How “The Four Agreements” Helps You Financially

by Neal Frankle, CFP ®

The Four Agreements by Miguel Ruiz – do you think of it as a book on psychology and money? While spiritual in nature, it’s a very practical guide to personal and financial freedom. If you haven’t read it, you should go out and get it today.

You might think I’m completely nuts, but I think it’s also one of the best personal finance books you can find. (I don’t know if this happens to you, but I often read something outside the realm of finance and find critical personal finance lessons. That’s certainly the case with The Four Agreements.)

What is the book about?

The main premise of the book is that we are all “conditioned” by our culture to want and do – without any consideration of who we really are. We make “agreements” about how to live before we really understand the nature of what we are agreeing to.

If you think about the role advertising plays in our economic lives, I think you’ll agree with the premise of the book. Unfortunately for us, our “conditioning” started long before we started watching TV, listening to the radio or surfing the net. It started when we were infants.

Ruiz suggests that much of the pain and suffering we experience individually and collectively is a direct result of this “conditioning.” Addictions and arguments. Violence and unhappy careers. Senseless pursuits of meaningless material goods. We are conditioned with fear rather than faith.

That fear leads down a dark road. The author suggests that the only antidote is to re-condition ourselves. The way we do this is to create a new set of “agreements” we use to navigate our lives.

I can’t give justice to the book in this short post but let me summarize the four agreements Ruiz suggests as a solution to our problems. You be the judge. Tell me if you think your financial life will improve if you adhere to these ideals:

1. Be Impeccable with Your Word.

This goes way beyond being truthful. It means speaking with integrity. Saying only what you mean and not demeaning yourself or others with your words.

Have you ever shot your mouth off and ended up shooting yourself in the foot as a bonus? Think about the greatest financial challenge you ever faced. Were you stuck and just didn’t know how to get out of financial trouble? Had you been impeccable with your word, would you have avoided that error? I know I would have.

When I was younger, I said the wrong thing to the wrong person at the wrong time. Maybe I satisfied my ego – but I hurt other people and myself to boot. Who knows how many opportunities I missed because I didn’t choose my words carefully in the past.

2. Don’t Take Anything Personally.

Ruiz says that nothing – absolutely nothing – people do is personal. Other people act out of their own perceived reality. They don’t do anything “to” us. We just think they do and when we do, we create anger and resentment. As a result, we needlessly close communication. The author suggests we stop doing this and tells us how.

I sure wish I took that advice when I was younger. Again, as a very young man, I took just about everything people said personally. As a result, I was one angry fellow. Nobody wants to be around an angry jerk. Heck, even I didn’t like being around myself at times. Did I miss business opportunities as a result? You better believe it.

3. Don’t Make Assumptions.

The author suggests that this is a transformative agreement, and I agree. The chapter that explains this agreement encourages us to be brave. To ask questions when we don’t fully understand. To tell people what we really want.

Ruiz gives a great example about a couple who gets married and assumes each shares the same feelings about marriage when in fact they don’t. Of course this leads to huge problems down the road. What about you? Have you ever assumed someone close to you had the same opinion about spending, debt and money when in fact they didn’t?

I know I’ve violated this agreement – and I try not to anymore.

4. Always Do Your Best.

This agreement recognizes that nobody is going to implement these agreements perfectly – and that’s OK. It’s actually more than OK; it’s human. But be satisfied with doing your best because if you’re not, you’ll waste time and energy judging yourself rather than improving yourself. Self-abuse and regret closes the door to opportunities that lie ahead.

I love this book and I hope you read it again if you own it. If you don’t please do yourself a favor and get it for yourself and the people you love. I’m writing this review about The Four Agreements as one of my last posts for 2009. I’m doing that for a few reasons:

First, if you haven’t achieved as much as you’d like to in 2009, if you study this book, you’ll make up for it. This guide to great living is like no other book I’ve ever read.

Second, I believe that to have the kind of life you deserve, you need to do the best you can with your finances and have the right attitude towards the things that money can’t fix.

This book goes a long way towards giving you the kind of life no amount of money could.

If you’ve read The Four Agreements, are you impressed as I am? If you haven’t read it, do you think it’s something you’d get something out of? What are your favorite personal development books?



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{ 7 comments… read them below or add one }

Neal@Wealth Pilgrim February 12, 2010 at 7:29 AM

Awesome goal Erika. I hope you chime in and let us know how it’s going.


FS December 31, 2009 at 3:55 PM

Thnx for the review Neal! Sounds like it’s a good book I will have to thumb thru at Barnes and Nobles!:)

Why do anything if you don’t do ur best?



Neal December 30, 2009 at 3:34 PM

Thanks Joel…I’m going to check that one out. I’ve heard it was great but with your endorsement, I know it’s a must read.


Gary Seidler December 30, 2009 at 10:26 AM

As a longtime fan of Miguel Ruiz and The Four Agreements, l want to let you and your readers know that the “Fifth” Agreement has just been published. l am not yet familiar with No. 5, but trust it will be as truthful and helpful as its predecessors.


Neal December 30, 2009 at 3:35 PM

Gary, I’m pretty sure the 5th Agreement is,”Always read Wealth Pilgrim”:


2 Cents December 30, 2009 at 9:22 AM

I often find the reverse is true too. Personal finance books have a lot to teach about life in general. I’m a big believer in the idea that aiming for improvement in any area of your life is catchy.

This sounds like a great read. Thanks for pointing it out.


Neal Frankle December 31, 2009 at 6:23 AM

I like that concept. I never considered that but you are absolutely right.

Improvement is catchy. Great observation.


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