Book Review: Your Money or Your Life

>> Thursday, March 26, 2009

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

Rating: ****

You know that weird thing when you learn something new, and then suddenly you hear it mentioned over and over in a bunch of random places? I can never remember what that's called, but it happened to me with this book.

At the end of the Tightwad Gazette, Amy Dacyzyn mentions Vicki Robin and Joe Dominguez and their former organization, the New Road Map Foundation. I can't remember if she mentioned Your Money or Your Life or if I looked it up later, but I casually added it to my "To Read at Some Undetermined Point in the Future" list.

A couple weeks later, I got an email from the New American Dream announcing the release of an updated version of Your Money or Your Life. Apparently, Vicki Robin was a co-founder of my favorite organization.

Then I stumbled upon a review of it by the guy that writes The Simple Dollar stating that of all the financial books he's read, Your Money or Your Life is his favorite.

The result was that I moved it from my "To Read at Some Undetermined Point in the Future" list to my "Must Read Now" list.

Joe Dominguez, the developer of the financial philosophy described in this book, realized early on in his fast-paced career on Wall Street that he didn't want to be stuck in that kind of job for the rest of his life. He began living far below his means and saving as much as he could until after only a few years, he was able to live completely off of his investment income of $6,000. He left Wall Street and began teaching his philosophy to others in collaboration with Vicki Robin.

In 1992, they published the first edition of Your Money or Your Life, which teaches readers how to live below their means to get out of debt, build up their savings, and ultimately achieve financial independence.

I can't say that this book had the same effect on me as it did on the guy at The Simple Dollar, but I would recommend it to anyone starting out on their frugal journey or looking to improve their relationship with money. The information is presented in a straightforward, step-by-step manner, and their belief that anyone can achieve financial independence is empowering to the reader.

Most worthwhile is the description of money as something you get in exchange for your life energy, leading to the three questions that are the crux of their philosophy:

  1. Did I receive fulfillment, satisfaction, and value in proportion to life energy spent?
  2. Is this expenditure of life energy in allignment with my values and life purpose?
  3. How might this expenditure change if I didn't have to work for a living?
Another valuable section of this book was their "101 Ways to Save Money," which for some strange reason, Vicki Robin decided to leave out of the new edition.

My main criticism of their ideas is that they would work best for singles or couples with no children. Some of the methods that they suggest for saving money simply would not work for a family. No matter how frugal you are, you really can't raise children on $6,000 a year.

My other criticisms are minor and personal: I had trouble getting into the book because the first three chapters describe how to set up a budget, something I have always done anyway. Also, I am a stay-at-home mom with no income of my own, and when I asked myself, as they advised, what I would do with my life energy if I didn't have to work for a living, the answer was, "Play with my kids, read a lot of books, blog...Oh wait, I already do that." It would have been more valuable for my husband to read the book, since he's the money maker.

Overall, I think the philosophy behind this book is an important lesson that we could all stand to be reminded of. Are we spending our lives working for things that don't matter? Or are our jobs a means to the ultimate goal of happiness and independence?


Next up on my reading list...Real Food by Nina Planck

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