I read a book called Your Money or Your Life when I was in college, and I have to admit, it was life changing in terms of my relationship to money. The book helped kick off the voluntary simplicity movement and while it definitely has a New Age feel to it, which makes the punk rocker in me want to puke, the concepts in the book are widely applicable to anyone interested in changing their relationship with money.
The book outlines a nine-step approach to "financial independence" that takes you through looking at all the money you've earned in your life and making peace with the past, converting your income into a calculation of your "life energy" that makes you look at how much you spend just so you can earn more (you know the phenomenon of the car you need for the commute, the clothes you need for work, etc), and ultimately to charting your income and expenses so that you can find your "break even" point, where your passive income from savings (they somewhat controversially advocate investing only in bonds) is greater than your living expenses.
What I got most out of the book was a few key lessons. One, if you want to save money, write down everything you spend it on. That task is so excruciatingly painful, you'll quit spending money just to avoid having to write anything down. Another is that you can, and probably should, work both sides of the equation of income and expenses simultaneously. It's drudgery to save only by giving up luxuries or by taking on extra jobs, but somehow if you do both at once, you feel superhuman rather than subhuman, and the ducats can really pile up. Lastly, just the vision of charting a path toward a point where passive income pays for life expenses, especially when I was only 19, made a life changing impact.
Despite some reservations about the book, I find I recommend it to people over and over. Money is a store of value. We ought to reflect a bit more about what we trade away for it. Ultimately, you are going to spend a huge part of your life trading time for money -- and Your Money or Your Life is a great guide for making sure you get what you want out of the bargain. I just wish there was a more punk version of the same book!
Do you recognize that this is correct time to get the loans, which would make you dreams real.
Posted by: SANTANALatonya | Jul 03, 2010 at 11:14 AM