A Collection of What I am keeping track of in the book Your Life or Your Money
Questions to asked before spending:
- Did I receive fullfilment, satisfaction, and value in proportion to life energy spent?
- Is this expenditure of life energy in alignment with my values and life purpose?
- How might this expenditure change if I didn’t have to work for money?
- What would this expense look like in a just and compassionate world?
CHECKLIST: THINK BEFORE YOU SPEND
- Don’t go shopping.
- Live within your means.
- Take care of what you have.
- Wear it out.
- Do it yourself.
- Anticipate your needs.
- Research value, quality, durability, multiple use, and price.
- Buy it for less.
- Meet your needs differently.
The 9 Steps
1. Making Peace with the Past
- How much have you earned in your life? Find out your total lifetime earnings—the sum total of your gross income, from the first penny you ever earned to your most recent paycheck.
- What have you got to show for it? Find out your net worth by creating a personal balance sheet of assets and liabilities—everything you own and everything you owe.
2. Being in the Present - Tracking Your Life Energy
- How much are you trading your life energy for? Establish the actual costs in time and money required to maintain your job, and compute your real hourly wage.
- Keep track of every cent that comes into or goes out of your life.
3. Where Is It All Going? (Monthly Tabulation)
- Every month, total all expenses within categories generated by your own unique spending pattern. Then total income.
- Convert dollars spent in each category to “hours of life energy,” using your real hourly wage as computed in step 2.
4. Three Questions That Will Transform Your Life
- Did I receive fullfilment, satisfaction, and value in proportion to life energy spent?
- Is this expenditure of life energy in alignment with my values and life purpose?
- How might this expenditure change if I didn’t have to work for money?
- (Optional) What would this expense look like in a just and compassionate world?
5. Making Life Energy Visible
Create a large Wall (or Online) Chart plotting the total monthly income and total monthly expenses from your Monthly Tabulation. Put it where you will see it every day.
6. Valuing Your Life Energy - Minimizing Spending
Learn and practice intelligent use of life energy (money), which will result in lowering your expenses and increasing your savings. This will create greater fulfillment, integrity, and alignment in your life.
7. Valuing Your Life Energy - Maximizing Income
Respect the life energy you are putting into your job. Money is simply something you trade your life energy for. Trade it with purpose and integrity for increased earnings.
8. Capital and the Crossover Point
Each month apply the following equation to your total accumulated capital, and post the montly independence income as a separate line on your Wall Chart:
capital x current long-term interest rate / 12 months = monthly investment income
9. Investing for FI
Set up financial plan using the three pillars:
- Capital: The income-producing core of your Financial Independence
- Cushion: Enough ready cash, earning bank interest, to cover six months of expenses
- Cache: The surplus of funds resulting from your continued pracrice of the nine steps