Making a dying
Your Money or Your Life by Joe Dominguez and Vicki Robin is without a doubt is the most influential book that I have read. It challenges and triumphs over the common belief that happiness can be bought. The book forces you to really to be self-critical and determine what actions in your life are worth keeping and those that are completely against your values and beliefs. Consider the following questions:"This is a wonderful book. It really can change your life"
-Oprah Winfrey
- Do you wonder where all of your money "disappears" before your next paycheck?
- Do you want to work in a field that is your true passion instead of the job you took for the money?
- Do you want to retire early so you can focus on what is important to you?
- Do ever feel excited about shopping but feel guilty when you get home?
- Do you buy something and then never use it after a week or two?
- Do you spend more than you earn?
What is Money Anyways?
We typically view money as something we can buy material goods with. Most of the time we forget that in order to get this money you have to use the most precious resource of all, your life energy. If you are 40 years old, you have approximately 329,601 hours left to live based on average life expectancies. It seems like a lot until you calculate that you need to invest 1500 hours to get that luxury car. Is it really worth ~1/200th of your remaining life for some metal and four wheels that costs even more of your life energy to drive, maintain, and insure? This is an example of the questions that you will automatically question once you start following steps towards "Financial Independence".
9 Steps Towards Financial Independence
The first question you might have is "What is Financial Independence?". The 9 steps all lead to this point which means that you will be able to live without having to work for an income. That means your assets (saved money) earn enough interest to support your living costs. Once you have reached financial independence, you will be able to do what is important to you without having to worry about money. That can mean taking a pay cut to work at a job that aligns with your values or quit outright and volunteer for your passion.
I've listed the 9 steps in the Your Money or Your Life program below. If you want more information on the specifics of each step, refer to the summary of Your Money Or Your Life online.
Step 1: Making Peace With The Past
Step 2: Being In The Present -- Tracking Your Life Energy
Step 3: Where Is It All Going? (The Monthly Tabulation)
Step 4: Three Questions That Will Transform Your Life
Step 5: Making Life Energy Visible
Step 6: Valuing Your Life Energy -- Minimizing Spending
Step 7: Valuing Your Life Energy -- Maximizing Income
Step 8: Capital And The Crossover Point
Step 9: Managing Your Finances
A Penny Saved is a Penny Earned
Steps 2-4 are the core of the program. These steps make you track every penny that enters or exits your life and evaluate your expense categories based on three questions:
- Did I receive fulfillment, satisfaction and value in proportion to life energy spent?
- Is this expenditure of life energy in alignment with my values and life purpose?
- How might this expenditure change if I didn't have to work for a living.
One of the mantras of the program is "no blame, no shame". The purchases in the past are exactly that, in the past. You shouldn't be ashamed or blame yourself for your previous purchases. The purpose of tracking your life energy is to see if the purchases were appropriate. If they weren't, then you can make changes in the next month. The process is ever evolving and your expenses will naturally move towards your optimal amount of spending.
It seems like a lot of effort to track every penny that you spend or earn, but it is important because it will show you where all your expenses are going. There are a variety of tools (Quicken, Wesabe, Mint) there that can help you with this.
Next Steps
After tracking your income and spending, the next steps include minimizing spending and maximizing income. Your spending will eventually level out and will show you where you get the most value from what you spend. After finding the optimal amount of spending, it is then important to maximize your income so that you can achieve financial independence faster. Once you achieve financial independence, you will be able to live life according to your values without worrying about "making a dying".
Conclusion
Most Americans today are too interested in affluence, material wealth, and "keeping up with the Jones's". Despite all of the new technologies and gadgets that we now have, polls consistently show that we were not as happy as we were 30-40 years ago. Marketing has conditioned us to think that our self-worth is derived from what we drive, what we wear, and most importantly, how much money we make. This is so far from the truth. We should value our friends, community, and self-worth for what we have accomplished in life.
Your Money or Your Life completely shatters the idea that you need material wealth to be happy and I truly think that everyone in America really should read this book. There are many actions that readers can take to bring their values back into their lives.
Most people in the society today will benefit from "down-shifting" from their current high-paced, high-stress lifestyles. Voluntary simplicity is a movement that is gaining popularity not only because it saves money, but it affects what should be most important of all, the quality of life.
There are tons of used copies of this book floating around including on Amazon.com and Half.com and it is also available at most public libraries. Try to find it used or free at a library before you buy it!
In my next post related to Credit/Debt/Finance I will discuss how Your Money or Your Life has affected my spending habits and ultimately my life. Hopefully the book will have the same impact on your life as it has had on mine.
Related Links:
Recommended Books:
- Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence
- Joe Dominguez, Vicki Robin
- Affluenza: The All-Consuming Epidemic (Bk Currents)
- John de Graff
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