I’ve read many books on finance, but I must admit that this one comes with an original idea. Die with zero.
Why?
The author sees life as a sum of experiences. And to live experiences, you need money, time, and health.
Most people prioritize money over time and health. And Bill tries to bring us back on track by maximizing our joy rather than our wealth.
Two strong influences guide his thinking.
1. A stoic Idea
We are only passing through this earth, how do we maximize this time?
2. A book. “Your Money or Your life”
A very well-known book in the FIRE community. It’s about how you consume your “life energy.” All activities, work, shopping…consume a part of this “life energy.” And remember, this fuel is limited.
If you earn more but work more, it is not necessarily a good deal. You’re drawing on your “life energy” reserve.
A higher salary doesn’t always mean more actual income on an hourly basis. For example, a person making $40,000 per year might actually be making more per hour than someone earning $70,000 per year. How is that possible? Again, it’s all about life energy. If the $70,000 job costs you more in terms of your life energy—the cost in time of a long commute to the city, the cost of the kinds of clothes you need for this high-status job, and of course the extra hours you have to put into the job itself—then the person making the higher salary often comes out poorer in the end.”
I earned a very good living in my previous job, and I liked what I was doing. But I left it because it took too much of my”life energy.”
So how do you try to die with Zero?
Don’t live your life on autopilot.
If we didn’t have to work to earn money, most of us would find other things we’d much rather do with our time.”
This is undoubtedly true for most people. And even if you love what you do, the idea is not to live on autopilot. We always have to balance work with time and health.
Statistically, the author shows that people continue to accumulate wealth (and therefore trade their time and health) at ages when it no longer makes rational sense.
Conversely, investing in your health (eating, moving, breathing) early is like compound interest. You’ll be able to experience more wealth even at an older age.
We continue to work as if “working” becomes such a strong habit that it’s impossible to get rid of. And it might be true.
It takes a child 10 years to get used to brushing his teeth, but try to stop it as an adult. I bet it’ll be difficult. (I don’t know yet, but I’m still in the phase where I need to create the habits for my young children. And it’s a daily battle 😀)
Are we working only as a habit even if it makes no more financial sense?
That’s the author’s point; let’s be rational and intentional about our choices.
How to Spend Your Money (Without Actually Hitting Zero Before You Die)
To free ourselves from this fear of ” missing out, “Bill suggests buying annuities. It’s an insurance product where you pay a large sum of money to an insurer, and they pay you monthly for the rest of your life. Of course, these products have a cost. (nothing is free in our world😀)
This option takes away the fear of running out of money at the end of one’s life.
Now that I have bought the idea of “Dying with Zero,” what do I do with my money.
“The business of life is the acquisition of memories. At the end that’s all there is.”
— Downton Abbey
Going back to the intro, “experiences” are the things to look for. This is where the author proposes to spend your “life energy” without counting the cost.
Why is this?
Experiences require money, time, health, and they build memories.
It’s a form of investment that doesn’t pay dividends in money but in memory— “Memory dividends.”
And like any good investment, you have to start early.
But you won’t be able to live the same experiences at 20, 40, or 80 years old?
The time-bucket suggestion.
If you want to die with zero and make the most of whatever health you have at every point in your lifetime, you will need to spend more in your fifties than in your sixties, and more in your sixties than in your seventies, let alone your eighties and nineties”
That’s why it’s essential to be intentional about the way you live and work.
Time cannot be regained, not even with a lot of money. So you have to live the right experience at the right time.
As you might know, I’m a big fan of the “Life Plan.” I’ll add this parameter to it.
A difference with the FIRE community.
Real fast, I swung from being a FIRE guy to a guy basically lighting money on fire.”
The author sometimes associates experience with purchasing power. The higher the spending power, the more unique the experience is likely to be. It’s also certainly related to his wealth.
But from my perspective, the experience can be unique and cost very little.
I recently listened to this podcast with Rickey Gates, who ran 3700 miles across the United States in 5 months on a budget of $5000. Listening to him, you can tell that he has had some unique experiences. He will gain a lot of “memory dividends.”
What About the Kids?
“If I spent all my money, I won’t let anything to my kids.”
Here again, Bill brings us to the rational part of the équation. Most inheritance arrives too late. See below.
By following the exercises in the book, you are supposed to find how much money you need to live your full life. Including your crazy experiences.😀
Now that you know that, why not give money to the Kids and your loved ones when they need it more. So give when you are still alive.
In conclusion
Remember: In the end, the business of life is the acquisition of memories. So what are you waiting for?”
We can discuss what kind of experiences, how much I need, when I should stop, etc…And each one of us has to do it.
But let’s remember the main idea, we are just passing through this earth.
So if you have the privilege to ask yourself these questions, do so and choose intention over auto-pilot.
Die with Zero: Getting All You Can from Your Money and Your Life by Bill Perkins
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