The FU Number
Divide your dream-life annual cost by 0.04 to find your walk-away number
- Difficulty
- Easy
- Time to result
- ~months to results
- Steps
- 5
- Confidence
- 95%
The FU Number converts a vague wish for freedom into one arithmetic target. The input is not a lifestyle benchmark but your own imagined happily-ever-after, priced for a single year — whatever that costs, whether it's a shoeless life in an Airstream at 30 or two homes and a golden retriever at 65. That annual cost is then divided by 0.04, the 4% safe-withdrawal assumption, producing the amount you need invested in income-earning assets. The output is a threshold: once invested assets cross it, portfolio returns alone cover the dream life indefinitely, and the job becomes optional. Tu deliberately calls 4% conservative — if your money earns more, the surplus is margin, not a requirement. The framework's power is that it makes freedom a measurable balance, tracked against one number, instead of an emotional guess.
Origin
Extracted from Young and Profiting
Core principles
- 01A freedom target must be a number, not a feeling
- 02Cost your actual dream life, not a generic benchmark
- 034% is deliberately conservative — anything above it is gravy
- 04Assets, not salary, buy the right to walk away
- 05The number is personal: an Airstream and a two-home retirement are equally valid inputs
How to run it
- 1
Picture the dream life concretely
Close your eyes and imagine your perfect life in specifics — location, housing, family situation, travel, the daily texture of it. Vagueness here produces a useless number downstream.
Pro tip Age and lifestyle are irrelevant to validity. An Airstream at 30 and two homes at 65 are equally legitimate inputs.
Watch out Do not import someone else's definition of rich; the number only works if the life is genuinely yours.
- 2
Price that life for one year
Total the annual cost of living that life — housing, food, travel, insurance, everything. This single figure is the only input the equation needs.
Pro tip Build it bottom-up from real line items rather than guessing a round number.
Watch out Understating the annual cost understates the target by 25x, so err generous.
- 3
Divide by 0.04
Take the annual cost and divide it by 0.04, representing a 4% annual return on invested assets. The result is your FU Number.
Pro tip Dividing by 0.04 is the same as multiplying by 25 — useful for mental math.
Watch out 4% is a conservative assumption, not a guarantee; it is a planning floor, not a promise.
- 4
Measure invested assets, not income
The target applies to money that is invested and earning, not salary or cash sitting in a savings account. Only invested assets count toward the threshold.
Pro tip Track the gap between current invested assets and the FU Number as your single freedom metric.
Watch out Cash under the metaphorical mattress earns nothing and never moves you toward the number.
- 5
Cross the line, then choose
Once invested assets exceed the number, your money earns enough to fund the dream life without labour. At that point continuing to work is a choice rather than a requirement.
Pro tip Returns above 4% are gravy — surplus that either shortens the timeline or widens the safety margin.
Watch out Hitting the number does not mean you must quit; it means you no longer have to stay.
In the wild
Someone imagines their happily-ever-after: a small home, groceries, one annual vacation, no commute. Priced honestly, that life costs $60,000 a year. Dividing $60,000 by 0.04 gives $1.5 million. That becomes the invested-assets target — the point at which a conservative 4% return covers the whole year without a paycheck. Instead of a vague ambition to 'get rich', the person now has one number to track, and every raise, side hustle, and invested dollar visibly closes the gap. If the portfolio happens to earn more than 4%, as Tu notes, that surplus is gravy rather than something the plan depends on.
→ A vague freedom wish becomes a single trackable balance target.
Before leaving her BuzzFeed salary, Tu applied the same logic in miniature: she set aside $100,000 in cash and worked out that if her content business could generate roughly $100,000 of income, she would always make rent and buy groceries. She did not quit on optimism — she quit against a number she had calculated and a nest egg she had banked, treating the leap as a risk she had already analysed rather than a gamble.
→ She quit a $600,000 job on a pre-calculated floor and later out-earned it.
Common mistakes
Using a generic 'rich' number instead of yours
The equation is only meaningful if the annual cost reflects the life you actually want. Borrowing someone else's target produces a number you will never feel motivated to reach.
Counting savings instead of invested assets
The 4% assumption depends on money that is invested and earning. Cash in a savings account does not generate the return the equation requires.
Treating 4% as a promise
Tu calls 4% deliberately conservative — a planning floor. Building a plan that requires a higher return removes the very margin the framework was designed to give you.
Is it for you?
Best for
Anyone with an income who wants a single, checkable number that defines when work becomes optional.
Not ideal for
People in debt or without an emergency fund, who need cash-flow stability before a long-horizon asset target.
From the transcript
“Whatever your happily ever after looks like, think about how much that would cost for one year. Then divide that number by 0.04. That represents…”
“That is the number you need to have invested before you can essentially kick over your desk and tell your boss, f you.”
“4% is a very conservative return. Ideally, your money would be earning you more than that, and that's just gravy.”
From the episode
Vivian Tu: How the Wealthiest People Work, Network, and Invest Their Money
Vivian Tu