Your Money or Your Life

Joe Dominguez and Vicki Robin

ISBN 0 14 01.6715 3

Begun September 1, 1997

Review begun February 11, 1998

I ordered this book as the most attractive title available under finance management at Amazon.com. It was all part of a rush to start new things before I clamped down on the starting of new things just as school was beginning for the year. We also joined a health club shortly, I started into a bunch of dental work, continued writing a book about Viannah and bought some wood to build a ham operating cabinet. But those are all different issues.

The book consists of nine chapters, each of which is an instructional step towards Financial Intelligence (or Independence, or Integrity, they're all "FI"). It was clear by the end of the first chapter that although this was an easy read, it was not going to be quick if I expected to do more than just be entertained for several evenings. As one might expect, to get any personal financial improvement out of the book, I was going to have to actually do the steps, some of which were pretty involved. I looked at the first assignment after Chapter 1, skipped to the Appendix where the whole plan is given in outline form, read that to Viann, and then we proceeded into the first assignment. That has taken four months to complete. If I didn't always insist on doing too many things at once (one of the 'other issues' above) it might have taken only one month. If I were unemployed and did nothing else, three days, excepting waiting periods for things to come by return mail.

So, I will be reviewing the book chapter by chapter, using this as a summary not only of the book, but of the answers from our own exercises and my commentary on how we carried them out.

Today is February 9, 1998 and I'm wrapping up Chapter 1, "what have we earned and what do I have to show for it?" This is "making peace with the past," a no-fault, no-blame attempt to get at where we are today and how we got there. The answer is supposed to be surprising in some way. As the first exercise, it is also supposed to be a calibration on how well, how thoroughly one might do the others. And, how well you do translates directly into how effective it all is. Just like everything else, blah blah.

The assignment was to figure out, to the last penny, everything that we owned from any source, bought, borrowed or stolen. (Yes, stolen. Virtually everyone has stolen something, even if it amounts to having found a $20 in the street and keeping it.) I did not take this "last penny" business all that literally. Every item that I ran into in our home inventory I did not rush off and instigate intensive research to get to the bottom of costs, taxes, depreciation, I just used my consumer's common sense and estimated it's value. I started with the master bedroom and had most of the shake out problems there. I went through every single item trying to decide whether to evaluate it at replacement value or garage sale value, arriving for most items somewhere between replacement value if I would replace it and insurance write-off value if I probably wouldn't. Anything that was in the box with a price still on it was counted at that price. I used the blue book for the car, CountryWide's appraisal for the house (though that is not the financed amount) and zero for the van, which is leased.

Though it took about four months to go through every item, I tried to reference it all to September 1997, when I counted the cash in my pocket and Viann's purse and the allowance bank (yes, to the last penny) and checked the market value of the Exxon stock. Anything bought since then, identifiably so, wasn't counted. This got more difficult as time drug on. Lots of things were either trashed or put in a big Good Will pile in the garage (probably worth a thousand or so) and marked T or G in the inventory field notes, still, they were counted on the way out. They were there when we started.

Though I didn't intend it this way in general, I did clean and reorganize the attic and garage in this process. The attic was dangerously cluttered, partly from Viannah's cleaning clutter.

My estimate is that the total net worth counting inventory, which is dominated by properties, is probably within 10% of correct. I do not know whether to think that my consumer estimates of value were high or low. I tried to go low when there was a question, but probably didn't always succeed. As Viann pointed out, much of what we have is really valueless. That was no doubt the point, to force us to look at our junk and clutter, struggle with an evaluation, and decide piece by piece whether it was worth the trouble to even have around. Some things without dollar value are priceless, but for non-fiscal reasons, other things with dollar values went in the trash anyway.

And then there was the matter lifetime total income. Dutifully, we sent off for our Social Security reports, but we also went through all of the tax returns we had, from current paycheck stubs in September 1997 to 1980, the earliest year for which we had any records. The two didn't agree for dates when we had dual records, the Social Security information was low. I only used it for income for years where there wasn't any other hint of what was going on. I also wrote down everything I could remember, completing the review, May 8, 1999.

I realized soon that Viann had to be in on all of this. I continued to pay the bills and keep the books, but she is responsible for every penny of her own money which she reports to me every two weeks when new money is passed out. I generate reports every four weeks just before a payday (and four weeks late so everything can get closed out) and she is responsible to use these to do the actual steps from the book. She figures out the hours spent on each expenditure and we answer the questions together (usually) whether to put +, 0, or - by them. She writes on the wall chart, with some supervision. For my part I have re-arranged some of the Quicken categories and have changed some of the reporting that is done to more align the results with what we need to see. The wall chart is not terribly consistent yet. The first few months reflected some big stock market shifts, for example, so I removed our retirement from that value.

As I read and absorbed each chapter, I then went and read it to Viann. I saw it twice and she heard it once. We finished on February 20, 1999, now all that is left is to become more and more conscious of what we are doing with money (i.e. 'generalized life energy') and to keep doing all the steps monthly as our capital investments grow. In the nearly two years since beginning this, our finances have greatly improved. We no longer struggle from month to month and we do have cash in the bank. I have Wilda working the program too and am reading a book on bond investment so as to plan properly the next steps.

For completeness, the nine steps are as follows:

1. Find starting point, total income and net worth to date.

2. Keep track of "real hourly wage" monthly and every cent that flows through.

I have a spreadsheet and Quicken for these.

3. Monthly reports.

4. Ask the three questions on all the line items in the monthly reports.

5. Keep the wall chart.

6. Be frugal.

7. Evaluate what income costs in the big picture of life.

8. Capital, cache, and the crossover point.

9. How to invest so that the crossover point actually works and is stable.

T-Bonds, learn how they work.

There is also an excellent set of references, including What Color is Your Parachute, by Bolles, another self-help book which came to me through Dr. Dave's recommendation when it became clear last December that I would be changing jobs this year. Between these two and another book, Experiencing God, which I still have going in connection with the same issues that bring me to Parachute..., I had for a time three intense self-help books going. These all being things I needed to do but none of them particularly energizing to me personally, I am now burned out and don't recommend this approach.

In January (1999) we found that the three questions were all being answered in roughly the same way on each category and that this was not leading to the desired multi-dimensional understanding of our values against fiscal reality so, for the present time, I rewrote the three questions as follows:

1. Did this exchange of hours at the grindstone result in something proportionally fulfilling, satisfying and valuable?

2. Was this exchange of hours away from home because of the grindstone an appropriate expression of our values and purpose in life?

3. When I have achieved my vision of Financial Independence, how do I expect this expenditure to change?

We then listed some things, incompletely:

Values:

Taking care of family

Community

Frugality

Rural

Participation in Church

Good children

Vision:

Sit in house on modest land creating things, absorbing information.

Go for walks or rides.

Feed the animals, tend the plants, repair things.

Do things with wife/kids.

I also wrote up

My Ideal Week:

Turn down the noise. Way down.

Mon - Sat Sunday

Sleep 9-5 daily church

get up family recreation

tune around down time

workout - sunrise

breakfast

today's task

lunch

nap

daily chores

repairs

speak with God

correspondence

planning

dinner

family time

read

get ready for bed

Today's Tasks would consist of the following sorts of things:

Finance, once per two weeks.

Major repair or upgrade, once per two weeks or less, PRN

Something for money (if needed)

Something for others

Something for self improvement

A skills project

A research project

Something for the kids

A date

A music project

A radio project

Some major event preparation

An extended-family visit

Keep up all those important relationships -- list, correspond

Take care of extended-family as needed.

Some things I'd like to do before I die: (cbd)

Quit being forced to work for money/mortgage

Get all the kids off to Christian Service, stability, responsibility

Write a book -- non biographical -- the New Antarctic (and support software)

Get the VED book revised up and published.

Do KLD and JCD similarly, maybe twice each for all three.

See some sites

Ride the bike to Alaska

Build the all-software radio.

These are all on handwritten pages in the book to which we will continue to refer as our financial and consciousness growth continues.

I can see where this book is not for everybody. Some people do not have a "frugality equivalent" for a value, for example and would consider it depriving not to be wasteful. This all drives the need for more money, more climbing, more risky investing, more life-consuming games along those lines. Parts of it will be a struggle for us too although we have appropriate poverty backgrounds to reinforce our ability to do these things and, later with higher consciousness, perhaps to decide that we are OK with enough rather than excess. There is an analogue to Experiencing God. Both require attention, subtlety and detailed concern. This truth is washed over in common evangelism and in common financial advice, particularly the need for quiet subtlety. To people who appear to be ready to pay attention and be internally honest, I could recommend this book. It would seem foolishness to those who are not ready. It was a good choice for us.

Appendix A:

And so the answers are:

How much money have we earned? $1,122,372.08.

What do we have to show for it? $ 287,788.96.

That's 25.6%. I only feel at peace in the accustomed sense that there is hope because a proactive program to do something about it is underway.

Appendix B: 2007 June 22

It took a long time but I finally realized I don’t want to be fooling with this sort of thing as a hobby. We abandoned all of this some years ago. The only legacy is a couple of T-Bonds that I keep for “diversity.” When the wall chart was written, we were shocked that it ran through 2003, when Viannah would be leaving home. We’ve been through that, now she’s working on her own money and her own life. I spent $160,000 sending her to college, much of it borrowed. We will not be retiring early.

I still pay my own bills although I’ve considered even hiring that out. To control sensitivity to spending, I need a tool which none of the software, ledgers, or checkbook registers I’ve ever seen provide. That’s what would work for me. Or to be frugal to the point of Simplexity. I’m not going to do that unless I’m forced to.

We joined a Simplicity Circle for a while on the theory that it would be helpful with this. It turned out to be just something more to be doing without much real bite. We quit when I figured out that it’s not really Simplicity. It’s been renamed “Simplexity” recently, which is an excellent description.

I now have rewritten my ideal week realistically and know what I do and don’t want to be doing with my limited time that I have any control over. The ideal week is not realized, but it is a known goal and there are components of the ideal in the weeks I have.

We’ve left the wall chart up in the bedroom as a warning against further self-help efforts.