Your Money or Your Life – Vicki Robin, Joe Dominguez | Free Book Summary

Your Money or Your Life – Vicki Robin, Joe Dominguez

Time, Money And Life: Attain financial freedom.

We Spend More Because Of Our Jobs

If you were financially independent and didn’t have to work, how would you adjust your spending habits? Would you buy more or fewer clothes if you had the option? Should you spend more or less money on gas?

In many circumstances, you may discover that your employment causes you to spend more money than you would otherwise.

Keeping Track Of Your Progress

The most vital technique for continuing success is to keep track of your progress.

Making oneself accountable to someone else is a terrific method to inculcate a new behaviour. You might try informing a friend or family member about your financial progress.

Being Thrifty Isn’t Cool But Essential

Being thrifty may appear unpleasant or out of date these days. More is more has become ingrained in us as a result of modern consumer society. Being thrifty was regarded as a virtue by everyone from Plato and Socrates to American historical giants like Benjamin Franklin, Robert Frost, and Ralph Waldo Emerson.

And you’ll need to get used to the term if you want to achieve financial independence.

The 40 Hour A Week Mindset

The 40-hour workweek is a concept that originated in Western culture.

New production processes during the Industrial Revolution created a distinction between workday and leisure time. Working conditions deteriorated to the point where workers lobbied for a shorter workweek.

Instead of being viewed as a time to relax, leisure has evolved into a time to learn how to be a more effective worker.

Free time became associated with unemployment during the Great Depression. This Depression-era mentality still pervades Western civilization today.

Increase Your Income to Value Your Life Energy

Is the amount of life energy you’re now investing in your career a reasonable trade-off for what you’re getting in return?

Getting the best possible salary in accordance with your health and ethics isn’t about desiring more money for the sake of it, whether you’re saving for grad school, supporting your family, or getting out of debt. It’s all about ensuring a long-term future.

Financial Independence Retire Early(FIRE)

For many people, the idea of retiring early appears to be a privilege reserved for the top 1% of the population. FIRE, or Financial Independence Retire Early, is a burgeoning movement that proves otherwise.

FIRE supporters have gained some simple wisdom: if you invest your savings, your money will ultimately start earning enough on its own for you to retire and focus on what matters most to you.

Generate Income from Your Investments

Make sure you have enough money in the bank to cover six months’ worth of expenses before you begin investing. This liquid cash is both your emergency fund and the money you’ll use to cover your monthly expenses.

Consider opening a savings account to keep this money separate. You can now begin the program’s eighth step: investing and tracking your additional funds.

Investing And Tracking Your Additional Funds

Multiply your capital, or additional savings, by your current long-term interest rate to get the amount you can expect to get from a long-term investment.  

Divide the result by 12 to get the final result. After you’ve followed the formula, put the result on your wall chart as a new line beside the lines that measure your income and expenses.  

When your income and expenses grow more stable, you’ll be able to estimate how much money you’ll need to achieve Financial Independence.

The Upward Curve

Your money invested will cause the line to curve upward over time. This is referred to as the crossing point. For most people, the point at which their savings equal 25 times their annual costs is when they cross the threshold. 

If you spend $36,000 per year on average, you’ll need $900,000 in assets to achieve Financial Independence.

Select Your Investing Alternatives

You can invest in low-cost index funds. ETFs, or exchange-traded funds, are index funds. Mutual funds that track the performance of stock or bond market indices are known as index funds. Index funds are a passive strategy for investing that diversifies your investments across a large array of trading activities, rather than beating the market or picking and choosing which stocks to invest in.