Your Money or Your Life

Original Mustachian Joe Dominguez

Original Mustachian Joe Dominguez

Want to hear something really weird? All this time, I’ve been writing this blog about financial independence, a term and movement that is often credited to the 1993 book “Your Money or Your Life”. I had been assuming that Mr. Money Mustache himself was at least partly motivated by a long-ago reading of that book as well, and I’ve been recommending it to people for years.

The only thing is: it turned out I had never read it.

I recently got my hands on a copy of this old classic, and read it in detail, expecting a nice refresher course. Absolutely none of it was even remotely familiar. Most of it aligned perfectly with my own philosophy known as Mustachianism, but surprisingly, not all of it.  Many things have changed in the 20 years since that book was written (including the birth of the Internet, the death of Interest rates, and great changes in consumer products and housing). And on top of that, the authors had different tastes in lifestyle and investment, allowing us to come up with the same basic idea from different directions.

So I came out of it more convinced than ever that we’re on to something great here, and with a few new tricks scooped from authors Joe Dominguez and Vicki Robin. Today I’d like to share them with you, in case you too are unfamiliar with the book.


As the Original Early Retiree, Joe Dominguez apparently grew up in the ghetto, made it out to land a great job in the Wall Street financial sector, saved about $70,000 by age 30 in 1969 ($423k inflation-adjusted to today), and never accepted money for any of his work for the rest of his life. Along the way, he met Vicki Robin, and together they founded an oldschool grassroots movement called the New Roadmap Foundation – a huge network of volunteer teachers complete with seminars and even cassette tapes. Without the benefit of the Internet, they educated thousands of people, freeing them from the chains of their spending addictions. Eventually, the efforts coalesced into the book called Your Money or Your Life, which became a big seller and really helped the word start spreading.

Today, there are a number of financial independence blogs and the concept even has its own category on reddit. Many of the terms that get thrown about (like “FI”) are based on things first invented in this book. But while the book itself has changed the lives of millions of people and I agreed with its methods and message, I found it decidedly quirky and antiquated in parts. And while I know it is considered effective by many and I consider its authors to be god-like in their accomplishments, it was clunky reading at times and it took me over a month to get through it.

Thus, I figured that not everyone has read the book in detail, and many of us could benefit from a quick look at the Nine Step Program it presents, contrasting it where appropriate to what we’ve been learning here on MMM:

Step 1: Make Peace with your Past
Add up all the money you’ve earned in your life, then add up your net worth today. How much have you managed to hold onto? How much did you spend? For most people, this yields an unpleasant surprise.. but it’s okay, for there is no sense beating yourself up over past mistakes.

Step 2:  Figure out your Real Earnings and Spending
The idea here is that your real hourly wage is much lower than you think. You can figure it out as follows, and I’ll even put in some plausible figures for a person with a $50,000 annual salary:

Take your total monthly income after federal and state taxes: ($3500)
Then subtract all work-related expenses (commuting, clothes, restaurant lunches, housekeepers, daycare,de-stressing activities etc) ($1500)
Divide this by your total work time (including commuting, dressing up, clothes cleaning, unwinding time, etc.) (248 hours)

The net result is that you take home a lot less than you think, and spend a lot more time doing it. In the example above, the $50k earner ends up bringing home only $8.06 for each hour spent in activities directly related to the job. Thus, when you decide to buy yourself an 8 dollar treat at Starbucks or at the pub, you’ve really just burned off an entire hour of “life energy” which you’ll never get back – you have to add that hour to the end of your work career to achieve financial independence.

Tracking your spending is the easy part – the book recommends you use a notebook to handle everything, whereas I just do all of my spending by credit card, allowing it to be tracked automatically. The key, however, is you should know exactly what you buy each day, and why you decide to buy it. No more unconscious impulse shopping.

3: Create Monthly Reports for Yourself
Keep a table of all income and all spending for each month, break it into categories, and convert the figures into “hours of life energy spent”. Restaurant meals: 20 hours., etc. I find that the “Mint” financial tool does an acceptable job of this for me, but the book recommends you do it in more detail.

4: Three Questions that will Supposedly Transform your Life:
For each of the categories above, ask yourself:

  • Did I receive fulfillment in proportion to the hours of life energy spent?
  • Is this expenditure in alignment with my goals and life purpose?
  • How might this expenditure change if I didn’t have to work for a living? (more, less, same)

5: Keep a prominent (i.e. right on your kitchen wall) graph of income and expenses
You keep doing this for multiple months which will grow into multiple years. The authors report that most people start to see their income grow even as their expenses shrink, since they are now learning to spend more consciously. Although I don’t have anything on my kitchen wall, we do maintain a history of spreadsheet versions and graphs of savings that dates back several years. But if you are a beginner who still wrangles with optional luxury purchases while still in debt, the kitchen wall is a good idea.

6: Learn to Value your Life Energy by Minimizing Spending
This is the meat of anyone’s financial independence – learning to spend your money efficiently on the things you do get true fulfillment from, and not spend it all on the things you don’t.  The book presents 101 tips, most of which have been covered here on this blog at various times.

7: Maximize your Earnings
Adopt a positive attitude about your work and appreciate the earnings as a tool which gets you to financial independence.. rather than feeling like a victim of outside forces like the economy or a recession. Seek to earn more, and don’t be limited to work only in your current field – after all, you’ll be retiring soon anyway, meaning every activity will soon be open to you whether paid or unpaid.

8: Watch for the Crossover Point
This is when your passive income from investments equals your expenses. When you reach that point – DingDing! – you are Financially Independent. However, the authors define this as “Monthly Income = Capital x Current long-term interest rate/12 months”, since they like government bonds as their retirement income vehicle, which currently pay approximately zero after adjusting for inflation. But Mustachians of course have other options, discussed below.

9: Managing your Money
“Become knowledgeable and invest your capital in such a way as to provide an absolutely safe income sufficient to meet your basic needs for life”

Here’s where one of the most significant differences pops up between YMOYL and MMM (and other modern takes on financial independence). In the early 1980s, you could buy 30-year government bonds with a nominal yield of over 12%. Even in the surrounding time periods, yields were well over 7%. The YM authors liked the guaranteed return and decided to use these bonds as a complete income source*.

Due to our continued hangover from the financial crisis, the latest figure for the 30-year bonds is about 2.9%. While it is still possible to retire on bonds, I consider an over-50% reduction in investment returns in exchange for “safety” to be too high a price to pay. Safety is just an expensive illusion anyway. So instead of bonds, we focus here on stocks, dividends, owning rental real estate (or its passive cousin REITs), and even a bit of wacky new higher risk/return stuff like peer-to-peer lending. And on top of that, I don’t consider “retirement” to mean “never accepting money for things you do”, so I allow you to do fun things that happen to generate money in retirement as well.

Your Money or Your Life is a wise book, and the authors were clearly motivated by what they saw was a pointless death march of society. Workworkwork, Buybuybuy, TrashDestroyWaste, Die. Even 20 years ago, when the first clunky SUVs were coming to market and trailblazing a path to widespread stupidity, this pattern was already obvious. And Joe and Vicki were wise to it, trying to guide society away from its wasteful ways and vividly aware that our consumption is an ongoing trainwreck of environmental destruction.

The bad news is that we went through some pretty shitty decades since then, when measured by the spread of the very consumer disease the book was fighting against. Cars turned into personal trucks, commutes grew, suburbs sprawled, and China joined the party, building a communist copy of the Great American Smokestack, flooding their own country with asphalt and ours with cheap manufactured goods. Americans kept working more so they could borrow more and buy more, we grew much fatter and less happy, and generally continue to live our lives in the most blind and inefficient way possible on average.

The good news is, the Internet happened. Of course, it spawned an acceleration of technological progress, giving us things like remote working and energy-efficient products. But technology can’t save the world by itself – in the wrong hands, it just allows us to consume more efficiently, which means consuming more. It’s a good tool, but it’s not enough.

The good news comes from the free exchange of ideas. Only now can the ideas of the non-wealthy majority compete equally with the billion-dollar budgets of crusty old companies seeking to prolong over-consumption. Nowadays, even an untrained individual can sit on the couch and type some shit into the computer, and it can reach a wider audience than a successful book might have in the past. So imagine what a big group of people could accomplish, some of them with influence over companies and governments, if they all started grooving on the right message.

The bottom line: I am thankful to Joe Dominguez and Vicki Robin for getting so much of this started, as are countless thousands of other people who are now more free than they could have otherwise been.


*Like me, they were not overly worried about inflation – that measures changes in the Consumer Price Index, which is an approximation of the blind spending patterns of Sucka Consumers rather than flexible and conscious purchasers.

More about the authors of Your Money of Your Life:



  • partgypsy January 2, 2013, 8:59 am

    When I wanted to educate myself about personal finance I had accidently picked up YMOYL as one of the first books, and it was an eye opener. I would almost categorize it as a philosophy book to reframe one’s perspective on life than as a “mere” personal finance book. Though I didn’t complete all the steps, it did strike home, how much of life is dross or raw ore, while what matter is the refined ore (how much one actually saves versus how much one has earned, what is produced either creatively, in relationships, etc, versus all the time spent “wasted”). Time IS precious. It is finite. Live each day that way.

  • Mary M January 5, 2013, 7:55 am

    There is a companion book titled “Getting a Life” that shares the stories of several families following the path. The author and her husband used to maintain a website, but I haven’t looked for it in years. I think you would like them… the husband is a big bike enthusiast!

  • Bogdan@bankowe January 5, 2013, 1:42 pm

    One thing many people don’t get about these finance self-help books is that they need to take this advice and filter it through their own needs, goals and timing of their lives. It’d be ridiculous if there was a surefire program anybody can blindly follow and come out financially independent. It’s a lifetime of self discovery, learning and improvement.

    BTW. First time here and living it!

  • Trudy January 11, 2013, 10:47 am

    Joe lived a wonderful life and has been a hero of mine for years – totally changed my way of thinking about spending. HOWEVER, I remember reading about him being terminalliy ill and getting the impression he did not have health insurance and chosing to not be treated for lymphoma and dying of it in January of 1997 when he wrote “Joe Dominguez has been given a clean bill of death. Put your attention on the living and the things that need to be done.” This impression could be totally wrong on my part – but it made me firm in my resolve to always have health insurance – the MMMs high-deductible health insurance is just fine.

  • Chris January 12, 2013, 10:10 am

    It’s easy to get sucked in to the live to work ideology as when people start earning more they spend more and thus still take home the same wage. It’s an awful situation to be in. Like the look of the book I will certainly have a read!

  • Marina January 14, 2013, 3:22 pm

    I first read this book in my early 20s when I was working minimum wage jobs, and had to stop reading it when I calculated I had spent over two hours of life energy on my most recent purchase: a pair of socks. It was seriously depressing.

    That said, a lot of the philosophy has stuck with me as my income has increased. But the book is really aimed at mid-career middle class folks who want to cut back, not early career low income folks who want to get ahead.

  • Kingston February 27, 2013, 7:12 pm

    Does the new edition of YMOYL deal with health insurance? Because that is the biggest stumbling block I see with living very frugally on a limited income.

    • kc February 28, 2013, 7:20 am

      Kingston – The latest edition of YMOYL (2008) references health insurance; under the subheading “Taking Care of Your Body” it talks about the “best basic health insurance is diet, good rest and exercise.”(181) which is a reoccurring message throughout MMM’s blog. The book also makes mention of “medical tourism” ; of which several of our friends have had good success with medical care in Mexico. Hope this helps.

  • panhead June 5, 2013, 6:44 am

    Hey MMM, I’ve read this book as well and had to skim over certain parts due to the way it was written. I agree it is one of the early bibles and that Joe and Vicki are amazing people. Have you ever checked out “Cashing in on the American Dream” by Paul Terhorst? He retired at 35 after working as a CPA for about 12 years. The investment advice is just as dated as YMOYL, but the read is well worth it IMO. They are still retired and maintain a website.

  • Rachel June 28, 2013, 6:05 am

    Hi MMM,

    Joe and Vicki were never married. They were just friends. The original People magazine article published about them covers that aspect of their relationship. (I think a lot of people thought they were romantic partners but their relationship was always platonic.)

  • Katie August 17, 2014, 8:14 pm

    Hi! I really liked this book. I am very actively implementing certain parts of that book. I”ve tracked every penny for the last 2 months, and last week I put up the wall chart of expenses, income, and income from interest on investments. Which leads me to a question. How does debt reduction tie into expense? for instance, say my income each month is $10,000. My expenses are $5000. I pay $4000 to maybe a student loan or credit card debt. Does that make my overall expenses $9K? Appreciate the feedback!

    • Mr. Money Mustache August 19, 2014, 9:45 am

      Hi Katie – I suggest tracking interest costs as expenses, but any principal portion of those payments is saving. Because it increases your Net Worth.

  • Getting There! August 25, 2014, 11:04 pm

    I loved YMOYL and have read it several times since the mid-90s. The fulfillment curve and the gazingus pin factor has really stayed with me. Each month I do a networth statement on excel which is my version of the wallchart. I anxiously awaited the updated version in 2008. There are free companion guides on the website with a Canadian version too http://financialintegrity.org/index.php?title=Downloadable_Guides

  • DA October 9, 2014, 3:10 pm

    Damn, MMM! I found this place a few days ago and definitely felt I was hardcore enough to handle Maximum Mustache… so here I am having started at the beginning of Mustachian Time :) Now I just had to install an add-on to block this awesome place from view so I can continue studying for my own final CS exams so I can graduate and start practicing a lot more Badassity already!!

  • Mrs Handlebar Mustache July 21, 2015, 6:52 pm

    I read Joe and Vicki’s book many years ago and it changed my life. I worked my way through all the steps and could see that Financial Independence was within reach.

    A few years later we reached the crossover point of financial independence while living on a single income and raising our family. My husband has continued to work however because he loves his work.

    I passed the book on to our son when he married and he is well on the way to being financially independent as well.

    I am new to MMM and I am working my way through all the posts. All I can say is a very huge thank you to Mr Money Mustache for offering us a real alternative.

  • Barbara June 12, 2016, 11:32 am

    If you can find a copy of Getting a Life: Strategies for Simple Living Based on the Revolutionary Program for Financial Freedom, “Your Money or Your Life by Jacqueline Blix and David Heitmiller, it’s an inspiring read. It’s life stories of people who followed the YMML path to early retirement. I always like to read how others achieved early retirement. Another good book alone those lines is Stop Working, Start Living by Dianne Nahirny.

  • Mary August 8, 2016, 8:07 pm

    I am scared to death (well, almost). At age 81, I have lost my main source of income. I have had to take my savings, and re do all my former ideas of retiring early. I am at the point where I am not so good physically and I can still think, but that’s not so good either. What I am doing is taking all my sources of income or savings and putting it into real estate (rentals, all of it) as it’s the only thing I know how to do. I don’t trust my investors of the past. They surely didn’t do well by me. I have no one to talk to about it. Any suggestions?

    • john September 9, 2016, 3:48 am

      You could head over to http://reddit.com/r/personalfinance It is an active community, where you can post a more detail case study and get opinions and suggestion what your options are.

  • Shane April 7, 2017, 2:08 pm

    I thoroughly enjoyed listening to his live recorded seminar, Transforming Your Relationship with Money. Joe was the man. He was an excellent speaker…intelligent, funny, & frank. To me, Joe sounded like MMM’s uncle or godfather.

  • Stephen A. Schullo August 8, 2017, 8:00 am

    Great book, it has so much information that readers may need a Mr. Money Mustache to help them through the amazing amount of material detail throughout the book.
    I have read many books on personal finance. The majority were about the quantitative aspect, the emotionally cold: data, graphs, statistics, market history, types of stocks and bonds, and the skills needed to construct low-cost diversified portfolios. This book finishes the job by discussing the lesser status qualitative aspect: your thinking and your emotions (OMG!) surrounding money. Both aspects make valid contributions for the eventual, sometimes elusive goal of financial independence, and to be happy at your job and giving back to the greater good.
    Here is my review on Amazon: https://www.amazon.com/gp/customer-reviews/R34XCX7436D7ZK/ref=cm_cr_dp_d_rvw_ttl?ie=UTF8&ASIN=0143115766

  • Michael January 14, 2020, 10:06 am

    Reading this in 2020, with a *library* copy of the 2018 edition of YMOYL, with the foreword written by MMM himself…chuckle chuckle.

  • Hskrfan87 June 13, 2022, 3:00 pm

    I just recently found your blog by way of the MadFientist and the Military Money Manual podcasts. I just started reading YMOYL and thought it was so cool that you wrote the Foreward for the latest edition!


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