Your Money or Your Life

Joe Dominguez and Vicki Robin

1. Figure out your earnings and net worth. The idea is to figure out how much money has flowed into and out of your life.
2. Figure out your current cash flow
1. Figure out your real hourly wage by adding into work hours all the work-related
   time outside the office (commuting, working from home, cost of meals.
2. Keep track of all the money coming into and out of your life on a monthly
   basis (for me, approximate using bank and credit card statements)
3. Create a table of income and expenses, in broad categories. Convert the dollars spent in each category into “hours of life energy” spent. Think of purchases and other expenses in
   terms of the amount of life given up to earn the needed money.
4. For each spending category, ask the following questions
1. Did I receive fulfillment, satisfaction, and value in proportion to life
   energy spent?
2. Is life energy spending in alignment with my values and purpose?
3. How might this expenditure change if I didn’t have to work for a living?
5. Create a chart plotting total monthly income and total monthly expenses, and put
   it somewhere you will see it every day.
6. Value life energy by minimizing spending. Beyond a certain point on the fulfillment curve, spending more will bring less fulfillment, so you are not giving up happiness.
7. Value life energy by maximizing real income. Work and wages are not the same; wages are simply the money you trade your life energy for.
8. Post monthly investment income on the wall chart. As monthly investment income curves upward, at some point, it will cross over the monthly expenses line. This crossover point represents the time when you can stop working for pay.

1. Note taker’s note: This should probably be adjusted for real returns
   (post-inflation)
2. You only need to work for pay for a finite period of time—focus on that goal
   and make that period of time as short as possible. When you no longer need to work for pay, you are Financially Independent.
9. Invest your capital to provide safe investment income, with 6 months of cash
   cushion. Surplus funds can be reinvested, donated, or otherwise used.

1. Note taker’s note: While Joe Dominguez focuses solely on buying U.S.
   Treasuries, it would probably be wisest to pursue a balanced investment
   strategy with an equity component.

Final thoughts: As with “The Millionaire Next Door,” the emphasis is on “playing defense,” or controlling spending. What YMOYL does is to put controlling spending into a larger context of maximizing fulfillment, minimizing waste, and pursuing a higher purpose.