In this post I wanted to review a book that utterly changed my life for the better and redirected its course more so than any other book other than the Bible. The book in question is called Your Money or Your Life and I read it in 1995 when I was stationed in Germany. It is a personal finance book, but don’t let it fool you. It’s much less about money than it is about intentional choices and decisions you make in your daily life and how planning for what you really want as opposed to just accepting what everyone else tells you you want is the key to having the life of your dreams.
So, let’s jump in and see how to change your life for the better.….
A Gift in the Mail
I remember one Saturday while stationed in Germany as an enlisted soldier in the US Army I discovered a note in my P.O. Box that stated I had a package. I was a little surprised since I was not expecting anything.
I quickly handed the slip over to the guy behind the counter and took my nondescript package to my barrack’s room. After opening it, I held this little red and yellow book in my hand that said, “Your Money or Your Life” by Joe Dominquez.
Just a little background, I’d hit my two year mark of a four year enlistment by this point and it had not turned out at all as I had hoped (or been promised). It seems the military (and later I would discover the entirety of the United States Government) has really no interest in ethical standards or keeping the promises it makes. I was struggling to stay above water in a sewer, with commanders that I had no respect for and a system in which seemed hell bent on breaking me.
Because of the childhood I had, I had been churned into the world with no real practical skills. I’d watched my family especially in my teen years struggle under massive debts simply so they could afford a lifestyle that was above their means. I instinctively took on their tendency toward emotional spending for myself and by the time I was sitting in that little room with that book in my hand I was thousands of dollars in debt. I owed the military money. I owed several other creditors. I had a car I couldn’t afford and really had no use for. I even had people calling my commander to complain about my delinquency.
Needless to say, I was the perfect candidate for that little books if there ever was one. Later I found out that the book had been sent to me as a gift by my sibling who, despite their own long and still continuing history of indebtedness and near insolvency, thought I should make some changes in my financial life.
So, with really nothing better to do on any given Saturday while serving out my indentured servitude, I lay back in my armchair and started reading.
Finding Your Actual Wage
The book really started off by framing my situation. I was struggling emotionally and psychologically because I was locked into a system that, despite everyone telling me it would be what I wanted, it turned out most if not every one of my advisors (when I was 17) were either liars or ignorant of the reality of military life.
I had spent the first two years of my military service wrapped up in a pyramid scheme, desperate to make enough money so as to purchase my own freedom. Once I landed in Germany I discovered the hard sober truth of the company I was entangled with and sought a painful exit.
So, at that point, I was stuck. I had 2 years remaining on my enlistment. I had maybe $13,000 in debt altogether, maybe more. I was making some money (I remember paychecks of $583 twice a month for some reason, but I’m not certain how accurate that is). Very much like today, I had money coming in, but back then I just didn’t know how to spend it, or better yet, keep my emotions in check and keep myself from spending money as a reaction to psychological and emotional states.
But, this book was much different than others I would later read. Rather than trying to convince me to get a part time job on the side, make more money, or find a hussle, Your Money or Your Life broke down for me the reality of how much I was actually making when everything was factored in.
If I make $500 a month that is not the true total of what I am able to use. There is first taxes the United States steals every month from my paycheck. Then there is the cost of my transportation to get back and forth to work. Then there are clothes I need to buy. Lunches I need to buy. There is also the stress associated with any particular job that requires some sort of reduction which typically cost some kind of money. All in probably half of my gross income is gone at the end of the day so my true living wage is $250 instead of $500. This was a shocking revelation for me, despite having no expenses at the time other than what I consumed. Food. Clothes. Entertainment. But for me, personally, food was the biggest item on the list. This was because food was a means of stress reduction for me, and with the ton and a half of stress while in the military I was having to deal with a ton and a half of food was used to try and soothe the nerves.
The next thing explained in the book was the concept and illness suffered by many people in western contries: overconsumption. It was true. I was buying things I didn’t need and buying too much of it. I didn’t need a car. I also didn’t need to spend $300 + on food every month when the military provided 3 meals a day for free.
But how often do we buy things for other reasons besides utility and necessity? I watch people around me constantly buying this kind of toy or that kind of gadget. People buy RVs for tens of thousands of dollars and they typically sit in storage or in the driveway and rot. Or people spend insane amounts of money on entertainment or throw lavish parties to impress their neighbors, or insist on having the newest model car of their choice because their cousin or brother or inlays got their new car last month. It is a vicious circle to spend money and there never seems to be a reason to stop. It would be a hard lesson for me to learn and it would take me several years to learn it. But I finally did.
Overall, as I sat there in my barrack’s room reading this book, the plan started to come together. I first needed to define what it was I wanted in life, what I wanted to achieve – truly. Then I needed to take stalk of how much money I actually made, and then how much I was spending and how much I could realistically reduce so I could then save the difference, and invest passively. Once the returns on the passive investment matched my reduced income (or the income needs I would actually need once I achieved my goals) that was called the “Cross-Over Point.” At that point I could keep working, could retire, or do whatever it was that would make me the most fulfilled.
After reading that book I jumped into action. I stopped spending frivolously. I spent the rest of my enlistment getting out of debt, building a saving account, and really trying to work out what it was I wanted out of life.
To be honest, though, in the end I still struggled. I still struggled with eating food as a stress reliever. I struggled with putting faith and trust in people only to have them betray me at some point along the way. I tried to find my place in a religion that had no interest in me or what I believed. Even a marriage failed, despite the financial process that we made (going from minimum wage on well-fair to a $60,000 year business).
I did manage to get out of debt and stay out of debt within five years. I also increased my income through informal training and self-study, to the point that I make more now than my father ever did during his working career. I’ve also been able to psychologically adopt a minimalist mindset concerning overconsumption and spending, to the point that I now have several years of expenses saved as a cushion in case I ever lose my current employment.
But, as for the investments and reaching a cross over point, I was not only skeptical but things in the world seemed to change significantly from the time I read the book to today.
1. There is no safety in government bonds and especially in the United States Government.
2. There is an aggressive authoritarian movement within the US government and culture to tear down society and plunge into socialism, meaning inflation is now a real and present danger (before this inflation during my entire life was non-existent).
3. I never could seem to make enough money to save enough money that would be required to actually retire. I estimated it would cost me $100,000 in 30 year treasury bonds at 4% (which was high, now they’re much lower still) to provide $500 / month of income. With inflation, this would be destroyed.
So, I struggled through the last 20 years and finally stumbled onto what I call a hybrid plan that now has a great deal of promise for me, and is actually being used as we speak.
A Hybrid Option
As I previously stated, I never reached a cross-over point because the money required to be saved was too great, the risks were too many, and I was struggling with marriage relationships, lack of employment opportunities (there is a cost of these), and a relationship with the church.
But, about five years ago, I found myself divorced, and a new transplant to the Pacific Northwest, working in a medical office. I had purchased a house in a tiny coastal town, had also purchased a lake property I named the Eden Property, where I hoped I could one day develop into a hermitage.
My plan was set. I wanted to eventually get to the point where I:
1. Had about 5 years of expenses in liquid savings.
2. Reduced my expenses to the lowest point that still provided a realistic level of comfort.
3. Use my real estate holdings to finance the remainder of my expenses between (whatever point I stopped working) to age 62 when social security kicked in, which was estimated to be about $800 / month.
I had quickly paid off both properties within about five years. Interestingly, because of inflation and an insane housing market, my house in town is now listed as worth double what I paid for it. Of course, I would never get that out of it since it’s in terrible shape and needs remodeling. But, the higher the price goes the easier it will be for me to pull out of it what I put into it, since I bought when the market was extremely low. Even at cost (which I think I could still get $10,000 to $12,000 over my investment) it will fund my retirement for the time I need.
This plan, of course, is only possible given two realities: 1. I am older (46) and have only 17 years to fund. 2. I’m using social security to fund years from 62-death.
If social security fails at some point my plan breaks. If inflation becomes permanent or turns into hyperinflation and social security does not keep pace or my savings do not last until 62, then my plan breaks.
To hedge against these two risks, I plan to work another five years (or for as long as my current employer allows). My current income is double what I need today for expenses and triple what I would need if I retired at the Eden Property. This allows me there positives: 1. I have a high quality of life (work only 2 days / week with 5 days off) 2. I live on half of my income and save the other half, putting a years income in savings every year. 3. I’m technically already living my dream while working and still saving.
But, the biggest part of the hybrid plan comes from YMOYL and that is in it’s analysis and exploration of value of time vs value of money and the cure to overconsumption. I discovered later this is best expressed by Thoreau in his book Walden. He states there “it’s no that we study how to make baskets that are worth men’s while to buy them, but to study, rather, how to avoid the necessity of selling those baskets in the first place.”
I would say above any other lesson I’ve taken from the book is a minimalist mindset and lifestyle. Living on $500 / month is simply an impossibility for many if not most people. Yet I can do it while still enjoying some of the greatest comforts imaginable. Those who insist $500 is way to little, they go off each weekday and slave for 8 or 10 or 12 hours each day for their employer masters while I spend those five days doing what I like in leisure and comfort, wanting for no necessity, and having most amenities.
Technological advancements has afforded me seemingly unlimited access to entertainment for pennies a day. Transportation affords me the mobility incomprehensible just 50 years ago. Yet, the mindset in which I strive to learn to live without something rather than learn how to afford it has allowed me the freedom to neither desire travel or the most desirable or newest technological bobble brought to market at any given day after Turkey Day.
I think this is the secret of YMOYL. It’s not the saving of money and hitting the cross over point (I’m not entirely sure this is a reasonable goal for most in this world today). It’s the minimal mindset. It is the cure to overconsumption that is the root of illness and unhappiness and discontentment.
My personal plan currently includes
1. Moving outside of the current system and remaining independent of the system being developed.
2. Invest in skillsets and abilities rather than stuff or money.
3. Relocate so I can survive independently (grow/procure own food, etc).
4. Get right with God (this is the aim of everything else).
In the end, I can attest, Your Money or Your Life changed me from the inside out. It gave me a new direction, a new focus. It transformed my relationship to money, to things, and ultimately to people (and with this I’ve found less is more). The sections on investment are somewhat obsolete (even despite the revision in later editions) though such might still theoretically be possible, though risks are many.
I would highly recommend this book, though, for the sections on overconsumption alone, along with the writings of Thoreau.
Until my next review….
Please consider supporting my writing, my unschooled studies, and my hermitic lifestyle by purchasing one or more of my books. I’m not supported by academia or have a lucrative corporate job – I’m just a mystical modern-day hermit trying to live out the life I believe God has called me to. So, any support you choose to provide is GREATLY appreciated.
Excerpt from Sacred the Circle:
There was a knock at the door.
Campbell got up from the chair and crossed the small distance so he could open it.
A young man stood in the doorway, probably in his early twenties.
Campbell could tell he looked a little disheveled.
He had deep rings around his eyes, as if he hadn’t been sleeping much, and he kept checking the hallway in both directions, as if half expecting someone to be stalking him.
“Hey,” Campbell said.
The kid was stumbling over his own words.
Campbell leaned out into the hallway, checking to make sure there was no one else listening.
This guy wasn’t the only one who was becoming paranoid.
There were two students hanging out at the foyer, near the stairs, but the rest of the floor was clear.
“I’m sorry,” the kid said. “Must be the wrong place. I’m mistaken.”
He started to leave.
“Wait,” Campbell said, putting a hand out. “Hold on a second.”
The kid paused.
“What’s your name?”
He fidgeted with his collar.
“I know it sounds crazy, but – ”
“You’re not crazy, Lloyd,” Campbell said, grinning.
“Did you – ? ”
The kid paused, as if unsure if he should continue.
He looked back toward the stairs, then at Campbell.
“Did you know I was coming?” he finally asked. “I mean, that’s not possible, but, were you expecting me?”
Campbell chuckled to himself.
“What’s so funny?” Lloyd asked.
“Well – ”
Campbell pushed the door open all the way so Lloyd could see inside his dorm room.
The entire room was full of them, students, non-students, ranging from what looked like eighteen to even a few middle-aged men, scattered about the room, sitting wherever they could find a comfortable spot.
Lloyd’s mouth dropped open.
“I wasn’t really expecting them, either,” Campbell said. “So, I hope you don’t hold it against me when I tell you, I had no idea you’d be showing up here. Do you care to join us, anyway?”
Buy my book Sacred the Circle to find out what these men are hearing from the supernatural realm. Will they answer the questions tugging at them? What are the visions saying? Who are the Multitude? Why are all these men being brought together? By whom? And why, above all else, are they being convicted….to pray?
But, trust me when I say, you’ll be white knuckling this one with every turn of the page!