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Summary: The Cost of Working, The Cost of Spending
Review: First, the bad news. Getting the most out of this book, which has been on the market for at least a decade, will take a lot of hard work, typically over a period of years. Those who have bought the book and read it have been known to recoil from it in horror, only to return to it again five to seven years later, and apply its wisdom in earnest over a period of at least three years (like this reviewer). It does not tell the reader how to get rich quick, or even how best to invest one's funds or make money (though it does offer admittedly dated advice on that score, but more on that later). Nor does it offer the reader a quick fix or temporary escape from what has come to be for many a depressing, consumerist, materialistic and self-centered reality. The text is at times a bit too eco-hip, retro-New Age in its presentation, and it does assume that everybody hates their jobs.
Now the good news. Your Money or Your Life is one of those rare books that not only enlightens, but also challenges the reader to think about some very personal, very serious topics. There is a cost to working, and this book explains this cost, gives you the tools and challenges you to calculate that cost for yourself. There is also a cost to spending, and again, the book explains this cost, gives you the tools and challenges you to calculate the cost of spending. Moreover, it looks at one particular reason why we take on the costs of working and the costs of spending- our consumerist, materialistic society. It is not the only reason, and there are certainly many others, but it is one of the bigger reasons we take on these costs, which have health and emotional dimensions as well as the obvious financial aspect. In passing, wary readers can relax- the book does not advocate going back to the land, shucking all of your clothes, and frolicking naked through the forest while chowing down on nuts, grubs and berries(and perhaps the occasional squirrel!).
Of course, there is the usual budgeting and cutting expenses and all else that you would expect to find in a personal finance book with a New Age, eco-aware bent. However, there is something more here that all other personal finance and investment books, besides perhaps Benjamin Graham's The Intelligent Investor, do not possess. This book forces you to question why you make the purchases you make, and how you look at money, which Dominguez sees as being equivalent with your time on earth. This book forces you to look at the direction of your life from the standpoint of your time and your money and offers a glimpse of what can and often does happen to those who allow money to control them, and not the other way around. It asks you to think about what work and having a job means to you (and the implied meaning from our culture) and suggests that both could mean something more (a revolutionary concept indeed!) if only we could change the way we look at money.
This feeds into another important point. In the book, Dominguez recommended investment in 30 year US Treasuries. Ben Graham, in both his classic investment books Security Analysis and The Intelligent Investor, defined an investment as being any activity which offers the possibility of income with safety of principal- all other things are speculative. This is the real reason why the 30 year US Treasury was recommended, and it is in perfect keeping with the central themes of this book. I will be the first to admit that yields on treasuries have sucked (and continue to suck) and of course, the 30 year bond is no longer with us as many reviewers have pointed out. However, there are alternatives, such as treasury bills, notes and the 10 year bond. If you are worried about inflation, you can also buy into I-bonds offered by the US treasury (however these accumulate interest, but don't pay out unless they are cashed in full). Treasuries are about the safest thing around, are considered risk-free, and do provide income (and may provide some capital appreciation). Any other investment moves away from this raises the possibility of risk- particularly the risk of losing some or all of one's principal.
Finally, if you follow the ideas outlined in the book, you can work for the pleasure of working, and your income can then supplement your savings and be enjoyed as part of the reward for your effort. It is unfortunate that the authors just assumed that everyone was unhappy with the nature of work in this Our Post-Industrial Age, but in their defense, working for a living does leave much to be desired for many of us(how many? I'd say about 99.99999% of people holding down jobs in many a soul-less organization). In particular, anyone that has read Marsha Sinetar's book, Do What You Love, The Money Will Follow and still worries about the money issue definitely must read this book.
Work does not have to feel like undergoing a daily root canal without anesthetic. In order to take control of your finances, you have to know why you spend and the costs of working and spending. Doing so will not only help you take back your financial life, but also acquire a fulfilling work and social life. Those down on modern American consumerism will derive the most sustenance from this book, but others looking to find a certain (but very difficult) path to financial independence will also find much of value in this potentially life-changing book.
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Summary: One of my all-time best in finance
Review: This is one of my all-time best books in finance. I should have some say in this becaue I've worked in finance for about 10 years. Whenever my friends ask me about investment advice, I always include this book in the list of must reads. Please note that this book has been around for a long time, maybe 20 years, and it's still raved about by readers (as you can see here at Amazon). There are only a handful of books about investments that has such staying power.
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Summary: Not Your Everyday Relationship Book! But a Lifesaving One...
Review: One of the great lessons of life that I thankfully learned at a relatively young age is that if you do what everyone else does, you'll end up with what everyone else has. Sadly, most people have nothing. No savings, no investments of any real value, excessive debt and a lifestyle that revolves around paid employment that they hate. You don't want that, or you wouldn't be here.There are three challenges to implementing this program. The first is believing in the program enough to alter your behavior. After all, Dominguez asks you to do some things that most of your friends, financial advisors, etc. would claim to be a waste of time. They aren't, but it's going to require a little blind faith for about 90 days or so on your part before you figure that out. The second challenge is to have the discipline during the early stages of the program to stay the course. We live in a society that expects instant gratification, but this program (like most things worth having) doesn't work that way. Writing down every penny of spending is boring, but it is absolutely necesesary if you're going to understand just how much money you waste every month. Finally, the last obstacle (and perhaps the largest) is getting around your old friends, because they're not going to like the new you. They will try to derail you, because most people are uncomfortable with change and they won't like the fact that you're trying to make such radical changes in your life. Be prepared. The good news is that the goal of FI is realistic. The changes to your lifestyle are easy to make once you understand the author's concept of life energy. Ironically, once you understand life energy, you'll realize that spending less doesn't mean giving anything up. You actually gain by having less. Finally, those acquaintences who resent your new casual lifestyle can be replaced by real friends who understand and respect your choices. One of the great paradoxes of life for most Americans is that they think being financially independent is difficult and they think they want it badly. In reality, it's not at all difficult...they just don't want it badly enough. Read the book, implement the complete plan for 90 days. Figure out how much of your life energy you're wasting on trinkets and junk. Change your life. You won't regret it.
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Summary: It's your life - Take charge of your personal finance
Review: YMOYL is one of my top ten books of all time. Why? Because it maturely and rationally analyzes your personal relationship and attitudes about money, status, and life style and basically forces any sentient human being to realize that living within his or her means is a plausible and desirable way to live. By doing a personal inventory and finding what we really want to do and cutting all the unnecessary crap out of lives that isn't fulfilling. It encourages you to reduce your consumption, reevaluate your career path and dare to do what you really dream to do, or even work less. You rethink the American Dream, maybe you don't need to have a house or a fancy car. Maybe you'd rather have your time. Maybe you just know that the way you are living isn't how you want to. The books teaches you to see money as your life energy. To think of every dollar as an increment of your time. And it teaches you how very precious your life energy is. In our hectic, status-fueled, mad world this book is a breath of fresh air. It offers a lot of information on how other humans simplified their lives and to open up the possibilities for you to live this way as well.
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