Over the past twenty-seven months, beginning in January of
2016, I have read more financial and self-improvement advice than you could
shake a stick at.
I read advice from bloggers like myself with only about fifty Twitter followers all the way up to the top gurus in the world, like Tony Robbins,
Robert Kiyosaki, Suze Orman and David Bach.
One of the books that I purchased for a mere dollar a few
years ago, read through and bookmarked is
Your Money or Your Life by Joe
Dominguez and Vicki Robin, published twenty-six years ago in 1992.
Many things have changed since this book came out, such as
the invention of blogging like this one that you are reading, the advent of
artificial intelligence, the massive outflow of American manufacturing jobs to
low-cost overseas markets, a great deal of inflation, Recessions, the rise of
global terrorism, mass shootings at schools and public venues every few months
and so much crazy political shit that I could not begin to list it out.
However, as “they” say, the more things change, the more
things stay the same. Thus, I learned
quite a bit from this book and am glad to share some of it with you. Much of it applies to Yours Truly Money Mensch,
therefore I think that some may apply to you, as well.
Nearly anything that you could find written on FIRE and
transforming your relationship with money as written by one of hundreds of
bloggers with “Millennial” in their handle has already been written many times
before. This book was one of the earlier
ones to write about achieving financial independence and much of it hit home as
I read it.
The following are some things that I found noteworthy.
Street Level View
Dominguez illustrates the broader perspective of money by
describing it in four ever-higher perspectives.
I, myself, have grappled and struggled with viewing money from above
what he calls “the street-level perspective,” i.e., you make money, you pay
your bills, you buy some things, you worry about getting more money and so on
and so forth.
Dominguez refers to this as the everyday, “pedestrian”
perspective of money. It has to do not
only with physical pieces of paper or, to bring it into current terms, numbers
on your computer screen, but also with all of our financial transactions from
cradle to grave.
This boggles my mind and, in my case, would range all the
way from my zaide giving me a quarter in the early seventies to however many
hundreds of thousands or more I bequest to my survivors.
It includes our first allowance, our efforts to get our
first job, our efforts to obtain better and higher paying jobs. Here in 2018, it includes our efforts to
side-hustle some extra shekels, like I do here by contributing financial
thoughts in cyberspace, attracting more and more readers and hoping that some
of you click on those lovely ads on the top of the screen.
Thoughts like these and thoughts like the ones in your head
right now can be typed into the blogosphere, collated into eBooks and
eventually purchased by readers unknown to you while you sleep. Just last month, I sold one whole eBook on
Amazon, netting me almost enough for a coffee at Dunkin' Donuts, or nearly half of one at Starbucks.
From the street-level view, things are not so simple. The things that we buy, pay for, invest in
throughout the course of our lives is myriad and nearly overwhelming. Even a regular ol’ middle class fellow like me has bought and sold stock
options, some of which made me some money and others that expired worthless.
I would not even want to attempt a list of things that I have
paid for in the past, pay for currently and will pay for in the future. Overall, it has taken up most of what I have
earned so far and will continue to do so, with a bit invested here and a little
bit more invested there.
From the simplest information on how much, if anything, your
parents paid in allowance all the way to the most complex financial
derivatives, like the times that I sold call options on the volatility index or
purchased options on the triple-leveraged gold miners index, this street-level
perspective represents the entire range of financial transactions that we
encounter in our lives.
Most books, articles and posts about money educate us on how
to navigate this street level more skillfully and more profitably. In that sense, my writing is no different
than what you may read with any blogger or writer, with the exception that I
have yet to make a significant amount of income from my online endeavors. Perhaps about two thousand dollars to date,
but I hope and expect to increase that amount substantially in the coming
years.
Most, but not all, of us financial bloggers adopt the attitude
that I have, that more is better. I seek
more income, a better home, a better vehicle, more vacations, a better TV,
better smart phones, better musical instruments for my children, better
clothes. We want more and better, like
you do and most everyone else does.
I certainly do respect and admire the gurus of frugality,
who can squeeze blood out of a turnip and live well for a month or more on what
my family spends in a week. While I have
been on that treadmill and had the mindset that more is better for many years,
I cannot report here that it has been a boon for me.
Like Dominguez wrote, “Trying to solve our financial
problems solely at this physical level is like manipulating the pieces on a
game board without getting a bird’s-eye view of the game itself.”
You Might As Well
Face It, You’re Addicted to Money
Typically, being an addict is something that one would frown
upon. You may think of addicts as
substance abusers, degenerate gamblers and the like, but aren’t many of us
addicted to money?
Dominguez contends that it seems odd to think of money as a
socially acceptable addiction. Since
everybody wants money, and we want it in abundance, it cannot be an
addiction. Or can it? What else would you call a substance or
activity that we strive for compulsively even though it does not bring
fulfillment, he asks.
The thought of not having enough consumes us with fear. We need more of it as an intense, chronic and
essential part of our self-worth. I know
that those notions apply to me.
Money goes beyond my rational concern, consumes my daydreams
and my night dreams as well. It has
become more important to me than some of my relationships. Worse, I am pretty okay with that.
What else would you call something that the acquiring of
becomes an end in itself? Something that
you feel we need and hoard, building up unreasonably large supplies of in order
to feel secure?
You know the answer.
Greed is considered an acceptable part of it. For many people, the acquisition of
additional money is viewed as paramount and “just business,” even if it comes
at the expense of others. Our society,
with its enormously skewed distribution of wealth, rewards greed over need – so
much so that it seems wrong to many to share some of the wealth with those less
fortunate than we are.
As these thoughts apply to myself, I must admit to being an
addict when it comes to money. I even
write these words with the thought of generating additional income at some
future time.
Purpose
Surely, your and my purpose in life must be more than just
generating income in order to pay our bills.
Dominguez asks the reader what we have always wanted to do
but have not done yet and what brings us the most fulfillment. Given enough time, I could write a very long book answering
those two questions.
Do I feel like I am fulfilling my purpose in life? In some aspects, yes, but in most aspects not
even close.
After you think about your purpose in life for a bit,
consider whether it relates to how you now spend your time. It may not seem real clear to you just yet,
just like it does not to me.
If you are already living out my dream, a dream where what
you think and write generates a high enough income that you can provide for you
and yours and live the type of lifestyle that I envy, then kudos to you.
If you are more like me and a majority of others in the U.S.
and throughout the world, you do what you need to do to get by and do the best
you can financially and in every aspect of your life. It just so happens that, in my humble
opinion, many of the other things that people want to do and achieve is closely
tied to money. Want a better home? Want to provide great educations for your
children? Want attend concerts or
sporting events? All of the above?
There is one thing that could make the above come true, and
you know what it is.
Even if you crave a simpler, less expensive lifestyle, that,
too, can be achieved through an outlay of money. Even shacks in the woods, seeds for planting
and chickens for your eggs cost money.
Dominguez contends that there is another, more accurate,
measure of whether you are living your purpose – one that goes beyond material
success and beyond rewards and recognition.
It is the answer to the question of “Is this expenditure of life energy
in alignment with my values?”
He urges the reader to ask this of ourselves faithfully
every month for every category, which he writes will nudge us toward clarifying
our values, living in alignment with our stated purpose and defining further
our true purpose in this life that God has given us.
I may be middle aged and far less successful than I would
have thought I would become had you asked me twenty years ago, but reading this
again this month and writing it down is a great reminder. Along with my prayer for us this month, I
will use this post as another reinforcement to pursue my purposes beyond just
what I do at work and for my family on a day-to-day basis.
If you have read this far in the post, I thank you now for
helping me fulfill part of my purpose of improving the lives and finances of
others.
Reconnecting and Having Enough
Dominguez writes about reconnecting with our communities, friends and loved ones as being more important than the mindless accumulation of more money. He goes what is way back in the time machine for some of you readers to a August 1989 article in Fortune magazine (which I subscribe to now) by Ronald Henkoff regarding a survey of working Americans, citing that seventy-five percent of them would like to see the U.S. return to a simpler lifestyle, with less emphasis on material success. Only ten percent polled thought that earning a lot of money was an indicator of success, while sixty-two percent said that a happy family life was the most important status symbol.
Dominguez writes that it seems that the primary "thing" that people have sacrificed in "going for the gold" is their relationships with other people. He further questions that we will ever feel like we "have enough," claiming that the notion has been with us as a species for thousands of years, yet has never been fulfilled.
He closes this section by citing two proverbs, a Japanese saying that "The gods only laugh when people ask them for money" and a Chinese saying that "He who knows he has enough is rich."
Again, though many things have changed in the twenty-six years since this book was published, much of the information and recommendations found within apply as easily today or decades from now as they did back then.
The Pleasures of Frugality
Dominguez expounds at length on the practice of frugality. Having retired around the age of thirty, himself, after accumulating about $100,000 by 1969, or the equivalent of about seven hundred thousand by today's standards, he never accepted money for any of his work for the rest of his life.
He passed away soon after Your Money or Your Life was published in 1997 and from his obituary in the New York Times: A warm, comical man, Mr. Dominguez acted as a living example of the frugality he espoused. After growing up in Harlem, he went on to earn a plum salary as a stock analyst on Wall Street, but retired at age thirty-one with a nest egg of about $100,000. For the rest of his life, he lived on the interest, about $6,000 a year. He avoided buying on credit, he bargain-hunted and he bought only what he truly needed. He devoted his time to the foundation that he created and public service.
As a side note, I want to add that, unlike Yours Truly and perhaps yourself, he did not have any children. I add that because I, too, could be extremely frugal if I was on my own. I would probably be so frugal as to be considered a hermit and possibly mentally ill by how little I would purchase. But that is not the case. My family spends in excess of ten thousand per month, which amounts to every dollar that I earn and then some. Just saying, you cannot compare apples to oranges when it comes to frugality. Had Dominguez been a loving and giving father, I doubt that he could have lived off of $6,000 per year, even in the sixties.
Speaking of oranges, he notes that frugal people get value from everything - a dandelion or a bouquet of roses, a single strawberry or a gourmet meal. "A hedonist," like he would consider me, "might consume the juice of five oranges as a prelude to a pancake breakfast. A frugal person, on the other hand, might relish eating a single orange, enjoying the color and texture of the whole fruit, the smell and the light spray that comes as you begin to peel it, the translucence of each section, the flood of flavor that pours out as a section bursts over the tongue...and the thrift of saving the peels for baking."
To be frugal means to have a high joy-to-stuff ratio. If you get one unit of joy for each material possession, that's frugal. But if you need ten possessions to even begin registering on the joy meter, you've missed the point of being alive.
Like I wrote, he expounds at length on the topic and many years before many bloggers and tweeters wrote the same thing, some of whom have the word "Millennial" in their handle and make more than $6,000 every single month writing the same things that Dominguez wrote way back when. Dear Reader, if you consider yourself frugal or aspire to be more so, like I do, this is a must-read.
After writing that bit, I really must finish this post because I am seriously craving some OJ.
One Sure Way Before Ten Sure Ways
I may just use Dominguez's and Robins's Step Six for eleven future posts. Step Six in their method describes one sure way to save money, which I basically have accepted, which is to stop trying to impress other people. Honestly, I do not really care much what people think of my car, my phone, my clothes (well, maybe my clothes), my watches, my briefcases and what not.
Because I have accomplished saving over one hundred thousand for each of my two children for their college savings accounts on what has been a decidedly middle class salary, I know in my mind that I could have purchased much more outward signs of success had I saved, for example, "only" fifty thousand per child for college. To be honest, I still would not have purchased anything more extravagant than I have, but my wife and I would each have fifty grand more in our retirement accounts.
Dominguez writes that just because conspicuous consumption is a cross-cultural and historic aberration of the human species does not mean that you and I have to fall prey to it. If we stop trying to impress other people we will save thousands and perhaps even millions of dollars.
Think how impressed people will be with how much you have saved or when you retire ten years before they do due to your prolific frugality.
Step Six goes on to elaborate on ten more sure ways to save money, which are all tried and true and as relevant today as they were when written. I will elaborate on these in future posts.
Reconnecting and Having Enough
Dominguez writes about reconnecting with our communities, friends and loved ones as being more important than the mindless accumulation of more money. He goes what is way back in the time machine for some of you readers to a August 1989 article in Fortune magazine (which I subscribe to now) by Ronald Henkoff regarding a survey of working Americans, citing that seventy-five percent of them would like to see the U.S. return to a simpler lifestyle, with less emphasis on material success. Only ten percent polled thought that earning a lot of money was an indicator of success, while sixty-two percent said that a happy family life was the most important status symbol.
Dominguez writes that it seems that the primary "thing" that people have sacrificed in "going for the gold" is their relationships with other people. He further questions that we will ever feel like we "have enough," claiming that the notion has been with us as a species for thousands of years, yet has never been fulfilled.
He closes this section by citing two proverbs, a Japanese saying that "The gods only laugh when people ask them for money" and a Chinese saying that "He who knows he has enough is rich."
Again, though many things have changed in the twenty-six years since this book was published, much of the information and recommendations found within apply as easily today or decades from now as they did back then.
The Pleasures of Frugality
He passed away soon after Your Money or Your Life was published in 1997 and from his obituary in the New York Times: A warm, comical man, Mr. Dominguez acted as a living example of the frugality he espoused. After growing up in Harlem, he went on to earn a plum salary as a stock analyst on Wall Street, but retired at age thirty-one with a nest egg of about $100,000. For the rest of his life, he lived on the interest, about $6,000 a year. He avoided buying on credit, he bargain-hunted and he bought only what he truly needed. He devoted his time to the foundation that he created and public service.
As a side note, I want to add that, unlike Yours Truly and perhaps yourself, he did not have any children. I add that because I, too, could be extremely frugal if I was on my own. I would probably be so frugal as to be considered a hermit and possibly mentally ill by how little I would purchase. But that is not the case. My family spends in excess of ten thousand per month, which amounts to every dollar that I earn and then some. Just saying, you cannot compare apples to oranges when it comes to frugality. Had Dominguez been a loving and giving father, I doubt that he could have lived off of $6,000 per year, even in the sixties.
Speaking of oranges, he notes that frugal people get value from everything - a dandelion or a bouquet of roses, a single strawberry or a gourmet meal. "A hedonist," like he would consider me, "might consume the juice of five oranges as a prelude to a pancake breakfast. A frugal person, on the other hand, might relish eating a single orange, enjoying the color and texture of the whole fruit, the smell and the light spray that comes as you begin to peel it, the translucence of each section, the flood of flavor that pours out as a section bursts over the tongue...and the thrift of saving the peels for baking."
To be frugal means to have a high joy-to-stuff ratio. If you get one unit of joy for each material possession, that's frugal. But if you need ten possessions to even begin registering on the joy meter, you've missed the point of being alive.
Like I wrote, he expounds at length on the topic and many years before many bloggers and tweeters wrote the same thing, some of whom have the word "Millennial" in their handle and make more than $6,000 every single month writing the same things that Dominguez wrote way back when. Dear Reader, if you consider yourself frugal or aspire to be more so, like I do, this is a must-read.
After writing that bit, I really must finish this post because I am seriously craving some OJ.
One Sure Way Before Ten Sure Ways
I may just use Dominguez's and Robins's Step Six for eleven future posts. Step Six in their method describes one sure way to save money, which I basically have accepted, which is to stop trying to impress other people. Honestly, I do not really care much what people think of my car, my phone, my clothes (well, maybe my clothes), my watches, my briefcases and what not.
Because I have accomplished saving over one hundred thousand for each of my two children for their college savings accounts on what has been a decidedly middle class salary, I know in my mind that I could have purchased much more outward signs of success had I saved, for example, "only" fifty thousand per child for college. To be honest, I still would not have purchased anything more extravagant than I have, but my wife and I would each have fifty grand more in our retirement accounts.
Dominguez writes that just because conspicuous consumption is a cross-cultural and historic aberration of the human species does not mean that you and I have to fall prey to it. If we stop trying to impress other people we will save thousands and perhaps even millions of dollars.
Think how impressed people will be with how much you have saved or when you retire ten years before they do due to your prolific frugality.
Step Six goes on to elaborate on ten more sure ways to save money, which are all tried and true and as relevant today as they were when written. I will elaborate on these in future posts.
- Don't go shopping
- Live within your means
- Take care of what you havbe
- Wear it out
- Do it yourself
- Anticipate your needs
- Research value, quality, durability and multiple use
- Get it for less
- Buy it used
- Follow the nine steps of this program
After that, he goes on to list 101 sure fire ways to save money, getting into the nitty gritty of frugality, from paying off your credit cards to bicycling instead of driving to living in a used mobile home on a piece of land that you buy. Like I said, hard-core frugality!
I cannot write enough good things about this book. If you value your time and money and would like to become more frugal, like I would, it is a must read. I purchased it for a dollar at a book sale a few years ago, but I have spent even less on books of late, preferring to check them out of my local library.
If you have neither the time nor the inclination or the book is not available at your local library, may I suggest that you purchase it through Amazon at this handy-dandy link that I have provided?
It will be one of the best dollars that you ever spend because if you are frugal at all, you will purchase one of the used one dollar copies. You would be crazy to spend the money for a new one, or at least Joe Dominguez, Vicki Robin and the Money Mensch would think so.
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