By ofwisdomowl By Bill Perkins
Short Summary
Die with Zero brings a new perspective on the relationship of work, savings and enjoying life. Perkins’s focus on the collection of memorable experiences ahead of savings and money accumulation.
Regardless of your age, you can start working on optimizing your life, defining a plan to when and which memories and experiences you want to collect enjoying what you’ve worked and saved for.
It brings an interesting perspective on defining your Peak for wealth accumulation. Your Peak is a date, not a number. A date in which your focus changes from wealth accumulation to experience collection.
I will leave you with a quote from the book which brings it all together. “Chase memorable life experiences, give money to your kids when they can best use it, donate money to charity while you’re still alive . That’s the way to live life . Remember: In the end, the business of life is the acquisition of memories. So what are you waiting for?”
Takeaways
Rule No. 1: Maximize your positive life experiences. Most of us go through life as if we had all the time in the world .
To increase your overall lifetime fulfillment , it’s important to have each experience at the right age
Many psychological studies have shown that spending money on experiences makes us happier than spending money on things
Invest in Experiences. Start investing in experiences early .
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
Point in earning money is to be able to spend it on the experiences that make your life what it is .
If you’re still concerned and resisting the idea of dying with zero , try to figure out where this psychological resistance comes from .
Balance Your Life. Don’t live your life on autopilot. 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.
Know Your Peak. Know when to stop growing your wealth.
Knowing Your Peak : It’s a Date , Not a Number
Your ability to enjoy experiences depends on both your economic ability and your physical ability. Continuing to build wealth doesn’t necessarily buy you more experiences , because your declining health limits your enjoyment of certain experiences no matter how much money you have
Knowing that you have enough money to last you the rest of your life ( by doing some survival calculations ) should give you the peace of mind to start spending more aggressively now
Given your own health and history , think about when your enjoyment of those activities is likely to start declining in a noticeable way on an annual basis — and how the activities you love will be affected by this decline .
Be Bold—Not Foolish. Take your biggest risks when you have little to lose
The Younger You Are , the Bolder You Should Be
Quotes that resonated with me
- Rule No. 1: Maximize your positive life experiences. Most of us go through life as if we had all the time in the world
- Balance Your Life. Don’t live your life on autopilot
- Being aware that your time is limited can clearly motivate you to make the most of the time you do have
- The business of life is the acquisition of memories. In the end that’s all there is .
- 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
- Know Your Peak. Know when to stop growing your wealth
- You can’t leave the timing of the peak to chance — to get the most out of your money and your life, you must deliberately determine the date of your peak
- Your Peak. It’s a Date, Not a Number
- Don’t underestimate the risk of inaction. Don’t let irrational fears get in the way of your dreams.
- Chase memorable life experiences, give money to your kids when they can best use it, donate money to charity while you’re still alive . That’s the way to live life . Remember: In the end, the business of life is the acquisition of memories. So what are you waiting for?
Some practical advice you can start with
Start actively thinking about the life experiences you’d like to have , and the number of times you’d like to have them . The experiences can be large or small , free or costly , charitable or hedonistic . But think about what you really want out of this life in terms of meaningful and memorable experiences .
Invest in Experiences. Start investing in experiences early .
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 .
Elizabeth Warren’s 50-30-20 rule. According to this rule , you should budget 50 percent of your income for must – haves ( like rent , groceries , and utilities ) , 30 percent for your personal wants ( like travel , entertainment , and dining out ) , and the remaining 20 percent on building your savings and paying down your debt .
Start to Time-Bucket Your Life. As you time – bucket your life , you parcel out a single list of experiences into different and distinct time sections of your life. By dividing goals into time buckets , you are taking a much more proactive approach to your life . In effect , you’re looking ahead over several coming decades of your life and trying to plan out all the various activities , events , and experiences you’d like to have .
Knowing that you have enough money to last you the rest of your life ( by doing some survival calculations ) should give you the peace of mind to start spending more aggressively now . But even so , the psychological shift from savings mode to spending mode won’t be easy . The basic formula for calculating your survival threshold : survival threshold = 0.7 × ( cost to live one year ) × ( years left to live )
Be Bold — Not Foolish. Take your biggest risks when you have little to lose .
When you face asymmetric risk , it makes total sense to be bold , to grab the opportunity at hand. At the extreme , when the downside is very low ( or nonexistent , as in the “ nothing to lose ” case ) and the upside is really high , it’s actually riskier not to make the bold move –
The Younger You Are , the Bolder You Should Be