The classic New York Times best seller book about financial independence, Your Money or Your Life, was updated in 2008. Co-author Vicki Robin introduces the updated edition with new insights on becoming financially independent. Watch now, or read the transcript below.
Summary: Fresh up-to-date examples in revised best seller about becoming financially independent
The first edition of Your Money or Your Life came out in 1992. It was based on a seminar they did in the 1980’s—and it was the audio-cassette seminar by Joe Dominguez that I became exposed to the big thoughts—specifically, that becoming financially independent wasn’t about being rich and that it was accessible even to those with moderate income.
The concepts in this book were immediately important to me and sharpened my purpose, but I saw the importance with new light when my daughter came home from Smith College where they teach their students that “they are not truly independent until and unless they are financially independent.”
The big awakenings of that book haven’t changed but some important things have. Interest rates for U.S. Treasury Bonds was unusually high in the 1980’s, just as it has been unusually low for the past decade. The 100% Treasuries investments they relied on back then wouldn’t be prudent today—but that’s an easy fix, and addressed in greater detail here at the FinancingLife.org educational website. This 2008 revision of the book also updates old statistics, adds new stories, and weeds out other things that have become obsolete.
Watch this short video or read the transcript below. It’s interesting to me to hear Vicki Robin identify the three core awakenings from the 9-step program suggested by this book.
Transcript: Vicki updates book and highlights the three big ideas
Hi. I’m Vicki Robin, co-Author of Your Money or Your Life. Welcome to the new website. Your Money or Your Life presents a nine-step program for personal financial transformation that was developed by my co-Author, Joe Dominguez. We taught this program all the way up until 1997, when he died, and I’ve continued on, and recognized from the last year that the material in the book, while classic, needed a face lift, an update.
We needed to weed out the old statistics, bring in new stories, and actually amend some things that have become obsolete. I undertook with my two colleagues, Monique Tilford and Mark Zaifman to do this, revise and update it for the 21st Century, Your Money or Your Life.
Your Money or Your Life presents and practical and transformational program for earning, spending and saving money, and in this time of economic meltdown people are trying to regain control over the money and their lives, and this program really let’s you do that, not out of fear but out of an awakening. There are actually three core awakenings that people have as they go through the nine-step program in Your Money or Your Life.
#1 Awakening: Recognizing that money is life energy
Now, the first one is that money is life energy. You see, or common and economic idea of money is that it’s a store value; it’s a means of exchange. Every time you get ends to meet somebody moves the other end, but actually, the only definition of money that is real to you and me, our personal definition of money is that we trade the hours of our very real, unlimited lives for the money in our wallet, and so we better make that exchange good.
Now, we ask people to do something that we call Calculate Their Real Hourly Wage. Your nominal wage might be $15 an hour, but after you take into account, all extra money you spend on car fare and daycare, and taxes, and after you take into account also all the extra time you spend for your job, not the 8 hours a day, but the commuting back and forth, the extra time getting extra education, all that factored in, that $15 an hour might be $5 an hour.
Most people do find that their real hourly wage is a third or a quarter of what they thought, so that $5 equals one hour of your life. You take that into your shopping and it transforms the way you buy things.
#2 Awakening: Happiness with having enough and no more
That leads to the second big awareness. Is that people who follow the program in this book shift from an ethic of more is better and there is never enough, to a happiness with having enough and no more.
How do you do this? As you start to recognize as you go about your shopping and you are calculating how much of your life energy you are pouring into this purchase. You say, “Okay, is this part of my survival needs?” I mean those needs you must have. Is this comforts? Are these things that make my life better but are not crucially necessary? Are these luxuries, things that make my life better and sweeter, but also, or is this contributing to what we call clutter? That goes, all of those purchases that are more than enough, that you don’t really need, that actually start to put you in debt that you have to store, fix, clean, you know, your stuff. Basically, you begin to discern between how much is enough and when more is not better.
#3 Awakening: Putting money and service to your values
The third awakening, is putting money and service to your values, rather than life and service to your money. You do this by, when you buy something you ask, “Is this really bringing me happiness, in proportion to the hours of my life I’ve invested it in?” Is it taking me where I want to go in life? Is it contributing to my dreams, my true dreams and goals and commitments and values for my life? Or is it just stuff?”
When you have those three awakenings you go into a state that we call FI, or financially-independent thinking. Financially-independent thinking is: you are independent of the bamboozle, if you will, that the consumer culture brings to you that every problem is solved by a product, so you become independent to be able to decode the consumer culture. You are also able to understand, to know down to a penny, where your money is coming from and where it’s going.
You liberate yourself from spending all of your time on just the whole process of what Joe used to call, “Making a Dying“, the “9:00 to 5:00 till you are 65“, because it’s not making a living. You liberate yourself from that and you stand on a firm foundation of having enough and then some.
Welcome to the site, I hope you come back often. We are going to be blogging here, we are going to be relating what happens in the world, and what happens in our personal financial lives, to the program in Your Money or Your Life, and offering many more resources. Welcome, and thank you for coming.
WAIT, before you go ...
Did you get the 10 Simple Rules for Common Sense Investing? Get to financial independence sooner.
Video Credits: Vicki updates book and expands on becoming financially independent
This video was uploaded to YouTube and published on Nov 28, 2008. I have permission to embed this using their Standard YouTube License onto this educational website.