There’s a reason why I chose “Your Money or Your Life” by Vicki Robin for my first book review: it’s a staple in the financial independence movement, and if you haven’t already read it, you probably should. Is it perfect? Not exactly (more on that later). But there’s more going for it than against it, and that’s saying a lot considering the subject matter. So read on if you want to know more.
Why should you read “Your Money or Your Life?
If you’re new to the whole idea of becoming financially independent, then this book is a great place to start. But even if you’re well on your way to getting there, it’s a good refresher on the basics. What you take away from the book will depend entirely upon your expectations. So long as you keep in mind that it’s essentially written for beginners who want to have a healthier relationship with money — and not a treatise on economic fundamentals — you’ll likely finish it with a positive opinion. If anything it’ll reinforce what you’re already doing and maybe give you a few new ideas along the way.
As for the book’s style, it’s actually pretty easy to read. It doesn’t contain a lot of the jargon you might find in a more technical financial planning book. Words like “life energy” and “gazingus pins” are about as technical as it gets — the latter being things you spend money on, but don’t really need. See what I mean? That being said, the book’s simplicity might turn you off at first, especially if you’re already doing most of the things being described in the book. I found myself wanting to skip the first couple of chapters because I didn’t feel like that they were suggesting anything that I wasn’t already doing. Again, it’s a book for beginners.
Is this a book about investing?
In a word, no. True, there are a few pages at the end of the book that are dedicated to various types of investment vehicles, but these are mostly descriptions with a few generic tips at best. Hardly the stuff that’ll make you the next Warren Buffet. The real purpose of this book is to change the way you perceive money and how you use it. It’s ultimately a book about your relationship with cash and how to take charge of your financial affairs instead of letting your money taking charge of you. Finally, it’s about how to escape the trap of mindless consumerism.
How is the book set up?
The book is broken up into nine chapters, each representing one of the nine steps to becoming financially independent. Every chapter logically follows and builds upon the last, and if you’ve taken control of your finances already, chances are you’re already doing some of these steps. If that’s the case, read it anyway because you might actually learn something new or see something from a different perspective. Let’s be honest, financial planning is mostly just common sense, but sometimes it helps to get a different perspective to really solidify an idea.
In the first couple of chapters the author wants to drive home the idea that money really is just life energy. But before you think this book is all about healing crystals and chakras, think of life energy as the amount of time you have on earth. The point is that money isn’t a thing — it represents a part of your time on earth that you’ve exchanged for the ability to buy something, hence the title of the book. If you hadn’t already figured this out on your own, then this alone should make the book worth reading for you.
Once you’ve understood that money represents precious life-time, the author proposes a handful of tasks (like calculating the total of all the income that you’ve earned over the course of your life) to help you see your financial big picture. To some these tasks might seem pointless, or overly difficult, but their purpose is to show you that you’ve probably wasted a lot of your “life energy” on things you don’t really need or even want. You’ll likely be asking yourself where did all of your money go? The ultimate goal, however, isn’t to shame you but rather to help motivate you to get your financial picture under control.
The final couple of chapters is where things get really interesting— especially if you’re one of those people who already tracks their money and lives well below their means. Here the author gives you a road map to financial independence. The premise is pretty simple: maximize your income, lower your expenses and uncover ways to earn passive income. Once your monthly passive income exceeds your monthly expenses, you’re free. Although I knew this already, I became super excited when I saw the graph representation of this idea in the book. I’m a visual person, and seeing this really solidified the whole concept. (Yes, I’m a total nerd!)
The formula for becoming FI may sound simple, and it is, but it’s much harder to implement in real life. If it wasn’t, then more people would be doing it. But it’s not impossible, and the book gives quite a few examples taken from people who have already achieved financial independence. The great thing about these examples is that they give you ideas on how to achieve FI for yourself.
There’s a lot to like about this book, most of the points having already been touched upon above. For me, the most useful aspect of the book was how it broke down the problem of becoming FI into 9 easy to understand steps. Don’t be fooled, however, since most of these steps aren’t easy to implement. But with some tenacity, anyone can do it. Which is another point I like about the book — its ideas are flexible and can be applied to almost any situation. The sheer variety of real world examples given by the author proves this.
I also liked how the book uses visuals to drive it’s message home. Especially in the final few chapters, which explain how one can become financially independent relatively simply. For someone visual like me, the visuals helped me a lot to not only better understand what was being said, but really solidified concepts that I knew already. While embarrassingly simple, seeing the expense line crossing the passive income line on a graph really struck a chord with me — to the point where I decided to implement such a graph in this blog (see my monthly statements). I can honestly say that this has increased my motivation exponentially, proving that even the most seemingly innocuous thing can have a serious impact on your thinking.
Unfortunately, like most things, the book isn’t perfect. For one, I felt there was a lot of padding. Truth be told, the main points in this book could probably be reduced to a short pamphlet or at least half as many pages. The ideas presented in the book aren’t exactly rocket science, and I caught myself skipping a few paragraphs here and there, especially in the beginning. You might not have the same reaction, and I suspect this will depend a lot on where you are on your journey. If you’re already keeping track of your finances, for example, parts of this book might seem redundant to you.
Part of the problem also (depending on your personality) is that there’s a lot of flowery writing, which might turn off the more rationally minded reader. However, given that the author is trying to change your emotional relationship with money, this style choice shouldn’t be too surprising. The hardest challenge for most people, with respect to becoming FI, is the emotional aspect of having and using money. Becoming FI requires knowledge, but it also requires a lot of self control, which is mostly due to the fact that many of us associate money with happiness.
Finally, depending on your political leanings, you might find the book has a very obvious liberal slant (sorta ironic given that it’s essentially about using capitalism to your advantage). For example, the author talks quite a bit about the environment and saving the planet, which might seem strange given that it’s a book about financial planning. The bulk of this is to correlate mindless consumption with environmental degradation, which the author feels is an added motivator for becoming FI. If you think global warming is a myth, or at least not manmade, then I suggest you gloss over these parts.
There isn’t anything particularly ugly about the book.
“Your Money or Your Life” is an excellent book, whether for the beginner and the intermediate reader. It not only explains what it means to become financial independent, but gives you a roadmap on how to achieve it. The use of real world stories gives you concrete examples on how to implement these ideas, while giving you the ingredients you’ll need to succeed in your own journey. Flowery language aside, it’s an easy read and took me less than a week to get through it while reading it on the bus on my way to work. Definitely worth checking out and should be in every FI-er’s library. If anything, you can lend it to a friend who wants to know more about what you’re doing.
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