How to build wealth using the STRIP framework and calculate your FU number

Executive overview

Most people either don't save enough or save without investing — both paths lead to falling behind inflation. Vivian Tu (YourRichBFF) walks through a five-step financial framework and a formula for calculating the exact portfolio size needed to stop working.

The framework covers savings, debt, retirement accounts, investing, and planning — in that order. The FU number formula: decide your ideal annual spend, divide by 0.04 to get the liquid investment target.

Knowing your FU number turns retirement from a vague hope into a trackable target.

S — Savings: build your emergency fund first

• Singles: 3–6 months of living expenses; heads of household or self-employed: 6–12 months.
• Emergency fund buys time — job loss, injury, or unexpected costs don't force bad financial decisions.
• Put it in a high-yield savings account (SoFi, Ally, Marcus, Amex) — earns up to 10× a traditional bank.
• Pick one and start; the cost of indecision compounds over years.

Budgeting with 50/30/20

• 50% of take-home pay to needs (housing, groceries, insurance, utilities).
• 30% to wants (dining, entertainment, personal care).
• 20% to future you: saving, debt paydown, investing.
• As income rises, keep needs and wants flat so the 20% grows — don't lifestyle-inflate to match every raise.
• Vivian saves over 50% of her income, knowing creator careers have shorter runways than traditional professions.

T — Total debt: rank and attack by interest rate

• List all debts from highest to lowest interest rate.
• Make minimum payments on everything; direct all extra cash to the highest-rate debt first.
• This minimises total interest paid and clears debt in the shortest time.
• Rule of 7: if a debt carries 7%+ interest, pay it off before investing; below 7%, consider investing instead, since index funds average 8–10% annually.
• Example: a 2% mortgage — slow-roll it and invest the difference. A 7% mortgage — pay it down more aggressively.

R — Retirement: use tax-advantaged accounts

• Contribute at least enough to capture the full employer 401k match — that's an instant return.
• Account types: 401k, 403b, 457 (employer plans); Roth IRA, traditional IRA (individual).
• "Saving for retirement" is a misnomer: unless you earn $400k+/year, you cannot save your way there — inflation and rising costs outpace cash savings.
• You must invest; only investment returns can keep pace with long-run cost growth.

I — Invest: buying the account is not enough

• Opening a retirement account and depositing cash is not investing — the cash sits idle and loses ~8% to inflation annually.
• You must buy investments inside the account.
• Target date retirement funds: one-click diversification matched to your retirement year — suitable for most people.
• Index funds tracking the S&P 500: broad, low-cost, historically 8–10% average annual return.
• Avoid stock-picking: even professional hedge funds with unlimited research resources consistently fail to beat the market.

P — Plan: calculate your FU number

• Visualise your ideal year: housing, travel, food, dependants, healthcare, lifestyle. Use today's prices.
• That annual figure is your target spending in retirement.
• Divide by 0.04 (the 4% safe withdrawal rate) to get your required liquid investment portfolio.
• Example: $1M/year desired spend ÷ 0.04 = $25 million FU number.
• The 4% rate is conservative — it accounts for capital gains taxes and leaves a buffer above typical returns.
• Only liquid investments count (brokerage, retirement accounts). Real estate equity does not — property takes months to liquidate even in smooth transactions.
• Calculate three versions: bare-bones, middle-of-the-road, balling-out. Use them as milestone markers.
• Recalculate every 1–2 years as life changes (kids, income shifts, market moves).

On real estate and liquidity

• Real estate builds generational wealth but is illiquid by nature.
• A "smooth" closing still takes 3–4 months; factor that into any plan that requires accessible capital.
• REITs and real estate crowdfunding offer exposure with far better liquidity than physical property.

Creator-specific notes on team and sustainability

• Vivian's core team is two people (herself and an ops manager); everything else is agency and specialist contractors (agents, manager, attorney, publicist, business manager).
• Agent/manager/attorney percentages follow entertainment convention: 10/10/5.
• Operating at 110% for a book launch was unsustainable; she targets 85–90% as a long-run pace.
• Goal: slow down hiring, eventually hand off production, retain creative and on-screen work.

Resources and further learning

• Book: Rich AF by Vivian Tu — includes a monthly budgeting template via QR code.
• The Richest Man in Babylon — short, story-based personal finance fundamentals.
• Podcasts: NPR Planet Money, How I Built This (Guy Raz).
• Creators: Girls That Invest, Tiffany Aliche (The Budgetnista), Her First 100K.