9 Steps to Financial Independence!《Get Good with Money》Book Review and Practical Guide

10 Questions to Get Good with Money

If you’re unhappy because you feel you have too little money, you might misunderstand the meaning of money. If you think more money equals more happiness, you might find it hard to be happy. Because money is just a tool, not the goal.

Ask yourself these questions:

1. Is your money enough?
2. Do you spend enough time with family and friends?
3. Do you feel fulfilled when you get off work?
4. Do you have time for activities you genuinely find meaningful?
5. If you could quit or lose your job, would you see it as an opportunity?
6. Are you satisfied with your contribution to the world? Can you live in harmony with money?
7. Does your work highlight your values?
8. Do you have enough savings to cover 6 months of living expenses?
9. Is your life complete?
10. Can your work expenses and your life values coexist?

If you answered “no” to any of these questions,

then this book is for you.

MindMap - 《Get Good with Money》

What Money Is and Isn’t

• Material: A banknote is just a piece of paper or plastic. The money we earn, the expenses we make, bank transactions, and fund transfers are all based on these simple numbers. This is the level of money most people understand.
• Psychology: Your fears and desires, your personality—are you conservative or impulsive? Are you generous or frugal? Who influenced your perception and ideas about money?
• Culture: The concept of money is deeply rooted in social perceptions and habits. Usually, because we haven’t had much, we feel more is better. More money is always good, makes you a winner, and those with less money are losers. Money as a reward or punishment? Have you ever considered what factors shape your perception of money in life?
• Value: The true value of money is what you earn with each hour of your life. Time and life can earn money, but money can never buy back time.

The above is an excerpt from the book, but I feel it’s profound, so I rewrote some of it. The main point is that “we earn money with our lives, every penny is earned with life, so we should cherish and use this money wisely” instead of squandering it arbitrarily.

The Four Aspects of Finance

Financial Intelligence

Refers to a person’s knowledge, understanding, and ability in financial matters, including skills in financial planning, income and expense management, investment management, risk management, and tax management. Financial intelligence helps individuals or organizations better understand financial concepts, make informed financial decisions, and effectively manage and grow wealth.

Financial Soundness

Financial soundness here doesn’t mean “being rich.” The focus of financial soundness is whether you can spend money healthily, consciously, and distinguish between “necessary,” “needed,” and “wanted,” clearly understanding your relationship with money. This completely overturned my imagination of financial soundness, and you also need to know how your spending affects society (which is too difficult, most people don’t realize it).

Financial Independence

Most people use “financial freedom” to describe this, and the meaning in the book is similar. It means having more time to spend on things you want to do and not spending too much time at work. This state usually involves having enough non-wage income. But the real purpose of having non-wage income is not to stop working entirely, but to not worry about money even if you work.

Financial Interdependence

The financial interdependence mentioned in the book is quite interesting. It refers to being able to reinvest time into more social and interpersonal activities after achieving financial independence, rather than being detached from the community or society. I wonder… if I were a homebody and became financially independent, would I really do that?

Of course, you don’t have to believe everything in a book! There are valuable lessons, but also things we must critically think about. Like the financial interdependence in this book, for me personally, it means investing in writing and recording, so that more people have the opportunity to experience the beauty of finance. Maybe some people will spend all their money and return to being a corporate slave after achieving financial independence 😝

9 Steps in the Book to Get Good with Money

Create a Personal Balance Sheet

The book asks you to calculate how much money you can earn in your lifetime and then work backward to estimate your worth! This, to some extent, teaches you to recognize reality and know your own weight. So if you really can’t afford a sports car, it’s better to drive a regular car well. The real content is what we call assessing the current situation in financial planning, so we can know how to plan for the future.

Live in the Present

This content has been written in many books, which means the future is hard to predict, and the past is hard to pursue. After the first step, you need to clearly know your net worth. Then decide whether to accept or change it. Usually, a positive person will choose to change, but you can also choose to accept the status quo passively.

Establish an Income and Expense Statement

The book says to create a budget. Creating a budget is rare in most people’s financial processes because there’s a misconception that there’s no point in budgeting when you have little money, unlike a company with a lot of money to budget. But this is important.

Start Changing

Starting to change here really means changing your mindset. Besides changing your mindset, you also need to change your behavior. One thing that impressed me was, “Is the money earned with time valuable? Does this value align with my life goals?” Many people may not have even thought about their life goals. If you really haven’t, think about it next time you’re alone. When your funeral is held, what would the sad family and friends in front of your photo want to say to you?

Visualize Your Life

Visualizing your life is a slogan I wrote myself. What does visualizing your life mean? Simply put, it means keeping a record of your expenses! This way, you know where you’re squandering your precious life, just like this post says. Sometimes, keeping a record is just a short-term exercise. Understanding yourself through expense tracking is a good thing, but you don’t necessarily need to pressure yourself with frequent tracking. If you really don’t like tracking expenses, I’ll share other financial management methods that don’t require it.

Live Consciously

While reading this book, I found this step and chapter quite silly. Living consciously here just means remembering to save money when spending. There are 10 ways to save money: don’t go shopping, live within your means, take care of what you already have, use things until they break, DIY is your sense of accomplishment, plan your needs well, research the cost-performance ratio, spend little money to buy good things, and meet needs efficiently. Let the above nine things be meaningful. Because the length is too long, I don’t want to say too much. In short, it’s telling us to save money. Saving money is not wrong in some ways because it’s a way to avoid waste, depending on the angle we take.

Maximize Your Income

Maximizing your income means trying to earn as much money as possible, whether through side hustles, part-time jobs, or improving your skills. When I read this, I thought the book was contradicting itself. But after reading carefully, I found it wasn’t because its main purpose is in the next step called “invest in your life.” Here, maximizing income has a viewpoint that I think is quite good: people with lower salaries or incomes often don’t think there’s anything wrong with their abilities or status. Instead, they tend to think, “Why do people with high incomes seem to do nothing, but their income is higher?” This misconception can easily make you hesitate.

Invest in Your Life

Investing in life, in other words, is using the money earned with your life to enrich yourself. The part of enriching yourself is to enable the four financial aspects— Financial Intelligence / Financial Soundness / Financial Independence / Financial Interdependence—to be realized. This chapter also writes about the benefits of compound interest and advises everyone to give back to society after having money, not to be a wealthy recluse.

Strive for Independence

I think the most important last step in this book is written for those who have won the lottery or are already financially independent. Continuously investing in yourself is very important, and the book mentions diversifying your intellectual property and assets.

Intellectual property means enriching your mind.

Further Reading

懶得 (Lazy) Conclusion

懶大

金融科技新創 CEO | 獨立財務顧問

When I first read this book, the first half was mostly about the basics of financial planning, which is to assess the current situation. Many people don’t know how to assess the current situation or where to start, which is one of the pain points most people encounter in financial management.

The middle part of the article discusses the meaning of money and work, which is quite profound. The focus is on the relationship between work and money, avoiding work for the sake of money and avoiding the unconscious waste of money earned with life.

The last part of the book is the most outrageous. Originally, the first 2/3 were encouraging a minimalist lifestyle, but then there’s a twist, talking about how important it is to make money! Indeed, making money is very important, but you really need to avoid blindly making money.

I think some parts of this book could be shorter, especially since it’s a thick book with deep meanings. So I’ll summarize it for everyone:

Diagnose yourself well, don’t end it yourself.

Understand money well, don’t spend it foolishly.

Invest in yourself well, repeatedly invest in yourself.

• The problem with financial management may be blindly investing in financial instruments before understanding yourself, which is one of the key points I mentioned in my first episode, whether you have financial confidence in your financial decisions.

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