I was very skeptical of this book by Bill Perkins, because unless you know the date of your death, dying with zero is impossible. So what could it really be about?
But I was wrong, because this book is about so much more than just “dying with zero”. To be honest, it is one of the most thought provoking books that I have read in a long time.
The author says that it is primarily meant for people who are doing well — maybe too well — on saving for retirement. But I think anyone could get inspiration from this book, because it is really about how to shift yourself from your day-to-day existence to really thinking about what you want from your life.
To quote from the end of the book,
“I hope my message has at least jarred you into rethinking the standard and conventional approaches to living one’s life — get a good job, work hard through endless hours, and then retire in your sixties or seventies and live out your days in your so-called golden years. But I still ask you: Why wait until your health and life energy have begun to wane? Rather than just focusing on saving up for a big pot full of money that you will most likely not be able to spend in your lifetime, live your life to the fullest now.”
No matter what your financial situation is, this book will help you take stock of your life and think about not putting off the things that you can do now.
Valuing Experiences Over Possessions
The author starts each chapter with a rule, and rule number one is “Maximize your Positive Life Experiences.” He states:
“Many psychological studies have shown that spending money on experiences makes us happier than spending money on things. Unlike material possessions, which seem exciting at the beginning but then often depreciate quickly, experiences actually gain in value over time.”
He tells a story about giving a gift of $10,000 to his 80-year old grandmother. He had gotten a big bonus at work and was excited to share this with her – but there was nothing she wanted to spend it on. At this point in her life she was happy just living a quiet life at home. He realized then that “you retire on memories.” At the end of your life when you are too frail to do anything else you can still look back on the experiences you have had, so you should try to maximize what he calls your “memory dividends.”
“Start actively thinking about the life experiences you’d like to have, and the number of times you’d like to have them. The experiences can be large or small, free or costly, charitable or hedonistic. But think about what you really want out of this life in terms of meaningful and memorable experiences.”
Rule Number 2: Start Investing in Experiences Early
He talks quite a bit about the fact that not all the things you want to do can be done at any time in your life. If you want to spend more time with your six-year-old child – you only have one year to do that. An intense ski weekend will be more enjoyable in your 20s than in your 30s or 40s. While you are raising your children you probably don’t have the time to go backpacking through Europe. A long trip that might be really enjoyable in your 50s might be something you don’t have the energy for in your 60s.
“Remember that “early” is right now. […] think about which [experiences] would be appropriate to invest in today, this month, or this year. If you’re resisting having them now, consider the risk of not having them now.”
Not Living on Autopilot
Rule number three is to aim to die with zero.
“Staying on autopilot is easy; that’s why we use it. But if you’re trying to live a full and optimal life, rather than just taking the path of least resistance, autopilot won’t give you what you want.”
Without deliberate planning it can be easy to “follow our culture’s well – trodden , default path through life — to coast on autopilot” and spend too much of our life working to accumulate money that in the end we will never spend, instead of realizing when we have enough.
He points out that if you have a financial advisor who is paid with a percentage of your “assets under management” they are certainly not going to tell you to save less and/or spend some of that money early, because that would reduce your “assets under management.” He suggests (as do I) working with a fee-only advisor so you get an unbiased opinion of what you really need for retirement.
What About Unforeseen Medical Expenses?
He states that people also tend to want to save a lot of money for unforeseen medical expenses that may happen late in life, and while it makes sense to save some money for this, to him it does not make sense to die with, for example, a million dollars in the bank because you were afraid you might need a million dollar surgery.
“To put it bluntly, no amount of savings available to most people will cover the costliest healthcare you might possibly need.” If insurance won’t cover it, “it won’t make any difference for the vast majority of us whether we save for it or not. Either the government will pay for it or you will die.”
He also states “I will not work for years to save up for a few more months on a ventilator with a quality of life that is close to zero” […] “I’ll let the cards fall where they may.”
He also suggests that it is smarter to spend your health care money earlier on things to maintain and improve your health, since that will add to your ability to enjoy every other aspect of your life.
“People of all ages should be spending more time and money on their health. No age group spends more on their health than the elderly, whose healthcare spending aims to treat degenerative diseases, manage pain, and prolong life. But earlier investments in health would actually yield a greater lifetime fulfillment.”
Predicting When You Will Die
As part of rule number four – use all available tools to help you die with zero – he suggests using a life expectancy calculator to try to get a prediction of when you might die based on sex, age, current health and other factors. It is not an exact science, but it can give you at least some idea of how long your money will need to last.
He mentions a couple of different calculators:
https://www.longevityillustrator.org/
https://www.livingto100.com/calculator (this one requires an email address for results)
“Here is the problem: People are irrational about death even when they are not close to death. That’s why they have outsized fears of running out of money before they die – big enough to compel many people to over-save for the distant future and, as a result, fail to enjoy their present as much as they could.”
What About the Kids?
“Rule No. 5: Give money to your children or to charity when it has the most impact.”
The author says that a common objection to his ideas is wanting to leave an inheritance for your children or for a charitable cause. But, he says, by the time you die your children will themselves be old – so instead you should give it to them when they are younger and need it more, and you can actually enjoy giving it to them and can add another positive experience to your life. Charities can also probably make better use of your money now rather than later.
“Whether the money or time you’re giving is to children, to charity, or to yourself, the key concept is the same: There is an optimal time, and it is never when you’re dead.”
Time-Bucket Your Life
Rule number six is to not live your life on autopilot – as I mentioned earlier. Rule number seven is to think of your life as distinct seasons.
For this he suggests one of the most interesting ideas of the book – that you should ‘time bucket” your life. You do this by first writing down in a list all of the activities or events you definitely want to have during your lifetime.
“For example, you might want to have a child, run the Boston Marathon, hike the Himalayas, build a house, file a patent, start a business, volunteer for Doctors Without Borders, dine at a Michelin-star restaurant, […] read 20 classic novels, attend the Super Bowl, compete in a Scrabble tournament,” etc.
“We all have dreams in life, but I have found that it’s extremely helpful to actually write them all down in a list.” For right now, he suggests, don’t worry about money – the goal is to envision what you want your life to be like.
After this you make a list of 5- or 10-year intervals that represent the rest of your life – your “time buckets” – and you put each of your hoped-for activities into the specific buckets, based on when you’d ideally like to have each experience. Think about how health, available free time, and family commitments might affect when you reasonably do each activity.
One of the purposes of this exercise is to give yourself a sense of urgency about the things you want to do in your life. We all know that if someone told us we only had 30 days to live we would do all sorts of things we wouldn’t do otherwise – but you can’t actually live your life that way. But we do have a limited amount of time, and “time-bucketing” our life can help us be proactive and make a plan for that time.
Know When You Have Reached Your Peak
You might be thinking – but how can I afford to do all of those things? The author tries to address this with rule number eight which is to know when to stop growing your wealth. The idea is to figure out the minimum you need to live in retirement, and to realize that when you hit that number you are now free to do other things with that money.
This is almost exactly what happened to me. At a certain point in my mid 40s I realized that if I just let my retirement account grow naturally, I would have enough even without contributing more. I thought about what else I would like to do with that money, and decided I wanted to try to retire early. It was an unconventional choice, but one that I don’t regret at all.
“If your net worth keeps climbing, rising from your sixes to your seventies and beyond, there is no way you will die with zero. So at some point you must actually start dipping into your lifetime savings; if you don’t, you will end up with unspent money, which means you haven’t acquired as many experience points as you could have”
This means that there will be a point in your life when you will be as wealthy as you will ever be, and your net worth will go DOWN after that point. If you are someone who has had a lifetime habit of saving money, this can be a difficult concept to accept.
He also urges people to remember that though working longer and making more money for retirement can mean you will have a more luxurious retirement, “for every additional day you spend working, you sacrifice an equivalent amount of free time, and during that time your health gradually declines.”
At a certain point “continuing to build wealth doesn’t necessarily buy you more experiences, because your declining health limits your enjoyment of certain experiences no matter how much money you have.”
“People so often talk about saving for retirement. But there are far fewer conversations about saving for excellent and memorable life experiences that need to happen much sooner than the typical retirement age”.
Rule number nine is to be bold but not foolish. He talks about taking chances with your life when you are younger and have a lot of time to recover if, for example, your career in Hollywood doesn’t work out. Also,
“Do the bold thing now, rather than in retirement, because the go-go years are very short. In general, this whole “I’ll wait to do this when I’m retired ” is a massive blunder. But if you’ve already made that blunder, go ahead and make the most of the time you’ve got.”
He also suggests that part of being bold as an older person is having the courage to actually spend your hard-earned money.
In Conclusion
At the end of the book the author acknowledges that it really isn’t possible to die with zero, but “by aiming to die with zero, you will forever change your autopilot focus from earning and saving and maximizing your wealth to living the best life you possibly can. That’s why dying with zero is a worthy goal — with this goal in mind, you are sure to get more out of your life than you otherwise would have.”
My own conclusion about this book is that it is extremely thought provoking, and that no matter where you are financially this book will help you think about how to get the most out of your life. Author Bill Perkins, who per his bio is a successful energy trader, hedge fund manager, Hollywood film producer and high-stakes poker player, offers numerous stories from his life, anecdotes of other people, and words of advice that can inspire you to take a new look at your life.
