Your Money or Your Life

Summary Report Your Money or Your Life

 Ryan Templet and Edmund Allen Jr.

Your Money or Your Life is not a normal "Economics for Dummies" novel that suggests a pattern of particular expenditures in order to better financial standing, but a series of steps to transform the way a person views and understands the concept of money. The main theme portrayed by the author in the novel is that your financial life is not separate from the rest of your life. In order to better your life, you must integrate all individual aspects of your life. The authors point out that the biggest issue of financial difficulties is that people inherently stick to the "old road map." This idea can be described as the pattern of thinking we have learned over the course of our lives by our own experiences and by others'. The problem with the "old road map" is that we feel we can't stray from it to try new things. Our society has become too dependent on material possession and the need to spend money; weakening our relationship with money.

The goal of this nine step program is to teach individuals how to utilize financially independent thinking by introducing a "new road map." Financial thinking is the process of examining basic, unconscious assumptions created by your old road map. Financial thinking produces financial intelligence, integrity, and independence. Financial intelligence is the ability to objectively observe your assumptions and emotions about money. This is the idea of judging if it is really worth it to spend money on something.  The ability of knowing what amounts of money and material goods are needed to keep you at the peak of fulfillment describes financial integrity. Financial independence is defined as  having enough income to serve your basic needs and comforts that comes from a source other than paid employment. By following this program diligently, one should be able to achieve all aspects of financial thinking. The nine steps are as follows:

Step 1: Making Peace with the Past - Two Parts

1: You need to find out how much money you have earned in your entire life by searching through statements of earnings, tax returns, and other income documents. This will allow you to figure out how much money you have brought in throughout your entire life. It will help to instill confidence in your money-making abilities.

2: Find your net worth by creating a balance sheet of all assets and liabilities. This will you give you the opportunity to figure out what you actually own as well as see if you own any material possessions that you could sell for profit.

Step 2: Being in the Present- Tracking Your Life Energy- Two Parts

1: Life energy is the amount of time that we have to live. We expend life energy on everything we decide to do. By working, we are trading life energy for money. Decide how much you are trading your life energy for by calculating your weekly income, while deducting your weekly costs of living. This step will show you how much of your life energy your are dedicating to work and what you get out of it, known as your "real hourly wage."

2: Keep track of all money that comes in or leaves your life. This will benefit you by showing what you are trading your earnings for.

Step 3: Where is it All Going?

Create a table of all income and expenses, or a balance sheet. Convert "dollars spent" to "hours of life energy", using your real hourly wage. This is known as your monthly tabulation and will benefit you as it displays how you are actually living as well as to help plan for the rest of the program.

Step 4: Three Questions that will Transform Your Life

                Based on your monthly tabulation, ask the following three questions.

1.       Did I receive fulfillment, satisfaction and value in proportion to life energy spent?

2.       Is this expenditure of life energy in alignment with my values and life purpose?

3.       How might this expenditure change if I didn't have to work for a living?

It is important to answer these questions honestly as this will help you to decide what is "enough" for you.

Step 5: Making Life Energy Visible

Plot your total monthly income and expenses from your monthly tabulation on a wall chart where you will see it every day. This will show you the trend in your finances and allow you to see progress over time as you begin to transform you relationship with money.

Step 6: Valuing Your Life Energy- Minimizing Spending

“Learn and practice intelligent use of your life energy (money) which will result in lowering your expenses and increasing your savings.” When minimizing your spending it is not a matter of deviating your total income out correctly. It is not a numerical value. But rather it is an issue of perspective. For example, a person who has ten dresses and says they have nothing to wear is less frugal to her possessions and wants more. But a person who has ten dresses and has had valuable time wearing them doesn’t possess the need to buy more, i.e. more frugal.  Ask the three questions from step four every month.

Step 7: Valuing Your Life Energy- Maximizing Income

Money is the result of what you are trading your life energy for. Value your life energy time you put in and not the money that as a result. To maximize your income, you must recognize the value of time. What do you spend your time doing even when not at work? Are you making positive investments that will contribute to a positive income or negative? You only have an X amount of hours left in your life at certain ages. Are you wasting that time doing negatively contributing tasks? Make a checklist before you spend money that is the result of your life energy spent. Truly ponder if you are indeed making a worthy purchase.

Step 8: Capital and the Cross Over Point

·         Net income money after expenses are paid are not to be splurged. That amount of money is called savings.

·         Accumulate capital. Capital is the money earned as profit.

·         Put capital in interest bearing instruments, such as the bank. Investment is the conversion of capital into another form of wealth other than cash.

·         Receive income from your capital, separate from your job income, to the point that the income you receive from capital is equal to your total monthly expenses. This point is called the cross over point.

·         From this point on, all income you receive from your job is net worth.

·         Capital   X   with a long term interest rate /12 months=  monthly investment income

Step 9: Managing Your Finances

“The final step to financial independence: become knowledgeable and sophisticated about long term income-producing investments”. This step in about empowering yourself financially via knowledge. To know how to weed out the middle man, avoid vulgar brokers, financial planners and sales person. You must recognize these dangers and know the precautious steps to take in order avoid these financial negatives.

With Your Money Your Life, the goal was not to try to mold the target audience on numerical values in order to minimize expenses and maximize income. The goal was an inner self change. To mold the readers mind of thinking about money. It was to change the perspective of the target audience. If your perspective and values for certain objects change, then the need to purchase those objects will change with it. Your values will change as you increase in age, it is important to note them, recognize and reevaluate them over and over again to maintain a strong grip on them. Financial independence is achieved through the collection of mind body and spirit on purchases.

Book Questions

1.       What is the overall goal of this nine-step program?

2.       What is financial independent thinking?

3.       What three aspects make up financial thinking?

4.       What is the most important attribute of a person needed to be successful in this program?

5.       Why is it important your real hourly wage?

6.       How do you calculate your net worth?

7.       How can you take the concept of being frugal or not, and connect them to personal situations in your life that causes for financial decisions?

8.       When you are deviating your expenses, does value and perspective play a role on potential to purchase items?

9.       In your opinion, is the value of time and money interchangeable when it comes to being efficient?

10.   Can you be a time warrior towards the goal financial independency and mental awareness if the task you complete to do such are conflicts of each other?

11.   Which capital investments are more suitable to yourself in partnership to a particular career?

12.   Can being knowledgeable of financial mishaps alone gain you financial independency? Why or why not?

Interviews (Part 1)

1.       Do you feel that you handle your finances well? Why or why not?

2.       What is something that you feel you spend too much money on?

3.       What is one way that you could improve your financial spending?

The first individual that we interviewed was David, a 22 year old from England who is studying civil engineering at the university. David told us that he felt that he has improved greatly in his time at the university because he has learned how to better spend his money. He also told us that he feels he spends too much money on food, a problem many college males endure. David said that he could improve his financial spending by giving himself a budget of how much he could spend on certain things.

We also interviewed a girl named Ana at the university, who studies fine arts. When asked, Ana told us that she knows she does not manage her money well and needs to be smarter about her spending. She said that spends too much money on having fun. For example, things like eating out with friends and going to clubs. Ana also told us that she could improve her financial spending by only allowing herself to spend a certain amount of money on having fun as well as learning to say no to her friends when she does not have the money to spend.

Interviews (Part 2)

1.       What values do you make on purchases here at Gandia beach?

2.       How do you spend your time in the case of gaining income outside of your job?

3.       What kind of financial do’s and don’ts are you knowledgeable in?

Thirdly we interviewed a local resident here at Gandia beach whose name was Baudelio who was 29 year old family man. Through what seemed like hours of miss communication I finally received a response to the prior three questions. The first one he claimed that he was not a tourist here, and was not young. So he did not go to the beach or bars a lot. His money was put forth for his family. That’s what took precedence over all else. For the second question he claimed that outside of his job has a restaurant server, he also sold some of his oranges he grew in some lands that he owns. The lastly he claimed that he knew little of financial knowledge like brokers and etc… But did know how to stay from tourist purchases and things that only gave temporary enjoyment

Lastly we interviewed Yaiza who was a 22 year old student back in Barcelona. She was here in Gandia to visit her cousin for a bit a then travel back home.  Her response to the first question was that she indeed like to go out and have a good time. So the way she looked was crucial to her expenses. A lot of money put towards looking and feeling the part. So hair products, nails, clothes, and etc… She then explained to me that she had no other income outside of her part time job back in Barcelona. She sometimes asked her parents for money but that was the extent of that. And lastly she told me that being knowledgeable in financial terms was not her best things. She told me much learning was to be done because she don’t know anything at all. Either that or she couldn’t understand what I was asking. 

Survey Link

http://www.wife.org/your-money-style-quiz.htm