Your Money Or Your Life (YMOYL) Month #1

I’ve talked about this book a few times, but now you’ll get to watch it work it’s magic (or tragically fail I suppose.) The books goal is to turn a person into a FIer (Financially Independent, Intelligent, and to have Financial Integrity.)

Financial Independence is probably what most people are interested in. What that means is you no longer have to rely on a job to cover your basic expenses. When you reach FI, you now have control of your time so you can do the things you love and all that good stuff.

How do you make the dream of Financial Independence a reality? I’m not sure, but I’m going to try to find out, and you can watch me.

The book goes through 9 steps to get you Financially Independent. I’m going to briefly go through them before I post my data from last month.

Step 1: Making Peace with the Past

In this step you try to estimate how much money you’ve made in your life, and then figure out your net worth to see what you have to show for it. It’s suppose to be an eye opener of sorts. You only need to do this step once.

Step 2: Being in the Present – Tracking Your Life Energy

In this step you find out about the concept of “life energy.” What you do to figure that out is add all the travel time, unwinding time, and any other extra time to your working hours. Then you subtract any extra expenses you have from work (gas, food, clothes, etc.) You take the new hour amount (for the week) and new salary for the week, do the math (Salary/hours) and find out your new hourly wage. What you will have is your real hourly wage (mine went from 650 to 400/hour :().

The second part of step 2 is tracking every dollar that comes in and goes out of your life. It’s taken me more than half a year to master this step. I’ve started and stopped it 3 times before this current time.

Step 3: Where is it All Going? – Monthly Tabulation

This is where (if you did part 2 of step 2 by hand) you’d categorise your spending so you can see how much you spend and where. Because I track my spending on the computer, step 3 is done at the end of the month for me . In this step you organise your data for use in step 4.

Step 4: How Much is Enough? The Nature of Fulfilment
Three questions that will transform your life

With the data you collected in step 3 (where it went) you’re going to ask yourself these questions about each category:

Question 1: Did I receive fulfilment, satisfaction and value in proportion to life energy spent?

So if I spent 4,000NT on video games last month and my real hourly wage is 400NT/hour, I would ask myself “I’m I OK with spending 10 hours of my life on this purchase?”

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

Question 3: How might this expenditure change is I didn’t have to work for a living?

You ask yourself question 3, because the author states that when you no longer work for a living, there are a lot of expenses that will actually decrease (like food and entertainment.)

I’m going to stop at step 4 because that’s as far as you’re going to see in today’s data. I’ll address the other steps as they come up.

Below you’ll see my chart from last month. You ask yourself the three questions for each category and mark a + (didn’t spend enough time/money on the category), – (spent too much) and Zero (feels pretty OK.)

I believe the goal is to get Zeros in rows 1 and 2. Row three is just a reminder of how things will be when you separate yourself from work.

If you have any questions about the book or thoughts, leave a comment.

Note: I live in Taiwan, so those are NT dollars. It doesn’t really matter since the focus is on the hours of “life energy.”

Note 2: This is missing my rent and utilities because I haven’t paid for them yet :D. Someone looking at this page to get an idea of expenses can add about 12,000NT (for me) for those. Next month will just be double. What is below is every NT dollar that left my hand last month.

Month: August Year: 2006 Actual Hourly Wage: 400/$12.19
Expenses Total Dollars Hours of Life Energy Fulfillment Alignment After FI
Business 2264/$69 5.66 + + +
Clothing 715/$22 1.79
Cell Phone 1870/$57 4.68
At home 1860/$57 4.65 + + +
Junk Food 778/$24 1.95 0
Out: Fast 3619/$110 9.05
Out: Restaurant or Enjoyment 1320/$40 3.3 0
Health 460/$14 1.15 0 0 0
Household 718/$22 1.8 + + 0
Losses 360/$11 0.9 0 0 0
Misc. 120/$4 0.3 0 0 0
Alcohol 1140/$35 2.85 + 0
Comics 124/$4 0.31 + + +
Computing 985/$30 2.46 + + 0
Sports 2700/$82 6.75 + +
Movies 540/$16 1.35 +
Video Gaming 3000/$91 7.5 +
Public Trans 162/$5 0.41 0 0 0
Scooter 2043/$62 5.11 0
Taxi 415/$13 1.04

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4 Responses to Your Money Or Your Life (YMOYL) Month #1

  1. Tetsuo says:

    Alcohol != enjoyment?


  2. miltownkid says:

    Oh, it is. I have it listed under recreation and leisure. The minus for after retirement is because I hope to have my own bar/club and get paid to drink.

  3. JOBNUMBER says:

    Dude, I’ve done mad cutting back on expenses and junk… but at heart I’m still a techno geek. Gotta have the new phones, games, gizmos and gadgets. If it ain’t better than yours, then it ain’t worth havin’. My financial independence is hindered by my need for electronic goodies

  4. miltownmom says:

    I like this. Keep it up.

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