Die With Zero (Bill Perkins)

What Resonated with Me

I am particularly drawn to the concept of maximizing life fulfillment through intentional spending and experiences. The idea of timing experiences to align with one’s age and health, and the importance of memory dividends, resonates with my desire for a balanced and meaningful life. I also value the practical advice on consumption smoothing, life-cycle planning, and the critique of traditional retirement saving strategies. The focus on making deliberate choices to maximise life energy and enjoyment is a key takeaway for me.

Summary

“Die With Zero” by Bill Perkins advocates for a life strategy that maximises fulfilment through intentional spending and experiences rather than hoarding wealth for the future. Perkins emphasises the importance of timing experiences to align with one’s age and health, leveraging the concept of memory dividends, and making deliberate choices about how to spend money and time. The book critiques traditional retirement saving strategies and introduces concepts like consumption smoothing and the Life-Cycle Hypothesis to optimise lifetime fulfilment.

3 Key Takeaways

Timing of Experiences

To maximise lifetime fulfilment, it’s crucial to have experiences at the right age. Perkins argues that delaying gratification indefinitely leads to missed opportunities for enjoyment, as the ability to derive pleasure from experiences diminishes with age.

Memory Dividends

Experiences provide ongoing enjoyment through memories, which Perkins calls memory dividends. These dividends grow over time and can even surpass the initial enjoyment of the experience, emphasising the value of investing in experiences over material possessions.

Consumption Smoothing and Life-Cycle Planning

Perkins introduces the concept of consumption smoothing, which involves spreading out spending evenly over one’s lifetime to avoid periods of excessive frugality or indulgence. The Life-Cycle Hypothesis supports this approach, advocating for balancing spending and saving to maximise lifetime enjoyment.

Interesting Quotes

“Some of that behaviour 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. So it makes sense to delay gratification to some extent, because that pays off in the long run. 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.”

“To get the most out of your time and money, timing matters. So to increase your overall lifetime fulfilment, it’s important to have each experience at the right age.”

“Maximising your fulfilment from experiences—by planning how you will spend your time and money to achieve the biggest peaks you can with the resources you have—is how you maximise your life.”

“Many psychological studies have shown that spending money on experiences makes us happier than spending money on things. Unlike material possessions, which seem exciting at the beginning but then often depreciate quickly, experiences actually gain in value over time: They pay what I call a memory dividend.”

“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 payoff from an investment does not 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 in the moment—they pay an ongoing dividend, the memory dividend.”

“Everyone’s health declines with age. Wealth, on the other hand, tends to grow over the years as people save up more and more. But worsening health gradually constrains your enjoyment of that wealth as more and more physical activities become impossible to enjoy, no matter how much money you can afford to spend on them.”

Other Notes

Critique of Traditional Retirement Saving: Perkins argues that many people save excessively for retirement, only to find they can’t fully enjoy their wealth due to declining health and fewer desires. He advocates for a balanced approach to spending throughout life to avoid leaving significant unspent wealth.
Consumption Smoothing: The concept involves spreading out consumption evenly over one’s lifetime to maintain a consistent quality of life, avoiding periods of unnecessary austerity or excessive spending.
Life-Cycle Hypothesis: This hypothesis suggests that people should plan their spending and saving to maximise their enjoyment and utility over their entire lifespan, rather than focusing solely on accumulating wealth for retirement.
Time Buckets: Perkins introduces the idea of time buckets, where individuals map out their life in intervals and plan key experiences for each period. This approach helps ensure that meaningful activities are prioritised and aligned with one’s physical and mental capacity.
Memory Dividends: Experiences continue to provide joy through memories, and these memory dividends compound over time, adding significant value to one’s life. Investing in experiences can yield long-lasting benefits beyond the initial enjoyment.