The book “Your money or your life” was written by three authors Vicki Robin, Monique Tilford, and Joseph R Dominguez. Released by Pluto Press in the spring of 1999, in the language of English. As the book launched in 1999, at the same time it was published in several languages like French, Dutch, Spanish, German, Turkish, and Greek. The book “Your money or your life” is a sign of renewed interest in global alternatives to mainstream thinking. The book itself is pride that doesn’t hide its hostility to the neo-liberal books. This book will also help us to become financially independent.
Table of Contents
What this book is all about?
This book is different from other finance books as it talks about a person’s own choice, his/her freedom, and desires he wants to fulfill-instead of deprivation and discipline. After reading the book you will learn how to use the money to achieve your goals and real dreams. Escaping yourself from the modern traps of consumerism, greed, clutter, and debt.
Having a relationship with money can help you to overcome your financial issues. It can be a systematic guide to achieve your financial independence by transforming your relationship with money. The book contains more than 300 pages explaining the importance and right use of money for a successful life. Also, the author of this book have discussed 5-steps for achieving your financial goal. As discussed, these steps are very simple which help any person to achieve his/her financial independence.
Let us go through these 5 simple yet efficient steps to become financially independent:
1. Decide your own enough:
This is the starting point. Enough is not too much or not too little but just right. If you don’t learn about yourself enough you’ll never be satisfied. In an experiment, people from different profession and from every income bracket were asked to rate their happiness on the scale of 1-5. Moreover, they were also asked, how much money would make them happy?
The result came out to be similar in all the cases. All of them wanted to earn fifty percent more than what they’re earning per day or per month. But does money means happiness? The answer can be debatable.
– “More money doesn’t equal to more happiness after a certain level of sufficiency” says the author. Currently, this level of happiness is at 75000 US Dollars per year. So if a person makes equal or more than that in a year then he is satisfied but it differs from person to person. Therefore, you need to decide your own enough which is the right amount for you.
2. Compare your lifetime income to your net worth:
It’s about reviewing your earnings and spending habits of the past. “No shame, no blame”. There are two steps to do so:
- Firstly, find out how much you’ve earned in your life. To do so, you can use resources such as online records from your bank, your resume, social security statement etc.
- And second is to calculate your net worth. It’s very simple. All you need to do is to follow this formula.
(net worth*liquid/fixed asset – liability)
Examples of liquid asset- Cash, Savings, Bonds, Stocks, Funds, etc. Examples of fixed asset- House, Car, Jewelry, Electronics, Furniture, etc.
3. Calculate your true hourly wage:
What is work? Work is defined as something people do not want to do but still do it in order to get paid. Now work can be a lot of different things for different people. It can be-
- Earning money
- Time structuring, etc.
So basically, work has two functions- First, Financial function which is earning money, and second is personal function which is security, tradition, etc. Now, you need to ask yourself why are you earning and what is your hourly wage. Is it worth the time and energy you’re giving?
4. Money isn’t Dollars, Euros or Rupees. It’s life energy.
Your one and only asset and the only true currency is life energy that you can never get back. Track your expense over month and see where you spend your life energy. So what is life energy? It is our allotment of time on earth, the hours of precious life available to us. When we go to our jobs we’re trading our life energy for money. In other words, you can also say that money is our life energy. Also, ask yourself these three questions about every expense.
- Did I receive fulfillment in proportion to life energy spent?
- Is this expenditure of life energy aligned with my life purpose?
- How much this expenditure change if I didn’t have to work for money?
This is important to realize if you’re spending a lot of your energy trying to impress others with expensive things or too much energy on impulsive shopping. Or too little energy on your relationship, people you love.
5. Create a wall chart of Income and Expenses:
To become financially independent, tracking of your income and expense each month is the starting point. A wall chart is basically a large piece of paper where you draw a graph showing your monthly earning, spending, investment, etc. The goal here is to minimize your expense. Overtime, you’ll have more savings that you can invest and your investment returns are more than your spending. If you can achieve this, you’ll be financially independent.
I hope this mini review cum summary was helpful. If you want to read the book then click here. Also, if you want to read any other book summary or review like this one then click on these below. Rich Dad Poor Dad Getting Things Done The Psychology of Money I'll teach you to be rich Do let us know in the comments down below if you liked the article. And what other book summary would you like to read about. Your suggestions and recommendations would mean a lot to us.