From: phoenix@ugcs.caltech.edu (Damien Raphael Sullivan) To: darbnet@ Subject: Book Review: YMoYL Date: 2000 Nov 24 Months ago we had a little discussion about or inspired by _Your Money or Your Life_, and I eventually decided I'd go read it, if only to see the original of the dumb-sounding inflation advice Joseph passed onto us. So, a review. The book took me a while to appreciate, as I was going in skeptically, much of the language puts me off, and I don't need the basic advice. Talk about "life-energy" and "jet's eye view of money" and a growth-bad attitude put me off. And while the advice to keep track of all your expenses down to the penny is something I've been doing for a while, having the advice repeated in bold four times within two pages also didn't appeal. But most of the advice is actually good, and I've started using some of it; most of the ruminations about life are also good, even if not optimally aimed at how I think. This covers most of the book. The last bit, about inflation, is still unconvincing. To start they prime you up, saying that if you spend much of your waking life on a job from which you come feeling drained, are you making a living or making a dying? And they toss out the term "jobism", for how we judge people based on what they do. Then there's the unoriginal observation that Americans have gone from being thought of as citizens to being thought of as consumers, and the possibly more original observation that "disposable income" implies the only thing one would do with extra money is dispose of it. Then we have "clutter -- a fate worse than dearth", which can refer both to dust-gathering stuff and to unfinished dreams and projects splitting your attention. This part really resonated with me, for standard reasons. And finally the various "road maps" of money, from "cash" to "medium of exchange" to "stuff we trade our life-energy for, whether in a job or in a welfare line." Outline of the FI (Financial Integrity, Financial Independence) steps; * Try to figure all the money you've earned in your life, and add up your net worth. (I extended this to trying to figure all the money I've spent in my life, which should equal the difference of the first two numbers. I'm still out a few grand; this is more worrying since my income and largest expenditures are fairly well known, so the error on the rest must be large.) * Calculate your real wage: after tax income, minus expenses directly related to maintaining the income (buying clothes for work, say, or going out for lunch) divided by the time you spend working, including commuting. The whole "life-energy" business is really talking about time: you're selling off your life, so what are you really getting for it? (Another extension: you can use the number to figure how much of your life is backing any purchase. I have a high wage, so a comic book costs me about 6 minutes, less time than it takes to read it. And I'll probably re-read the stuff I buy. OTOH, a $100 meal would take 3 hours of my life. You can argue intensity of experience, of course, but since I'm not that sensitive to food quality -- or food memories! -- it doesn't seem particularly worth it.) * Keep track of every cent that comes in and out of your life. They urge real accuracy, down to the penny, no estimation, with a shift in attitude from laziness and "do I have to?" to one of pride in precision, accuracy, and integrity. I'm not arguing. The phrase I took from Doc Smith's Lensmen books was "precisionist-grade thought". There's a brief passage comparing budgets to diets as equally ineffective, then * Monthly tabulations. Now that you can see all your expenses, calculate subtotals in categories relevant to you. They give examples of how just this step can tell a lot about you, whether you have multiple categories for clothes and beauty supplies, or separate sums for books and magazines, or a Charity section which is usually zero. And once you have the money totals, convert them to life-energy numbers, so you can see how much of your life you're spending on clothes or charity or accumulated junk you don't need. (I'd already started doing the first part of this on my own, but I hadn't done the logical step of comparing your monthly subtotals in a table. No big surprises for me, since most of my expenses go to rent and food. OTOH, there's a bigger spike in Groceries than I expected, correlated with my houseguest.) * The last big step is extending the table, so that by each subtotal you can mark whether the expenditure is giving you proportional fulfillment, whether it's in alignment with your purpose and values (and there's a digression of how to figure out what your values are), and how the expenditure might change if you didn't have to work for a living. Those are three different questions. You make little + (aligned or fulfilling) and 0 (just right) and - (not) marks, and try to shift your spending to make them all + or 0, at least for the first two. The third just tells you stuff about your job shapes your life. (I haven't done this formally, just eyeing my totals. As I said, I don't spend that much.) They claim this step can bypass a lot of paid therapy, as your life and dysfunctional spending habits (clothing therapy?) become a bunch of - marks. * Then there's making a Wall Chart, just a graph of your monthly income and expenditures, with "income from interest" added later. First you want the income line above the expenditures line, then later you'd like the interest line above the expenditures line. Then you're FI! They also have lots of advice about reducing spending (valuing your life energy by getting good deals for what you buy), and saying frugality is about getting the most joy from your stuff, and talk about maximizing your income by aiming for a well-paying job (valuing your life energy by getting good deals for what you're selling -- you.) Contrary to what I remember Joseph saying, they do not necessarily advocate doing what you love. They advocate mentally separating work you do to live from work you do for love, and point out that if you mix the two you might end up compromising the work you love. Chapter 8 talks more about the investment income on your wall chart, pointing out that once you start accumulating savings as capital you can look forward to working for only a finite period of time -- at some point interest will overtake job income, and you have the freedom to retire. (Of course, whether that point comes before you die depends on your numbers.) The final chapter talks about cushion/capital/cache (six months of expenses, for emergencies/the money you'll be living off of/additional savings after your cushion and capital are full), but mostly about inflation and buying US bonds. And I'm afraid the dismissal of inflation is as unconvincing as in Joseph's rendition; they really are comparing apples to oranges. Sears Roebuck stuff in 1970 to used or discounted stuff today. Probably the best thing to do is look at your own expenses and see how they scale. If you own your own home and all you buy is food and gasoline, you'll care a lot about food and gas prices over time. If all you buy is computer stuff for some reason, you can forget about inflation.