★ Rockstar Book Review: “Your Money or Your Life”

Posted January 6, 2017 6:00 am by with 10 comments

Book:
Vicki Robin, Joe Dominguez
Price:
$9.55

Reviewed by:
Rating:
5
On January 6, 2017
Last modified:March 19, 2017

Summary:

If you want to stop having to work for "The Man" sooner than later, YMOYL is a must read. It’s a powerful book and should be part of every person's lifetime curriculum.

your money or your life

This is part of our Rockstar Book Review series.
Be sure to check out all previous books we’ve covered!

“Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence” by Vicki Robin and Joe Dominguez

rockstar rating 5 stars
Who it’s for: Anyone who wants to reach financial independence, sooner than later.

Readability: MEDIUM. It’s well written and easy to follow thanks to the authors’ obvious attention to layout and structure. The personal stories and visuals included in the book also help drive the authors’ points home for the reader, and keep the book entertaining as well as inspiring.

What I liked about it: “Your Money or Your Life” (YMOYL) helps redefine our relationship with work and money by forcing us to reevaluate their respective roles in our lives. The authors walk us through nine clear steps that help guide our thinking from status quo to financial independence, by addressing the psychology of money as opposed to focusing on the mechanics of money management, as so many other personal finance resources tend to do.

What I didn’t like about it: I may not agree with the idea of investing in treasury bonds as the default investment vehicle, but it’s such a minor point I feel silly even mentioning it. Talk about splitting hairs!

Find it @ Amazon for $9.55 || Free at the library :)

“Your Money or Your Life” Invites Us to Rethink How We Invest Our Time and Our Money

This is the perfect book for anyone who wants to change their relationship with money, and the source of money for most of us: work. The authors’ guide the reader through nine critical steps. These steps help us reevaluate our relationship with money, work and time, to determine whether our current actions are helping us maximize our potential to live a full and rich life.

(Note: If anyone wants a bird’s eye view of its contents, I suggest reading the epilogue starting on pg. 295. It provides a powerful summary of the nine steps as a quick reference.)

They also use simple calculations and visuals in the form of tables and graphs to help us map our behavior and our progress toward the ultimate goal: having investment revenue match our spending, which equals reaching financial independence.

The main steps in YMOYL help us create an understanding of:

  1. Where We’ve Been: Gaining an understanding of how much money we’ve spent in our lifetimes and evaluating our return thus far in the form of life satisfaction.
  2. Where We Are: Evaluating the magnitude and quality of our current spending to determine whether we’re maximizing how we use our life energy (0ur most precious resource).
  3. Where We’re Going: Measuring our self-sufficiency by tracking our progress toward financial independence and beyond.

#1. Understanding How Much We’ve Spent in Our Lifetime

First, the authors’ invite us to determine how much we’ve earned in our lifetime and compare it to our current net worth. Ouch! Seeing how much money we’ve thrown away is sobering to say the least. The exercise is definitely worth the pain because, as we know, we can’t change what we don’t acknowledge.

(Note: For a quick and dirty way of finding your lifetime income, log into your Social Security account online which tracks it all (ssa.gov/myaccount). J. Money once shared his earnings and made this net worth comparison dubbing it the Lifetime Wealth Ratio™.)

#2. Evaluating the Magnitude and Quality of Our Spending

Second, they ask us to look to the present: They want us to get acquainted with our regular (monthly) spending to get a sense of where our money is going. What do we spend our money on and does it add to the quality of our lives? Are we better off for having spent the money?

If we’re truthful, there’s a great deal of money we spend for other people that doesn’t add to the quality of our lives, just to its “flashiness”.

Other people’s expectations don’t make you buy stuff. Television doesn’t make you buy stuff. Your thoughts make you buy stuff. Watch those suckers. They’re dangerous to your pocketbook—and to a lot more. (pg. 194)

Once we know what doesn’t add to our quality of life, the authors invite us to either eliminate the expenditures and/or reallocate the funds to something we know adds to our life satisfaction.

Case in point: I could not believe how much I was spending on “work”: commuting, dressing the part, etc. YMOYL made me realize years ago that I was spending $26K per year just to get to work and look the part!

#3. Measuring Our Level of Self-Sufficiency

ymoyl wall chart

Finally, YMOYL invites us to measure our self-sufficiency by tracking our progress toward financial independence. We can do this by tracking our monthly:

  • earned income (all money flowing in from working)
  • expenses
  • investment income (all money earned from investments)

The graph is powerful for a few reasons. It offers a visual reference that prods us to maximize income and reduce expenses. Plus, it promises the ultimate payoff: once the total monthly expenses and total investment income lines intersect, we’ve reached financial independence because we’re no longer dependent on earned income to meet our needs.

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. 55)

I used this chart myself on my closet door for a few years and it helped to keep my eye on the prize.

Bottom Line

If you want to stop having to work for “The Man” sooner than later, YMOYL is a must read. It’s a powerful book and should be part of every person’s lifetime curriculum.

Where you can find the book: Amazon @ $9.55
Where you can find the authors: YourMoneyOrYourLife.info and VickiRobin.com
(You can also find free teaching and independent learning guides to the nine steps at FinancialIntegrity.org.)

Anyone who peruses the book may also notice the references at the end, which include a number of books worth reading. Here are three I would recommend: The Overworked American by Juliet B. Schor; The High Price of Materialism by Tim Kasser and Man’s Search for Meaning by Viktor Frankl. Another worthwhile read that puts spending in perspective but is not referenced in YMOYL is Happy Money by Elizabeth Dunn and Michael Norton.

******

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Hélène is Rockstar Finance’s Curator of Books, and Blogger at FreetoPursue.com. A perpetual student, speaker, writer and coach, you’ll often find her reading, researching or writing. She also likes travelling and hanging out with her husband and their greyhound Belle.

10 responses to ★ Rockstar Book Review: “Your Money or Your Life”

  1. Mrs. Picky Pincher January 6th, 2017 at 9:06 am

    I’ve really been meaning to read more personal finance books. I’ve added this to my list, right after The Millionaire Next Door, which most people seem to swear by. We’ll see how it goes. :)

    Reply

    • Hélène Massicotte January 6th, 2017 at 9:11 am

      I can virtually guarantee you won’t regret reading it. The concepts are rock solid and it’s well written. I especially appreciate the more recent edition’s summary of the nine steps at the back of the book, as this is one I find I like to reference regularly. Happy reading!

      Reply

  2. Tucker January 6th, 2017 at 12:02 pm

    I first read this book 20 years ago (when I was 20) and have read every couple of years since. They changed their tune about T-bonds in a later, and have accepted the mutual fund approach. The mutual fund approach is the approach the authors of the follow-up book “Getting a Life,” use so I wasn’t surprised to see its inclusion.

    I think the most helpful aspect of this book is that it was really the first FIRE-related book that got a lot of play, and a lot of advice stands the test of time. It also tackles the emotional aspect of money quite well. Like you said though, it seems like a quibble to not agree on the ways one should invest when the rest of it is so good.

    Reply

    • Hélène Massicotte January 6th, 2017 at 12:38 pm

      “I think the most helpful aspect of this book is that it was really the first FIRE-related book that got a lot of play, and a lot of advice stands the test of time.”

      I couldn’t agree more. The psychology of money and wealth has been around for a long time but the authors’ emphasis on the idea of how we use our “life energy” is powerful. It gave “time is money” a whole new spin: “money is time”.

      Reply

  3. A Noonan Moose January 6th, 2017 at 5:44 pm

    I first read YMOYL in 1995 and have read it through a dozen or more times since then. It helped me quit the rat race for good in 2008 (at age 48), and for this I’m forever grateful to its authors Joe Dominguez and Vicki Robin.

    YMOYL is a truly life-changing read—and there aren’t many of those out there.

    Great review Helene!

    Reply

    • Hélène Massicotte January 6th, 2017 at 7:32 pm

      Thanks Noonan. I couldn’t agree more with your description of this book as being “a life-changing read”. I appreciate you sharing with us how the book was instrumental in making some significant changes in your life.

      Reply

  4. TheFIexplorer January 7th, 2017 at 6:41 am

    This is such a good choice of a book to highlight – it was on of the first and most important that set me on the FIRE path. Like you, one of my first instincts after reading it was to start graphing passive income against expenditure, it’s such a tangible tool to see your real circumstances and the possibilities ahead.

    Agree with your comments on the bond recommendation, it has not dated well, it was well suited to its times but would have been a disaster through the bond rally and falling rates.

    Reply

    • Hélène Massicotte January 7th, 2017 at 7:04 am

      It is a great choice, isn’t it? I remember reading it the first time and wondering where it had been all my life.

      Reply

  5. Jitender Sharma January 9th, 2017 at 11:00 am

    Being a financial consultant its good to read some great books like this.I have a good collection of personal finance and self-development books.
    Now I have added one more book to my list. Thanks for your great suggestions.

    Reply

    • Hélène Massicotte January 9th, 2017 at 12:17 pm

      My pleasure Jitender. I hope you find it as impactful as I did. Also, you might find that the summary of the book’s 9 Steps, which is located at the end of the book makes it easy to go back to from time to time. I wish more books would offer similar summaries of their contents for ease of reference.

      Reply

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