Personal finance isn’t a subject taught in the American school system even though it really should be. If you feel dumb as a rock when it comes to your finances you’re not alone. Only 24% of Millennials are considered financially literate.
Gurus get away with selling you courses and classes for hundreds of dollars while accountants make bank during tax season simply because most of us don’t understand our financial system. No matter where you’re at in your personal finance journey, the best (and arguably only) personal finance book you need to read this year is: Your Money or Your Life by Vicki Robin.
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What is Money?
To get a handle on your finances you first have to learn what exactly money is in the first place. Spoiler alert: it’s not what you think it is. Your Money or Your Life isn’t the best personal finance book nor is it the most technically savvy. Some books like The Intelligent Investor or The Simple Path to Wealth go into great detail about investment strategies while other books like I Will Teach You To Be Rich give you play-by-play instructions on how to reduce your bills to live a “rich” life. Vicki Robin’s book is none of these things.
Instead of focusing on what money does, Vicki helps you understand what money is. Money represents far more than the binary framework you’re used to of wealth and debt. It is the means by which we fulfill our life’s purpose and something we must learn to master from within ourselves. It’s not something you can learn by taking a handful of courses or playing the stock market. This sounds woo woo but it really is something you have to experience.
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Money is Time
In the second chapter of Your Money or Your Life, Vicki talks about money in terms of life energy. She describes it succinctly: “money is something we trade our life energy for.”
Unlike money, time is a finite resource. There are only 24 hours in a day and 365 (or 366) days each year. Every single one of us is predestined for the same fate some day: death. The only difference between you and me is the amount of time we have remaining before each of our respective appointments with Death.
Within your allotment of time you also have a fixed window to fulfill your life’s purpose (or the thing you were put on this earth to do). When you’re a kid you don’t have much agency and when you’re old and too frail you simply can’t do much of anything. The window of time most of us have to fulfill our life’s purpose is typically between 18-65. Unironically, this is also the time you’re told you need to build a career.
When you trade your limited time for an unfulfilling job or sell your talents short to a low-paying gig you aren’t just failing yourself, you’re failing the people who need to experience the gifts you have to share with the world. You know the butterfly effect? Imagine this scenario:
You’re a budding artist but like most people, you don’t think art is a viable career path. Instead of following your passion you become an accountant. You spend your days overcaffeinated in a cubicle, struggling to reconcile this month’s chart of accounts. Meanwhile, at a local hospital a young girl whom you’ve never met is recovering from cancer. This young girl is supposed to grow up to become a doctor where she discovers the cure to cancer. She’s waiting for you to show up to her hospital room to inspire her through your art but you never come. You grow old in your cubicle and she grows up, never reaching her potential either. Every person you failed to reach in your life, fails to reach people in theirs and the cycle continues.
You are the missing link in someone else’s life and you have no idea. How you trade your time for money determines how and when you show up for others. When you look at money from this perspective your life is no longer just about you, it’s about all the people your life is intended to reach.
Your job is just a dollar value you ascribe to your life. What’s more important is how you use your time. Money is an infinite resource that can grow, time is not. Once it’s gone, it’s gone.
Money is a Story
When you think of money what comes to mind first? A numerical value of course. Usually, the amount of cash in your bank account or possibly in your retirement fund. For most people, money represents a fixed quantity of a resource you can use to buy things. What if you started thinking about money as a story rather than a number?
Money is energy. Money is a tool. Money is a resource. Money is a mindset. All of these things tell a story about you and your life. How you earn money tells the world what your time is worth. How you spend money tells the world what you value. How you save money tells the world how you perceive your future. And how you view money will determine what you attract from the universe.
When you look at money from this perspective you can immediately see that money is constantly in a state of flow. You can be poor in one season of life and rich in the next. Wherever your finances are now is not where they will always be.
Your Money or Your Life shares this perspective about money and it’s what sets it apart from every other personal finance book in existence. By completing each of the nine steps in the “roadmap,” you will use your own financial data to paint a picture about your relationship with money that goes beyond the number in your checking account.
The 9 Step Roadmap
The book is broken down to help you reshape your financial mindset. Each chapter follows a nine step “roadmap” to make you aware of your current situation and prompt you to take action to align your money with your life’s purpose.
The roadmap consists of the following steps:
Step 1: Confront your past
Step 2: Determine what your life energy is worth
Step 3: Calculate your monthly expenses
Step 4: Determine what fulfillment means to you
Step 5: Track your progress
Step 6: Reduce your spending
Step 7: Increase your income
Step 8: Calculate your crossover number
Step 9: Manage your money
These nine steps can be simplified even further. Steps 1-4 consist of collecting data points about your present financial situation and how you got there; Steps 5-8 help you develop a plan to use your money in alignment with how you want to spend your life energy; and Step 9 shows you how to maintain your progress.
Notice anything about those middle steps? They are tailored to YOU and your life. It’s not about what kind of car your neighbor drives or what type of house your coworker can afford. It’s about aligning YOUR life’s energy with what YOU value in life.
For me, aligning my finances to my energy meant making some radical life changes. I gave up a studio apartment in the heart of Washington, DC where I drove an Audi to a job at a well-regarded consulting firm in order to travel the country while living in the back of a Subaru Outback. I’m happy as a lark and by taking the path less traveled, my relationship with money has changed in the process. Funny how that works…
I like Vicki’s “roadmap” because it helps you unpack emotional baggage as you go. Remember, money isn’t just a number, it tells a story about your life. Wrapped inside that are going to be emotions and experiences around money that you will have to confront if you want to change your financial situation. As much as you might want to just read tactical blog posts about recipes to save money on your next grocery bill, that type of effort will only get you so far. To make real change, you have to go under the hood. Your Money or Your Life is designed to help you do just that.
Making a Dying
The main takeaway of the book is how some people use money to enable living while others use it to hasten dying. You might consider your job as a means to provide a living. If you are spending your life energy earning an income that isn’t aligned with your life’s purpose you’re not actually making a living — you’re making a dying.
At the end of the day we are all racing towards the same destination: death. The question is, are you using your limited time here on earth to live in alignment with your passions and purpose? If you spend your entire day slaving away in a cubicle — or on never ending Zoom calls — what justice are you doing to the miracle that is your life?
The odds that you should have even been born in the first place are basically zero. Your existence is quite literally miraculous. Whether you believe in an unknown higher being, God, or fate, you aren’t a random accident. Squandering your life on a salary that isn’t aligned with who you know you’re destined to become will be your greatest tragedy in your last moments.
The question you need to answer is do you want to make a living or do you want to keep making a dying? Your Money or Your Life is one of the best books you can read to help you figure out an answer to that question and quite possibly change the trajectory of your life altogether.
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