5 Ways to Financial Independence from Your Money or Your Life by Vicki Robin

John Ajayi
6 min readJul 1, 2021


Imagine this.

What if you get to save $500 from your paycheck every month; no matter the payments you have to make, you consistently put $500 in your bank. In the space of 12 months, you’re going to have $6000 saved up.

Let’s say you invest half in the stocks of Berkshire Hathaway — which has been doing an average return of 20%. Thus, you have $3000 in the stocks of Berkshire Hathaway. After the first year, your money becomes $3,600.

From your second-year savings, you add $3000 to the investment, making it $6,600. By the end of the second year, you will have $7,920.

If you keep investing $3000 to what you have already invested at the annual returns of just 20%, you will have $26,789.76 in stocks at the end of the fifth year. Add that to the $15,000 you would have saved up from the half you didn’t invest. Altogether, you will have $41,789.76.

This is how Ronald Read was able to leave a fortune of $8 million by the time he died. He was just a janitor and a gas station attendant.

Of course, the stock market won’t always be perfect, but if you hold the stocks of reputable companies for long, you’re not going to lose.

$500 may seem impossible to save every month, but take a minute to imagine how you would feel knowing you had almost $42,000 somewhere. Would it be enough for you to leave that frustrating job and look for the one you love?

The How

Achieving this was the reason the book Your Money or Your Life was written. Financial independence seems distant to many people. College debts, mortgage, car loans, credit card debt, and loans from friends can truly be overwhelming.

New Year resolutions and budgets have failed many times. To be financially free, here are 5 things you need to do:

What’s your life energy worth?

The authors made it clear that money is something we choose to trade our life energy for. What you earn in a month is what your life energy is worth for that month.

First, look at the time and money it costs to maintain your job. To do this, you need to note the following:

  • How much do you spend to get to work?
  • How much do you spend on costuming for work? Shaving, makeup, clothing …
  • How much do you spend on food because of work? Coffee, snacks, lunch … and those meals you ordered for dinner because you were too busy (or tired) to cook.
  • Those things you do to escape work — If work was great and fulfilling, you would hardly do them. The recreational substances, weekend parties to blow off steam, …
  • Those vacations you took because you needed a break from your job.
  • Those times you had to visit the doctor because of work-related stress or other health issues.
  • The services you pay for because your job does not give you the time to do them yourself — babysitting, mowing your lawn, …
  • Social evenings when you had to ‘network’ for business.
  • Educational programs to get better at your job.

Note what you spend on everything above and the number of hours you spend doing them in a year. So, if you use 10 gallons of fuel in a week to get to work — $37, then you may spend $2000 on gas in a year.

Your real hourly wage = what you earn weekly — all you spend because of your job.

What you spend because of your job annually should be divided by 52 weeks.

What you really earn may not be more than $10 an hour, instead of the $20 you think you earn.

Why do you have to know this?

  1. Makes you see if your decisions about your job are worth it. Would it cost you less if you can move closer to your workplace? What if you start taking the bus? Are those clothes you bought to impress worth it? What if you took another job that may pay less but cost much lesser?
  2. Makes you see how your money is flying. This answers the question — where did all the money go?
  3. Makes you more accountable for every dollar.

Note how you spend your life energy

Now that you know how much you really earn, how have you been spending it? This is how you’ll know.

Get a pocketbook or open a note on your phone and start to input every penny that goes out and comes into your life. That $2 you gave as a tip, note it down. That $10 you won in a bet, add it.

You want to know what is taking the bulk of your money. At the end of the week, look at what you’ve spent on the most. Can you reduce the spending in any way? Is it a necessity or a craving you always satisfy?

The authors of the book The Millionaire Next Door noted that those who have achieved a high net worth relative to income know how much they spend on clothes, travel, housing, transportation, etc.

At this point, you want to solely rely on the money from your income, so keep the credit card. When you use a credit card for a purchase, you’re only piling up debts you will pay interest on.

Getting to Enough

‘He who knows he has enough is rich.’ — Tao Tè Ching, the ancient Chinese book of wisdom.

  • Enough is having what you need for survival.
  • Enough is having what you need for your comfort.
  • Enough is having some special luxuries, with no excess to burden you unnecessarily.

Enough is knowing when your body tells you that you’re okay instead of eating everything on the plate. It is knowing that you don’t need a third car even though everyone on your pay grade has three or more cars.

If all you chase is money or you live to have it all, you can never have enough. What you worked hard to buy three years ago would now seem outmoded, you would need to upgrade to the latest one.

Enough has 4 components:

  1. Accountability: you need to know how much money is flowing in and out of your life. If you don’t know this, you can never have enough.
  2. An internal yardstick for fulfillment: you should be able to tell when you have reached the stage of survival, comfort, and a few luxuries. Following other people will make you never have enough — they don’t have enough themselves.
  3. A purpose in life higher than satisfying your desires and wants. You can never have enough if a desire becomes a need. There will always be things you desire, but you need to be able to keep them as desires.

When you focus on a purpose bigger than you, your energy will be focused on fulfilling it. The purpose could be:

  • Building a brand
  • Loving your family
  • Serving on the school board
  • Creating art
  • Working towards environmental sustainability.

With time, you will no longer define your net worth in dollars and cents or trying to get ahead of the next person.

4. Responsibility: a sense of how your life fits within your community and the needs of the world. If you don’t care about anyone but yourself, you can’t have enough.

Watch the way you swipe

The credit card is the ticket to consumerism. When you swipe and get something, irrespective of how well you can afford it, it creates a pattern of continuous spending.

You should rarely use your credit card. A justifiable instance is to cover an emergency when cash is not available. Dave Ramsey, a popular personal finance expert, says that if you use credit cards instead of cash, you will spend 12–18% more.

Pay with cash as much as you can. No interest accumulates on that.

Frugality isn’t as bad as it sounds

Frugality is enjoying the virtue of getting good value for every minute of your life energy and from everything you have the use of.

Frugality means you get value from everything you spend your life energy on. You don’t have to buy everything you enjoy. A swimming pool is costly to maintain and you won’t swim most days of the week. Why not enjoy the pool at a hotel or a community center?

Frugality does not say don’t drive nice cars. You don’t have to own a nice car before you drive one. The cost of maintenance is killing. Why not just lease one when you want to enjoy a ride in a nice car? Leasing one will cost you way less.

And if you have stuff you don’t need, Amazon, eBay, Craigslist are places where you can sell stuff you no longer need.

Frugality does not mean being cheap. Going for a lower quality variant of a thing you need because you want to be frugal is not frugality, it’s being cheap.

Frugality is about maximum fulfillment for each unit of life energy spent.

So, what should you spend your life energy on?



John Ajayi

Walking through this adventure called life. Am I the only one who thinks this way or life is just like Jumanji without dinosaurs?