Your Money or Your Life by Vicki Robin & Joe Dominguez
Chapter 2: Money Ain’t What It Used to Be – and Never Was
Notes by Roshan A. Loungani, CFP® CRPC®
Retirement Specialist
- What is money?
o Something you trade your life energy for. You sell your time for money. The hours of your life.
- Four Levels of Misunderstanding what money is and isn’t
o Material – paper, plastic etc.
o Psychological – fear and longings, your personality - modesty or flamboyant, big spender or tightwad
o Cultural – the beliefs embedded in our laws and customs, more is better, winners or losers, private property, rewards and punishments
o Life Energy – trade the hours of your life for it
Knowing this does not change the requirements that you treat your obligations with integrity.
- What makes us happy? Buying a car and getting 5 years of payments or a day at the beach.
- Resisting consumerism is easier when you think of money as life energy. Is buying X worth my life energy?
- Winning isn’t having the most toys; it is having precisely what you need and nothing in excess.
o I am not sure I agree with this as it is. I agree that wants never end, but there are certain standard of living items that I want that are not needs. Maybe I am not ready to stop playing the game.
- Your Life Energy
o What does “money=life energy” mean to you?
- A First Look at Financial Independence
o More is like a mirage; we can never reach it because it isn’t real.
“Men do not desire to be rich, only to be richer than other men.” By John Stuart Mill
o Their definition of Financial Independence – having enough – and then some
Enough will vary by individual.
- Financial and Psychological Freedom
o When you are financially independent, the way money functions in your life is determined by you and not your circumstances.
o Financial Bliss
- Step 2 – Being in the Present – Tracking Your Life Energy
o Establish the actual costs in time and money required to maintain your job(s) and compute your real hourly wage
How much are you trading your life energy for?
• This is not just your hourly wage, include commuting costs, clothes for work, any other costs associated with the job, eating out due to work vs. cooking, hire other people to do tasks you could do if you had the time (maid, handyman etc.)
- Step 2 – Being in the Present – Tracking Your Life Energy (Continued
o Keep track of every cent that comes into or goes out of our life.
Many people remain aloof about money
• Lending money to a friend and keeping track seems nasty and insisting on payback even nastier.
Track every cent, ideally no rounding.
• Using cash for everything and not credit can help in monitoring this. It will help keep you grounded in your spending.
• Shift your attitude from laxity and leeway to accuracy, precision and impeccability.
• No judgement, lots of discernment
o Discern which expenses are fitting and fulfilling and which are unnecessary.
- Money Talk Questions
o What is money?
o Describe your relationship with money in five words or less. Why those words?
o Do you experience more stress when you have money or when you don’t have it?
o Finish the sentence. If I had more money then I’d be ….” Elaborate.
o Are you earning what you’re worth?
o What belief about money keeps you from being, doing or having what you want?
Bibliography
Robin, Vicki. Dominguez, Joe. Your Money or Your Life. New York: Penguin Books, 2018,pp 43-80