Book review: Your Money or Your Life

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Overview
Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence, by Joe Dominguez and Vicki Robin, is absolutely one of my favorite books ever and perhaps the best book on personal finance ever written. It changed my life.

That might sound like a pretty rave review, but it’s genuine, and I believe it’s justified. If you’re expecting a typical book about personal finance — investing, saving, budgeting, etc. — you’ll be surprised. It has those elements, to be sure, but it approaches everything with a refreshing perspective: life isn’t worth wasting away by working 40+ hours a week for the rest of your life, just so you can have enough money to buy material possessions. Once you realize this, you realize that you can live on less, and retire early.

That’s right: live on less, and retire early. Simple yet brilliant. You’ll love this book. Read on for more.

The core philosophy
The book begins by talking about the typical lifestyle of people in our society — working long hours, stressed out, not seeing their families … all to support a lifestyle of luxury, to have material possessions. Sound familiar? If so, this book will speak to you.

The book then talks about how precious our time is, how little of it we have, and how we are exchanging our life in order to get money to buy possessions. If this transaction is not fulfilling to you, then they suggest an alternative: reduce your living expenses, increase your income, invest the difference, and retire early.

The books authors did just that — reducing their annual expenses to just $6,000 — and spend all their time volunteering and making other people’s llives better.

Some of the things the book will help you do:

  • get out of debt and develop savings
  • reorder material priorities and live well for less
  • resolve inner conflicts between values and lifestyles
  • convert problems into opportunities to learn new skills
  • attain a wholeness of livelihood and lifestyle
  • save the planet while saving money

Retiring early
One of the key concepts in the book is the Crossover Point. Here’s how it works:

  • Track your living expenses on a graph, trying to continually reduce them and lower the line on your graph.
  • Track your income, trying to raise it above the living expenses.
  • Take the difference between income and expenses, and invest that amount.
  • Track the income from your investments, watching it rise on your graph until it crosses over your living expenses — the Crossover Point.

Once you reach that Crossover Point, you have enough income from your investments to retire. They don’t recommend you retire right away, as you should build up a cushion to live on and to use in emergencies, but at this Crossover Point, you have the ability to walk away from your job.

That’s a liberating idea. Because then, your job is no longer something that will go on indefinitely, but something you’re doing for a limited time so that you can quit, and go on to do whatever you want.

Conclusion
There’s a lot more to the book, but I decided to give you just my favorite part. In the end, the book is more about your values and aligning your lifestyle with those values, than it is about wealth. It’s more about our relationship with money than it is about money.

Needless to say, I give this book my highest rating, with a very strong buy recommendation. You’ll love this book, and it has the power to change your life.

If you’re interested in the book, check it out here: Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence

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