"People who follow the program in Your Money or Your Life, on average, lower their expenses by 25 percent within six months and almost to the person they say their quality of life has gone up. When folks really catch fire with the program, they often save 50 percent or more of every paycheck."
If you're wondering why it's worth your time and attention to read Your Money Or Your Life, and why I'm doing an in-depth, chapter-by-chapter series on the book, well, the paragraph above pretty much says it all. YMOYL does lots of things: it discusses mind-opening philosophies of consumerism, it helps you think about the real purpose of your work, it helps you think through the importance of income and spending in life, and it helps readers reach a new level of peace and serenity with money.
These philosophical aspects of the book may really resonate with you, or you may find them kind of squishy and woo-woo. Either way, it's fine. The truth is there's a far more important and pragmatic reason to embrace this book: because it works.
The simple fact is this: if you work through each chapter of YMOYL and do the exercises honestly and sincerely, money will cease to be a drain on your life, and you will accomplish savings rates just like the ones cited above. That's right, 25%. Or 50%. Or more. And your quality of life will go up.
This book radically reshaped our financial life when we first worked through it back in 2002, so it is with direct personal experience and great sincerity that I say that this book really does what it promises to do. That, in a nutshell, is why I'm writing this series.
Before we get into the book itself, let's first tackle a few likely reader questions about this upcoming series:
What's the format? I plan to write one post per chapter, with today's post covering preliminaries, the intro and the prologue. So, with another nine chapters to go, this series should run for some 10 weeks--perhaps more, if we come up with issues or side topics worthy of further discussion. I'll run one post each Sunday, and I'll clearly label it with "YMOYL" so readers who aren't interested can easily skip it.
Is there that big a difference between the 1992/1998 edition and the 2008 edition? Can I still use my old copy? I've been reading both copies side by side and they are largely similar. There are some chapters (e.g., Chapters 6 and 9) that have been rewritten to some extent, but I will make sure to highlight any key differences between editions in my discussion. Thus either version is fine.
Can I read the series without buying the book? Hmmm. Well, I can't stop you. But you'll get far more value if you have your own copy and can read along. Hey, why not borrow a free copy from your local library? Seems fitting somehow.
Who's the intended audience? Any reader interested in being more conscious and capable in spending, earning and managing money will benefit from this series. You don't have to have any special knowledge or investing experience or anything like that. Just an interest in the book and a willingness to invest time and attention into improving your financial situation.
That said, I really don't want dilettantes nosing in on the comments of these posts when they clearly haven't read--and don't plan to read--the book. If that means I write this series for a very small handful of readers, that's fine. I'd much rather have a tiny audience of readers who want real results and are willing to put the concepts of this book to work than have 10,000 readers read this series unseriously and not have it impact them at all.
Moreover, a year from now, I want that small handful of readers to be able to tell me, in clear and specific terms, that:
1) they're in dramatically better financial shape,
2) they can say exactly how much extra money they put away each month,
3) they can tell me exactly how they've mapped out their road to financial independence.
Again, it's fine if you just want to dip in here and there, skim a few posts, not really read the book, etc. It's okay. Just keep in mind that my intended audience isn't you.
Okay! Now, to the book--and to today's portions: the Introduction and Prologue.
Keep in mind that the introduction of any book is essentially a sales document. It's designed to reel you in and keep your attention, and quite frankly, it's a one of the weakest parts of YMOYL. The 2008 introduction focuses on many of the standard alarmist statistics that have characterized the US economy for years: a low or negative savings rate, too much consumer debt, and the sense that everything feels like it's on a greased road to hell (see below for how this differs from the 1992 introduction).
However, all of this leads up to the key thesis of the book: that the rat race sucks, and what most of us are doing--working to spend to work more to spend more--isn't working.
What does work is stepping off the treadmill, becoming less status-conscious, and redirecting and saving all the money you would otherwise spend on materialistic purchases. In short, choosing "your life" rather than "your money."
If you've decided to participate in this virtual book club and you've made it this far into this post, you should be nodding your head right now. Yes, that's what I want! But how do I step out of the rat race? And how, exactly, do I put "life" before "money"?
Well, like I said, the introduction is supposed to reel you in. I hope it did. Now we've gotta read the rest of the book to learn the answers.
The purpose of this book is to transform your relationship with money.
Yep, that's about it in an nutshell. Four thoughts on what's important here in the prologue:
1) How the incredible material progress of the industrial era ended up leading consumers astray in the modern era: Interesting to read how the very same forces of mass production--innovations that helped improve everyone's access to basic products--kept right on chugging along... until it started producing stuff that today we buy but don't need. The economy kept making stuff, and consumers kept climbing the standard-of-living ladder. Pretty soon we'd gone from "fulfilling needs to enhancing comfort to facilitating luxury--and even beyond to excess."
Now, status-seeking behavior has become one of the largest drivers behind consumer purchasing. Worse, we willingly take on still more costs so we can maintain a professional life that will fund our status. In the section titled The Not-So-Merry Money-Go-Round, there are some wince-worthy euphemisms the authors use to describe modern professional life. Phrases like "job costuming" or needing to "recreate" and "vacate" from our jobs with "escape entertainment," and how "we must spend so that our neighborhood, house, car, lifestyle and even life mate reflect our position in the world." Ouch.
But it gets worse still: because all of the aspects of our "status" are intertwined, it all combines to persuade us to derive more and more of our identities from our jobs. Thus begets the cycle of work and spend and work and spend.
Obviously this is insane. But the truth is, most people don't really think about this stuff at all. And so, because the authors need to make this concept extra-super-duper clear for non-thinking readers, they use a rather negative and condescending framework for considering work. But don't hear the wrong message: the authors aren't saying work is bad, they are saying working in order to spend, in order to maintain your identity is bad. There's a big difference.
2) On thinking in new ways: there's a brief section on how to think differently, replete with the "9 dots test" that always seems to show up in books and articles on out of the box thinking. Despite the stupid test, the point still holds: you will need to think differently throughout this book, and you'll have to shake off many assumptions, unconscious habits and mental scripts that are lurking in your mind about money and status. Be ready.
3) The concept of FI: FI is an important jargon term in YMOYL. It stands for Financial Independence, but it also represents financially independent thinking, financial intelligence and financial integrity. Combine all these attributes, and you essentially have a non-consensus, anti-consumerist way of thinking about money and spending. We're going to hear a lot about this concept in the coming chapters too.
4) On the excuse of not wanting to dwell on money: Finally, a quick anecdote from my own life that ties in with the last couple of pages of the prologue. I have a friend (who I'll leave unnamed, obviously) who was always money-challenged. Whenever the subject came up, he always used the exact same default mental script: "I don't like to spend all day thinking about or dwelling on money. I'm just not preoccupied with that stuff."
This is actually a textbook money excuse that's part defense mechanism and part delaying technique. Worst of all, this guy had it all exactly backwards: because of his inattention, his money worries increasingly kept him up at night, wasting a tremendous amount of his time and energy. The thing is, once you invest a moderate amount of time rethinking how you handle your money and your spending, you'd be shocked how quickly the process goes on autopilot. You will find yourself spending far less time on your money matters than ever before, while you gain economic ground every month:
At first, some of the steps may look as if they will be time-consuming to put into practice consistently--however, people who have been doing the steps for some months report that they are actually spending less time on their money matters than before the course. The fact that their checkbooks always balance, that they don't ever have to rush to the bank to cover overdrafts, that they spend no time on unrealistic budgets, that they have no more arguments with their spouses over money, that they don't have to spend hours wondering "where it all went" ... are just a few of the ways applying the steps consistently produces savings of our most precious resource--time.
Next week we'll really get into the meat of the book. Stay tuned!
A quick PS to readers: What follows are some short ideas, notes and side thoughts that were beyond the scope of the post itself, but that I still considered worth sharing. I'll probably have an Appendix/Side Thoughts section after each post in this series. If you're too bleary-eyed to continue, feel free to skip the remainder of this post.
1) On changes in blurb copy between the 1992 and 2008 editions:
Sometimes blurb copy tells you more about the publishers' perceptions of their own book than it tells you about the book itself. And it's interesting to read the sounds of rebellion and revolution in the blurb copy of the 2008 edition:
"antidote for our corporate culture"
"It's time to stop trying to 'get ahead' in a race that's both fixed and futile"
"liberates us from our self-imposed impoverishment"
The above blurb quotes from the 2008 edition are way more aggressive than the tame and tepid blurbs in the 1992 edition.
2) On changes in tone from the 1992/1998 introduction to the 2008 introduction:
As we mentioned above, the 2008 edition starts off with an alarmist discussion of the new global economy while the introduction to the 1992/1998 edition features a rather sedate discussion of voluntary simplicity and a shift in how we think about consumption. Heck, the 1992 edition even contains an "admonishment page" that tells readers not to make excuses--and warning them that "ONLY BY ACTUALLY, REALLY, HONESTLY DOING THE STEPS WILL THE PROGRAM WORK." That's just hilarious.
Maybe it's just me, but in the 2008 revision, you get the sense that somebody in marketing decided to tone down the admonishment and punch up the prose. Perhaps the publisher didn't want to repel so many potential book buyers.
3) On author Joe Dominguez and why his career path resonates with me:
A few words about co-author Joe Dominguez, who died of cancer in 1997: He and I actually had a similar career path, although he left his Wall Street career in 1969 at the ripe old age of 29. I wasn't quite that fast: I left my career in 2008 at age 38.
He was an investment analyst (so was I), and he worked in the industry just long enough to save up enough money to get out--and stay out. I love that. Then, he essentially did non-profit work for the rest of his life, getting the message of Your Money Or Your Life out to the world via low-cost seminars, classes and workshops. He was a man completely uninterested in the trappings of wealth or status, he dedicated his life to helping people--and in his rejection of consumerism, he was decades ahead of his time.
Rest in peace Joe. You made a difference in my life.
Coming up next week: YMOYL Chapter 1: The Money Trap
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