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

by Bill Perkins

Rule No. 1: Maximize your positive life experiences.

Death wakes people up, and the closer it gets, the more awake and aware we become.

Death awakens

Living as if your life were infinite is the opposite of taking the long view: It’s terribly shortsighted.

I see this question as an optimization problem: how to maximize fulfillment while minimizing waste.

some experiences can be enjoyed only at certain times:

Temporal limitations

we all have at least the potential to make more money in the future, we can never go back and recapture time that is now gone. So it makes no sense to let opportunities pass us by for fear of squandering our money. Squandering our lives should be a much greater worry.

What I am an advocate for is deciding what makes you happy and then converting your money into the experiences you choose.

you should choose your experiences deliberately and purposefully rather than living life on autopilot, as too many of us do.

Make conscious choices about how you spend

“What Good Is Wealth Without Health?” In other words, to get the most out of your time and money, timing matters. So to increase your overall lifetime fulfillment, it’s important to have each experience at the right age.

I’m not actually a billionaire, but I spend like one.

At least Gates had the wisdom and foresight to stop working for money when he was still young enough to start spending it in a big way. Too many wealthy, successful people fail to do that.

They just keep earning and earning, trying to maximize their wealth without giving nearly as much thought to maximizing what they get out of that wealth—including what they can give to their children, their friends, and the larger society now, instead of waiting until they die.

Now is the time

It’s called consumption smoothing. Our incomes might vary from one month or one year to another, but that doesn’t mean our spending should reflect those variations—we would be better off if we evened out those variations. To do that, we need to basically transfer money from years of abundance into the leaner years.

Consumption Smoothing

Your Money or Your Life, by Vicki Robins and Joe Dominguez.

Life energy is all the hours that you’re alive to do things—and whenever you work, you spend some of that finite life energy. So any amount of money you’ve earned through your work represents the amount of life energy you spent earning that money. That is true regardless of how much or how little your work pays. So even if you’re earning only $8 an hour, spending that $8 also means spending an hour’s worth of your life energy.

Think in Life Energy

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.

Factor in all liffe energy aspects of a job

so when I look at a cookie, I convert it to time on the treadmill. Sometimes, when I see a cookie that looks good, I’ll take a bite to see how good it tastes and then ask myself, Is eating this cookie worth walking an extra hour on the treadmill? The answer is not always no (although it usually is), but either way, it’s never a thoughtless decision.

Your Money or Your Life. Above all, the authors of that book urge us not to sacrifice our lives for money; they want us not to be slaves to our jobs and our possessions. So how do they suggest we go about achieving this financial freedom? The path they lay out is frugality—choosing to live simply so that you don’t need a lot of money.

Follow on reading

Your Money or Your Life. Above all, the authors of that book urge us not to sacrifice our lives for money; they want us not to be slaves to our jobs and our possessions. So how do they suggest we go about achieving this financial freedom? The path they lay out is frugality—choosing to live simply so that you don’t need a lot of money.

Frugality. Be mindful about spending

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

Spend on experiences. Not things

They pay what I call a memory dividend, which you’ll read a lot more about in the next chapter. Living on a shoestring when you can afford more deprives you of those experiences and makes your world smaller than it needs to be.

The memory dividend. Value increasing with time

After all, nobody would ever try to die with zero if they’re afraid they’ll hit zero before they die. I want to be clear, though, that not all financial fears are the same. Some people’s fears are irrational: They have plenty of resources, so if they plan right, they won’t need to worry about running out of money. Those are the people I’m writing for—people who are saving too much for their own good.

indigent

Rule No. 2: Start investing in experiences early.

When he came back a few months later, there was no discernible difference between his income and mine—but the pictures and stories of his experiences showed that he was infinitely richer for having gone.

The main idea here is that your life is the sum of your experiences. This just means that everything you do in life—all the daily, weekly, monthly, annual, and once-in-a-lifetime experiences you have—adds up to who you are.

So it stands to reason that you should put some serious thought and effort into planning the kinds of experiences that you want for yourself. Without that kind of deliberate planning, you’re bound to just follow our culture’s well-trodden, default path through life—to coast on autopilot. You’ll get to your destination (death) but probably without having the kind of journey you would have actively chosen for yourself.

“The business of life is the acquisition of memories. In the end that’s all there is.”

That was when I realized that you retire on your memories. When you’re too frail to do much of anything else, you can still look back on the life you’ve lived and experience immense pride, joy, and the bittersweet feeling of nostalgia.

What I’m saying is that our culture tends to overemphasize the virtues of the ant—of hard work and delayed gratification—at the cost of other virtues.

Economists even call expenditures on education “investment in human capital.”

So buying an experience doesn’t just buy you the experience itself—it also buys you the sum of all the dividends that experience will bring for the rest of your life.

That’s because whenever you interact with someone, sharing an experience you’ve had, that is an experience in itself.

like so many people who invest in real estate, Paulie was thinking only about return on equity—not about return on experience. To me that’s just another version of the same mistake I’m always harping about: earning and earning while forgetting that your whole point in earning money is to be able to spend it on the experiences that make your life what it is.

many people live as if they forget that this is the point of earning, saving, and investing money. When you ask people what they’re saving money for, much of the time the answer is “retirement.”

Yes, you need money to survive in retirement, but the main thing you’ll be retiring on will be your memories—so make sure you invest enough in those.

The answer is up to you, and you might choose the lattes, but if you’ve actively thought through the question and made a deliberate decision, then you’re not acting on autopilot.

Conscious choice of how too spend

Rule No. 3: Aim to die with zero.

So many people feel like they can never get enough, and as their net worth grows, their goalposts just keep shifting.

If you spend hours and hours of your life acquiring money and then die without spending all of that money, then you’ve needlessly wasted too many precious hours of your life. There is just no way to get those hours back. If you die with $1 million left, that’s $1 million of experiences you didn’t have.

Well, divide the $130,000 by $19.56 an hour and you get a little more than 6,646. That’s 6,646 hours that Elizabeth worked for money she never got to spend. That’s more than two and a half years of 50-hour workweeks! Two and a half years of working for free. What a waste of life energy.

2.5 YEARS of time spent at the office for nothing

People who are earning a high hourly rate or a high annual salary are sometimes even more tempted to keep on working and earning.

Maybe it’s because of my training as an engineer, or maybe it’s why I chose to study engineering in the first place, but I love efficiency and I hate waste. And I can’t think of any worse form of waste than squandering your life energy.

Waste not, want not

Back in the 1950s, an economist named Franco Modigliani, who went on to win the Nobel Prize, posited something that came to be known as the Life-Cycle Hypothesis (LCH)—an idea about how people manage their spending and saving to try to get the most from their money across their life span. He basically said that making the most of your money in the course of your life requires that, as another economist put it, “wealth will decline to zero by the date of death.” In other words, if you know when you will die, you must die with zero—because if you don’t, you are not getting maximum enjoyment (utility) from your money.

Modigliani and maximum utility of the dollar

Optimizing across your whole life takes a lot of thought and planning; it’s easier to live for short-term rewards (myopia) and to stay on autopilot (inertia) than to do what will be good for you in the long term.

Behavioral economists understand that just because something is rational to do—in this case, switching from saving to “dissaving”—that doesn’t mean people will do it easily. Inertia is a very powerful force.

2024 for me. Used as a time of great personal growth. Could not have been spent better

“Maximizing your life” doesn’t care where the money came from. Whether you earn it from a job you love or you inherit it from your great-granddad, whether the money is a by-product of following your passion or of being a member of the lucky-sperm club, once it’s given to you it becomes yours. And once it’s yours, it now represents hours of your life, which you can exchange for whatever will help you live

The source of the money does not matter. It is yours. Use it. It is a tool

the truth is that those people and causes would be better off getting your wealth sooner rather than later. Why wait until after you die? Second, whatever amount you give to others immediately becomes their money,

Give now. Early and often. 1 - 1 - 1

the truth is that those people and causes would be better off getting your wealth sooner rather than later. Why wait until after you die? Second, whatever amount you give to others immediately becomes their money,

And then let it go

How do I know that people save too much for too late? I’ve seen the statistics. If you look at data on net worth by age, you find that most people keep accumulating wealth for decades, and most don’t start spending it down until very late in life.

People save too much