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3 steps to money mastery: Would you rather have freedom or stuff?
If you want to free yourself from the consumer culture and economic constraints, you have to achieve financial independence, says author Vicki Robin.
Vicki Robin is a prolific social innovator, writer, and speaker. She is coauthor with Joe Dominguez of the international best-seller, Your Money or Your Life: Transforming Your Relationship With Money and Achieving Financial Independence (Viking Penguin, 1992, 1998, 2008, 2018).
So let’s take a look at financial independence and what that really means. It means, you know, if you haven’t thought about it at all you just think “Oh, that’s for rich people” or “I could never do that.”
And so first of all I’d like to distinguish between independence and freedom.
So financial freedom is like freeing your mind. Financial freedom is understanding that I’m me and there’s an economy out there, and I have a relationship with it but it doesn’t run my life. It’s freeing my mind from the messages of the consumer culture, the messages of the economy. The message is that, you know, a house is a “starter house.” No, that’s MY HOUSE! I could die in my house, you know. It’s like there’s so many presumptions that drive us into wage slavery, debt, and it doesn’t matter whether you are at the low end or at the high end.
If you are engaged in that sort of ancient process of “more, more, more” you are not free. So the first layer of financial independence I talk about is this freedom of the mind, this freeing your mind, of saying like “I’m sovereign, the economy is secondary. I will move my sovereign self into the economy for my own purposes.”
Rather than “I’m a schlump and the economy is my mega boss and, I don’t know – my boss seems to be as big as the sky and so I will just let my life be run by my boss and the tax system. I’m just going to let myself be run by this thing.”
No, so you’re a sovereign being! So that’s your first layer of financial independence is your own sovereignty.
And then the second layer is to get out of debt. And for some people debt feels endless. And the first step to getting out of debt is stop going into debt. Really. It’s like – and so there are many organizations. There’s Debtors Anonymous. There’s many ways that people can help them with this addiction to constantly spending and spending beyond their means. However you do that you just stop increasing your debt and start whittling your way through it. And with the approach in Your Money or Your Life I mean there’s many people who have written to us who flatten their debt in a couple of years—impossible debt, debt that was going to be endless. They would die with this debt. And once they see what the debt is doing to them in terms of the actual opportunities, the future opportunities of their lives, once they see that, once they have a taste for, a yen for the kind of sovereignty, authenticity, autonomy, freedom, whatever you want to call it, you know, mastery over your own time, ability to write your novel or take your sailing cruise or play with your grandkids—Whatever it is that you want more than you want stuff that’s what we’re trying – that’s the sort of link that we try to get people to make, so that something in the future is more important than the immediate pleasure of buying one more tchotchke that you’re never going to use.
We call them “gazingus pins”, the things you buy repeatedly and you never use, and they go into the gazingus-pin-drawer and yet when you’re in the store you buy another one. And just look in your drawers, look in your closets, you’ll find it.
So getting, flattening your debt is the second level of financial independence, and the third level really is to get those six months of savings in liquid assets, whether it’s bank accounts—Someplace where you can actually within 24 to 48 hours you could realize that money.
So that you have an emergency fund so that you are not tumbled back into debt as soon as something happens; You lose a job which many people now feel that even their very, very important and significant jobs are precarious. So you want to get out of the zone of precariousness. And part of how you get out of that precariousness is savings.
And then over time the next layer of financial independence is you start to see that surplus savings can be invested in such a way that it throws off an income. And over time if you become a systematic and sometimes obsessive saver, you know, there are people who save up to 80 or 90 percent of their income whether it’s in their 401K or in a Roth IRA. There’s all these instruments for saving money.
You become a super saver and you can see, you could chart it. You can watch your passive income grow, and you can start to see because you track your daily expenses based on the mechanics of this whole thing, of knowing money is your life energy. You track everything you buy.
And an easy way to do it—if you don’t like, you know, like writing in a little notebook every time you do a transaction—is just use your debit card. I said debit, not credit.
You use your debit card and your bank has a complete record of all your purchases. And then every month you take a look at your purchases, you sort out in categories the plight of your lifestyle. And then let’s say, you know, you have a category called shoes and you spend like $150 or let’s say $162 on shoes. And we have a calculation that says “my real hourly wage,” all things considered is not $36 an hour, it’s $9 an hour. So I’ve just spent X number of hours, ten hours of my life or whatever on shoes and then you ask – is this worth it to me? Did it make me happy? Am I glad about this purchase? Would I spend more on it? Would I spend less on it? No shame, no blame, no like admonition. No going and confessing to your financial planner. Just between you and your Mint.com or whatever it is.
You just look at that and you kind of tell yourself the truth about whether spending your life energy in that way makes a difference.
That process gives you a sense. You develop a month in, month out, year in, year out sense of precisely how much money it costs you to have a happy life. You have your happy life number. It’s not, you know, some columnist in the Washington Post, blah, blah. It’s your happy life number. It is, “I spend $3,776 month in, month out, month in, month out, month in, month out, month in, month out more or less plus or minus ten percent.” And then you start to see your income from your investments, from your savings line—when that crosses and you have $3,7776 (or whatever I said) dollars passive income you realize you could let go of the active income and live on that amount of money. So it’s reality-based, it’s unique to you. The only person who knows what your number is is you. Some people become FI on $700,000. Some people a million. Some people ten million. Some people less. Some people basically they get out of debt and they have their six months of savings and they have some basic income that the bottom will never fall out. And then they travel around the world for three years on bicycles.
It’s freedom. It’s like you’re buying yourself degrees of freedom through this developing a habit of precise attention to the flow of money and stuff in your life.
If you want to free yourself from the consumer culture and economic constraints, you have to achieve financial independence, says author Vicki Robin. She lays out her 3-step plan towards achieving that freedom over money and finding your "happy life number" - how much money it costs you to have a happy life.
Vaccines find more success in development than any other kind of drug, but have been relatively neglected in recent decades.
Vaccines are more likely to get through clinical trials than any other type of drug — but have been given relatively little pharmaceutical industry support during the last two decades, according to a new study by MIT scholars.
Sallie Krawcheck and Bob Kulhan will be talking money, jobs, and how the pandemic will disproportionally affect women's finances.
What would it be like to experience the 4th dimension?
Physicists have understood at least theoretically, that there may be higher dimensions, besides our normal three. The first clue came in 1905 when Einstein developed his theory of special relativity. Of course, by dimensions we’re talking about length, width, and height. Generally speaking, when we talk about a fourth dimension, it’s considered space-time. But here, physicists mean a spatial dimension beyond the normal three, not a parallel universe, as such dimensions are mistaken for in popular sci-fi shows.
An article in Journal of Bioethical Inquiry raises questions about the goal of these advocacy groups.
- Two-thirds of American consumer advocacy groups are funded by pharmaceutical companies.
- The authors of an article in Journal of Bioethical Inquiry say this compromises their advocacy.
- Groups like the National Alliance on Mental Illness act more like lobbyists than patient advocates.
The Corruption That Brought Prozac to Market — Robert Whitaker, Journalist<span style="display:block;position:relative;padding-top:56.25%;" class="rm-shortcode" data-rm-shortcode-id="bea9cff2b25efc18b663a011a679ba16"><iframe type="lazy-iframe" data-runner-src="https://www.youtube.com/embed/UyaJExxFPAE?rel=0" width="100%" height="auto" frameborder="0" scrolling="no" style="position:absolute;top:0;left:0;width:100%;height:100%;"></iframe></span><p>Consumer-oriented groups gained steam over the ensuing decades. Their efforts helped inspire the 1938 Food, Drug, and Cosmetic Act after over 100 people (mostly children) died from a sanctioned drug, Sulfanilamide. If not for the hard work of these advocates, this case might have been overlooked.</p><p>Early efforts also focused on the food industry, which was increasingly using chemical preservatives. The origin of Consumer Reports can be found in the consumer advocacy movement. Both the food and drug industries were getting a free pass to experiment on citizens with few repercussions.</p><p>These movements provided a social foundation for important advocacy work in the second half of the century. Female-led groups evolved to focus on women's reproductive rights, AIDS, and mental health. As the authors write, these groups struck a balance between working <em>with</em> and <em>against</em> current trends. Sometimes you need to craft legislation with officials; at other times, you have to rage against the machine with everything you've got. </p><p>Advocacy marked an important turning point in public health (and culture in general). These groups were tired of placating to a medical model that treated the male body as the standard. This wasn't limited to anatomy. As I <a href="https://bigthink.com/coronavirus/pandemic-warnings-rp-eddy" target="_self">wrote about last week</a>, a high-profile 1970s-era conference about the role of women on Wall St featured no women on stage. You can imagine what reproductive health looked like during that time. </p><p>Advocacy groups made real impact in public health. Then the money began pouring in. </p><p style="margin-left: 20px;">"These groups were funded largely by individual donations with some foundation support, but in the late 1980s, newer women's health groups moved to professionalize, effectively splitting the women's health movement."</p><p>A number of groups resist corporate ties to this day, such as the National Women's Heath Network and Breast Cancer Action. Too often, however, groups argue that their existence depends on corporate funding. This can lead to uncomfortable compromises. </p><p>An estimated two-thirds of patient advocacy groups in America accept funds from the pharmaceutical industry. Pharma companies gave <a href="https://link.springer.com/content/pdf/10.1007/s11673-019-09956-8.pdf" target="_blank">at least $116 million</a> to such groups in 2015 alone.</p><p>For example, over a three-year period, the National Alliance on Mental Illness (NAMI), which was founded by two mothers whose sons suffered from schizophrenia, received nearly $12 million from 18 pharmaceutical companies. The largest donor was Prozac manufacturer, Eli Lilly. By 2008, three-quarters of NAMI's budget was funded by the pharmaceutical industry. It gets worse:</p><p style="margin-left: 20px;">"An Eli Lilly executive was even 'on loan' to NAMI, paid by Eli Lilly, while he worked out of the NAMI office on 'strategic planning.'"</p>
A customer waiting for his medication at the Headache Bar in a pharmacy in Sydney, Australia. Among the items on sale are 'Paigees with Chlorophyll' and Alka Seltzer on tap.
Photo by Dennis Rowe/BIPs/Getty Images<p>This influx of cash skews public understanding of drugs. It also influences advocates to overlook real problems caused by pharmaceutical interventions, especially when it comes to mental health.<br></p><p>For a real-world example, consider how Xanax came to market. As journalist Robert Whitaker <a href="https://www.youtube.com/watch?v=2e829xdb4AA" target="_blank">explains</a>, an <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1463502/?page=1" target="_blank">initial study</a> was conducted to determine efficacy in treating panic attacks. After four weeks, Xanax was outperforming placebo, which is common with benzodiazepines over short-term usage. But it wasn't a four-week study; it was a 14-week study.</p><p>At the end of eight weeks, there was no difference in efficacy between Xanax and placebo.</p><p>At the conclusion of the study after 14 weeks, the placebo outperformed Xanax. By a lot.</p><p>Why is Xanax still prescribed for panic attacks? Because the pharmaceutical company, Upjohn, only published the four-week data. The 14-week data was not in its favor. Nearly forty years later, over <a href="https://www.statista.com/statistics/781816/alprazolam-sodium-prescriptions-number-in-the-us/" target="_blank">25 million</a> Americans receive a prescription despite its <a href="https://drugabuse.com/xanax/effects-use/" target="_blank">long list</a> of side effects and addictive profile. </p><p>As the authors note, many consumers are not aware of how advocacy groups are funded.</p><p style="margin-left: 20px;">"An international study of groups in the United States, United Kingdom, Australia, Canada, and South Africa found that the extent of relationships with industry was inadequately disclosed in websites that addressed ten health conditions: cancer, heart disease, diabetes, asthma, cystic fibrosis, epilepsy, depression, Parkinson's disease, osteoporosis, and rheumatoid arthritis."</p><p>That's a tangled web of relationships. Pharmaceutical industry funding negatively impacts the work advocacy groups should be focused on: protecting us. NAMI, for example, claims that as a "natural ally" to the pharmaceutical industry, it helps consumers access "all scientifically proven treatments." When the industry ignores evidence of long-term damage caused by its treatments, you have to wonder what's being advocated. </p><p>Although, as the authors conclude, that question is easy to answer. </p><p style="margin-left: 20px;">"Instead of drawing insights from patient experience to set organizational agendas and challenge industry agendas, today's groups are silent on high prices and drug harms, oppose efforts to regulate these basic rights, and demand access to drugs that challenge the safety and effectiveness."</p><p><span></span>--</p><p><em>Stay in touch with Derek on <a href="http://www.twitter.com/derekberes" target="_blank">Twitter</a>, <a href="https://www.facebook.com/DerekBeresdotcom" target="_blank">Facebook</a> and <a href="https://derekberes.substack.com/" target="_blank">Substack</a>. His next book is</em> "<em>Hero's Dose: The Case For Psychedelics in Ritual and Therapy."</em></p>