Die with Zero: Getting All You Can from Your Money and Your Life

by Bill Perkins

optimization problem: how to maximize fulfillment while minimizing waste.

I was taking

money away from my starving younger self to give to my future wealthier self! No wonder Joe called me an idiot.

Many psychological studies have shown that spending money on experiences makes us happier than spending money on things.

In the wise words of Carson, the butler of Downton Abbey, “The business of life is the acquisition of memories. In the end that’s all there is.”

What do all investments have in common? They are just mechanisms for generating future income.

go-go years, slow-go years, and no-go years.

the senselessness of indefinitely delayed gratification.

And if you’re not aware of this fairly predictable pattern, you’re likely to (incorrectly) expect steady expenditures on experiences from the day you retire until the day you die. That’s one reason you might greatly oversave and underspend.

buying annuities protects you against the risk of dying too old (outliving your savings).

one popular rule of thumb for retirement spending is the “4 percent rule,” whereby you withdraw 4 percent

from your savings each year of retirement. Well, with annuities, your annual payouts will probably amount to more than 4 percent of what you put into the annuity—and, unlike the 4 percent withdrawals, those payouts are guaranteed to continue for the rest of your life.

That is, the premise of this book is that you should be focusing on maximizing your life enjoyment rather than on maximizing your wealth.

a person’s ability to extract real enjoyment out of the gift declines with their age.

By age 50, the utility of money has declined considerably: Either you would get a lot less enjoyment out of that same dollar or you would need more money (say, $1.50) to obtain the same amount of enjoyment as you got out of $1 back when you were a healthy, vibrant 30-year-old.

The 26-to-35 age range combines the best of all these considerations—old enough to be trusted with money, yet young enough to fully enjoy its benefits.

“donors should ask not just how, but how soon, their gifts will be used.”

You want to achieve the optimal balance between enjoying the present and providing for a good future.

investing in your health is investing in every single subsequent experience!

People who spend money on time-saving purchases experience greater life satisfaction, regardless of their income.

the older you are, the more someone should have to pay you to delay an experience.

there are far fewer conversations about saving for excellent and memorable life experiences that need to happen much sooner than the typical retirement age.

asymmetric risk: when the upside of possible success is much greater than the downside of possible failure.

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.

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.