What You Will Learn from Die with Zero

This week, Ashto and Jonesy learn different ways to utilise their wealth to live a fulfilling life from one of the most successful hedge fund managers and entrepreneurs in the world Bill Perkins. Written from Perkins’ personal experiences and other cautionary tales, Die with Zero is a guide to living rich instead of dying rich. In this book, Perkins also provides eye-opening insights into time, money, and happiness based on psychological science and behavioural finance studies.

Maybe you’ve heard the classic Aesop fable of the Ant and the Grasshopper: The industrious ant worked all summer long storing food for the winter, while the carefree grasshopper fiddled and played all summer. So when winter came, the ant was able to survive, while the grasshopper was in dire straits. We know what happens to the grasshopper, but what happens to the ant? That is if the ant spends his short life slaving away, when does he get to have any fun? We all have to survive, but we all want to do much more than survive: We want to really live. The true moral of the fable? There’s a time for work and a time for play.

Amongst many other principles you’ll learn in this book, Perkins believes that your life experiences can be quantified and optimised. Die with Zero will teach you how to avoid over-saving your money and under-living your life. So, get ready to discover ways to maximise your life by identifying the best times to make the most of your earnings and invest in meaningful experiences.

Rule #1: Maximise Your Positive Life Experiences

In October of 2008, Erin and her husband, John, were successful lawyers with three young children when they learned that John had clear-cell sarcoma. No one suspected it until the tumor had spread to John’s back and leg bones. The grim diagnosis terrified and overwhelmed Erin. With John too sick to work, the full burden of taking care of the family physically and financially fell to her.

However, Erin quit her job to focus on what really mattered: enjoying the simple pleasures of each other’s company with John. They’d go to the park, watch movies, play video games, and pick their kids up after school together. John died just three months after his diagnosis. Looking back at that period, Erin recalls the trauma and devastation, but she was glad that she quit her job to be home with John.

Most people would have done the same in these circumstances. Death wakes people up, and the closer it gets, the more awake and aware we become. When the end is near, we suddenly start thinking: What the hell am I doing? Why did I wait this long? Until then, most of us go through life as if we had all the time in the world. Sometimes delaying gratification is rational. It would be foolish to live every day as if it were your last: You wouldn’t bother to work, or study for a test, or visit the dentist. But the sad truth is that too many people delay gratification for too long, or indefinitely. They put off what they want to do until it’s too late, saving money for experiences they will never enjoy.

Optimising your life experiences

As an engineer with strong analytical skills, Bill Perkins believed that making the most of our finite time on earth was less of a lofty, philosophical question and more of an optimisation problem. According to Perkins, although each individual has different circumstances, the core question is the same for everyone: What’s the best way to allocate our life energy before we die?

There are a few guiding principles to optimise your life experiences – for example, our ability to enjoy different kinds of experiences changes throughout our lifetimes. Think about it: If your parents took you along on a tour of Italy when you were a toddler, how much would you have gotten out of that expensive vacation? How much do you think you’ll enjoy climbing Rome’s Spanish Steps when you’re in your nineties – assuming you’ll still be alive and able to climb them at all by then?

Although we all have at least the potential to make more money in the future, we can never go back and recapture the 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. By planning how you will spend your time and money, you can achieve the best experience peaks with the resources you have.

Rule #2: Start Investing in Experiences Early

Your life is the sum of your experiences. But how do you maximise the value of your experiences in order to make the most out of your one life? The goal is to get you to think about your life in a more purposeful, deliberate manner, instead of simply doing things as you and others have always done them. It’s important to plan for your future, but never in such a way that you forget to enjoy the present moment.

The business of your life

The main idea here is that your life is the sum of your experiences. When you look back on your life, the richness of those experiences will determine your judgment of how full a life you’ve led. 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. You’ll get to your destination (death) but probably without having the kind of journey you would have actively chosen for yourself.

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.’ When you’re too old to acquire new experiences, you could still derive great enjoyment from old photographs or videos. 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.

By having experiences, you not only live a more engaged and interesting life yourself, but you also have more of yourself to share with others. It’s like the idea that business begets more business. Positive experiences are radioactive and contagious in a good way; they start a chain reaction that releases more energy than you thought you had. One plus one can be more than two.

Between the ant and the grasshopper

The idea that you retire on your memories runs completely counter to most of what we normally hear about retirement. As we get older we’re constantly getting the message that we must save for retirement. That’s just the grown-up version of lessons we learned as kids about the need to save for a rainy day. The best-remembered variant of the fable of the Ant and the Grasshopper, for example, has the ant sitting pretty and smug after harvesting his grain, while the grasshopper goes hungry after spending his whole summer playing. That retelling leaves no doubt about which of the two insects had done the right thing, and it sure wasn’t the fun-loving, shortsighted grasshopper.

The point isn’t that we should be just like the grasshopper: failing to save for the winter of our life, or believing that any amount we spend on experiences is worth it because experiences are the stuff of life. That would be foolish. Our culture tends to overemphasise the virtues of the ant – of hard work and delayed gratification – at the cost of other virtues. As a result, we fail to appreciate that the grasshopper was onto something, too. The grasshopper would be better off saving a little and the ant would be better off living a little.

The memory dividend

Are experiences really an investment? First, let’s talk about what an investment is. Most of us hear that word and right away think of the stock market. Or bonds. Or a portfolio of different investments, such as stocks, bonds, and real estate. What do all investments have in common? They are just mechanisms for generating future income.

Now, here’s a more radical idea: The payoff from an investment doesn’t have to be financial. When you teach your daughter to swim or to ride a bike, it’s not because you think she’ll get a better-paying job with those new skills. Experiences are like that. When you spend time or money on experiences, they are not only enjoyable at the moment, but they also pay an ongoing dividend. Experiences yield dividends because as humans, we have memory.

Think back to one of the best vacations you ever had, and let’s say it lasted a full week. Now think about how much time you spent showing pictures of that trip to your friends back home. Add to that all the times you and the people you traveled with reminisced about that trip, and all the times you’ve thought about it yourself or given advice to other people considering going on a similar trip.

All those residual experiences from the original experience are the dividends I’m talking about – they’re your memory dividends, and they add up. In fact, some of these memories, upon repeat reflection, may actually bring more enjoyment than the original experience itself. 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.

Conclusion of Die With Zero

Once you start thinking about the memory dividend, something becomes really clear: It pays to invest early. The earlier you start investing, the more time you have to reap your memory dividends. For example, if you start in your twenties, you’ll have a longer tail of memory dividends; so you’ll be more likely to have the tail add up to more than the head (the number of experience points from the initial event). Clearly, the closer you are to death, the fewer memory dividends you’ll have for significant experiences.

This concept resonates with Warren Buffett’s investment advice: Invest early, and by the time you get to a certain age, look at how much you’ve accumulated. If Buffett and other investment advisers are focused on growing money, Perkins is focused on growing the richest life he can. A life rich with experiences, adventures, and memories – rich with all the reasons why you strive to acquire money in the first place. If you’re looking for more references on personal development, don’t hesitate to take a look at our reviews of Death by Sadhguru, Stolen Focus by Johann Hari, or The Righteous Mind by Jonathan Haidt.