Your money or your life Book review | Best

Personal Financial Books for Beginners

Raveling Money October 02, 2021

Your money or your life Book review | Best Personal Financial Books for
Beginners

This book has the potential to completely transform your relationship with money.

And everyone should read because it can benefit everyone.

Even though it is marketed as a personal finance book, it provides answers to much deeper
questions than just answering

"How can someone save more?"

"Your Money or Your Life" is a must-read for anyone interested in the financial
independence retire early movement. It is a step-by-step guide to financial independence.
While it does offer advice on how to save and earn money, it focuses heavily on how to
change your money mind-set. How to Change Your Attitude and Relationship with Money
and Jobs.

Most people are dying rather than living, spending their lives working at a job that exhausts
them and leaves no room for personal development.

By viewing our spending as a trade of our life energy, we can become more conscious of
the things we buy, particularly those that do not bring us fulfilment.
Tracking our spending is a step toward a more fulfilled life in which our purchases are in
line with our values.

Society has been shaped around a more-is-better mentality, which means that money has
become a thing that we are constantly chasing, which means that we are all on a life-long
dopamine pathway in short running in a hamster wheel.

Vicki Robin provides an actual solution - determining the point of "enough" - to get off the
hamster wheel and start thinking about earning and spending money as trading our life
energy, which is the only resource we should be concerned with.

We all learn certain money taboos as we grow up, which leads to unhealthy spending and
earning habits. This book disproves all of these myths and teaches us why and how we
should treat all of our purchases as a trade of our life energy - that is, the time we spend
working for a living.

It's not so much about personal finance as it is about making our lives more deliberate,
meaningful, and, yes, productive, because after reading this, you won't be able to spend
another minute on things that push you towards dying rather than living.

Here's a short overview of the 9 steps to financial independence,

Step 1: What is your current financial situation?

Determine how much money you have earned throughout your life that is lifetime earnings.
Calculate your net worth = assets – liabilities.

Compare your lifetime earnings to your net worth.

Step 2) “Being in the Present – Tracking Your Life Energy”

Calculate the costs in time and money for your day job

Compute your real hourly wage – how much money you are making

Step 3) Monthly Summary of How Money is Coming In and Going

Out

Calculate your monthly income and each of your expenses – separate them line by line

Create spending categories like food, housing, clothing etc.

Categorize each of your expenses

Calculate how much “life energy” you’re using for every expense

Calculate your net income

Step 4) What is “Enough”?

Review each expense and question if it’s worth it – if you received true satisfaction as
compared to the amount of life energy spent

Understand if each expense is aligned with your end goals

Understand how the expense would change if you become financially independent

Step 5) Make a Picture of your Finances

Make a graph with lines for your monthly income and expenses.

Step 6) Embrace Frugal Living

Minimize your expenses by thinking about whether you really need an item before you
purchase it

Step 7) Make the Most Amount of Money in the Least Amount of

Time

Maximize your income by valuing your time and seeking the highest pay possible for your
time

Step 8) What is your Crossover Point?

In your graph, add a monthly investment income line

Estimate the crossover point between this line and your expenses line

Step 9) Where Should you put Your Money for Long-Term

Financial Freedom.

Understand where to put your money as you go beyond your crossover point

Quotes from the Book:

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

“Americans used to be ‘citizens’. Now we are ‘consumers'”

“Money is something you trade your life energy for. You sell your time for money. It doesn’t
matter that Ned over there sells his time for a hundred dollars and you sell yours for twenty
dollars an hour. Ned’s money is irrelevant to you. The only real asset you have is your time.
The hours of your life.”

If you want to pursue financial independence, we strongly advise you to read this book at
least once.