Your Money or Your Life by Vicki Robin & Joe Dominguez
Chapter 1: The Money Trap: The Old Road Map for Money
Notes by Roshan A. Loungani, CFP® CRPC®
Retirement Specialist
- When Asked, your money or your life, can you respond with “Ill take both, thank you”
- Are you making a living or making a dying?
o Do you spend all your time focused on commuting, working and then fill life in-between?
- We think we are our jobs
o Identity and self-worth come from our jobs.
o Jobism – hidden hierarchy based on what you do for money
- High Cost of Making a Dying
o Led 60% of LaBier’s sample group to depression, anxiety and other disorders
- What do we have to show for it?
o Savings rates are down from 10% pre 1980 to 5% now
o Debt is up to $3.7 Trillion, more than double that of the end of 2000 ($11,000 for every man, woman and child)
o Low savings and high debt make the 9-5 routine mandatory
- We make a dying at work so we can live it up on the weekend
o We spend more than we make on more than we need which send us back to work to get the money for more stuff.
§ A vicious cycle
- What about Happiness?
o Their study showed that people were unhappy at any income level and that they all believed that they needed more money to be happy.
- Prosperity and the Planet
o We Only Have One Planet
- Is More Better
o Percent of Americans that are very happy has been declining since 1950
- The Cleopatra explanation
o Is it worth it?
o Are we getting the fulfillment we are seeking if not, why do we persist like addicts in habits that are killing us?
- The Creation of Consumers
o We no longer live life, we consume it
o Needs can be fulfilled, wants are endless
o 1929 introduces the concept of the standard of living and leisure as an opportunity for consumption
- The Right to Buy
o If consuming is the way to keep the economy strong and savers are people willing to put fellow citizens out of work.
o People are driven by fear, promise of exclusivity, guilt and greed and by the need for approval
- The beginning of a new roadmap for money
o We are more uncomfortable talking to our accountant about money than to our therapist about sex
- What do our actions say
o We know that money can’t buy happiness and the best things in life are free however
§ What do we do when we are depressed, lonely or feeling unloved? We buy something to feel better for example: a new outfit, a drink, a new car, ice cream cone, a trip.
§ When you want to celebrate good fortune, we buy something (seek external solutions)
· A round of drinks, catering a wedding, a diamond ring
§ When we are bored, we buy something
§ When we think there is more to life, we buy something, a workshop, self-help book
- Step 1 Making Peace with The Past
o How Much Money Have You Earned in Your Life?
§ Knowing how much money entered our life allows you to know what could enter your life going forward.
o What Have You Got to Show for It?
§ Your Net Worth
§ Great line – once we are above the survival level, the difference between prosperity and poverty lies simply in our degree of gratitude.
o Why do a balance sheet?
§ Consider converting fixed assets to cash
§ Determine if you are financial independent
- Money Talk Questions
o Who gave you your first lessons about money? What did you learn?
o What messages did you get about money growing up? Where did you get them from? Parents, teachers, ads or…?
o Talk about an early memory of money and how it affects you now.
o Talk about a money mistake. What would you do differently?
o What does “enough” mean to you?
o What do you have (in storage or closets) that you’d be better off without? Why do you keep it?
Bibliography
Robin, Vicki. Dominguez, Joe. Your Money or Your Life. New York: Penguin Books, 2018,pp 1-42.