Your Money or Your Life – Vicki Robin


I read this book because I read an article on the FIRE movement (Financial Independence Retire Early) that referred to it as the Bible of the lifestyle.  It was originally written in the early nineties and spawned a whole movement of people who decided they didn’t want to work 9-5 jobs their whole life but wanted to achieve financial independence at a young age and then pursue their dreams.  It remains especially popular among Millennials.  The version of the book I read was updated for 2018.

The book outlines a nine-step program to “changing your relationship with money.”  I’ll list the nine steps below (in case you’re interested), but I think the main take-away is to see money differently.  It’s not just money, it’s a representation of time.  We essentially purchase money with our hours/days/years.  And since all of us only have so many of those, we should see everything we do with money – earning/spending/saving/giving/investing – in those terms.  So if you make $50,000/year and that equates to $25/hour, then you should evaluate every purchase in terms of that ratio – is that $50 meal worth two hours of my time?  And you use that approach with everything that involves money.

She actually doesn’t use the term ‘time’ for this analysis, she uses her own term “life-energy.”  For some reason this irritated the heck out of me.  I’m sure life-energy was used because it sounds more dramatic and memorable, but to me it seemed a little manipulative and new-agey.  I don’t need a jazzy, made-up synonym for time to grasp the concept.

For me, the book was just okay.  Honestly – and I’ll try not to break my arm as I pat myself on the back – I already do some of the things she presents as life-changing.  That aside, however, everything she says to do is probably worthwhile and for someone who really struggles with managing money or has no idea where all of it goes, this would be a very good book.  I guess my contrarian nature didn’t love the preachy tone that sometimes came out or the assumption that the reader’s life is totally out of control and needs the book to rein it in.  She also is very pro-environment and pro-socially-responsible-consumption and investing, and while she’s not over the top with it, it does come out numerous times throughout the book.

I did like that one of the steps is essentially, “Make more money” (Step 7 below).  That reminds me of an old Steve Martin comedy routine: “You can be a millionaire and never pay taxes!  You say, ‘Steve, how can I be a millionaire and never pay taxes?’  First, get a million dollars…”  Her point is a little more than that, but at the end of the day I think if any of us could make more money we’d probably already be doing it, eh?

Would I recommend it?  I guess so.  If you’re looking for a roadmap to help with your personal finances, this is a good resource.  It definitely will make you think.  And the good news is that it’s not written like a personal finance book with lots of jargon, it’s written for non-financial types.  Just know that it’s a little preachy and potentially irritating in spots.  And make sure before you read it that it’s worth the life energy you’ll have to invest in reading it.

The nine steps are as follows:

  1. Making Peace with the Past. Tally up everything you’ve earned in your life and compare it to your net worth.
  2. Being in the Present. Compute your REAL hourly wage by taking your earnings and divide it by not just 2000 hours of work, but add in the hours spent commuting and dressing and shopping for work clothes and any other time you expend simply because you have your job.  Now keep track of every penny that comes into or goes out of your life.
  3. Where is it all going? Total all expenses every month and categorize them (however you want).  Then total all income.  Next to the spending categories, convert the money spent into hours of life energy based on your hourly wage computed in Step 2.
  4. Three Questions. Ask these three questions about each expenditure of life energy: Did I receive fulfillment, satisfaction, and value in proportion to life energy spent?  Is this expenditure of life energy in alignment with my values?  How might this expenditure change if I didn’t have to work?
  5. Making Life Energy Visible. Create a large wall chart and plot your total monthly income and spending.  Put it where you will see it every day.
  6. Valuing Your Life Energy – Minimizing Spending. Learn and practice intelligent use of your life energy, which will result in lowering your expenses and increasing your savings.
  7. Valuing Your Life Energy – Maximizing Income. Respect the life energy you put into your job.  Trade life energy with purpose and integrity for increased earnings.
  8. Capital and the Crossover Point. Calculate your monthly accumulated capital and track it on your wall chart.  When your investment income exceeds your monthly expenses, you’ve reached FI (Financial Independence).
  9. Investing for FI. Set up your financial plan using three pillars: Capital, Cushion (six months of expenses), and Cache (surplus you continue accumulating because you don’t spend much).

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