Tuesday, August 7, 2007

Joe Dominguez

This is the second post in a series outlining our journey away from excessive consumerism and wealth creation to a more "simpler" life. If you haven't already read "A journey of a thousand miles begins with a single step", you might like to read that first. You should be able to scroll down and find it (there is a post in between that and this one).

So, we've jumped onto the "frugal bandwagon" and discovered that it's not such a bad lifestyle after all. Plenty of room for improvement of course - I'm not sure if I'll ever stop learning new ideas. And I certainly can't claim that I'm frugal all of the time!

I think it was toward the end of 2004 that one of the girls from the Frugal Aussies group suggested that I might enjoy the content on a set of tapes she owned. She offered to send them to me on loan. I then sent them on to another person within our group and so on. I wasn't really sure what I was going to find in listening to the tapes but so far we'd been happy with the twist our life journey was taking so I was quite excited at the prospect of being challenged in relation to our attitude toward money. The tape set was called Transforming Your Relationship with Money or something along those lines. The speaker on the tapes was a man named Joe Dominguez (fingers crossed I've spelt his name right). I later found out that a book by the same person "Your Money or Your Life" is basically the same content.

I started listening to the tapes while I was doing the ironing. That didn't work out so well in the end. I was so busy stopping to take notes that not much ironing got done! LOL. I've just dug out those notes - I think a bit of a review is always a good thing. See, sharing this with you is helping me! :-) There is a LOT of material in this course and I won't even try to go through it all. But I will say it impacted me in many ways. I asked my DH to listen to the tapes as well and he too had a lot of "ah ha" moments. What I want to share with you are a couple of parts of this course that really helped change the way my DH and I started to view money and wealth in general.

One of the most significant things that stood out in my mind was the definition of money. How would you define money? I was thinking of it as a way to exchange goods and services. However, he challenges this idea and states that "money is something you'll exchange your life energy for". Life energy is a finite thing - we all have X number of hours in the day (although none of us know how many days we'll have). It's about recognising that when we go out to work to earn money, we're using up some of our life energy to do that. Once we recognise this fact, it's easier to make a more conscious decision about whether certain purchases are worthwhile or not - based on the fact that the money to buy them *cost* us a certain amount of our life energy. The great thing I love about this concept is that there are no right or wrong answers - what matters to one person may not matter to another and that's okay. There's no restriction on what you do or don't spend your money on - only the suggestion that you do so consciously rather than automatically.

The whole concept of money = life energy was a completely foreign one to me and it did take me a while to get my head around it. But it does make sense. You could argue that this gives a higher weight to the importance of a passive income (a passive income being something you earn from investments that doesn't necessarily require a lot of time from you). That is certainly a part of Joe's overall plan and I'll come back to that in a later post.

The other concept that really stood out to both DH and I was the spending vs fulfillment curve. In a nutshell it is a concept that suggests that not all dollars spent are equal when it comes to how much fulfillment/enjoyment we receive in return for that spending.

To give you an example. Once upon a time, it was a treat to go to the roadhouse and buy hot chips for lunch on our way home from church. As things got a little bit more comfortable finance wise, we started to do this every Sunday. After a while we got bored with just hot chips and so we started adding other items to our lunch to increase the *fun factor*. What began as a $5 outing grew to $20 (still providing the same level of enjoyment but now costing us 4 times the money) and on it grew from there. Eventually it got to the point where no amount of money spent could continue to offer us the same level of enjoyment that our original $5 had bought us. Spending more money hadn't increased our fulfillment - if anything it ended up decreasing it. That's just one example of many trying to explain to you how the more money you spend, the more you need to spend in order to get the same level of fulfilment.

His point is that when you first start out on your own with your own money - you get quite a bit of fulfilment from purchasing even the most basic of needs. As you get into more *wants*, the amount of enjoyment/fulfillment you receive per dollar starts to slow down. So you need to spend more and more money in an effort to gain that fulfillment. You can even reach a point where spending more money starts to decrease your sense of fulfillment (my own theory - that this is based on a certain amount of frustration in the pursuit of happiness and perhaps even a subconscious realisation that money isn't going to buy you happiness). He goes on to explain that if you can find your point of enough - you find your point of minimum spend for maximum fulfillment.

Have I totally confused you yet? LOL. I'm not finding it easy to explain what I mean without writing a complete novel here. If what I've shared so far has tweaked your interest a little, you might like to try and get hold of Joe's book "Your Money or Your Life" and read it for yourself.

I do have a little more I'd like to share with you on what we learnt through listening to Joe's tapes. I haven't quite made it to the "Simple Living" part that I was going to today. But I will get there! :-)

Next Instalment: More on Joe Dominguez - How Joe's definition of money can help you find your point of "enough" or "maximum fulfillment for minimum spend".


Rhonda Jean said...

I read Your Money or Your Life a few years ago, and have lent it to my kids to read. It's a life changing book, that's for sure. I didn't know it was on a tape. It's good to see another friend on the frugal highway. : )

Kez said...

Thanks J, I really needed the reminder about the money = life energy (and yes, I think you explained it well!). I'm having a 'me' day today - I think I'll dig out Your Money or Your Life for a refresher.