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

by Bill Perkins

I’m trained as an engineer and made my fortune on the strength of my analytical skills, so I see this question as an optimization problem: how to maximize fulfillment while minimizing waste.

For example, some experiences can be enjoyed only at certain times: Most people can’t go water-skiing in their nineties. Another principle: Although 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.

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.

And I’m not saying you shouldn’t save for the future. What I’m saying is that people who save tend to save too much for too late in their lives. They are depriving themselves now just to care for a much, much older future self—a future self that may never live long enough to enjoy that money.

But the next time I visited, all the plastic was back on, and it stayed on for the rest of my grandmother’s life. This never made sense to me: Why spend all this money on furniture that you don’t get to enjoy? The plastic over the couches is a microcosmic example of much of what I’m talking about in this book: the senselessness of indefinitely delayed gratification.

So instead of engaging in “precautionary saving,” as economists call the practice, I’ll let the cards fall where they may. We all die sooner or later, and I’d rather die when the time is right than sacrifice my better years just to squeeze out a few more days at the tail end. Or, as I like to say, “See you at the grave!”

They wouldn’t endorse a certain calculator but instead referred me to their own Web site (soa.org), which mainly provides tools for professional actuaries. There is one very accessible tool their Web site recommends: the Actuaries Longevity Illustrator (http://www.longevityillustrator.org/). Based on your answers to just a few questions, it produces a chart that shows your probabilities of dying at different ages.

In fact, thinking of annuities as insurance makes them a lot more sensible than thinking of them as investments—because as investments they are not good at all. But that’s not their goal—their goal is to insure you against the risk of outliving your money.

I’ve actually started using an app called Final Countdown that counts down the days (and years, months, weeks, and so on) before my estimated death date, and I have been urging all my friends to do the same.

If your goal is to maximize what you get out of your life, it makes sense to want to maximize what your kids get out of their lives, too. So if you want to make the most of your gifts to your kids, you have to consider each recipient’s age. By applying this line of thinking, you will be taking money that is nonproductive in terms of life enjoyment and turning it into money that is maximally useful.

Recommendations Consider at what ages you want to give money to your children, and how much you want to give. The same goes with giving money to charity. Discuss these issues with your spouse or partner. And do it today!

the key takeaway, I now realize, is to strike the right balance between spending on the present (and only on what you value) and saving smartly for the future.

50-30-20 comes from Elizabeth Warren—yes, that same Elizabeth Warren. Before she entered politics, Warren had been a law professor with special expertise in bankruptcy and also co-wrote books about why middle-class Americans go broke and how to avoid that dismal fate. She suggested the 50-30-20 rule, which she called the Balanced Money Formula, as a way to help people maintain financial stability.

You want to save as close to the perfect amount as possible: You want to achieve the optimal balance between enjoying the present and providing for a good future.

Your ability to enjoy many experiences in life depends on your health—but money plays a part, too, because a lot of activities cost money. So you’d better spend the money when you still have the health.

because $100,000 has more value in your fifties than it does in your eighties, and your goal is to maximize your enjoyment of your money and your life, it’s in your best interest to shift at least some of that money from your eighties into your fifties.

Nothing has a greater effect on your ability to enjoy experiences—at any age—than your health. In fact, health is actually a lot more valuable than money, because no amount of money can ever make up for very poor health—whereas people in good health but with little money can still have many wonderful experiences.

The more money you have, the more you should be using this tactic, because your time is a lot more scarce and finite than your cash. I am constantly trading money back into time. I’ll never get more than 24 hours in a day, but I can do my utmost to free up as much of that finite time as I possibly can.

Learn from Your “Time Buckets”

Draw a timeline of your life from now to the grave, then divide it into intervals of five or ten years. Each of those intervals—say, from age 30 to 40, or from 70 to 75—is a time bucket, which is just a random grouping of years. Then think about what key experiences—activities or events—you definitely want to have during your lifetime. We all have dreams in life, but I have found that it’s extremely helpful to actually write them all down in a list.

What’s the best way to spend our money for maximum enjoyment and in order to generate maximum memories? Now, you already know some of my answers to this question: Invest in experiences that yield long-lasting memories, always bear in mind that everyone’s health declines with age, give your money to your children before you die instead of saving for their inheritance, and learn to balance current enjoyment with later gratification.

Before you start thinking about spending down your money, you must make sure you have enough to live on for the rest of your life. That’s an important caveat, because plenty of people aren’t saving enough for retirement. Although I want to urge everyone to maximize their experiences, I don’t want to encourage irresponsible spending.

After all, if you are 55 and a valued worker, chances are you’re earning more per hour than you’ve ever earned before. But remember that your goal isn’t to maximize wealth but rather to maximize your life experiences. That’s a big turnabout for most people.

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.

So being bold is an investment in your future happiness—and therefore another way to maximize the area under the curve.

I’ll admit I had my own stereotypes about Texas, or anywhere south of the Mason-Dixon Line, really—especially as a black person.

Your biggest fear ought to be wasting your life and time, not Am I going to have x number of dollars when I’m 80?

Because that goal will have done its real job, of pushing you in the right direction: 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.