Updated on 10.22.07

Your Money or Your Life: Valuing Your Life Energy – Maximizing Income

Trent Hamm

YMOYLThis is the twenty-second part of The Simple Dollar Book Club reading of Your Money or Your Life. Want to know more?

Here, the book takes what I at first thought was a very odd jump based on what came before. Instead of implying that a lower-paying, lower-responsibility job is better (because you can reserve more of your life’s energy for your real work), Your Money or Your Life actually goes down the other path, encouraging you to chase the buck, as long as it’s in alignment with your health and integrity.

They use the example of a person that figured out earlier in the book that they really only need $1,000 a month to live. Now, that person could get a 40 hour a week job making $8 an hour and actually bring home that $1,000 a month. Or, that person could get a job that earns an effective hourly rate of $25 an hour and only work 20 hours a month.

Hold on, I thought, what kind of job would pay that well and only have me work 20 hours a month? The truth is that not many would, but if you change your perspective, you might be able to find a job that does the same thing. For example, look at a tax preparer – that person works crazy (but profitable) hours from January to April, then basically closes up shop until next January. That person might earn the $12,000 they would need for the whole year in those four months, then they can spend the other eight months simply not working and instead doing volunteer work or chasing their dream of writing a great novel.

This actually makes me think of an old friend of mine named Jacob. His philosophy is that he works for about a year for a company, then quits and spends three years doing whatever – usually living almost as a homeless person wandering around the country with a backpack. He’s repeated this cycle at least three times that I know of – he’ll interview for a few jobs, work incredibly hard at them, quit after a year (and he takes a pile of shining recommendations with him) and then wander for three years until the funds run low. Then the cycle repeats.

The point of these stories is that you don’t have to be glued to the traditional get up go to work come home go to bed cycle – there are other options available to you. The key is to know how much you actually need to live and then find the solution that maximizes your hourly wage, getting you to that minimum with as little burnt life energy as possible.

The book offers a few tips on how to get a high-paying, high-integrity job, but the advice isn’t that strong. Smartly, Joe and Vicki point the reader towards What Color Is Your Parachute?, an absolutely brilliant book on just this topic.

The take home from all of this? The only purpose for paid employment is to get paid, so one should either seek the absolute maximum dollar for their work or else get involved in something that provides other life-affirming benefits. If you’re working at Wal-Mart, for example, look for the best retail job you can get, even if it’s part time – that frees you up to do other things – or look for another minimum wage job closer to what fulfills you the most. Either way, you’ll be getting far more out of each hour of life energy you spend.

Tomorrow, we’ll dig into the eighth chapter, “The Crossover Point,” continuing until the subheading “The Power of Working for a Finite Period of Time.” This section appears on pages 259 through 268 in my paperback version of the book.

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  1. I definitely feel like my job is a means to an end, I’m not looking for my life’s fulfillment out of a job, but I do need to make good money so I can get out of debt and achieve my other goals.

    I think the book is right on in that regard, and I think our culture tends to think that you need to find a job to do FOREVER (until ‘retirement age’) and then do what you want. That doesn’t really make a lot of sense if you stop and think about it. That outlook will only keep you entrenched in our consumerism culture for good. Breaking free of that is the only way out in my opinion.

  2. Philby says:

    Trent, your book reviews are always incredibly in depth. Honestly, they’re so in depth that a lot of time I don’t feel it’s necessary to read the book! I might actually pick up this book since it appears to approach finance from a perspective that places more importance on things other than the bottom line dollar amount.

  3. “The only purpose for paid employment is to get paid …” That seems to be the rut many are stuck in but it doesn’t have to be that.

    In terms of going for the top job – always a good idea. If you are doing what you are doing might as well make the most of that venture – financially, educationally, networking etc.

    – Mark.

  4. Laura says:

    I enjoy this part because it shows that a fulfilling serves two purposes, gives a good paycheck AND enriches your life. It’s not an either/or situation.

  5. infix says:

    But what if instead of taking a job that pays well maybe it’s better to take a job that you will like? Trent’s example of his friend Jacob: he works for one year and then takes 3 years off. What if one could find a job that is fullfilling enough such that you don’t want to quit every year? If this Jacob (for sake of example) found a job that made 1/2 as much, but one which he didn’t feel like he had to quit after a year and take 3 years off he’d actually be ahead financially.

    ““The only purpose for paid employment is to get paid …” That seems to be the rut many are stuck in but it doesn’t have to be that.” Yes, exactly. Up until this point I’ve tracked quite well with the book, but now I disagree with this point. Yes, for most paid employment is to get paid, but we all know of people who get much more satisfaction than just pay out of their work.

    Personally, I think I’ll be facing this kind of choice in a few months: Stay at my current job, which after a year I no longer like (I’m no longer waking up with energy and eager to get to work, now I dread going to work) but it pays pretty good. Or take a job with a friend who is starting a new company – I have no doubt that the startup will pay much less than the current job (probably about $20,000 less/year) however, I know this person and he is determined to have fun at whatever he does – he brings an energy into any situation and he energizes everyone he works with. It sounds like this part of this chapter is saying that would be a bad move (to take a big paycut) – but I think I’d be much more willing to keep working for several years in this startup instead of just enduring my current job and possibly quitting in another year.

  6. DebtKid says:

    I’ve been thinking about taking a 2nd (or 3rd in my sort of case) job actually not for the money, but just to get out and live life a bit. I’ve been self-employed since I was 21, am 24 now, and think I might just take a low-paying job a few hours a week just to get out and about. We’ll see.

  7. plonkee says:

    Surely I’m not the only person in the world who enjoys their job. I think maybe a 4 day week would be nice and am kind of working towards being able to afford that, but I don’t get the whole ‘a paid job just gives you money’. My paid job does indeed give me money, but it also stretches my mind, helps me make the world a better place, provides me with interesting people to work with, and so on.

  8. I just took a freelancing gig and told myself it was for the experience, to diversify my income, for this reason, for that one.
    Now that I’m starting to do the work I realize it’s strictly for the money. I’ll have to find spiritual fulfillment elsewhere.

  9. Minimum Wage says:

    Around here, tax preparers are paid $8-$10 per hour (you have to be hired by someone else and you can’t set your own rates) and you have to get a license to do it.

  10. Kay says:

    Last month, I quit a full-time Internet product management job that required 30% of my time to be spent away from home. My salary was very nice, but the cost to my family and health was too high. So, I negotiated an ongoing, remote, part-time consulting gig with my company. I put in 15 hours each week at a higher hourly rate than I used to earn, on my own schedule, sometimes across the table from my kid while he does his homework. This feels reasonable.

    However, I don’t expect this contract to last. We’ve been living on a budget that doesn’t require my income and we’ve been banking every dime I earn until my old company decides they don’t need me anymore. I have two more money-making projects queued up for that eventuality, plus my husband understands that the money we save by my housework/cooking/frugal shopping contributes directly to the bottom line as well.

    Our goal is that I’ll never work full-time again unless it’s a project that truly moves me. My husband has a high-paying job he enjoys that only requires about 35 hours a week (he comes home for lunch each day) and we’re stashing money away in case that falls through some day, but life is so much better when the bulk of our energy is going to our family, not our employers.

  11. KarenFLA says:

    Two comments. First of all, I love my work and get a lot of personal satisfaction out of it. I am in a helping field and change people’s lives for the better. Because I have been doing this for 35 years I have a lot of knowledge in my head and I find it easier and faster to do my work than people who have been in it a shorter time. I plan to work into my mid 70s, but probably only 20 hours a week at that point.
    Secondly, when the person who takes off for the years years gets too old or disabled to work, he does not have a pension or savings to fall back upon. His social security retirement is based on an average of 35 years.A lot of zeros averaged in doesn’t leave much income to calculate on.

  12. Jennifer says:

    Trent, I have a job where I can work as little as 8 hours a month(that is the minimum) and work as many hours as I want and at $35/hour. I am an RN and there are many nurses who work “casual” and work what they want, when they want.

  13. Debbie M says:

    The way I recall reading this section is that if you don’t like your job anyway, you may as well take the highest-paying job you can get so that you can quit sooner.

    To me this was a big eye-opener. I’m always taking jobs that are sort of what I would like to do or near what I would like or in the same building as people who sort of do what I like, so that at least I’m around interesting people. On bad days, I sometimes think that if I’m going to hate my job anyway, I may as well be a programmer. (I have the brain for it, but it feels like mental sweatshop work.)

    It’s nice if you can get work that you love or at least like, but it seems unlikely that everyone can get jobs they like. Some jobs are almost inherently unlikeable. Sure, some sanitation engineers enjoy working outside, and some custodians and clerks are control freaks who enjoy fixing things up, and some professors enjoy both teaching and research, but does the ratio of jobs and the ratio of people who like them match up perfectly? I doubt it!

    As far as going without work some years while you’re young (and healthy and not dead yet), I’m all for it. Not that I’ve actually done it. What I do is work jobs that require only 40 hours per week, and often, I’m really only on call 40 hours and don’t always have to actually work the whole 40 hours, so that’s my version of taking early retirement. In return, I get low pay which means my Social Security payments will also be low.

  14. Minimum Wage says:

    The way I recall reading this section is that if you don’t like your job anyway, you may as well take the highest-paying job you can get so that you can quit sooner.

    What if all you can get are low-wage jobs that will never pay enough to allow you to quit?

  15. K.J. says:

    “The only purpose for paid employment is to get paid.”

    Oh dear. I read _Your Money or Your Life_ last week (thanks for recommending it!), and I don’t think that’s the point Joe and Vicki are making at all. (Think of the example of the nurse-turned-truck driver.) Debbie M’s much more on the money.

    Overall, I really enjoy your site, Trent. It’s full of good stuff. :-)

  16. pamphyila says:

    There was a time in my life when due to health reasons I chose to work part time for $25/30 per hour as opposed to working fulltime for $7-$10 per hour. It didn’t make any sense to most people in my family who knew about it at the time – but it certainly made more sense to ME. I could make much better money tutoring/teaching and so on than at Target!

  17. Jason says:

    Minimum Wage:
    I don’t know where you live but i’m an accountant, i don’t have my CPA yet and my rate is above $25.

    Just on a side note for your example most accounting firms don’t close up shop after April unless they exist in a rural area or they are a sole proprieter.

  18. d.a. says:

    I enjoy the work that I do, and would do it for free… it’s just that there’s more I’d like to do as well. This chapter has reverberated for me over the years, and I’m at the point where creating a custom work environment is a strong possibility. Looking forward to the next few years…

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