December 28, 2016

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

Financial Independence is the point where you can live off your savings. The more you can save now, the earlier that time will come.

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What’s it about?

Joe Dominguez and Viki Robin’s classic book on transforming your relationship with money and achieving financial independence. A book about capitalism, consumerism, money and what it means to us, and how to find meaning in life by doing work we love. Making a living, not a dying.

A book for anyone who wants to live and work on their terms, not societies, and needs money only to survive, not for status.

Your Money or Your Life:

  1. The Industrial Revolution was successful in providing the material goods that were necessary for a basic standard of living in Western Society. This point was reached some 40 years ago.
  2. By the early 1920s the capacity of machinery to fill human needs was so successful the economy was slowing down. Workers were asking for a shorter workweek and more leisure to enjoy the fruits of their labours. They did not seem as instinctively eager to buy new goods and services (like cars, chemicals, appliances and entertainment) as they did the old ones (like food, clothing, and shelter).
  3. Two sectors of American society were alarmed at this trend. The moralists, who believed that idle hands would do the work of the devil, and the industrialists, who were afraid of damage to economic growth. The first worried about corruption of the Protestant work ethic, the second feared that workers would choose leisure over consumption (at their expense).
  4. Culture was reconfigured to educate people to want things that they didn’t need. Art, science and industry came to serve a new concept, that of ‘standard of living,’ convincing workers to pursue higher levels of consumption rather than stop and be satisfied.
  5. Instead of leisure being relaxing activity, it became an opportunity to consume –  travel and vacations meant the consumption of even leisure itself .
  6. Several research studies have confirmed that above a certain subsistence level money does not make you happy. There is a fulfilment curve at which overconsumption actually deceases happiness.

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So here we are the most affluent society that has had the privilege to walk the face of the earth, and were stuck with our noses to the grindstone, our lives in a perpetual loop between home and job and our hearts yearning for something that’s just over the horizon.

We have come to believe that it is our right to consume. If we have money we can buy whatever we want, whether or not we need it, use it or even enjoy it. After all, it’s a free country. And if we don’t have the money…heck, what are credit cards for?

Born to shop. Whoever dies with the most toys wins. Life, liberty and the pursuit of material possessions.

A new relationship

As well as its transactional value money can be about power, security, status and social acceptance. Understanding your relationship with money and what it costs you to obtain is the first step to getting control of your finances. What does your job cost you? Take off the holidays, the commute, the meals out, the bottles of wine: all the things you might do to drown out your despair. How much of your daily expenses are really needed?

The authors ask us to be diligent and ruthless in understanding our earnings and expenditure and ensuring that we always save more than we spend.

Take Away Points and Context

  • The planet is showing signs of nearing its capacity to handle the results of our economic growth and consumerism. Water shortages, topsoil loss, global warming, species extinction, natural resource degradation and depletion, and air pollution. The world will be unable to live as the West has done for the last 40-50 years.
  • Society exhibits a caste mentality with regard to your status, derived through what job you do and how much it earns you. Numerous psychotherapists have documented the effect of this social belief system. A continuous supply of ‘successful’ professionals with empty souls and burnt out bodies showing up to take a seat at the clinicians chair.
  • Financial Independence is the point where you can live of your savings. The more you can save now, the earlier that time will come. Work thereafter is a choice, not a trap.

 

Full Article:

This is my own review of Your Money or Your Life, for more on this topic and other subjects see www.mattmcginty.net, or see the book below.

Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence: Revised and Updated for the 21st Century

by Joe Dominguez and Viki Robin

Viking Penguin, 363 pp, $9.55.

 

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Matt

I'm a writer and social critic a little tired of the general madness around. If you get any value at from this site please support me at Patreon!

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