9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence

The book started out too fluffy and basic for me. But then it shifts into 5th gear and offers some great formulae and strategies to keep track of spending and to start saving or making the money work for you.

Summary

Nobel laureate discovered that after a certain amount of money anymore will not buy you any more happiness.
4 FI’s (look it up)
– Financial integrity
– financial intelligence
– financial independence
– financial interdependence

Book updates to consider the new age of mobiles and internet.

More is not better and we always want more so it’s never enough

How the rat race was created and ‘standard of living’.

Get to know your enough.

Mantra – no shame no blame.

List all your assets so basically what you’d do to value your everything before getting a mortgage etc. Anything that can be converted into cash should be listed.

Then do your liabilities and then a balance sheet of net value which is assets – liabilities. If you’ve done accounts classes this should be easy.

Life Energy Calculator

Calculate what your hourly rate is and subtracted with how much it cost you to get to work and all work expenses.

Talks about what money is what financial independence is what is not.

Different formulas for job related time, transport, clothing, grooming, meals, leisure, entertainment, drinks, illness, education, seminars, vacation, e.g. annual expenses.

Now you have your hourly wage and time spent.

Keep track of every cent that comes into or goes out of your life.

Get as detailed with categories when breaking down the money no matter what system you choose.

Go plastic free and carry cash.

Calculate how much life energy and money you’re spending on reading. Replace trash magazine for life building books.

What are your feelings and emotions around money and tipping and tithing habits?

Questions about the dream you sacrificed for mediocre and stressful versions of these dreams. What dreams are calling you?

3 Questions that will Transform your Life – on Spending on your Life Purpose (Ask this every month)
1. Did I receive satisfaction fulfilment and value in proportion to the life energy spent?
2. Is this expenditure in alignment with my values and life purpose?
3. How much would this expenditure change if I did not have to work for money?

You’ll see where you’ve put your values when you put all this in the sheets and added your up and down next to each spend. Even asking ‘is this expenditure in line with my values?’ will get you on the right track.

3 Directions to look for your Purpose (Take a few minutes to write it down)
1. What the work you’d do even if you weren’t paid for.
2. Work with your pain and suffering personal to you and how you can help others.
3. Work with what is at hand and fulfilling the simple needs of others.

You want to get to a point of ENOUGH.

The 4 Common Qualities of Enough
1. Accountability. Knowing everything that goes in and out.
2. Internal yardstick for fulfilment. Don’t compare yourself to the Joneses.
3. A higher purpose in life. Giving.
4. Responsibility. Ability to response. Sri Sri Ravi Shankar says responsibility is power.

Create a wall chart of your monthly income and expenses. It can be a line graph with 2 different colours.

Post your monthly accounting on a blog or in your closet door. You can share with your friends the the conversation moves towards financial independence or you could be more private and have it show somewhere where you can see your progress regularly.

Talks on the importance of being frugal.

Includes a ton of basic tips like DIY, resourcing, being cheap, buying a coat after 3 years instead of every year winter, look for deals and bargains, don’t spend too much on things you will not be using regularly but still buy something which is durable and other obvious tips and tricks. Don’t drive, share cars, work from home, barter, staying fit is the best health insurance. Just read this book – The Moneyless Manifesto: Live Well, Live Rich, Live Free by Mark Boyle

Remember anything you buy and don’t use/throw away/don’t enjoy is even wasting resources of the planet.

Watch your thoughts and how easily they’re swayed – Influence by Robert B. Cialdini

Out of the list of questions to ask I really like this one – ‘what is the last thing that you wore out?’

If you are in the right job you will be working for more than money, you will have good friends, social status etc. but don’t confuse wages for work and remember time is your number one resource.

Lists the benefits of redefining work.

Step 8 is about adding a new line to your chart which is ‘monthly investment income’ and it’s going to get you thinking about capital investing saving interest you make on your savings or your dividends in your stock. If you don’t know the power of compounding yet you need to study the hell out of it.

Includes tips on buying bonds, CDs, Funds, term deposits, EFTs, real estate, etc.

Finally join investment groups to learn about making, saving and investing money. Start your own money talks.

Contents

Foreword by Mr. Money Moustache

1. The Money Trap: The Old Road Map for Money
   Step 1: Making Peace with the Past
   A. How Much Have You Earned in Your Life?
   B. What Have You Got to Show for It?
2. Money Ain’t What It Used to Be-and Never Was
   STEP 2: Being in the Present-Tracking Your Life Energy
   A. How Much Are You Trading Your Life Energy For?
   B. Keep Track of Every Cent That Comes into or Goes out of Your Life
3. Where Is It All Going?
   STEP 3: Monthly Tabulation
4. How Much Is Enough? The Quest for Happiness
   STEP 4: Three Questions That Will Transform Your Life
   QUESTION 1: Did I Receive Fulfillment, Satisfaction, and Value in Proportion to Life Energy Spent? QUESTION 2: Is This Expenditure of Life Energy in Alignment with My Values and Life Purpose? QUESTION 3: How Might This Expenditure Change If I Didn’t Have to Work for Money?
5. Getting It Out in the Open
   STEP 5: Making Life Energy Visible
6. The American Dream-on a Shoestring
   STEP 6: Valuing Your Life Energy-Minimizing Spending
7. For Love or Money: Valuing Your Life Energy-Work and Income
   STEP 7: Valuing Your Life Energy-Maximizing Income
8. Catching Fire: The Crossover Point
   STEP 8: Capital and the Crossover Point
9. Where to Stash Your Cash for Long-Term Financial Freedom
   STEP 9: Investing for FI

Quick Reference for the 9-Step Program
Epilogue
Acknowledgments
Notes