How Much is Enough?

Lawyers Assistance Program

Facilitated by Robert Bircher

Your Money or Your Life

• This is based on a book with the above title, it is a classic on the subject of your relationship with money

• Few people actually examine their relationship with money and simply assume more is better- because it will make them happier

• For many people what they do for money dominates their waking hours, and life is what can be fit into the scant remaining time

Making a Dying

• Many people are killing themselves –their health, relationships, their sense of joy and wonder for their jobs

• The dream of finding fulfillment and meaning in our jobs have faded into the reality of office politics , burnout, boredom and intense competition

• Some lawyers are so identified with their role of being a lawyer they think they are lawyers-not human beings in a temporary role

Making a Dying

• We live in a culture that equates our worth with what we make

• This encourages people to overwork and end up with “exhausted bodies and empty souls”-in law a major source of anxiety and depression

• We are working more and enjoying life less than previous generation

• Paradoxically we are in more debt than ever

Making a Dying

• We make a dying so we can live it up on the weekends

• If the daily grind was making us happy it would probably be worth it-but clearly it doesn’t work

• Many studies show that happiness is not correlated to income level-especially past the basic survival level

• Yet we believe that if only we could make 50 to 100 % more-then we would be happy!

Overconsumption

• This endless chasing of money not only depletes individuals-but also the planet –the extinction of many species has already occurred

• The whole basis of modern economics is based on a mantra of “Growth is Good” there is no concept of “enough” at all!!-Can you imagine a new company president saying “I will keep the company the same size and just keep things as they are”

• This is all based on a core belief that more is better-this of course then means we never experience what “enough” actually feels like!!

The Gospel of “More”

• Quite apart from many other problems created by the “more is good” mantra-it is psychologically devastating

• If you live for having it all-what you have will never be enough

• The problem is that many people have lost the ability to identify that point of sufficiency at which point they can choose to stop

• It means having a concept of what “enough” is for you

Fulfillment Curve

• A certain amount of money is obviously necessary for basic necessities-and survival

• In Canada most of us have always had this

• Looking at the fulfillment curves on the charts-the peak is the place where we have “enough”

• Beyond the peak more effort does not increase value-in fact more effort simply reduces quality of life

Awash in Clutter

• Most people have far too much stuff-the self storage business is one of the fastest growing businesses around

• Clutter is any possession that doesn't adds value to your life

• Whenever you move, it becomes clear how much unused junk you have accumulated

• Meaningless activity is a form of clutter-meetings, some social events, TV watching-many add nothing to your life at all

Your Relationship with Money

• You have a living ongoing relationship with money and you have had this relationship for a long time

• The program from “Your Money or Your Life” works on awareness and change with respect to your attitude toward money

• This is not a budget program-it is a change in your relationship with money

Making Peace With the Past

• Step one in this program is to find out how much money you have made in your life so far and what do you have to show for it-this is a money only exercise-intangible assets are not included in this exercise

• We can do a quick version using the book itself as a guide

• Basically this means adding up all of your assets less your liabilities

• What works is to take a dispassionate view of the result-no shame or blame or self judging

What is Money?

• Money as security-can really mean emotional security-can manifest in Scrooge-like behavior

• Money can be used to defend against unpleasant emotional states like fear or worry or loneliness

• Money as Power-can command compliance and loyalty-can increase choices to do or not do something

What is Money?

• Money as social acceptance-spending money to be liked or loved-advertising works because it capitalizes on an epidemic in our culture of low self esteem

• Money as the root of all evil-it is our behavior that creates problems not money itself

• YMOYL definition of money-money is something we choose to trade our life energy for

Trading our Life Energy

• Our life energy is our allotment of time here on earth-the hours of precious life left to us

• Money equals our life energy• Money has little intrinsic value-on

a deserted island your would use it to light fires and for toilet paper

• Our life energy has high value to us-it is all we have!

• What would financial independence look like for you?

Financial and Psychological freedom

• What is the difference between financial independence and being rich- are they one and the same?

• Being rich-can only exist in comparison to something or someone else. “ More “is a mirage-it isn’t real

• It cannot be a certain quantum of money-if you asked people around the world how much would you need to consider themselves rich you would get almost infinite answers

The Concept of Enough

• If your definition of rich is simply “A hell of a lot more than I have now” you can’t, by definition, ever make it

• A much more useful definition is that “Financial independence is the experience of having enough”

• This is a psychological definition and is achievable-it is also extremely variable from person to person

Enough

• Financial independence is an experience of freedom at a psychological level

• You will be free of guilt, resentment, envy, frustration and despair

• You are free from cultural beliefs about how you “should” relate to money to be successful and happy

• You buy what you actually need and only that which creates value in your life

• You determine the way money functions in your life-you are not on autopilot about money

Your Real wage

• To begin to understand what is enough there are several steps

• First calculate your net actual hourlywage• This is your hourly wage less all the costs

(and extra time)relating to work-including clothing, extra cost of food, commuting, decompression activities, escape entertainment etc.(not taxes) see checklist

• This can easily cut your hourly rate in half or more

• At the end you can say I am trading an hour of my life for X-this gives you something to use as a measurement of value of things you buy

Keeping Track of all Money

• This step involves work outside of this workshop but I have included an income and expense statement you could use

• I did this step for about 9 months-at first using a little note book then a palm pilot then I just used my debit card which only left items not on debit

• This meticulous tracking was very illuminating –I knew my net hourly wage and at the end of the month I could ask-Was this expense worth an hour of my life energy?-It automatically dropped expenses by 20% with no budgeting at all

Be Meticulous

• In this exercise you must account for every penny-roughing it out won’t work

• This keeps us from being aloof about money

• Why every cent?-most of us are penny foolish but pound wise- not the other way around

• After a month do a monthly tabulation-you can use the form provided –this process will get you away from the story of your life and connect you with the reality of what you do with your money

Monthly Tabulations

• At the end of a month or several months you can compare your actual wage to what you spend on an item-i.e. shoes that cost 4 hours of life energy

• I did this for many months and automatically cut 20% of my spending-with no budget at all

• I just didn’t think certain things were worth it

How Much is Enough?

• After you have done at least one months tabulations you can ask 3 valuable questions-you can see these are described in my balance sheet

• HLE- means how many hours of life energy did this cost-i.e. if your real hourly wage is $20 per hour(net of work expense) and an item is $80-this took 4 hours of your non recoverable Life Energy

How Much is Enough?

• The next question is Did I receive fulfillment, satisfaction and value in proportion to life energy spent?

• This weeds out mindless spending and your weakness areas(called Gazingus Pins in the book) for some this is shoes ,cars ,books, clothes bought to excess

• Asking yourself month after month whether you actually got value and fulfillment in proportion to life energy spent helps awaken a sense of knowing when enough is enough

Enough

• You may find you are spending too little on something you get a huge amount of value for

• In the balance sheet provided you can put a 0 meaning the expenditure is ok as is; a + if you got great value and a – if you got poor or no value

• The next Question “Is this expenditure of life energy in alignment with my values and life purpose”

• Of course to do this you have to know your core values

Alignment

• If a core value is raising your children but your expenditure is not about that then it is not in alignment

• If a core value is being creative and you only spend a paltry amount on this you are out of alignment

• For people that are clear about their core values this is a core test of whether your spending matches what you value in life

After Financial Independence

• The third question is how would this expenditure change if I didn’t have to work? (after FI)

• Many expenses would simply disappear

• The book continues with more steps but doing this much will be very helpful

• The real question is how much do you need to work to be fulfilled but no more

What is Work

• People say they work for many reasons-social connection,learning,service etc but all of these can be achieved outside of work except one-getting paid

• YMOYL shows the value of separating the concept of paid employment from the concept of work

• Work then is any productive or purposeful activity with paid employment as being one activity

Ways to save money and this planet

• Stop trying to impress other people!!-They aren’t thinking about you anyway-even if they are if you do impress them they will resent you for it!!

• Don’t go shopping-it leads to spending!-if you need something just buy it-Much shopping is about filling psychological needs-it is retail therapy that doesn’t work

• Live within your means-a totally radical idea in this age

Ways to Cut Spending

• Take care of what you have-this includes your body-if you don't take care of it where will you live?

• Wear it out• Do it yourself• Research value, quality and

multiple use• Buy used whenever possible• Follow this program-the average

person cuts 20% just by following this plan