Title: Your Money Or Your Life
Author: Joe Dominguez
Publisher: Penguin Books; Rev Upd edition (10 Dec 2008)
BOOKS DIGEST SUMMARY:
With similar overtones to ‘How to Be Rich by J.Paul Getty’ this book focuses on the uneducated concept and management of money that the majority of Americans have. This book shares sentiments found in ‘Rich Dad, Poor Dad by Robert Kiyosaki’ regarding the prevalence of financial illiteracy and offers advice and solutions to overcome this. I found this book to be very interesting and worthwhile because it also touches on the philosophical debate on what money actually is and why attitudes towards money in society are the way they are. The authors essentially argue with strong factual evidence that the ‘shop till you drop’ mentality is mass media propaganda to get people into debt and to prop up the flaws of the American economy. Such arguments are shared by Michel Albert and Fleckenstein in their respective books, Capitalism Vs Capitalism (1993) and Greenspan’s Bubbles (2008). Using real life personal examples of people who have overcome the burden of debt through following the advice offered by former Wall-Streeter Joe Dominguez, the book serves as an inspiring and motivating force for those struggling with life in the rat race.
Prologue:-
This section brings up such philosophical questions as ‘what is fulfilment?’ and why are so few in America content with their lot? The authors argue that conspicuous consumption has us on a hamster wheel; the more material possessions we acquire the more in debt we become. Interestingly enough, the dictionary defines ‘consumption’ as ‘destroy, squander, use up’ and this is, according to the writers, exactly what materialistic society has done. Littered with hard hitting facts to support their argument (90% of all divorces are caused by money and 48% of 4,126 male executives saw their lives as ‘empty and meaningless’), this section suggests that the escape route is close when we adopt a Financial Integrity (FI) mentality. This mentality is achieved by “learning the true impact of your earning and spending. It is knowing what is enough money and material goods to keep you at the peak of fulfilment”.
Standout quote:-
“At some point in the last forty years, conditions began to change. For many people, material possessions went from fulfilling needs to enhancing comfort to facilitating luxury-and even beyond to excess”.
Part one of this review will comprise of chapters 1-3 (The Money Trap, Money Ain’t What it used to Be and Where Is It All Going?), part two consists of The Nature of Fulfilment, Seeing Progress and The American Dream. The last part includes For Love or Money, The Crossover Point and the Epilogue. The review has been constructed in this way to make it more concise and quicker to read. After all, time is money J
Part one:-
This section asserts that we aren’t making a living but rather a dying because our work becomes our life. The writers highlight that our worth as a human being is judged by human doing (our work). In addition, the book states the argument that in America, saving has become unpatriotic and highlights the devious tactics of the advertising companies; “by the time an average teenager receives his or her high-school diploma, s/he has been exposed to as many as 100,000 ads”.
All of these have contributed to unfulfilling lives filled with clutter and no savings to show for 20 plus years of hard work. The authors also argue that at a certain point, no matter what else we acquire, our peak fulfilment is never hit again and our enjoyment from such material possessions drops. This introduces the theory of the ‘Fulfilment Curve’ and offers advice on how to be fulfilled on things that one would have normally discarded as ‘silly’ because they weren’t expensive or offered social status. The advice is common sense, however, as entrepreneur Theo Paphitis points out “common sense isn’t common”. Readers are encouraged to total up every cent of their money that comes into their lives daily and report on what they spend it on. The point of such an exercise is to turn money-phobes into money-lovers by encouraging people to become more aware of how much money they actually have and what they trade their life energy (time) for.
Standout quote:-
“For so many working people there seems to be no real choice between their money and their lives. What they do for money dominates their waking hours, and life is what can be fit into the scant remaining time”.
Part two:-
This meatier section of the book emphasises the importance of fulfilment in our lives and how it isn’t congruent with merely acquiring money through work that one doesn’t enjoy; “to have fulfilment in the larger sense, you need to have a sense of purpose, a dream of what a good life might be”. With overtones extremely similar to J.Paul Getty and Mr Kiyosaki, the authors make it clear that money should merely be a tool to enhance your enjoyment on the short time we have on earth. The writers suggest that giving to help others will lead you to receive in abundance; which brings up the idea of Karma as principle to abide by.
More interestingly enough, this section discusses the etymology of the word ‘frugal’ and tells us how congruent it is with achieving a fulfilling life. “Frugal shares a Latin root with frug (meaning virtue), frux (meaning fruit or value) and frui (meaning to enjoy or have use of)…Frugality is enjoying the virtue of getting good value for every minute of your life energy and from everything you have the use of”. Our notion of ‘frugal’ has negative connotations, one of being a miser and penny pincher. However, this isn’t what ‘frugality’ actually means and the writers highlight that this grave misconception of this lifestyle has contributed to us being in debt.
It is profound to note that there isn’t a word in the English dictionary to sum up a frugal mentality-of using something wisely and maximising its use and your enjoyment from it. However, there is in Spanish; aprovechar; which is reflected by noting how the lifestyle in Spain and other Romance countries contrasts so harshly with the Anglo-Saxon mindset of ‘more is better and it’s never enough’.
Part three:-
This section touches on the importance of a positive attitude, “while economic realities may at times be harsh, it is also the nature of the human mind to make real the thoughts and beliefs that we hold” in one’s exploration for more enjoyable ways to make a living. The value of goal setting is also briefly mentioned.
In later pages, the Crossover Point is discussed; which is when one can live off monthly investment income generated by years of a frugal but fulfilling lifestyle. The importance in celebrating one’s move toward Financial Independence is considered crucial by the writers because, they argue, it further encourages and motivates. “Celebrate…for you have dedicated yourself to replacing financial fictions with financial facts, challenging many old beliefs about yourself, your money and your life”.
Fundamentals of investment strategy are raised and ‘life changing’ questions are posed to the reader:
“What have you got to show for all the money you have earned in your life”, and “How much are you trading your life energy (time) for?” The focus of the last question is to force the reader to think about how much s/he is really trading his/her time for? Transport and food costs must be taken into account as must be entertainment costs with the purpose of re-winding from the stress of work. If one breaks it down, one can conclude that the vast majority of even educated high powered white collar workers are underpaid and struggling financially. The book hits home that it isn’t how much money one makes. Rather, it is what we do with the money.
End Notes:-
This book was a fantastic and an entertaining read. It keeps the reader engaged by using motivating real life examples of people who have been thousands of dollars in debt and, through adopting a financial independent mentality and asking tough questions, have completely changed their lives and become happier and more fulfilled as a result. Don’t just take my word for it. Oprah Winfrey says “this is a wonderful book. It really can change your life”. Respected papers such as the Los Angeles Times also sing its praises, “One of the ten best business books of the year…the seminal guide to the new morality of personal money management”.
Through changing our concept of money, we can lead more fulfilling lives. When I speak to my friends who have travelled to less economically developed countries, they always say to me something along the lines of “although they are dirt poor, they are so, so, so much happier than we in Britain are”. Happiness, as other esteemed authors and successful business people have pointed out, is merely a state of mind. And with this, we can live out of the materialistic illusion that leads people ever closer to the rat race.
