Written by Vicki Robin and Joe Dominquez back in the 90s, this newly revised version of “Your Money or Your Life” (Top 5 Best Books about Financial Independence) is a must-have for anyone looking to master their personal finances. This is the first book that taught people how to become financially independent. A topic that has become so large that half of all the blogs on the internet are now devoted to writing about it.
It’s a 9-step program that starts out looking at your past, then gradually works forward into the future. Along the way you learn what money really is; something you exchange for your time.

The Life Energy Concept
The author talks a lot about life energy throughout the book. Life energy is essentially your time. If you work 8 hours a day, 5 days a week, then your giving 40 hours of your life every week to your job.
But those 40 hours aren’t the only thing you’re giving away to your employer. What about your commute, the time it takes to shop for work clothes, going out to lunch, and decompressing once you get home? These are hours that wouldn’t be spent if you didn’t have to work.
This starts to put into perspective how much life energy we put into our work.
What Do You Have to Show for It?
After you tally everything up you realize you’re devoting 50-60+ hours every week to your employment. The author then has you tally up all your assets and subtract your liabilities. What do you have to show for it?
This part was eye opening. During the beginning of the book, you’re tasked with adding up all the income you’ve ever made in your life up to this point. Now that you’ve seen your equity and know how much money has flown into your account over the years you get to see a picture you’ve never seen before. It’s like an ugly painting that hurts to look at, but you can’t look away. If you’ve earned hundreds of thousands of dollars throughout your lifetime and barely have any equity, then where the heck did it all go???
Understanding Your Spending Habits
This book doesn’t rely on standard budgeting techniques. Cost cutting for the sake of cost cutting rarely works. And if it does, then it’s only for a limited time.
Vicki teaches you how to track your spending and regularly evaluate each purchase to see if does the following for you:
- Did I receive fulfillment, satisfaction, and value in proportion to life energy spent?
- Is this expenditure of life energy in alignment with my values and purpose?
- How might this expenditure change if I didn’t have to work for money?
At this point in the book you have a strong understanding of what your life energy is and how you’d like to spend it. Buying random things becomes less fun and more, “Was that really worth 20 hours of my life?”
These questions helped inspire my fiancé and I to build a $100 patio instead of a $10,000 deck. All we really wanted was a place to sit outside. I couldn’t stop thinking that a deck wasn’t worth hundreds of hours of our life energy
Making Life Energy Visible
This part is pretty neat. At this point in “Your Money or Your Life” you’re great at keeping tracking of all your income and expenses. So, what you’re going to do next is create a wall chart. You want to place this somewhere where you’ll see it all the time (even if it’s on the back of a door).
Your x-axis will be time, chunked into months. Your y-axis will be money, with the upper limit being double the greatest amount of income you’ve ever generated in one month (ie, if your highest month of income ever was $2,000, your y-axis max would be $4,000).
Every month you’ll place a dot for your income and a dot for your expenses. Over time you’ll see a line that shows how your income and expenses fluctuate over time. You finally get a visualization of where your life energy is going.
This strategy, coupled with your new spending habits, causes the expense lines to naturally decrease over time. All of this is happening without your traditional “budget.” You just have new respect for your life energy and how you spend it.
Investing and the Crossover Point
You’re watching your income and expenses grow and shrink over time. In an ideal world, your income line is going up and your expense line is going down. This makes the gap between those two lines larger and larger over time.
So, what do you do with the gap? If you have more income than expenses, then money is left in your bank account.
The last parts of the book are about investing and the crossover point. What’s the crossover point? Excellent question!
If you save $1,000 and invest it in something safe, then you’ll be paid around $3.33/month in investment income. Over time as you invest more and more of your savings, you’ll be making $10/month in investment income, then $100/month, and then $1,000/month. You’ll start tracking this line on your wall chart as well.
At some point in the future, you’ll look at your wall chart and notice your investment income line is above your expenses line. That means the income you generate from your investments, which is 100% passive (you don’t need to work for it), can pay for all your expenses. You no longer NEED to go to work.
That is the crossover point. The ultimate goal of “Your Money or Your Life” is to get you to that point.
Final Thoughts
The final parts of “Your Money or Your Life” dig deeper into the specifics of which types of investments you can use to generate investment income. My How to Start Investing: A Step-by-Step for Beginners tutorial is great starting point for beginners. But the book offers a variety of other approaches.
All in all, I can’t recommend this book enough. It’s changed the way I look at my money and my time. I no longer see everything I buy in terms of dollars, but instead I see it in terms of life energy. This simple mindset has changed the course of my future.