How much is Enough? Learn how to calculate your FU-Number

Read our practical guide to calculating your own FU Number (FUN)

While you no doubt have a business mission, your business should also provide personally for you and your family.

All successful and established business owners should have two personal goals:

  1. To earn enough from their business to enjoy their chosen lifestyle
  2. To have enough time to enjoy this lifestyle

I understand the entrepreneurial flair to create and build something that makes a difference in the world, providing employment for your team and a great working environment.

I get it, but this is about you.

I want you to be selfish for a moment.

I want you to have all these things, plus a great income and a great life.

It’s you that has taken all the risks.

It’s you that has endured the 3am moments

It’s you that has suffered from time poverty and workaholic addictions

It’s you that has had to make both financial and personal sacrifices while building your business.

So, it is you that should be rewarded, and the number one reward for you is Financial Freedom.


There are many things money can buy, but the most valuable is freedom. Freedom to do what you want to do.

Your business needs to be your ticket to financial freedom.

What does financial freedom mean?

It means, having the financial capability to afford your chosen life, your best life, without having to work and generate an income. To be able to live off what you have accumulated, to have ‘enough’. This does not mean you have to retire, you may enjoy work, so why should you, but of course a key is to accumulate what I call a F-U Number (FUN).

Your FUN is calculated using the below calculation:

Annual Lifestyle Spend FUN (Cautious) = Income * 20 FUN (Positive) = Income * 15
£50,000 £1m £750k
£100,000 £2m £1.5m
£200,000 £4m £3m

The FUN is made up of liquid assets held in cash, investments, pensions, and properties/ventures yielding an income and hopefully growth. It excludes your main residence or a holiday home (unless rented for profit).

From my experience and having advised clients for over 25 years, most of whom have continued to not just preserve their wealth but to accumulate wealth after work (despite my best efforts for them to spend more), working on a yield of 5% is generally sufficient to maintain and maybe increase wealth. However, if you are happy to see your capital depreciate, leave less inheritance, but still most likely see your wealth outlive you, then a positive yield of 6.65% is not unreasonable, but this is very much dependent on age, health and risk tolerance levels (too much detail for this article).

In the real-world some individuals may have final salary and state pensions, which will reduce the need to call on investments to generate income to meet the annual lifestyle spend. These of course all need to be factored in when planning.

So, it’s quite simple really.

  • Work out your number
  • Extract enough money from your business using the calculation above.

If you want some tips on how to tax efficiently extract money from your business then click here.

A few other tips:

  1. Earn more than you spend, save the surplus, avoid ‘bad’ debt
  2. Avoid ‘lifestyle creep’, adding costs to living your normal life, before you have created the numbers to afford this life.
  3. Investing shouldn’t be complicated, or expensive and avoid complex get rich quick investments – If it is too good to be true it probably is. Exploit the stockmarket – The most powerful wealth building tool of all time
  4. Use all of your available tax reliefs and opportunities
  5. Avoid financial mistakes. Have a word with yourself. You are probably the biggest risk to your financial freedom with wayward wealth destroying behaviours, often impulsive decisions and spending on stuff you get bored with in time
  6. Get a financial life plan and to stick with.

Our purpose is to help our clients understand what their best life is, to cost this, to build a financial plan and strategy to reach this number, to keep the plan on track, but then to hopefully go beyond their FUN helping them to begin work on their kids and grandkids FUN.


Want to learn more?

We have recorded a webinar on this topic, you can view on the below link.

To begin your own planning and work out your FUN, then click here where we have proivided access to market leading cash flow forecasting.

Or if you want us to do it for you, contact us:

0121 313 1370

Henwood Court – Creating Your Tomorrow


Please note:

This document does not constitute advice, and all such matters should be discussed with a suitably qualified tax accountant. This is purely for guidance and many of the areas mentioned are not regulated by the FCA.

Please remember the value of your investments and any income from them can go down as well as up and you may get back less than the amount you originally invested. All investments carry an element of risk, which may differ significantly. If you are unsure as to the suitability of any particular investment or product, you should seek professional financial advice. Tax rules may change in the future and taxation will depend on your personal circumstances. Charges may be subject to change in the future.

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