Who is the author of Your Money or Your Life?

Vicki Robin and Joe Dominguez are the authors of Your Money or Your Life.

Money & Investments

Your Money or Your Life Book Summary - Your Money or Your Life Book explained in key points

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Your Money or Your Life summary

Name: Your Money or Your Life
Rating: 4.2 (333 reviews)
Author: Vicki Robin and Joe Dominguez

Vicki Robin Joe Dominguez

9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence

4.2 (333 ratings)

26 mins

Brief summary

Your Money or Your Life by Vicki Robin and Joe Dominguez is a personal finance book. It challenges readers to reassess their relationship with money, offering a nine-step program for achieving financial independence while emphasizing the importance of mindful spending and reducing consumption.

Topics

Personal Finances The Psychology of Money Investments

Table of Contents

Your Money or Your Life
Summary of 9 key ideas

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Key idea 1 of 9

What’s in it for me? Achieve Financial Independence and retire early.

If you were held at gunpoint and had to choose between handing over your money or risking your life, chances are, you’d hand over your wallet. But when it comes to the daily grind, most of us unconsciously prioritize our money over our lives. We’re stuck in a cycle of earning money from our jobs in order to buy things we don’t need, and sacrifice our true priorities in the process.

In these blinks, you’ll learn about the path to Financial Independence – the ability to decide how to spend your time without relying on paid employment. Along the way, you’ll see your financial history with clarity, liberate yourself from your preexisting attitudes about money, and develop new financial habits that will melt away your debt and enable you to retire early if you choose.

In these blinks, you’ll learn

which simple tool can help you gain control over your finances;
how to calculate the time it will take you to retire; and
where to invest your savings.

Make peace with your financial past by visualizing your earnings and calculating your net worth.

If you’re like most people, you probably have no idea how much money has cumulatively passed through your life. In order to get a grip on your finances, you need to come to terms with your financial history. That’s why the first step in transforming your relationship with money and reaching Financial Independence is to make peace with your financial past.

Calculating the money that’s entered your life will help you gain a clear picture of your financial history and your relationship with money. Maybe you’ve always felt like you’ve had financial security – but that’s just because you’ve been supported by other people. Or maybe you’ve felt like you’ve never earned much, but are actually underestimating your past income. In any case, understanding your history with money can help you shift your perspective on how much you might earn in the future.

The key message here is: Make peace with your financial past by visualizing your earnings and calculating your net worth.

To begin, calculate the sum total of your gross income across your lifetime. This amount should include everything from your first paycheck to the most recent penny you earned.

If you don’t know where to start, you can use records from the Social Security Administration, bank statements, or even old résumés to help you recall your year-by-year earnings. Make sure you adjust the amount to reflect unreported earnings like gifts from family members, cash prizes, or money earned under the table. The goal is for the calculation to be as honest and accurate as possible.

Once you’ve calculated your life earnings, the second step in making peace with your financial past is to determine the amount of money left in your life today: your net worth.

Calculate your net worth by creating a personal balance sheet which tracks your assets and liabilities. Your liquid assets are anything that can be converted into cash. This includes things like money in your savings and checking accounts, stocks and bonds at the current market value, or even spare change in your glove compartment. Your fixed assets are everything you own, from major possessions like your car or house to items that could be sold at a garage sale. Next, calculate your liabilities, which are any debts, loans, or outstanding bills. Subtract this amount from the combined value of your assets to determine your net worth.

Calculate your real hourly wage, and track your money.

Each of us has fewer than nine thousand hours a year – many of which are spent sleeping. It’s no question that time is our most precious resource. So when you get up and go to work in the morning, you’re giving more than just your time in exchange for a paycheck. You’re giving your life energy. In other words, when you spend money, you’re essentially trading your life energy.

If you want to transform your relationship with money, you’ll need to challenge your assumptions about what you earn and spend. That way, you can reserve your life energy for the things you truly care about. So step two of the program is to get in touch with your present situation by calculating your real hourly wage and tracking your money.

Categorize your monthly spending.

Now that you’ve collected the information about your financial history and real hourly wage, it’s time to begin taking a step toward implementing some changes. But don’t worry – you won’t need to put together a budget. While a budget can be a useful tool for planning, it leaves little room for nuance.

If a budget’s not the answer, what is? It’s simple: you need to understand exactly how you spend your money. Step three is to categorize your monthly spending. Group your expenses in ways that make the most sense to you.

Evaluate the money spent in your subcategories.

Using a journal, take a moment to reflect on what you would do if you didn’t have to work. When you were growing up, what did you want to be? If you only had one more year to live, how would you spend your life? Did you always want to write a book but now find yourself copywriting for a living?

Remember, no dream is too big. And by making minor adjustments to your spending, you’ll be on your way to realizing it. That takes us to the fourth step in the program: evaluating your spending by asking yourself three questions.

Make a wall chart to track your progress.

Congratulations! You’re halfway through the path to Financial Independence. But if you’ve followed any program in the past, you’ll know that a major part of the challenge is staying on track. To guarantee continued progress toward your financial goals, you’ll need to ensure that your new system is a habit rather than a choice.

A great way to instill a new habit is to make yourself accountable to someone else. You might consider sharing the results of financial progress with a friend or a family member.

Consciously lower or eliminate your expenses.

These days, the notion of being frugal might seem unappealing or dated. Modern consumer culture has conditioned us to believe that more is more. But from the ancient writings of Plato and Socrates to American historical figures such as Benjamin Franklin, Robert Frost, and Ralph Waldo Emerson, being frugal was considered a virtue. And if you want to become financially independent, you’ll need to get comfortable with the term.

In essence, frugality is about enjoying what you have. If you own ten dresses and enjoy wearing them over the years – great! But if you’re a compulsive shopper and are simply addicted to buying dresses that are hanging unworn in your closet, it might be time to lower that expense. While you’ve now gained awareness on your financial past and present, step six of the program is to consciously reduce your monthly spending.

Value your life energy by increasing your income.

The 40-hour workweek is a modern, Western concept.

During the Industrial Revolution, new manufacturing processes gave rise to a division between the workday and leisure time. Working conditions became so severe that workers eventually fought to establish a shorter workweek. But instead of being a time for rest, leisure became seen as a time to learn how to become a more productive worker.

Earn income from your investments to achieve Financial Independence.

For many people, the thought of retiring early seems like a privilege reserved for the 1 percent. But a growing movement called FIRE, or Financial Independence Retire Early, reveals otherwise. Supporters of the FIRE movement have gleaned some simple wisdom: if you invest your savings, your money will eventually start earning enough on its own for you to retire and focus on what you truly care about. The trick is to accrue enough monthly investment income.

Unlike the income you receive from your job, your monthly investment income is the income that you receive from your capital. This involves any income you didn’t have to work for – things like interest, dividends, rental checks, or business profits.

Research and choose your investment options.

Now that you’ve calculated your crossover point and the reality of reaching Financial Independence has become tangible, you’ll need to become an expert in long-term, income-producing investing. Financial planners, unscrupulous brokers, and salespeople will try to influence your decisions on investing while taking a substantial commission. Avoid spending unnecessary fees with such middlemen by empowering yourself to make your own investment decisions!

Your investment income might include receiving rent from real estate or royalties from intellectual property, franchises, or natural resources. You could gain capital from selling an investment for an amount more than what you initially invested. But you’ll most likely want to focus on earning interest or dividends by investing in bonds, mutual funds, or the stock market.

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What is Your Money or Your Life about?

Your Money or Your Life (1992) is a nine-step guide to taking control of your finances – so you can enjoy your life rather than just make a living. You’ll learn how to adjust your attitude toward your money and time, get out of debt, start saving, and ultimately reach Financial Independence.

Your Money or Your Life Review

Your Money or Your Life (1992) by Vicki Robin and Joe Dominguez is a thought-provoking book that challenges our beliefs about money and helps us achieve financial independence. Here's why this book is definitely worth reading:

It offers a unique perspective on the relationship between money and life, encouraging readers to question their spending habits and prioritize what truly matters.
With its practical exercises and step-by-step approach, the book helps readers gain control over their finances, leading to a more sustainable and fulfilling lifestyle.
Through compelling stories and insightful case studies, it keeps readers engaged and motivated, ensuring that financial education becomes an enjoyable journey.

Who should read Your Money or Your Life?

Anyone who wants to live intentionally
College students seeking positive spending habits
Furloughed workers

About the Author

Vicki Robin is an American writer and speaker. After Robin appeared on the Oprah Winfrey Show, her book Your Money or Your Life became an instant best seller; it has sold over a million copies.

Joe Dominguez was a Wall Street financial analyst before retiring at the age of 31. He formulated the nine-step program that’s presented in Your Money or Your Life.

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