Book Review: Your Money or Your Life

Feb 1, 2018

[originally published but unindexed on Jul. 26th, 2005|02:50 pm]

Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence
by Joe Dominguez and Vicki Robin

If you’re looking for a “get rich quick” or a no-effort-brainless solution to finances, look elsewhere. This is not a quick process, nor is it for those folks who are averse to actually THINKING and DOING. This approach demands self-reflection, brutal honesty, and a willingness to become aware of what you are doing, when you are doing it, and possibly even why you do what you do. [A friend] gave this book to me because she thought I would enjoy it – she was 120% correct. 😀

Ironically enough, as I was reading this book I began to see that steps 1 through 5 I had already been doing for some time now, though with a few sub-steps left out. I’m working on steps 6, 8, and 9. After being a colossal (understatement) financial MORON from about 15 to 31, it’s good to see that my trials in the fire have tempered my thinking into something more sound and workable. heh. I’m using this journal – though not publically posted – to sort through many of questions and musings which have been raised while reading this book.

One of the primary tenants of this book that I’ve not only grown up with but also observed in life is that consuming our way through life is not fulfilling. How many sweaters do I need before I have “enough”? Or is it not the “sweaters” I trying to gain, but rather what they represent to me? I’m at the point where I’m wondering “what’s it all for?” Hell, I’ve been at that point for YEARS, the difference is that now I’m beginning to wade into this question with some level of practicality.

In short, if you are looking for a practical, applicable, do-it-yourself, proven, grounded method of gaining reasonable Financial Independence, then I can’t recommend this book enough.

The following are quotes that I’ve highlighted in the reading of the book which I thought were worthwhile enough for me to revisit from time to time without having to crack the book again. After the quotes is the outline of all 9 steps necessary to begin the road toward Financial Independence. Here they are:

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xxiv – This book is about … making your spending (and hopefully your saving) of money into a clear mirror of your life values and purpose.

xxxi – Until you can think independently, you can’t be independent.

xxxi – Financial Intelligence is being able to step back from your assumptions and your emotions about money and observe them objectively.

xxxii – Financial Integrity is achieved by learning the true impact of your earning and spending, both on your immediate family and on the planet.

xxxiii – One purpose of this book is to teach the tools that allow you to become financially independent much sooner than traditional retirement and without dependence on traditional retirement sources of income such as pensions and Social Security. … Financial Independence is anything that frees you from a dependence on money to handle your life.

pg 5 – (in reference to psychotherapist Douglas LaBier in his book Modern Madness) … focusing on money/position/success at the expense of personal fulfillment and meaning had led 60 percent of his sample of several hundred (people) to suffer from depression, anxiety, and other job-related disorders, including the ubiquitous “stress”.

pg 7 – we think we work to pay the bills — but we spend more than we make on more than we need, which sends us back to work to get the money to spend to get more stuff to …

Pg 13 – If you live for “having it all”, what you have is never enough.

Pg 15 – We project onto money the capacity to fulfil our fantasies, allay our fears, soothe our pain and send us soaring to the heights. … We buy everything from hope to happiness. We no longer live life. We consume it.

pg 21 – Money — not necessarily how much we have, but how we feel about it — governs our lives as much or more than any other factor.

Pg 23 – We (as a society) have learned to seek out external solutions to signals from the mind, heart or soul that something is out of balance. We try to satisfy essentially psychological and spiritual needs with consumption at the physical level.

Pg 25 – Part of the secret of life … comes from identifying for yourself that point of maximum fulfillment. … The word is “enough”. … Enough for our survival. Enough comforts. And even enough little “luxuries”. We have everything we need; there’s nothing extra to weigh us down, distract or distress us, nothing we’ve bought on time (credit), have never used and are slaving to pay off. Enough is a fearless place. A trusting place. An honest and self-observant place. It’s appreciating and fully enjoying what money brings into your life and yet never purchasing anything that isn’t needed or wanted.

Pg 29 – Clutter — elements in your environment that don’t serve you yet take up space. … As your awareness of clutter deepens, you’ll be inspired to spring clean your whole life. … you will develop your own personal definition of clutter and will slowly, painlessly, even joyfully, rid yourself of it. … The program initiates a process of awareness and change that will continue for many years.

pg 35 – The difference between prosperity and poverty lies simply in our degree of gratitude.

pg 54 – Money is something we choose to trade our life energy for. Our life energy is our allotment of time here on earth, the hours of precious life available to us. When go to our jobs we are trading our life energy for money.

pg 57/58 – Financial Independence has nothing to do with rich. Financial Independence is the experience of having enough. … Financial Independence is an experience of freedom at a psychological level. You are free from the slavery of unconsciously held assumptions about money, and free of the guilt, resentment, envy, frustration and despair you may have felt about money issues.

pg 109 – … to have a fulfilled life, you need to have a sense of purpose, a dream of what a good life might be. … Wherever you are, take a few moments now to reflect upon your dreams.

pg 134 – Financial Intelligence is knowing that if you spend your life energy on stuff that brings only passing fulfillment and doesn’t support your values, you end with less life.

pg 139 – Sustainability recognizes that “economics” and “ecology” have the same root, “eco”, which means “house”.

pg 140 – “I learned very early and painfully that you have to decide at the outset whether your are trying to make money or make sense – I feel that they are mutually exclusive.” Buckminster Fuller

Pg 143 – “What is good for an individual household is also good for the Planet if it’s done with vision and purpose. Self-interest can be our ally in helping each other get off the treadmill. But the consumer culture has become adept at blurring the distinction between self-interest and selfishness, so most of us find it easy to slide into quagmires of debt, spending and consuming when all we really want is a reasonable level of comfort and security.” – Roger Ringer

pg 144 – a Japanese saying: The gods only laugh when people ask them for money.

pg 159 – It’s not the conditions of your life but how you interact with them that will allow you to move forward.

pg 160 – Debtors Anonymous says we go into debt to avoid feelings, esp feelings of deprivation. Like other addictions, debt allows us to deny pain, sorrow, loss, anger, loneliness, and despair.

pg 167 – Frugality is enjoying the virtue of getting good value for every minute of your life energy and everything you have the use of.

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There are 9 steps outlined in the book which initiate the process of bringing your relationship with money into your conscious everyday waking mind, so that you find yourself increasingly in the position and frame of mind to say “You know, I have enough sweaters (cars, books, furniture, baking dishes, doohickeys, tools, etc) and I don’t really need or want another one.” The folks who wrote the book started a foundation called “The New Road Map Foundation” and it has since evovled – http://www.financialintegrity.org

These are the 9 steps summarized:

Step 1: Making Peace With The Past
(a) Find how much money you have earned in your lifetime
(b) Create a balance sheet of your assets and liabilities. What do you have to show for the money you’ve earned?

Step 2: Being In The Present — Tracking Your Life Energy
(a) Establish (accurately and honestly) how much money you are trading your life energy for, and discover your real hourly wage
(b) Learn about your money behavior by keeping track of every cent that comes into and goes out of your life

Step 3: Monthly Tabulation
(a) Discern your unique spending and income categories and subcategories from the month’s worth of entries in your Daily Money Log
(b) Set up your Monthly Tabulation
(c) Enter all money transactions in the appropriate category
(d) Total the money spent in each subcategory
(e) Add up total monthly income and total monthly expenses. Total your cash on hand and balance all bank accounts.
(f) Convert the “dollars” spent in each subcategory into “hours of life energy” using the real hourly wage that you computed in step 2 (here’s another source online).

Step 4: Three Questions That Will Transform Your Life
(a) For each spending subcategory in your Monthly Tabulation ask question 1: “Did I receive fulfillment, satisfaction and value in proportion to life energy spent?” Mark your answer with a + for yes, more please ; a – or no, less please ; or a 0 for just right, keep steady.
(b) For each spending subcategory in your Monthly Tabulation ask question 2: “Is this expenditure of life energy in alignment with my values and life purpose?” Mark your answer with a + for yes, more please ; a – or no, less please ; or a 0 for just right, keep steady.
(c) For each spending subcategory in your Monthly Tabulation ask question 3: “How might this expenditure change if I didn’t have to work for a living?” Mark your answer with a + for yes, more please ; a – or no, less please ; or a 0 for just right, keep steady.
(d) Review and make a life of all subcategories you indicated with the –

Step 5: Making Life Energy Visible
* Make and keep an up-to-date wall chart of monthly Income and Expenses

Step 6: Valuing Your Life Energy – Minimizing Spending
* Lower your total monthly expenses by valuing your life energy and increasing your consciousness in spending. Learning to choose quality of life over standard of living. Be frugal; it’s cool.

Step 7: Valuing Your Life Energy – Maximizing Income
* Since the only purpose of paid employment is getting paid, value your life energy enough to increase your income.

Step 8: Capital And The Crossover Point
* Each month, apply the following equation to your total accumulated capital and post the monthly investment income as a separate line on your wall chart:

capital x current long-term interest rate divided by 12 months = monthly investment income.

When you begin investing your money, start entering your actual interest income for your monthly investment income on your Wall Chart. After trends become clear, project that line to the Crossover Point; you will have an estimate of how much time you will have to work before reaching Financial Independence.

Step 9: Managing Your Finances
* Become knowledgeable and sophisticated about long-term income-producing investments and managing your finances for safe, steady and sufficient income for the rest of your life.