Your Money or Your Life
Don’t ask yourself what the world needs, ask yourself what makes you come alive,
and then go do it. Because what the world needs is people who have come alive.
Is money a ransom for our time and energy? Do we make a living or do we make a dying while losing ourselves in the pursuit of more money, status, peer approval?
I have yet to gain experience from reading a book or listening to someone.
On the contrary, most of the time I read books because I have acquired a philosophy and have made choices based on certain life experiences. Do we have that in common? I actually get drawn to books that share my philosophy.
I truly believe that money should be assessed by the true amount of time and energy we expand to earn the X amount of money on an hourly basis.
If you earn $4,000/week but it costs you $ 3,000 in additional expenses including (but not limited to) the cost of commute, a certain type of clothing, make up, a certain make of car, food and so on, you actually earn $ 25/hour not $ 100.
But we almost never use the approach to evaluate what our time is truly worth. This method was proposed more than twenty years ago by Vicki Robin and Joe Dominguez in the book Your Money or Your Life.
What is Your Time Truly Worth?
I had internalized the energy and time for money concept when I figured out my true goal well before I read the book.
I came to realize that on my own through soul searching and aspirations I had invested my time and energy in.
I learned the hard way that I am happy when I feel good and agile, have a lot of energy and have a clear mind. I am happy when I am present.
The presence in your own body makes you attractive, not some external factors.
I honestly do not need to buy myself stuff or eat chocolate to feel good about myself.
I actually had to test the latter because I am guilty of being influenced by my peers. No longer.
I found the confidence of appreciating my energy and time and to recover from the flue of getting-me-some-trinket-to-feel-better. I also found peace and well-being in the heart of New York City.
The irony lies in the fact that it takes a lot of energy to find peace in a place like New York City, that constantly stresses you out: indeed, peace and happiness (and all answers you’ve been looking for) come from within.
Then I had found my purpose and had solidified my true life goal.
So how do we miss the point of why we need more money? Where does it go anyway?
Have you ever asked yourself (and track numbers) how much money you’ve made thus far?
It is crucial to answer these questions to determine how much money you need and how much money is enough to feel wealthy. It is crucial not only to increase income but to reduce expenses.
A lot of times we overlook job-related expenses I discussed above and discount the lack of fulfillment we get from an expense-laden job.
Increase Your Pay by Reducing the Cost of Living
You can give yourself a raise and cut out costly job associated expenses by doing a few thing. First, you can reduce the cost of living which is expressed in income tax you pay. You can pay less tax if you:
- Own a business;
- Live in a no-income tax state;
- Live and work abroad.
Own a Business
You can reduce the amount of income tax you pay in the United States by living in the states exempt from state income tax. Federal income tax still applies.
However, business owners receive the highest tax reduction. Running a business and creating jobs undeniably deserves an incentive.
Live in an Income Tax-Free State
You can move to one of the seven states that do not have income state tax.
- South Dakota.
You will still pay federal income tax but you will definitely save by not paying state income tax. Especially if you lived in California , you will experience significant savings.
Live and Work Abroad
The first $101,000 of your income are exempt from tax to the United States Internal Revenue Service under the privilege of bona fide residency.
If you are an entrepreneur who does not have to be tied to a specific place or if you need to relocate broad for a job, this option is for you. if you do not have a boss and can select a place to live abroad with the lowest tax bracket, your cost of living will be reduced dramatically by this option.
If you work for a corporation and relocating to another country for work, you may still qualify for the bona fide residency test.
The primary requirement for qualifying for the bona fide residency test is your intent to stay abroad in the near future, or do not have an intention to return to the United States.
You can travel back to the United States. However, the duration of your stay cannot exceed thirty five days combined annually.
The Foreign Earned Income Exclusion enables you not to pay income tax to the United States on the income earned abroad.
Most of the time whether you qualify for that exclusion is determined on a case-by-case basis and requires additional due diligence on your part to file required documents with the Internal Revenue Service.
If you have an accountant or uses services of a tax attorney, you may not need to dedicate too much time to research and the execution of the exclusion filing process. Otherwise, do your own research and determine whether the option is suitable for you.
The discussed strategies will help you optimize the value of the money you earn and will allow you to direct your time and energy toward thing that you find meaningful and fulfilling.