Your Money or Your Life

Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence. This is one of those books which can really change your life if you take it to heart. The basic premise is to follow your dreams – sounds lovely but difficult in reality, right? The first step, like in E-Myth is to figure out exactly what those dreams and your personal priorities are, so work – or not working – supports them.

In fact, the book’s authors, Vicki Robin and Joe Dominguez, call making a living ‘making a dying’. Yes that is a bit dramatic, but it is amazing how many hours can get eaten up during the working week without providing as much satisfaction as leisure time does.

The big plan is to maximise income and minimise spending, creating savings which will one day support a financially-independent you on interest alone. Sounds like the domain of trustafarians? After you read the book you will be convinced that it is possible. I’m waiting for another book to arrive, Getting a Life: Real Lives Transformed by Your Money or Your Life, with more stories of people who have achieved financial independence with financial integrity.

One tool I enjoyed in Your Money or Your Life is calculating the real amount you earn per hour by taking what you earn and then factoring in things like commuting, clothes needed for work only, unwinding time (which you wouldn’t need if you didn’t work) and even holidays / vacations. Then you can calculate any purchases in terms of the ‘hours of life energy’ it takes to pay for them.

While the authors are definitely environmentalists and support frugal living, they often repeat ‘no shame, no blame’ to leave the door open to people who prefer higher levels of consumption.

It’s worth reading this book even if you don’t follow it to the letter…like having a cash flow category for money lost in vending machines, and one for coins found on the ground. Having a new perspective on work, and how to not work, is always welcome.