For the love of life and money
I have to say that this post took me far too long to write. I am a fast writer, true, but this was hard. On the one hand, I have pledged that I’ll build a repository of book reviews that my readers can refer to – either to decide whether to read the book, or if they trust me, to take the messages I have synthesised away and ‘run with them’. On the other hand, this blog is about personal finance and the book should at least have something to do with it: but I already told you several times that in my opinion most personal finance books are a bit like conducting interviews: they start repeating themselves after the 11th or so.
A bit of a conundrum, eh?
Well, it is. But then, thinking a bit more about this, I realised that if the technical side of these books is very repetitive their philosophical foundations can be rather different. And this is the side of the books that I can get excited about.
So, today I’ll introduce to you a book that you may have come across; in fact you probably have come across it. It is Your Money or Your Life by Joe Dominguez and Vicky Robin. It is even likely that some of you have obeyed by the rules, good principles and techniques that it sets. This book pushes all the usual personal finance buttons and ticks all boxes: tracking your income and expenditure, frugality and frugal tips, case studies of success to prove credibility, the need to build passive income streams through investing, and even early retirement.
Furthermore, the book offers plenty of tools to do all this – tables, spreadsheets and graphs. One of my favourites is the tool mapping three graphs: your income from employment of different kinds, your expenditure and your income from investments. Reaching the cross over point between expenditure and income from investments is when you become financially independent. And you know what? This is usually achieved by doing both, increasing your passive income (investment income) and reducing your expenses.
Well, as is usual some of the technical tips and advice are probably a bit outmoded – I am not entirely convinced how wise it is at the moment to buy bonds, for instance. But this is not what this book is about.
I believe that this book is life changing not because of the technical advice it offers but because of three key messages.
- Your money is your life. When we think about money we tend to think about numbers. This masks the fact that money is ‘embodied labour’ or life. Thinking about money as numbers can skew our decisions: paying £10 on something we don’t particularly want or like doesn’t seem like a big deal. But thinking that this is the equivalent of 10 minutes of our lives which we spend labouring spending make us realise that life and money are a unity. Interestingly, Seth Godin recently published something similar arguing that to make decisions about money we have to compare things rather than think about numbers.
- You have to know your ‘enough’. There is an optimal point beyond which money doesn’t bring satisfaction and it is important to work this one out. Where your enough is, is not about numbers but about your desired lifestyle. I know there has been a lot written lately about lifestyle design and that it builds on a very similar premise – this book was the pioneer, though.
- Consumption is THE PROBLEM. Our problem generally in the ‘developed’ world is not that we don’t have enough but that we consume too much. I have been thinking about this one a lot any way; about all the websites where the ambition is to enable people to consume more for less.
Now, I would leave you with some of my favourite quotes from this book.
Frugality is enjoying the virtue of getting good value for every minute of your life energy and from everything you have the use of.
Waste lies not in the number of possessions but in the failure to enjoy them. Your success in being frugal is measured not by your penny pinching but by your degree of enjoyment of the material world.
Don’t think of a clogged toilet as a tragedy; think of it as an opportunity to work your pectoral muscles.
It is empowering to know that the major driving force behind our planetary plight is not the military-industrial complex or the federal budget or defence spending – things we usually feel powerless to do anything about. Rather it is our patterns of consumption here in North America, our demand. And that is something that we can do something about…
And last but not least
Life isn’t unduly stressful; you may, however, be unduly stressed by life.
So let’s get beyond the immediately obvious in personal finance and enjoy the more profound messages of this book.
Gaming and life: lessons from Cashflow
We all know that children learn best through games and play. We all suspect that there is no reason why this would change for grownups but at the same time most people forget how to play (and learn) sometime in their early to mid teens. Recently, John and I have come to realise that we have started taking life far too seriously and as Elbert Hubbard said ‘Do not take life too seriously. You will never get out of it alive.’ Add to the equation our youngest son who still wants and needs to play with us and, of course, ought to be learning life skills, and our choice will hopefully make sense. Continue reading
On ‘financial independence’ and ‘financial health’
Something has been bugging me lately and when something is bugging me I go away, do some research, do some thinking and write it down. The question that I have been pondering is the following: what is the difference between financial independence and financial health?
Now, most literature on personal finance will have us believe that financial independence is the ultimate aspiration; that achieving financial independence is the cherry on the cake(s) of our existence, our relationship with money and our happy and secure future. So I decided, based on the reading and thinking I have been doing, to see what the main features of financial independence are and check how they compare to those of what I understand to be financial health. Continue reading
A Nice Girl changing her money profile
Last week I told you about my scores according to the test in Nice Girls Don’t Get Rich. I also told you what the verdict of the test was and that I did ‘get moving’ as instructed in no uncertain terms. What I didn’t tell you is what my reaction to the score was, what I discovered and where I am today. This is what I’ll do in this post.
I am an avid reader and until recently I, like most people around, read paper book. I hardly ever write on the book – for me this is disrespectful to the author of the book and to the book. I like my books in good condition, read but not shabby and used. Having this attitude, you may imagine what strength of emotion and speed of thinking can make me write in the margins of a book? Very strong! I have written in two books in my entire life – and this, as it happens is one of them. When I opened it last week to write the post I saw the following:
‘Tragedy!’ – written after the interpretation of the test results. Continue reading
