Your Money or Your Life is a great financial book that has changed the life of millions. This book is full with timeless financial wisdom.
This book talks about how to achieve financial independence. It contains 368 pages and written by Vicki Robin and Joe Dominquez.
What is in this Book For You?
This book does not talk only about money, it is a book that explain about the relationship of your life energy and your money. This book is for those people who has difficulty in earning and saving enough money and for those people who want a clear, relaxed and happy relationship with money.
This book is not like those other books who tell you get-rich-quick schemes or tell you ways that can make you a millionaire, instead this book tells you about the true values of your life.
Most people work longer hours on the job they hate most to earn more money. This book will encourage you to find a job that you really enjoy doing.
How Much Have You Earned in Your Life?
The first chapter brings you to an interesting journey of your past and encourages you to calculate how much money you have earned in the your life till now. You must count each and every dollar you have earned since you started working. Now you need to –
Your net worth equals to your total assets minus your total liabilities.
Your assets can be your home, car, bank balance, cash, stocks, bonds, mutual funds and life insurance cash value.
Your liabilities can be home mortgage, unpaid bills, car and college loans and all other debts.
I think this simple exercise can open your eyes and bring you back on the road to financial freedom.
How Much are You Trading Your Life Energy For?
Once you have calculated your net worth, you need to
Calculate exactly how much money you are earning per hour.
You need to watch your recent monthly wage statement to find out how many hours you have worked in that month and how much you have earned. Now from your monthly income subtract all the expenses like the taxes, the clothes you buy for work, the car fuel and time you consume going and returning from work and the cost of having lunch.
Now to calculate how much you earn per hour you need to divide your monthly income (after subtracting all the expenses) with total number of hours you worked in that month.
For example if you worked 200 hours and received a paycheck of $2500 after taxes, now subtract the amount of money you spent on clothes for work, car-fuel, lunch and other expenses that are let’s say $500 per month. So by dividing your monthly income after expenses ($2,000) with total number of hours (200 hours), you will get $10 per hour wage.
This simple exercise will tell you how much life energy (in Hours) you are trading for how much money(in Dollars) and how much you are actually getting paid?
This chapter tells you to keep track of every single dollar that comes in and goes out of your pocket for next few months.
Write down all the expenses you make each day for a few months.
This simple exercise will work magically to reduce your expenses. The authors inspire you that before you buy anything you need to figure out how many hours you would have to work to buy that product.
For example if your net hourly wage is $10 and you want to buy a new computer that costs you $400 it means the computer will cost you 40 hours of work.
The Question that will transform Your Life?
In this step you need to ask yourself this question before making any acquisition decisions that –
Does this acquisition will bring the true fulfillment and satisfaction in my life in proportion to the life energy spent on the work?
If your answer is No and this acquisition does not bring the fulfillment and joy in your life then you should not spendyour hard earned money on it.
Making Life Energy Visible
You need to make your life energy visible by creating a chart that represents how much money you earn and how much money you spend each month.
The difference between earning and spending will show you the true value that is the Saving. Stop impressing others by buying the expensive items, if you follow the advice given in this amazing chapter you will surely save thousands of dollars in your life time.
Final Thoughts on This Book
I highly recommend this book if you think you are not financially fit and if you want to become financially intelligent about the true values that money can bring to your life.
One important thing I want to share with you is that this book is not an investing book. For investing there are a lot of other good books available. This book is a pure money-saving book. I rate this book very high, it will change your financial life and the way you spend your money.