The Game

It’s board game night at the local cafe.  From Monopoly to D&D, you’re always enthusiastic to play. The host invites you to join a table where the people seated are ready to start. You introduce yourself to the five players, and eagerly sit down.

You see a complex looking board, dice, cards, and colorful money. Other objects surround the board, but you’ve no clue their significance. But hey, you’re a smart cookie, you’ll pick it up as you go along.

A woman rolls the dice. She moves her pawn, picks up a card, then makes a transaction with a person you assume is the banker. She makes another transaction with another player. You’re not quite sure what she’s trying to achieve, and the game language is completely foreign to you.

The next person rolls, moves his pawn, picks up a few cards, and transacts a few of those objects that you still don’t know the significance of. The next person goes, but only moves his pawn. Same with the next player. You still have no understanding of the rules, and now it’s your turn. You roll a four, and move your pawn four spaces forward. Abruptly the ‘banker’ moves your pawn to another space altogether. She says, “No, given your assets, with a four, you end up here.” You’re behind where you started. You move your hand with an intention to pick up a card, but the banker stops you.  “Sorry, when you’re behind start, you get no cards.”

You say, “Oh, I don’t think this game’s for me. I’ll try something else.” The banker shrugs and sweeps you game pieces into her reserves.

You stand up to look for another game, one you might actually enjoy.  From one table to the next, they’re all playing the same game.  You observe for a few minutes and realize that very few seem to know what they’re doing.  The others seem completely lost.

Forget this. You grab your jacket and make for the door. The door’s locked.  Turning around, you see the cafe owner standing before you.  “You have to play.  There’s no getting out of this game.”

Irritated, you demand, “What are you saying? This is Hotel California, but for board games?”

“Pretty much,” he says.

For some reason, you don’t think to ask for the game rules.  You don’t even request the ‘getting started’ guide.  Noooo, you want to wing it.


Just by being born on this rock we call Earth, every one of us is entered into a game of money.  In the modern world, the name of this game is Capitalism™. There’s no escape. We’re all in it. Yet a large number of us never learn the complete rules.

Incidentally, the game is upgrading to version 2.0: Global Capitalism™.  Those who shunned the rules in version 1.0 are likely to get their asses handed to them in 2.0, and most likely by some foul-mouthed 12 year old living on the other side of the planet.

Why not learn the rules?  Maybe the notion of capitalism is offensive.  Sorry, whether one likes it or not, we’re all entered into the game.  Maybe it seems unfair. Yes – it is – some are born behind the start line, some are born way past it.  It’s totally unfair.  But it’s reality.

Here’s the thing: No matter what one thinks of the game, nor where one starts playing, everyone should at least know the ‘getting started’ rules.

I beg of you, please, understand the basics.  Warning: don’t get your learning materials from yahoo! finance.  They’re feeding you bullshit so that you click. Don’t go to investment  advisers either – they’ll likely try to sell you some product whether it suits your or not.  Remember, they’re playing the game too.

Game cheat/hint: unless you’re worth tens of millions of dollars and worry about estate taxes, never buy Universal Life or Whole Life insurance policies! Those are expensive hybrid financial products.  You’d be better off taking a personality quiz from the Church of Scientology.  If you want life insurance, buy term insurance. That’s it.  Put investment dollars into investments, don’t give them to insurance companies.

Here are the financial ‘getting started’ rules-of-the-game.  No equivocating here: these rules are one-size-fits all.  Buckle up.

Like any good set of game rules, we’ll begin with the objective:

Game Rule #1. The objective of the game is Financial Independence (FI). No, you don’t get to choose a different goal. FI is your goal. Accept it. Your objective is to accumulate a nest egg large enough to fund your life. That’s FI.

If you prefer, you can call it ‘FU’ Money.  Here’s Lucy Liu’s take on FU money, …and John Goodman’s character’s thoughts on FU money.

Game Rule #2. Find your FI Number.   Know how much you need in invested assets to call yourself ‘FI’.  Hint: it depends on your anticipated annual expenses.

It is this simple: Financial Independence, or FI, is achieved when the sum total of your investments are greater than 25 times your annual expenses.  This concept is most easily comprehended with examples.  Here are two:

  • If you spend $40k per year, you’ll need $1M invested to generate $40k every year without depleting your nest egg too much.
  • If you spend $100k per year, you need, that’s right, $2.5M in invested assets.

Game Rule #3. Budgets are for losers*.   If point #2 above left you wondering, “wait, but IDK how much I spend every year.” You may be moaning in dreaded anticipation of being told to make a budget.  Guess what, budgeting would be useless.  You’ll find yourself setting arbitrary goals based on wild guesses, and then failing – often. Budgeting at this point is a pointless exercise because you have not data.  It would be tremendously discouraging, and could catapult you back into actively avoiding the rules of the game. No, at this point, you need data.  You need to know what you’re actually spending. You can budget later… or not.  For now, you’ve got to track every transaction, down to the dime.

Luckily, we’ve got these amazing little attention-sinks called Smartphones-with-Apps. Install or YNAB (You Need a Budget).  Bam – you’ve got your new bathroom reading app.  Link the app to your credit card, and it’ll track your spending for you. All you need to do is lift the lid, sit, categorize each transaction, wipe, flush. Done. Eventually, the app will learn to categorize your $20 transaction at Trader Joe’s as ‘groceries’. At that point, your bathroom app time can be spent looking at spending trend graphs, or net worth balances.  Just stay seated when you fist pump “Yeah! I’m in this game!”

For the odd cash transaction, take 5 seconds out of your important daydreaming and enter the numbers at the time of the transaction.  It’s no big deal.

Game Rule #4. Optimize your spending.  Decide whether your current spending level is ideal for you and your values.  Do you really need to spend $200k per year to be happy?  Look at each category of spending.  See if you can optimize it down by making systematic changes in your habits.  Maybe you could ditch your car, as Mr. Money Mustache so fervently recommends.  Maybe you could make your coffee at home, as I do.  There’s no one single thing you must change.  I think you’ll find you could be happier if you dial in the things that don’t add value to your life. Don’t let anyone shame you into the changes – the motivation needs to come from you. And why do you care?  Well, because if you need $200k per year to live, that means you need $200k x 25 = $5M in invested assets in order to be FI.  Oof that sounds like an awful lot. By the way, you do remember that is your goal, right? If you can cut the required annual expenses, you lower the FI goal.  In one action you make the objective soooo much more attainable. It’s a direct relationship.  Simple.  Not necessarily easy, but it’s true.

Oh, and by the way, did you notice I still didn’t tell you to budget?  Guess what?  If you’ve been tracking your expenses, those nifty apps allow you to set budgets in a matter of a few minutes based on your spending patterns.  There’s really little reason to not do this at this point.  Brew your coffee, get your system moving, lift the lid, and … budget!

Game Rule #5. Calculate your savings rate.    In order to advance to the next level. you must calculate your savings rate.  Luckily, it’s easy:

Savings rate = (Income – expenses)/(income).   E.g.  Say your after tax income is $50k, and you spend $40k per year.  Your savings rate is:  ($50,000-$40,000)/($50,000) = 20%. Some fine print details to consider in figuring your income and expenses:

  • Include in ‘income’ any money your employer directly deposits into your retirement fund – matches and with-holdings alike. Omit from income all taxes/ tax withholding.
  • Include in ‘expenses’ all those stupid Coach bags, costly greens fees, and Lexus lease payments.

What’s your savings %?  Write it down and refer to it for the next game rule.

Game Rule #6. Memorize these numbers:

  • 75% = 7 years
  • 50% = 17 years
  • 25% = 32 years
  • 10% = 51 years

Putting those through our lucky decoder ring … we get:

  • If you save 75% of your after-tax income, you’ll be FI in 7 years.
  • If you save 50% of your after-tax income, you’ll be FI in 17 years.
  • If you save 25% of your after-tax income, you’ll be FI in 32 years (well that sucks)
  • If you save 10% of your after-tax income, you’ll be FI in 51 years (yeah – that’s conventional wisdom – bullshit, right?)
  • Drink your Ovaltine.

How long til you want to be FI? 17 years? 25 years?

If you answered ’51 years’, ask yourself the question again.  Loop on this question until your answer is less than that. Remember, FI does not equal retirement.  You don’t have to quit working.  You may want to, but you don’t have to. Hell, you don’t have to do anything at that point, cuz you’ll be FI. Read more about how and why this works: The Shockingly Simple Math Post on the Mr. Money Mustache Blog. 

(To be fair, if you are just starting out in your career, you may find saving 10% an absolute chore.  Set an intention to increase it when you get your next raise.  Keep going until hit your ideal savings rate)

Game Rule #7: Stop buying shit you don’t need.  Chances are you could optimize your expenses and loweryour FI number to something that feels a little more attainable.  That means cutting out paying for shit you don’t need. Here are my top five biggest bang-for-your-buck spending cuts:

  • kill cable (duh – You’ve got Netflix or Amazon Prime – oh no – not both?!?!)
  • get cheaper cell plan ($25 / month is all you need – try Ting or Republic Wireless)
  • stop eating out all the time, pack your damned lunch.
  • sell all cars until you own <= 1 for the whole family
  • carry your own water and stop buying silly bottled water /prepared coffee.

Game Rule #8: Never borrow money to buy a depreciating asset. No you don’t need a $20,000 car. This will land you back to the starting square. Unless you’re FI, you have no business buying such a car. Similarly, unless you can put 20% down on a house, you may want to keep renting.

Game Rule #9. Educate yourself on investing.

You can’t expect to build an FI fund by forwarding your monthly savings into a savings account.  No – you need that money to grow.  Understand the Rule of 72 to mentally calculate how money grows over time.

  • Read the wiki. Write an Investment Policy Statement (IPS)
  • Never pay more than .3% management fee on any fund. (check out vanguard)
  • That retirement account at work? Max that shit out. At the very least, get the employer match.  Even better: contribute the max allowable by the tax man.
  • Consider Real estate for your portfolio.  But dont’ jump into this naively.  It can be a wild ride (will write about that later).

Game Rule #11: When in doubt, pause the game and read the full rule book.  You can find complete rule-book variants for the Game of Capitalism 1.0 at the following sites.  The rule-books for Game of Capitalism 2.0 are in draft form.

  • Mr Money Mustache
  •, lurk for a bit, then post a user case and get feedback.
  • r/personalfinance.  There’s loads of good advice there – especially the ‘getting started’ stuff the bots prattle on about. Pose your own personal case study and get feedback from the world wide crowdiverse.

Some people on the MMM forum are saving more than 80% of their income.  Crazy, right?  Hardly. Those people are winning the game.


Change your thinking; it’s all just a game. Yes it’s that easy – think of your financial life as just a game. You know the objective, now its time to come up with strategies and tactics to reach it.  Be creative.  How can you have fun today without spending a dime?  Or,adopt this mantra: ‘if I throw money at a problem, I’ve lost.’  Or, put a post-it on your credit card that reads, ‘do you really need to buy stupid shit right now numb-nuts?’

That’s it.  Learn these getting-started rules for the Game of Capitalism, and one day, you may discover the word ‘money’ magically disappears from your ‘big problem’ mental ledger.  Isn’t that what you want after all? To not have to worry about money? I’ll bet it is. Because not thinking about money is precisely what got you where you are today.  You are in the game no matter what, so maybe it’s time to learn the rules.

Further reading: wiki (Honestly, this site is THE place to get tax info.  Random online articles can be good leads, but find the actual tax code on to confirm.
Your Money or Your Life (audible audiobook) The audio book beats the print edition IMO, but if you prefer…  YMOYL (paperback)  
The Shockingly Simple Math Behind Early Retirement
Find out if you’ve won the FI game on cFIREsim.

*Shamelessly stolen from a chapter heading “Goals are for Losers” in Scott Adam’s book, “How to Fail at almost everything and Still Win Big.”

**Incidentally, try to set your W-2 withholding to a level that’s very close to what you’ll actually owe.  Don’t ‘save’ by manufacturing a giant tax refund. Rather, save, by fricking just saving.

**Check the Retirement Account Page on to find IRAs you are eligible for. In general, contributions to a traditional IRA are deductible if your AGI is south of $100k, and Roth is open to everyone, unless you already have 401ks in which case eligibility ceases with AGI north of 180K (assuming married filing joint). Post your case in and use the frugal hive mind over there to dial this in for you.