Work Your Money, Not Your Life. Roger & Jennifer Ma.
I’ve found that creating an integrated work and money strategy can empower people to gain more control over their lives than they might have imagined, leading to greater happiness and a clearer sense of purpose.
“You are not your job, you’re not how much money you have in the bank. You are not the car you drive. You’re not the contents of your wallet.”
I was so focused on the dollars and cents (or lack thereof) that I neglected to account for everything else I had going for me.
Financial independence is typically defined as no longer needing to work for money because your savings and the income from your investment portfolio are sufficient to cover your living expenses. Many in the personal finance community use the 4% rule as a starting point to measure financial independence — a rule of thumb that says people need 25 times their annual expenses saved across cash and investments to reach financial independence.
The subtle changes that result from having financial runway can also translate into more concrete and long-term benefits
You Can Take Back Control of Your Life: Save money faster, Reduce the cost of certain goals, gain flexibility in job choices, Your Ideal Career Is Within Reach. You might know what it’s like to work in a “good” job, only to feel miserable doing it. The problem stemmed from the fact that I had subscribed to many falsehoods about career success without knowing it. “It’s All About Money and Prestige”
As business theorist Clay Christensen explains in his book How Will You Measure Your Life?, “The point isn’t that money is the root cause of professional unhappiness. It’s not. The problems start occurring when it becomes priority over all else, when hygiene factors are satisfied but the quest remains only to make more money.”
After your basic needs are met, we move on to needs at the higher tiers of the pyramid – including love, prestige, and self-actualization. That’s what causes the empty “Is this it?” feeling that keeps us on a hamster wheel.
While we may think careers are supposed to move in a linear fashion, they typically do not – nor should they. In fact, people who get the most out of their careers often take routes that look more like zigzags rather than straight lines.
“Each career move I made required me to take a cut in pay, but each role was more satisfying and made me happier than the previous job,” Liptak says. “From a purely financial standpoint, I suppose I made stupid choices. But life is not purely financial”. “Everyone Has One True Calling” “Two careers are better than one,” says Sehgal. “Committing to two careers allows you to follow your curiosities and potentially feel more fulfilled. As I discovered, you may also end up doing both jobs better than if you only had one role. “Do What You Love”
“Work-Life Balance Is the Answer”
Industry: • Are you interested in the subject matter that your industry focuses on? • Do you find yourself reading about developments in the industry in your free time, or could you care less? Do you find your work interesting, or are you assigned to work that no one else wants to do? • Do you feel like you’re learning something from your job and are challenged? Are You Adding Value?
Do you think your work positively impacts other people outside of your business (e.g., your clients, broader society)? • Do you find that you have the autonomy and freedom to make decisions at work? Do you have clarity on how you could overdeliver in your role or make a bigger impact?
Are You Increasing Your Value in the Market?
• Do you work for a prestigious or well-respected organization? Do you envision wanting your boss’s job one day? Does the leadership path at the organization inspire you? Do you have someone at work you can confide in for personal and professional matters, such as celebrating good days, venting about bad days, and running questions by them that you may be hesitant to ask human resources (sometimes referred to as a work spouse)? • Does your current job offer employee benefits that improve your quality of life, such as generous time-off policies (e.g., vacation days, sick days, family leave) and flexible work arrangements (e.g., ability to work from home, part-time work)? Are any important benefits missing that you wish you had? Does your current job allow you sufficient time to devote to your friends and family (if that’s important to you)? • Does your job allow you to participate freely in activities that interest you? For example, some companies limit employees’ participation in any outside business activities (even small side hustles), or their ability to share ideas on a website or blog.
Is your manager well-respected in the organization and progressing in his or her own career? • Does your manager have the power and political capital to accelerate your career? Do you receive direct feedback from your manager throughout the year so you can improve and reach your career development goals, or do you receive mixed messages?
ACTIVE INCOME AND SOLID RESOURCES.
• Net worth: What you own minus what you owe • Burn rate: What you spend, which influences what you save • Financial runway: The number of months of living expenses you can cover with your current savings • Credit reports and scores: Your history of borrowing money.
Net Worth = Assets (What You Own) − Liabilities (What You Owe)
Old-School Method: Manually check your balances at each account website or through account statements, and enter your Balances into a spreadsheet. e I find myself more involved in the process and better aware of any major changes.
The next metric to tackle is your burn rate, or how much you spend during a set period of time. Burn rate matters because when you have a better understanding of where your money goes, you can assert more control over your finances.
Annual Expenses: These include expenses that may only occur once a year, such as vacations, certain insurance payments, repairs (home, auto), and professional fees (accountant, financial planner).
• Net Income < Expenses: You’re not saving, likely racking up high-cost debt, and decreasing your net worth. • Net Income = Expenses: You’re not saving, simply breaking even, and neither adding to nor subtracting from your current net worth. • Net Income > Expenses: You’re saving and building your net worth.
What Do You Love Spending Money On? “Taking the time to identify your Money Dials can be powerful — it enables you to spend extravagantly on the things that truly matter to you, but also allows you to cut costs mercilessly on the things that don’t matter.” In addition to helping you be more deliberate with your spending, identifying what brings you value can help you begin to think about what financial goals you may want to set for yourself, and ultimately, the type of rich life you want to live.
Eliminate Bank and Credit Card Fees, Decrease Food Costs, Align Your Space and Amenities with What You Value.
Nobody likes paying taxes, and most people want to minimize the amount of taxes they have to pay (within the law). Luckily, there are surprisingly easy ways to cut your tax bill that could help you save a significant amount of money.
What Does a “Good” Job Look Like for You?
Some factors that could help jumpstart your brainstorming include: • Schedule: Flexible or rigid • Work Hours: Not much, average, or a lot • Predictability: Proactive or reactive • Stress Level: Low, medium, or high • How You Were Managed: Micromanaged or full autonomy • Managing: Individual contributor or manager • Work with Others: Independent or team-based work.
• Communication Skills: Write clear emails, communicate effectively internally and externally, develop engaging presentations, public speaking • Self-Management: Hard-working, diligent, self-motivated, organized, proactive, efficient • Leadership: Lead projects, speak up in meetings, suggest new projects or improvements to existing processes, help new or more junior co-workers • Interpersonal Skills: Work well with internal and external stakeholders • Flexibility: Ability to work under pressure, ability to adjust to changing priorities, able to work with little direction • Computer Skills: Word processing, creating presentations, developing models, creating program.
Step 1: Envision Your Ideal Weekday
Step 2: Consider Your Geographic Needs
Step 3: Consider Your Financial Needs
Questions to Consider • Can you confirm or eliminate certain industries or positions from your list (maybe even your current role or industry), based on one or more of the following factors? • Quality of Life: If you value having a significant amount of personal time, you may be able to eliminate certain jobs right off the bat • Location: If proximity to your family is important to you, you might choose to target jobs in a particular city or region. On the other hand, if you’re open to moving, you may be able to expand the types of work you’re considering. • Compensation: Based on your compensation requirements, you may be able to eliminate certain industries or roles. • Content: Consider whether any roles or industries you’ve identified may be a good fit, based on the strengths and interests you’ve noted.
: Think of Solutions, Not Just Problems, Win-Win, Gain New Skills: Taking on a side hustle may allow you to gain new skills that you are unable to build or hone in your day job, Diversify Your Life.
Practical Points: You Need Time: Blogs and articles often make having a side hustle sound so easy, You Won’t See Immediate Results, you may need to cover certain administrative costs, such as buying a website domain name and hosting services for your website, printing business cards, investing in advertising, and registering your business, among other costs. A Side Hustle Shouldn’t Threaten Your Current Job Prospects.
What’s It Going to Be? Of your possible career roles that remain, narrow them down to one or two. Once you’ve narrowed down your paths, fill in Table 9.1 (also available at http://www.workyourmoneybook.com): • Prioritization: Order your top one or two roles by inputting your top choice into the Role #1 column and your second choice into the Role #2 column. • New Skills Required: If you don’t currently meet all of the skill and experience requirements, list the skills you’ll need to build to make yourself a competitive candidate. • Time Needed: List out how much time it may take to build up the new skills and experience. • Money Needed: Estimate how much money it may take for any required training. • Small Ways to Test If You’d Like This Path.
Role • How long has the role been available? If it’s been available for a long time, why has the company had a hard time filling it? • How does the role fit into the larger team and company? • What is the approximate all-in salary of the role or similar roles? How is this broken down between base salary, bonus, and equity
Prioritize Your Goals: Must-haves & Nice-to-haves
Focus on What You Can Control and Tune out the Noise.
Don’t Take Yourself Too Seriously
Stop Comparing Yourself to Others on Social Media
Know When to Say No
Stay Mentally Fit
Get Comfortable with Being Uncomfortable.
Know That Money Won’t Make You a Better Person.
• Did we have a good rapport when we communicated? • Would I actually look forward to meeting with this person, and likely for multiple sessions? • Did I get a good vibe from this person? • Do I feel like they understood me, that I could trust them,and that I’d feel comfortable sharing very personal details about myself with them
Protecting Your Wealth: avoid all the fees of the Banks, promote the barter of products and services near your zone. Acept vintage products in good function, learn new techniques DYI for the mantenaince of your home, grow your own vegetables, generate your own energy, keep your own water recycled, keep your own medicines, wines, marmelades (home made).