Saturday, December 29, 2007

Will Your Money or Your Life change my life?

Your Money or Your Life is frequently touted as a life-changing book. Trent at The Simple Dollar frequently raves about the impact it had on his mindset and relationship with money. Since I was at the library and in the mood for some relaxing fluff, I thought I'd give it a try. I was somewhat skeptical; there are a lot of personal finance books that promise bold new solutions but actually just repackage the same stale ideas for the eighteenth time.

Overall, I was pleasantly surprised. It wasn't revelatory, but that's probably because I went through a phase during my early teens when I read a lot of Mother Earth News and daydreamed about saving up a bit of money, building a cabin, and dropping out of the workforce to farm and write. Since then, I've realized that I kill plants far too readily to ever farm successfully and that that dream was probably based in part on social anxiety and the desire to avoid having to interact with others in daily life. Nonetheless, the idea of working for a finite period of time as means to an end wasn't new to me. Neither was what I see as their key point, that having more stuff doesn't lead to more happiness and living beneath your means can be satisfying.

Mr. Dominguez and Ms. Robin are certain that if we follow their nine steps, we'll all step off the hedonic treadmill, put enough money into government bonds to live on the interest, and then devote our time to working for world peace, organic farming, caring for the elderly, or other such noble endeavors. It's a refreshingly different take on personal finance, which is often described as means of getting more money without any pause to consider why we want the money in the first place. Your Money or Your Life is, at its core, about leading an examined, purposeful, and fulfilling life. The accumulation of money is treated as a means to an end. The authors contend that, although the Industrial Revolution improved lives by raising standard of living, the materialism and careerism that accompanied it are slowly poisoning our culture and our planet. How many personal finance books sport a blurb from Ralph Nader on the cover?

I didn't find the hippie propensities of the authors off putting or too preachy, but some might. I felt that they repeated that "you must complete all nine steps" about one time too many. The anecdotes about folks who followed their program with great success were sometimes a little too pat. I don't fully buy into their dismissal of inflation, especially when it comes to health care costs, or their insistence on investing solely in bonds.

Making a wall chart and calculating the crossover point when my investment income will exceed my living expenses might be an interesting exercise, but I'm a bit less enthused about their suggestion that I include time spent on decompression, escape entertainment, and vacations when calculating my real hourly wage. I'm fairly certain I won't follow their nine steps to financial independence.

If you are looking for a guide to investing, this book isn't for you. If, like me, you're trying to sort out your goals and values in life, Your Money or Your Life raises some valuable questions. It was a good read for an introspective sort of day.


Mrs. Micah said...

Like you, I was ok with their slightly hippie (and I think much-needed) attitude towards things. As you say, great for helping figure out values and priorities. On the whole I liked it. :)

(oh, and Trent's The Simple Dollar. JD's Get Rich Slowly. Sometimes easy to confuse)

E.C. said...

Mrs. Micah:
Oh, oops, thanks for the heads up. I've fixed that now.