I remember the Saturday afternoon when I first read Your Money or Your Life, published in 1992 by Joe Dominguez and Vicki Robin.
I was desperate to make a shift toa more fulfilling type of work. But I had given up on the idea of sending out resumes and hitting up contacts hoping for a lucky break. I had tried that approach, seen it succeed, and then experienced the pain of losing the “good job” I had networked into to the recession of the early 1990s. I had decided that I wanted something more secure than a good job that could disappear with a dip in the economy or the hint of a corporate restructuring. I had determined that a longer-lasting solution to job dissatisfaction could be had from developing more effective money management skills. But I hadn’t yet been able to learn what I needed to fill in the details in my Passion Saving plan.
Flipping through the book at the Borders in downtown Washington, D.C., something in it called out to me “I am different.” But I had no idea how different until late that Saturday afternoon as I made my way towards the magic revealed on page 274. It was on reading page 274 that I experienced my epiphany. This was it! On that page were the lines that made money management finally make sense.
20 Magic Words
Here are the magic words that appear on that magic page of Your Money or Your Life: “Breaking the link between work and money in actual fact will exponentially expand the possibility of discovering your true work.” There’s a lot of meat in those 20 words, a lot to think over. It is those 20 words, and the implications of them explored in the rest of the book, that has made Your Money or Your Life the most influential personal finance book ever published.
Read the customer reviews of Your Money or Your Life at Amazon.com and the common theme you will hear is–“it changed my life!” Lots of authors aim to change people’s lives with their books. How many pull it off? Your Money or Your Life pulled it off because it revealed the connection between solving money problems and solving work problems. Looking back, one is tempted to say that the insight should long have been obvious to all. The reality is, it wasn’t. Your Money or Your Life has been a global bestseller for 13 years because it got to the root of the money management project and said something about it that had never been said before–the best reason to save is not to escape work but to free yourself to do a different kind of work.
That insight changes everything. The old way of saving was to save to escape work. The Your Money or Your Life way to save was to free yourself to do the work you love. Your Money or Your Life turns the conventional saving rules on their head. When you are saving to escape work, you are saving for the years when your life is drawing to an end. When you are saving to free yourself to do the work you love, you are saving for the years when you still have plenty of steam in your engine. The Your Money or Your Life vision of saving is in an important way the opposite of the conventional saving vision.
Fear Is a Poor Motivator
That’s why it works. Trying to save to prepare for the end of life is a fear-rooted approach to money management. Fear is a poor motivator until it becomes pressing. So most middle-class workers save little in their 20s and 30s, a bit in their 40s, and then become serious savers only in their 50s and 60s. Saving early in life is more effective than saving late in life, but the saving guides that came along prior to Your Money or Your Life just did not set forth a message that had much impact on people in their 20s or 30s or early 40s.
Millions who found saving boring when it was framed in conventional terms found it exciting when the idea was reinvented in the pages of Your Money or Your Life. The book revolutionized the field of personal finance by putting forward the idea that saving should be a means not to escape work but to free one to do more rewarding work. When you change the motivation for saving, you change the nature of the money management project in a fundamental way. Fundamental changes cause explosions. It takes years or even decades to come to terms with ideas as far-reaching as the one that serves as the driver of the Your Money or Your Life vision.
I’ve read this book five times. Each time I read it I discover something new in its pages. It’s that deep. As popular as it has become, I doubt that many today fully appreciate how revolutionary a book it is. We are only beginning to see what it means in practical terms to integrate life, work and money goals. We will be walking the path that Joe Dominguez and Vicki Robin, the authors of Your Money or Your Life, pointed out to us for many years to come.
Where I Disagree
I don’t agree with every line written in the pages of Your Money or Your Life. I like stocks more than Joe Dominguez does (although I see why he focused on the risks inherent in stock investing more than do most money advisers urging a more conventional money management approach). I don’t agree with the views expressed in Your Money or Your Life regarding inflation (that its effects can be avoided through good money management practices). And the book is more negative on consumerism than I am (I agree that most of us spend too much, but I also think that the goods and services available to middle-class workers today enhance our lives in many ways).
Those things are details. What’s important about Your Money or Your Life is the revolutionary insight at its core, the idea that life, work and money goals should be integrated. When you spend your money, you are spending your life. Once you see the truth of that, you can never again think of saving as being the boring money allocation choice. Saving is the means by which you become free to pursue your most important life goals. Saving for someone following the Your Money or Your Life vision is as exciting as the dreams that drive his or her money management project.
The goods and services obtained through spending add a lot to life. But spending can only do so much. There are other things that we all need to be satisfied with our lives that can only be attained through saving. Joe Dominguez and Vicki Robin, authors of Your Money or Your Life, taught me that lesson.
It changed my life!