Your Money or Your Life by Vicki Robin & Joe Dominguez


Your Money or Your Life


There were some valuable lessons I learnt from Your Money or Your Life by Vicki Robin & Joe Dominguez  – the book covers 9 steps to achieving financial independence

I will not cover all nine but would like to touch on those that are most relevant to building a strong balance sheet

1 Create a personal balance sheet so that you know your net worth ie your assets less your liabilities – this is what I suggest and do

2 Establish how much your rate per hour costs – in other words take your income and divide by the hours you work – this gets your rate per hour but you also need to adjust this for additional work costs(e.g. commuting) which reduces your rate and increase your hours ( e.g. getting ready for work) which again reduces your rate – you will come at an actual rate per hour – so if your rate is say $10 per hour and you buy something for $100 – this means you have worked 10 hours to get the $100 object you have bought – this really quantifies your buying habits

3 Keep a track of all income and expenses – this is what I recommend – use an accounting system to automate this

4 Track your income from investments  against your expenses – the best thing is when you get to a crossover point i.e. your income from investments exceed your expenses – you are then on the road to financial freedom