The alarm goes off in the morning.
Wake up. Check your Facebook feed. Shower. Dress up yourself and kids. Breakfast. Send the kids to school. Hop in the car. Get stuck in the traffic. Listen to people yelling on the radio.
Work from 9 AM to 5 PM. Always agree with the boss. Deal with the endless stream of emails. Act or be busy. Smile gratefully when you are handed impossible deadlines. Act happy. Be productive. Watch the clock.
5 PM. Hop in the car. Get stuck in the traffic. Listen to people yelling on the radio.
Home again.
Cook. Eat. Watch something on TV, mostly cartoons if you have kids. Feed the kids. Bathe them. Bedtime. Eight hours of sleep.
Repeat the above routine daily
Have you ever thought for a moment- What is more important to you?
“Your Money or Your Life?”
If someone asked you to choose between the above, what would you do?
Most of us would have no answer. We need both. But, how to handle them?
For majority of us, life is going very fast. Day after day, year after year are just passing by. It feels that we are gaining age fast. We are sacrificing our lives for money — but it’s happening so slowly we barely notice. Eventually, we may have all the comforts and even luxuries we ever wanted, but inertia itself keeps us locked into the nine-to-five pattern.
Your Money or Your Life is a bit unusual in terms of personal finance books that you’ll typically find at your local bookstore. Just for starters, the book doesn’t have much information on how you can increase your wealth.
In personal finance, a topic which is filled with endless titles that all have words or phrases like “Millionaire” or “Get rich” or “Wealth” in them, this book is kind of an outlier.
So, what does Your Money or Your Life offer instead?
Rather than focusing on being rich, the book instead looks deeply at finding the central values in one’s life and realigning your life and money to follow these values.
The idea here is that most people’s money problems are connected to a lack of fundamental direction in their life: they work just to earn money, not because it’s what they love doing.
The book’s real purpose is to reframe your relationship with money, not to reframe your management with money.
The book makes no qualms about stating that for many people, working a full workweek is not the best way to live life and that one should seek the best way to live their own life, not live the life others expect or demand.
So here are five takeaways from the book:
1. Decide your “Enough”:
Enough is enough. Not a lot, not very little, just right, just… enough.
If you don’t learn your “Enough”, you’ll spend your whole life chasing the Sun, sitting in a roller coaster whose operator has disappeared.
An experiment from the 1980s supports this. Participants from every income bracket were asked to rate their happiness on a 1-to-5 scale, and what amount of money would make them happier.
There was no significant difference in happiness between the top and bottom of the scale.
Also, they mostly had the same answer to the question of what would make them happy: 50% more.
More money does not equal more happiness after a certain level of sufficiency.
True happiness doesn’t come from getting and wanting more but from being satisfied with what you get. From knowing that enough is enough.
Have you heard of Catch-22? The classic novel? There’s a popular and very interesting story about the author of that great novel concerning this idea.
A mutual friend took Joseph Heller to a party at a billionaire’s home in New York.
It was an amazing night and the host made sure everyone was having fun.
The friend turned to Heller and yelled over the loud music, “Do you realize that our host probably makes more money in a day than you have made in a lifetime from your book?
“Nodding his head slowly and sipping his wine, Heller replied, “Yes, but I have something he will never have.”
“What?” the friend asked, curiously.
“Enough.”
2. Make peace with your past:
This is not about inflating your ego or depleting your confidence.
You just need to forgive yourself for what you did in the past and move on.
Let’s get to it.
Estimate every single dollar you’ve ever brought in.
Yes, going back to your lawn-mowing job when you were still wet behind the ears.
Once you see this pile of money, then calculate the complete worth of all your assets, minus what you still owe on them.
For most people, this yields an unpleasant surprise. But it’s okay, there is no sense beating yourself up over past mistakes.
This exercise is very similar to what Dae‑su Oh did in Oldboy.
Imprisoned in a room for a long time, he wrote names of all the people he had hurt, in a bid to find out who was taking revenge on him, and in the process, he found out something about himself.
He had hurt a lot of people. He thought he was a good man, but he had done a lot of bad things.
Let’s hope you forgive yourself for your past mistakes and move forward to a very bright, pleasant future.
3. Money isn’t just Dollars. It’s life energy:
Your only true currency is your life energy.
It’s a currency that you can never get back, as you are trading your hours for money every day at your job, you can easily calculate how much each of your expenses costs in the form of life energy.
For each expense in your life, ask yourself:
1. Do I receive fulfillment and value compared to the life energy spent on this?
2. Is this use of my life energy in line with my values and goals?
3. How would this expenditure change if I didn’t have to work?
The surprising result is that most of the expenditures of time and money in your life are simply enablers in an attempt to keep making money.
They don’t really reflect what else is important to you.
4. Maximize your Earnings:
Adopt a positive attitude about your work and appreciate the earnings as a tool which gets you to financial independence.
Rather than feeling like a victim of outside forces like the economy or a recession, seek to earn more, and don’t be limited to work only in your current field – after all, you’ll be retiring soon anyway, meaning every activity will soon be open to you whether paid or unpaid.
5. Aim for your Crossover point:
The Crossover point is when your investment income can cover your living expenses.
Once you’ve switched your priorities around and your living expenses are less than your income, you should start investing that money to maximize your investment income and continue livingfrugally.
Once you’ve reached a point where your income from your investments can cover your living expenses, you’re free to basically do whatever you want with your life.
You can follow your passion of becoming a painter, or write a novel, or travel the world or work for an NGO. Whatever.
But, you’ll have to make some sacrifices to get to this point, by working hard and living frugally for some years, so you can be free for the rest of your life.
We should all slow down in life and re-evaluate once as to what is important for us. What makes us happy in the long run. We should pursue our dreams that we always dreamt growing up.
The book offers more than just these 5 points. If you want to read more, get it on Amazon.
If you are a starter, You should read Rich Dad Poor Dad too.