Book review: Your Money or Your Life

Note: This is the second in a series of book reviews about books that inspire, that offer practical tips about goals, habits, productivity, simplifying, frugality and more. This series should run every few days or so, and it will cover some of my favorites in this fairly large genre.

Overview
Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence, by Joe Dominguez and Vicki Robin, is absolutely one of my favorite books ever and perhaps the best book on personal finance ever written. It changed my life.

That might sound like a pretty rave review, but it’s genuine, and I believe it’s justified. If you’re expecting a typical book about personal finance — investing, saving, budgeting, etc. — you’ll be surprised. It has those elements, to be sure, but it approaches everything with a refreshing perspective: life isn’t worth wasting away by working 40+ hours a week for the rest of your life, just so you can have enough money to buy material possessions. Once you realize this, you realize that you can live on less, and retire early.

That’s right: live on less, and retire early. Simple yet brilliant. You’ll love this book. Read on for more.

The core philosophy
The book begins by talking about the typical lifestyle of people in our society — working long hours, stressed out, not seeing their families … all to support a lifestyle of luxury, to have material possessions. Sound familiar? If so, this book will speak to you.

The book then talks about how precious our time is, how little of it we have, and how we are exchanging our life in order to get money to buy possessions. If this transaction is not fulfilling to you, then they suggest an alternative: reduce your living expenses, increase your income, invest the difference, and retire early.

The books authors did just that — reducing their annual expenses to just $6,000 — and spend all their time volunteering and making other people’s llives better.

Some of the things the book will help you do:

get out of debt and develop savings
reorder material priorities and live well for less
resolve inner conflicts between values and lifestyles
convert problems into opportunities to learn new skills
attain a wholeness of livelihood and lifestyle
save the planet while saving money

Retiring early
One of the key concepts in the book is the Crossover Point. Here’s how it works:

Track your living expenses on a graph, trying to continually reduce them and lower the line on your graph.
Track your income, trying to raise it above the living expenses.
Take the difference between income and expenses, and invest that amount.
Track the income from your investments, watching it rise on your graph until it crosses over your living expenses — the Crossover Point.

Once you reach that Crossover Point, you have enough income from your investments to retire. They don’t recommend you retire right away, as you should build up a cushion to live on and to use in emergencies, but at this Crossover Point, you have the ability to walk away from your job.

That’s a liberating idea. Because then, your job is no longer something that will go on indefinitely, but something you’re doing for a limited time so that you can quit, and go on to do whatever you want.

Conclusion
There’s a lot more to the book, but I decided to give you just my favorite part. In the end, the book is more about your values and aligning your lifestyle with those values, than it is about wealth. It’s more about our relationship with money than it is about money.

Needless to say, I give this book my highest rating, with a very strong buy recommendation. You’ll love this book, and it has the power to change your life.

If you’re interested in the book, check it out here: Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence

Book review: Your Money or Your Life

That’s right: live on less, and retire early. Simple yet brilliant. You’ll love this book. Read on for more.

The books authors did just that — reducing their annual expenses to just $6,000 — and spend all their time volunteering and making other people’s llives better.

Some of the things the book will help you do:

get out of debt and develop savings
reorder material priorities and live well for less
resolve inner conflicts between values and lifestyles
convert problems into opportunities to learn new skills
attain a wholeness of livelihood and lifestyle
save the planet while saving money

Retiring early
One of the key concepts in the book is the Crossover Point. Here’s how it works:

Track your living expenses on a graph, trying to continually reduce them and lower the line on your graph.
Track your income, trying to raise it above the living expenses.
Take the difference between income and expenses, and invest that amount.
Track the income from your investments, watching it rise on your graph until it crosses over your living expenses — the Crossover Point.

Needless to say, I give this book my highest rating, with a very strong buy recommendation. You’ll love this book, and it has the power to change your life.

If you’re interested in the book, check it out here: Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence

Posted on 31 March 2007 in Books |
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Comments (13)

stayfly Says:

March 31st, 2007, 5:55 am

great review!

as the review states, this book really is a must read for anyone interested in financial freedom

a couple of questions to Leo and anyone else who has read this book;

1. how has your progress towards financial freedom been so far?

2. do you record your progress on a graph, spreadsheet or other?

thanks :)

zenhabits Says:

March 31st, 2007, 6:11 am

Thanks for your questions, stayfly … I’d like to hear other people comment on this, but let me just say this: I read this book like 7-8 years ago, and it changed my outlook on life and work and money. I actually started following the plan for awhile, but a major life change kind of screwed up my finances, and I’m only now recovering.

But, I still believe in the principles of the book. I still try to live frugally and lower my expenses and increase my income. I haven’t been tracking my progress but the overall goal is still one I have in mind, and I would like to start the tracking process over again. I think it would help me stay even more focused than I already am.

I am further along in financial freedom than I was a year ago, but the truth is I have a ways to go. I do think I’ll be able to quit my job in a couple years and work for myself, which would be almost like financial freedom. And I think financial freedom will come faster for me than regular retirement age, but not as fast as if I had started 10 years ago.

Anyone else like to chime in with their experiences? - leo

stayfly Says:

March 31st, 2007, 6:33 am

^^^^

it’s great to hear your progress Leo and I wish you continued success!!

I’ve just started tracking everything and I’ll let u know how I go towards achieving my financial freedom goal.

Taylor Says:

March 31st, 2007, 6:45 am

I love this book and read it while in the Peace Corps. I didn`t have the chance to use all steps it advocates but I ultimately plan to once I return to the States. All I can say is read the book, it has life-changing potential.

James Says:

March 31st, 2007, 7:39 am

How dare you suggest me buying this book! That would be supporting the vicious cycle of working to attain more material possessions! :)
Good book review. I picked this book up a few months ago and just started reading it this week.

zenhabits Says:

March 31st, 2007, 8:01 am

@stayfly: looking forward to hearing about it!

@Taylor … thanks for sharing your thoughts. I’d love to hear about the Peace Corps!

@James: lol … I was actually thinking of having a contest to give away my copy of Your Money or Your Life, but I just love it too much to give up. How about a contest for the Monk Who Gave Away His Ferrari? I’m sure you’ll enjoy Your Money or Your Life … let me know. - leo

Harry Says:

March 31st, 2007, 10:37 am

“…Track the income from your investments, watching it rise on your graph until it crosses over your income level — the Crossover Point.”

Isn’t the crossover point where the investment income crosses living expenses? At least that would be the minimum you need (not counting safety cushion).

Great blog, there is so much here to read!

Heather Says:

March 31st, 2007, 11:46 am

The book can be found in many many many libraries, so chances are folks can borrow it instead of buying if they prefer:

http://worldcat.org/oclc/25246032 (shows libraries with the book)

Libraries are a great way to avoid buying things, from books and dvds to fulltext articles online. If your local library has a website, check to see if you can access encyclopedias and research databases online from home. I can read Consumer Reports articles online through my public library, for example.

I kept an income/expenses graph for several years but haven’t for the last two, as my method of keeping track of spending changed. I loved the graph and will probably go back to it eventually.

zenhabits Says:

March 31st, 2007, 17:07 pm

Harry … good catch! I meant to write living expenses, not income level. That’s why it’s great to have sharp readers like yourself. If you don’t mind, I’m going to correct it, but leave your comment.

And I’m glad you like the blog! - leo

Ann M. Says:

March 31st, 2007, 22:06 pm

I’m definitely planning on getting this book out from my library. Also where I get many books on CD (the latest being a very interesting one on the famous Dr. Livingstone and Stanley’s exploration of Africa). If I really enjoy a book then I go ahead and purchase it. I love books so much though, that I have to make sure it’s a book I’m going to re-read before I purchase it, or else I wouldn’t have room for anything else! Although, if everyone loved this book so much, I’ll probably end up buying it eventually.

Keala Says:

February 13th, 2008, 12:19 pm

sounds like a book I must read!

Catherine Says:

February 13th, 2008, 22:10 pm

This is a great book and I enjoyed it very much. My challenge is that it isn’t just me - or just me and my partner. We have kids who want to be involved in karate, piano, drama, you name it. Yes, I have sought out the cheapest flavors of these activities I can find and I limit them to one activity per person. Nevertheless, it adds up. What do other parents do?

Thanks -

Rainbow Casey Says:

February 14th, 2008, 0:15 am

I bought this book and the when it first came out. (20? years ago) I didn’t read it because I was afraid I would have to give up “stuff” that I felt I wasn’t ready to give up. Sounds like it is time to drag it out again. I am 60 and gave up the rat race years ago, but now I have no savings or investments and HAVE to work. It is just that I work now just enough to cover my expenses. I love the idea of retiring! But as a self-employed person I don’t qualify for social security and feel I have to work forever. ok, I will read the book. rainbow