Your Money Or Your Life - Chapter 1 Notes
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®
- 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?
Robin, Vicki. Dominguez, Joe. Your Money or Your Life. New York: Penguin Books, 2018,pp 1-42.