds have much more typical fees and of course they’re hoping to migrate you into those funds.

So my attitude is to just stick with a company that does it as a core value as opposed to other investment companies that do it as a business strategy. But in 401K, if you’re looking to T Rowe Price or Fidelity or any number of them and you want the index fund that’s offered by those companies, you’re probably getting the next one that serves you well and has low cost.

Mad Fientist: Right. That’s great advice. Speaking of advice, as we’re getting to the end of the podcast here, is there any final advice you’d give to somebody who’s maybe just out of college, just about to start making more money and maybe start on their path to financial independence? Is there anything in particular that you would say to them to give them advice?

Jim Collins: The first thing I would say is know that it can be done and that it’s really not that hard. Know that it’s a goal well worth pursuing.

One of the things, especially with young people who come out of school and maybe they’re lucky enough to get a job they’ve been studying for and developing potentials for, they get a job and they come out and they really love it, there might be a tendency to say, “Wow! I really love my job. I’m going to be happy to do this for the next 40 years.” Well, as much as you love it now, things change. You may change, the job may change. You may get a different boss.

Andy Rooney had a great quote. He said, “Never expect too much from your company even if it’s a good company.”

And then the last piece of advice I give, which is kind of the theme of the blog, is that if you want to be financially independent, it only takes three things. Avoid debt, live on less than you earn and invest the surplus. If you those three things, you can’t help but become rich – and in more than money.

Mad Fientist: That’s excellent advice. Jim, I really appreciate you taking the time to talk with me today. If anybody hasn’t checked out Jim’s site yet, you could find it at

Is there any other ways they can get in touch with you, Jim or should they just head to the blog?

Jim Collins: No, I think the blog is the way to go. I don’t do any other social media. I’m behind the times in that way.

But let me also say it’s been my pleasure, Brandon. I’ve enjoyed talking to you.

Mad Fientist: Likewise, Jim. I’ll hopefully speak to you again soon.

Jim Collins: I look forward to it.

Mad Fientist: Thank you, everyone for joining me for another episode of the Mad Fientist Financial Independence Podcast. If you haven’t checked out Jim’s site yet, head on over to I’ll link to his site as well as some of the other articles we discussed in the show notes. You can take a look at those as well.

Otherwise, thank you again to Jim. Thank you very much for listening.

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19 comments for “JLCollinsNH – The Importance of F-You Money

  1. jlcollinsnh
    October 1, 2012 at 9:03 am

    Hey Mr. MF…..

    I had a great time chatting with you. Hope your readers enjoy the conversation.

    Love the illustration you choose!



    • The Mad Fientist
      October 1, 2012 at 7:00 pm

      I thought you’d like that image!

      Thanks again, Jim!

    • Mrs. Fi365
      December 31, 2017 at 1:41 pm

      Wow, hearing your podcast and reading your book was life changing for us! Thank you!!! We switched all our scattered retirement accounts into the VTSAX and we’re tightening our bloated budget to live more like the monk you described in the opening pages of your book. We wrote a bit about those changes here: Thanks again to both of you.

  2. Michael Crosby
    October 5, 2012 at 12:10 pm

    J. Collins has become a guy I’ve followed, both on his blog and his post on MMM.

    It’s great to read his stuff, but after actually listening to Jim, I realize the gravitas that he brings. What an enjoyable interview.

    I must say, listening to Jim, is life changing experience. Jim, if you read this, thank you so much and thank you to the interviewer. Excellent interview.

    • The Mad Fientist
      October 5, 2012 at 12:52 pm

      I’m glad you enjoyed it, Michael!

      Jim was an amazing interviewee and he shared an incredible amount of knowledge so he definitely deserves all the credit for making it a great interview.

      Thank you for stopping by and thanks for the kind comment!

  3. Mike
    October 6, 2012 at 6:23 am

    Nice interview! Thanks for doing it. Now off to see what else you’ve got here!

    • The Mad Fientist
      October 6, 2012 at 7:30 am

      Hi Mike, I’m glad you enjoyed the interview!

      I just poked around your site a bit and it looks great so I’m looking forward to exploring more.

      Thanks for stopping by and hopefully I’ll see you around here again soon!

  4. Anu
    October 8, 2012 at 8:00 pm

    This is great, Brandon! I especially found a couple of concepts like ‘stay the course’ investing, and career-jumping that relies on f-you money very appealing.

    I would like to hear a bit more about how the successful implementation of these and other concepts is likely to be hindered by constraints (e.g., family obligations, needing to cope with unexpected life events, etc.) and about ways in which one might plan to factor in such constraints when building a path to financial independence.

    I really like what you’re doing with this site and look forward with great interest to following it more closely! Keep it up!

    • The Mad Fientist
      October 8, 2012 at 9:37 pm

      Thanks, Anu!

      As you suggested, it’s very unlikely that anyone’s path to financial independence will be completely smooth but the good news is, the act of pursuing FI will help you better navigate any obstacles that arise. Someone living paycheck to paycheck would have a much harder time dealing with unexpected life events than someone who is currently saving over 50% of their income. Not only will you have a huge cash cushion in the bank but you will be used to living below your means so you’d be able to better cope with unexpected expenses or a decrease in income.

      Even though there will be some things that come out of the blue, I try to plan for as many expenses that I can so that I don’t feel like my path to FI is always being thrown off course. For instance, we paid cash for our car but we have continued making “car payments” every month into a savings account. So rather than finance a car and pay car payments to the dealership, we paid cash for a used car and we’ve been socking away hundreds of dollars every month into our bank. If an unexpected car problem arises, we can use that money to fix the problem.

      We do the same thing for our house. We make monthly house payments into our savings account so we now have a big chunk of money set aside to fix any unexpected house problems. If no problems come up, we just shift some of that balance to another cause or we lower our monthly payments. Hopefully we never need to use the money and it can all go towards FI but it’s there if we do need it.

      Things are bound to happen and your circumstances and plans will likely change along your journey to FI but even if you have to delay financial independence by a few years due to an unexpected event, you’ll still likely be 30 years ahead of your peers and you’ll be much more capable of dealing with the things you can’t control or plan for.

      • Anu
        October 9, 2012 at 9:58 am

        Cool :)

        I can think of several ways you guys can put that extra car money to good use while staying on course for FI…first on the list is a trip to PGH!

  5. Anu
    October 9, 2012 at 10:17 am

    I have lots of follow-up questions for you, not just regarding this notion of seamlessly integrating contingency planning into a FI-seeking life, but also about several other basics of getting started and treading that line between frugality and self deprivation. I think you tread that line admirably well!

    Now that I’ve got a bit more time on my hands, the first thing on my agenda is to learn about this stuff. You’ve been warned!

    • The Mad Fientist
      October 9, 2012 at 10:19 pm

      Definitely don’t hesitate to ask more questions if you have them!

  6. Peter
    April 23, 2014 at 3:30 am

    It’s interesting that you always mention Vanguard and the CEO of V. mentions your book in his interview. You are working together?

    • The Mad Fientist
      April 23, 2014 at 11:38 am

      Hi Peter, I think you are thinking of the other Jim Collins! JL Collins is currently writing his first book but it hasn’t been released yet.

  7. Rachel
    March 16, 2015 at 6:08 pm

    Hi Brandon! I just discover your blog and love it! Thank you for all the wisdom!
    After listen to this Podcast you have with Jim Collin… I am start to freak out about the management cost I have been paying for the past 10+ years….haha

    I wonder if I should take out all my after tax investment (55k with 0.56% in fee) in brokerage firms and move them all to Vanguard index to reduce the management cost (Down to 0.08% in fee) RIGHT NOW?

    Or should I wait until I reach my FI (Hoping in 5 years!) then do this money transfer move to avoid the high tax rate on selling stock? ( Because in FI the Tax rate is much lower without full time pay check?..Still learning about this XD). Any suggestion would be appreciated !

    Thank you! Looking forward for more of your post! The Travel tip email today was awesome!

  8. Lesley
    May 26, 2017 at 1:07 am

    This podcast is still relevant 5 years after it was done. Jim Collins is one of the best for personal finance advice due to his long experience in the financial markets. I also like the clean look of his website. His site is one of the ones that I’m going to work my way through. I thoroughly enjoyed this podcast and listened to it twice!

  9. Callum Ford
    August 25, 2017 at 10:02 am

    Wow, great interview. Off to research quite a few things now! THANKYOU.

  10. HH
    November 29, 2020 at 6:33 pm

    Hello Mr. Mad Fientist,

    This was a wonderful interview with so much enlightening information from JL Collins!

    I loved two parts in particular in this interview:

    1) How average people are able to invest without the need to be professionals or invest years researching stocks/companies.

    2) How clear the difference between actively managed funds vs passively managed index funds was explained.

    If anybody is wondering whether or not to listen, just press “play” and soak in all the sage advice.

  11. MyFinancialShape
    May 18, 2021 at 2:33 pm

    Hi Mad Fientist
    I’ve listened to your podcasts for several years and they have always been a great inspiration on my wife’s and my Path towards Financial Independence. We will be there in a few years, in 2024 to be exact!
    Thank you for sharing these inligthening and valuable interviews.

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