Humphrey Bogart is one of my favorite actors. He was a man’s man. One of my favorite Bogart quotes is: “The only good reason to have money is to tell any SOB in the world to go to hell.” While this may be oversimplifying things (there are many more reasons to have money – cough *bills* cough) I get what he’s saying. The most appealing thing about being financially independent is that you don’t have to do anything you don’t want to do. All my needs are met, so all that’s left over is the wants. If I don’t want to do something, I don’t have to. Simple as that.
As the story goes, Bogart kept $100 in his dresser drawer at all times so that when he got offered a movie role he didn’t want, he could look at that money and then go tell the studio or producer “no thanks”. He didn’t need the movie, he’s got money, and that’s a very freeing thing.
Another actor quote I like is from Daniel Radcliffe, the young British actor who plays Harry Potter. Daniel says, “I’m very fortunate to have it [money], and it gives you room to maneuver. But the main thing about having money is it means you don’t have to worry about it, and that for me is a lovely thing. It’s not for fast cars and hookers.” While Harry Potter isn’t as cool as Bogey, the guy has it figured out when it comes to money.
One of the most helpful tools in being able to pursue what you want to pursue is having cash cushion. It will probably have to be a bit larger than the $100 that Humphrey Bogart had, after all, this is the 21st century and a hundred bucks doesn’t go as far as it used to. This cushion would go above and beyond the typical emergency fund of 3 – 6 months. We are talking a 6 – 12 months worth of expenses or more of savings.
Personally, I think this cushion would be fine to be put into a more aggressive asset class such as the stock market. Once I finish paying off my debt, I’m planning to put my cushion into an S&P 500 or Total Stock Market index fund in my taxable brokerage account. Of course, with this route I am at the mercy of the ups and downs of the stock market, but personally, I’m willing to accept that risk. If you are more risk averse, it would be perfectly fine to put it into a savings account. I’d just recommend going with an online savings account that yields an above average return.
The end goal of having this money tucked away is so that anytime my job starts driving me over the edge, or if I lose my job, I can just remind myself that I don’t need this job. Now that may just be a mental game I’m playing with myself, after all, I’m adult with dependents, bills, and responsibilities. Nevertheless, the ability to live 6 – 12 months off your savings would provide significant peace of mind.
This is a lofty goal, but once I have paid off my debt, invested for retirement, etc. I think it is a worthy one to pursue!