Years ago, many people encouraged a man named Bill Perkins to live a life that was worth living, to explore new things, to embrace each new day as a precious gift, and along the way encourage others to do the same. This challenge/encouragement became the inspiration behind his book – Die with Zero. For some people, this book became the most valuable book they ever read.
If you're like me, who enjoys reading about investing and financial planning, you'll notice that Die with Zero turns the conventional advice of saving and growing one's wealth on its head.
It's centered around this exciting idea that allows you to plan out your finances so that you can enjoy your life and die with, you guessed it, ZERO dollars in your bank account. It's an alternative perspective on saving and spending in the era of FIRE that offers eye-opening insights based on facts and highlights the correlation between time, money, and one's happiness.
The Main Idea
Die with Zero challenges the earn, save, and maximize your wealth model that has vastly permeated the American culture. It makes you pause and think about your health and wealth during various stages of your life and helps you define your limits, both financially and psychologically, so that you can enjoy what you've worked hard for.
To give you an example, Perkins says – imagine you did everything you were told to, you worked hard, you saved your money, and now you look forward to your financial freedom. All this while you wasted something… your life. This is where Die with Zero offers a startling revelation for those who place making and accumulating money far ahead of generating memorable experiences, waiting for the so-called golden years to arrive.
The main idea that Perkins tries to get across is that once you've saved enough for your retirement and to support your family, it's time to start focusing on creating memorable lifelong experiences. And he recommends doing this as early in life as possible so that you're healthy enough to enjoy these experiences.
The TL;DR is Perkins wants to rescue you from over-saving and under-living.
Finding the Right Balance
Perkins says we live in a culture with over-emphasized hard work and delayed gratification. He helps us see the balance between money, health, and time. I particularly enjoyed the chapter about finding balance. This chapter reminds us that there's always more to enjoy and look forward to, other than work and money.
Perkins pinpoints that most of us have got our priorities reversed. We forget that our health is also a commodity, and we don't have it forever. He talks about the sweet spot in our lifetime – an optimization point where you have money, time, and good health to enjoy it. For most of us, this is between the ages of 30 to 60.
Of course, most of us still need to work to build an emergency fund and retirement savings. But the key is to leverage the time we have to create memories and not waste time working any more than we need to. One of the most compelling points is – “why let death determine how and when you spend your money? Why not be intentional with your money while you're alive?”
If you're wondering, how do you calculate that? Don't worry; Perkins helps you figure out your peak optimization point so you can enjoy the fruits of our labor sooner than you think.
Another life-changing concept in this book is “Time Buckets.” Instead of having a bucket list where you wish to accomplish certain things before you die, Perkins suggests you be intentional and divide your life in 5 to 10 year increments. Decide what you would like to achieve in each of these segments while keeping in mind the amount of money, health, and time you would require.
The concept of being intentional with your life, your time and money, and whom you choose to spend these resources with is worth re-thinking. Perkins helps you feel less guilty about spending your money – to have some fun!
Essential Life Philosophies
Die with Zero can be summarized into 9 philosophies. Each of these seems reasonable, doable, and should be followed to the extent each reader deems appropriate.
1. Maximize Positive Life Experiences
What is really important in life? For most, it's not the money but the happiness they experience with their loved ones. Its relationships over material possessions.
For that reason, Perkins recommends not putting off things that make you happy for too long. He believes that life experiences increase in value over time and pay “memory dividends.”
2. Invest In Experiences Early
The things you do daily, weekly, monthly, annually adds up to who you are. When you look back, the richness of your experiences will determine the quality of your life. So, invest in your own life experiences that bring a sense of fulfillment and start doing that as early as possible.
3. Aim To Die With Zero
Perkins says that if you spend your life acquiring money but die without spending all of it, you've needlessly wasted a considerable amount of your life working for it. His idea is to aim to die with zero, after spending on personal experiences, taking care of family, and leaving behind a legacy where your money is not your legacy.
4. Use All Available Planning Tools
Perkins states that you won't make optimal life decisions if you don't have any idea when you'll die. It's beneficial to use tools like a life expectancy calculator to position yourself to not run out of money during retirement. Because if you're the overly cautious type, you might spend your life earning money that you'll never enjoy and, as a result, die rich.
5. Give Money To Kids/Charity Early
When Perkins teaches us about living our best life and dying with zero, he's talking about spending all of our money. Not the kids'. He strongly recommends that we give our kids their share when they need it the most. Not when we die, so that it has the most impact on their lives as well.
According to a poll conducted by Perkins, the ideal age of receiving an inheritance falls between the ages of 26 to 35 to fully enjoy its benefits.
6. Don't Live Life On Autopilot
Perkins firmly believes that the ability to extract joy from one's money begins to decline with age. So, he advises people to take the most advantage of their time and finances to enjoy life to its fullest and not fall into the trap of living life on autopilot.
7. Plan in Terms of Seasons
This rule touches upon the concept of “time buckets,” where each experience is better when done at a certain age. So, discover what your life would be like in each of those segments and think about when you'd like to experience each of your wishes during your lifetime.
8. Know When To Stop
Perkins thinks that many of us delay gratification and keep working each day to save for the future. The only risk we run is realizing that we might have delayed it by too much. He recommends finding that sweet spot where your finances are at their peak, after which you must start spending it to extract the most joy and fulfillment.
9. Take Big Risks Early, Not Later
Perkins claims that people are more afraid of running out of money than wasting their life and this thought process needs to change. Your biggest fear should be wasting your life and not the dollar amount you'll have left toward the end of your life.
Further, the younger you are, the more risks you should be taking. Chase after the opportunities that pose a slight risk as you won't be able to go after them once you're older.
Die with Zero is a nice reminder that some things we desire in life are closer than we think, and we don't need to wait an absurd amount of time to experience it. Would you agree?
Have you read this book? What are your thoughts on these 9 philosophies, and how has it changed your perspective on saving, investing, more importantly, enjoying your life? Do share it in the comments below!