Podcast
Die With Zero - Track 001 | Die With Zero - Track 002 | Die With Zero - Track 003 | Die With Zero - Track 004 | Die With Zero - Track 005
Die With Zero
- Quitting Work To Spend Final Months Together
- Bill Perkins recounts Aaron and John quitting work to spend John’s final months together after a rapid cancer diagnosis.
- They chose family time over income, showing urgent choices when death makes priorities clear. Transcript: Bill Perkins In October of 2008, Aaron and her husband, John, were successful lawyers with three young children when they learned that John had clear cell sarcoma, a rare and rapidly growing cancer Of the body’s soft tissues. Nobody thought that a healthy 35-year would have a tumor the size of a baseball, Aaron recalls, so no one suspected cancer until the tumor had spread to John’s back and leg bones. We didn’t understand how serious his condition was until he had an x-ray and it was lit up like a Christmas tree, Aaron says. The grim diagnosis terrified and overwhelmed her, and with John too sick to work, the full burden of taking care of the family physically and financially fell to her. It was too much for one person to bear. I had been friends with Aaron since we were kids, so I wanted to do everything I could to make the situation less horrible. Stop what you’re doing, I told her, and spend time as a family while John still can. I also offered to help with the costs. It turns out I was preaching to the choir. Erin had already been thinking about quitting work to focus on what really mattered. And that’s what she did. So at their home in Iowa, between John’s cancer treatments, the couple enjoyed the simple pleasures of each other’s company. They go to the park, watch movies, play video games, and pick their kids up after school together. In November, when local doctors had done everything they could without success, Erin found a clinical trial in Boston where she and John made several trips to undergo the experimental Treatment, using their free time to go on some of the city’s historic tours while John still walk. All too soon, though, their hope faded, and one day John broke down at the thought of everything he’d miss, from watching his children grow up to passing the years with Erin. John died in January of 2009, just three months after his diagnosis. Looking back at that period, Erin recalls the trauma and devastation. But she is glad she quit her job to be home with John. (Time 0:02:24)
- Life As An Optimization Problem
- Perkins frames life as an optimization problem: maximize fulfillment while minimizing waste.
- He contrasts irreplaceable time versus replaceable money and stresses timing of experiences against declining health. Transcript: Bill Perkins So I see this question as an optimization problem. How to maximize fulfillment while minimizing waste? Everyone’s problem. We all face some version of this question. Of course, the dollar amounts differ from person to person, often dramatically. But the core question is the same for all of us. What’s the best way to allocate our life energy before we die? I have thought about this question for many years, going back to when I was barely earning enough to live on, and over time, I’ve come up with several guiding principles that make sense. These are the ideas behind this audiobook. For example, some experiences can be enjoyed only at certain times. Most people can’t go water skiing in their 90s. 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. (Time 0:05:51)
- Stop Giving Future You All Your Present Joy
- Apply consumption smoothing: avoid hoarding early earnings that you’ll likely earn more later.
- Joe Farrell told Perkins not to save his $1,000 because future earnings power would let him enjoy money later. Transcript: Bill Perkins It’s called consumption smoothing. Our incomes might vary from one month or one year to another, but that doesn’t mean our spending should reflect those variations. We would be better off if we evened out those variations. To do that, we need to basically transfer money from years of abundance into the leaner years. That’s one use savings accounts. But in my case, I had been using my savings account totally backwards. I was taking money away from my starving younger self to give to my future wealthier self. No wonder Joe called me an idiot. (Time 0:15:57)
- Money Represents Life Energy
- Money equals life energy: every dollar bought with work costs you hours of life.
- Perkins began calculating hours required to buy items after reading Your Money or Your Life. Transcript: Bill Perkins How? The book contended that your money represents life energy. Life energy is all the hours you’re alive to do things. And whenever you work, you spend some of that finite life energy. So any amount of money you’ve earned through your work represents the amount of life energy you spent earning that money. That’s true regardless of how much or how little your work pays. So even if you’re only earning $8 an hour, spending that $8 also means spending an hour’s worth of your life energy. That simple idea made a huge impact on me, hitting me much harder than that old cliche that time is money. I started to think, you’re taking my life energy and you’re giving me paper. It was like the end of the matrix when Neo walks around seeing the world as it is. (Time 0:17:47)
- Choose Experiences Deliberately
- Decide deliberately which experiences matter and convert money into those experiences.
- Perkins emphasizes matching experiences to personal tastes rather than copying others, like travel versus home hobbies. Transcript: Bill Perkins Your life is the sum of your experiences. And that’s also very much in the spirit of your money or your life. Above all, the authors of that book urge us not to sacrifice our lives for money. They want us not to be slaves to our jobs and our possessions. So how do they suggest we go about achieving this financial freedom? The path they lay out is frugality, choosing to live simply so that you don’t need a lot of money. Yet that’s not one of my big takeaways from their life-changing book, and it’s not what I’m advocating for you. Instead, I’m a big believer in the value of experiences. Experiences don’t have to cost a lot of money, and they can even be free. But worthwhile experiences do usually cost some money. The unforgettable trip, the concert tickets, the pursuit of an entrepreneurial dream or a new hobby, all these experiences cost money, and sometimes they cost a lot of money. To me, that is money well worth spending. 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 often depreciate quickly, experiences actually gain in value over time. They pay what I call a memory dividend, which you’ll hear a lot more about in the next chapter. Living on a shoestring when you can afford more deprives you of those experiences and makes your world smaller than it needs to be. (Time 0:21:08)
- Backpacking Debt Led To Priceless Memories
- Perkins shares friend Jason who borrowed to backpack Europe in his 20s and returned richer in memories though not materially wealthier.
- Jason’s cheap hostels and park lunches yielded lifelong stories and no regret. Transcript: Bill Perkins When I was in my early 20s, my roommate at the time, Jason Ruffo, decided to take about three months off from work to go on a backpacking trip to Europe. This is the same friend with whom I was splitting the rent on a pizza oven-sized apartment in Manhattan. We were both screen clerks making about $18,000 a year. To make a trip like that a reality, Jason would have to put his job on hold and he’d have to borrow about 10 grand from the only person who would lend him that much money, a loan shark. You know, the kind of lender who doesn’t ask for collateral and doesn’t care about your credit report because he has other ways to make sure you pay up? I said to Jason, are you crazy? Borrowing money from a loan shark? You’ll get your legs broken. I wasn’t worried only about Jason’s physical safety. Going off to Europe meant that Jason would also miss out on opportunities for advancement in his job. To me, the idea of doing something like that was as foreign as going to the moon. No way was I going to go with him. But Jason was determined. So off he flew to London, both nervous and excited about traveling alone with a Eurorail pass, and no set schedule. When he came back a few months later, there was no discernible difference between his income and mine. But the pictures and stories of his experiences showed that he was infinitely richer for having gone. You have to remember, this was the early 1990s, before high speed internet and Google Earth. To see what Prague looked like without actually going, you had to get a coffee table photo book about the place. So hearing his stories and looking at his photos was like listening to some exotic explorer. In Germany, he saw the horrors of Dachau. In the newly formed Czech Republic, he heard about life under communist rule. In Paris, he and two friends he made, while the way, an afternoon sitting in the park, just enjoying baguettes with cheese and wine and feeling like anything was possible. Eventually, he made his way to the Greek islands. Somewhere along the way, he fell in love with a woman and had sex on the beach for the first time. As he met locals and young travelers from all over, he learned more about himself and other people and cultures and felt his world opening up. His stories of the interesting cultures he’d seen and the connections he had made were so amazing, I felt pretty envious and regretful that I hadn’t gone. As time passed, that feeling of regret only grew. When I finally went to Europe at age 30, it was too late. I was already a tad too old and too bougie to stay in youth hostels and hang out with a bunch of 24-year Plus, by the time I was 30, I had many more responsibilities than I had in my early 20s, Which made it that much harder to take months off for travel. I finally, unfortunately, had to conclude that I should have just gone earlier. Like me, Jason knows he timed that European trip exactly right. I wouldn’t enjoy sleeping in a youth hostel with 20 guys on a shitty bunk bed now, and I wouldn’t enjoy carrying a 60-pound backpack around on trains and through the streets. But unlike me, he actually took the trip, so he doesn’t have to live with the second thoughts. (Time 0:31:10)
- Experiences Pay A Memory Dividend
- Experiences are investments because they pay a memory dividend over time, not just momentary pleasure.
- Memories compound when shared, making experiences yield ongoing emotional returns. Transcript: Bill Perkins The Memory Dividend. This chapter tells you to invest in experiences, but are experiences really an investment? I mean, it’s easy to see that experiences take time and money and that they can bring enjoyment during the days and years you are having those experiences, which makes them worthwhile For that reason alone. But let me tell you why I say that they’re also an investment in your future. 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. When you buy a stock in, say, IBM, you are hoping that you will be able to sell a stock later for more than you bought it for, or at least be able to earn dividends that IBM issues to shareholders. A teeny tiny fraction of the company’s profits each year. Are you with me so far? The same with real estate. You buy a house that you think you can resell for a profit in a few years, and in the meantime, you can rent it out and generate passive income every month, as long as your tenants pay the Rent. If you own a business that makes widgets, and you buy a new machine that will crank out widgets twice as fast with fewer defects, then the new machine is an investment in your business. Standard, right? Now think about how to extend this idea, which we do all the time without necessarily thinking about it in terms of investment. For example, let’s say you’re a parent paying for your kid to go to college or graduate school. Why are you paying tens of thousands each year? Because you think it’s worth it. You probably believe your son or daughter will graduate with the kinds of skills and degree that will help them earn a much higher income than they would without the university education. But maybe you’re skeptical that their degree will ever pay off. Let’s say your son wants to study Himalayan basket weaving, and you hear that robots are getting so good at making baskets that all those lucrative basket weaving jobs are disappearing. In that case, you will probably be a lot less eager to write the big checks to the university. When you’re thinking about these things, you’re making investment decisions just as surely as if you were looking at rental properties or factory machines to buy. Economists even call expenditures on education investment in human capital. So you see that you can invest in yourself or in other people. You do this whenever you think the investment will pay off in the future. Now, here’s a more radical idea. The payoff from an investment does not have to be financial. When you teach your daughter to swim or 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’re paying ongoing dividend. The memory dividend I mentioned in (Time 0:42:04)
- Prioritize Return On Experience Not Just Return On Equity
- Bill Perkins recounts advising his friend Pauly to ignore traditional financial metrics when buying a vacation property and instead ask how much personal use and memorable experiences it will provide.
- He contrasts a small extra financial return (e.g., 3%) with the potentially life-changing value of repeated family vacations and bonding moments.
- Perkins emphasizes that experiences produce a “memory dividend” — a rate of return comparable to financial investments but paid in memories and meaning.
- The timing matters: starting to invest in experiences earlier yields greater lifetime value, but even at 50 experiences can still be transformative.
- Use money to buy the experiences you actually want, not just assets that sit and appreciate for their own sake. Transcript: Bill Perkins I went on, but if you’re just going to buy the property and have it sit there doing nothing but appreciating your capital investment, then who cares if you stand to gain an extra 3% on it? There’s nothing special life-changing about earning 3% on foreign real estate. It’s just one of a million types of investments you can make. That extra 3% is especially insignificant when you start at age 50, as compared with starting much earlier. Investing in experiences, on the other hand, really could change your life, even at 50. My point to you is that, like so many people who invest in real estate, Paulie was thinking only about return on equity, not about return on experience. To me, that’s just another version of the same mistake I’m always harping about. Earning and earning while forgetting that the whole point in earning money is to be able to spend it on the experiences that make your life what it is. Think about it. Whether the experiences we want are learning, skiing, watching our children grow, traveling, enjoying great meals with friends, advancing a political cause, attending live concerts, Or any of the trillions of combinations of experiences available to us, we acquire money with the goal of having experiences. Plus, because of the memory dividend, those experiences bring some rate of return, just as investments and financial instruments do. Sometimes a ridiculously high rate of return. This is what Jason was talking about when he said that he would not trade his European experiences for any amount of money. (Time 0:51:35)
- Invest In Experiences Early To Maximize Memory Dividends
- Bill Perkins argues money’s purpose is to buy experiences, which then pay a “memory dividend” over time.
- Investing in experiences directly yields returns in the form of lasting memories, rather than routing everything through financial returns first.
- The number of experiences (and future memory dividends) declines with age, so timing matters: start investing in experiences early.
- Starting experiences in your 20s gives a longer tail of memory dividends than starting later, increasing total lifetime value.
- Perkins equates this approach to standard financial advice to start early (e.g., 401(k)s), but applied to experiences rather than solely to money growth. Transcript: Bill Perkins Nobody wants to starve in their old age or make their children have to support them. But here’s the thing. Since the whole point of money is to have experiences, investing money to get a return with which to have experiences is a roundabout way of having experiences. Why go through all of that when you can just invest directly in experiences and get a return on experiences? Not only that, but the number of actual experiences available to you diminishes as you age. Yes, you need money to survive in retirement, but the main thing you’ll be retiring on will be your memories. So you better make sure you invest enough in those. Start early, start early, start early. 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 reap your memory dividends. For example, if you start in your 20s rather than your 30s, you’ll have a long 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 when you start having wonderful experiences, the fewer memory dividends you will have. So when I say you should invest in experiences, my investment advice is pretty much standard. (Time 0:53:50)
- Invest In Experiences Early To Maximize Memory Dividends
- Money exists to buy experiences, and investing solely to grow wealth is an indirect way to get experiences.
- Experiences produce a “memory dividend” — a rate of return in the form of lasting satisfaction and value.
- The number of available experiences shrinks with age, so investing in them earlier yields a longer tail of memory dividends.
- Start early to let memory dividends compound: experiences begun in your 20s can produce a much larger cumulative payoff than those started later.
- Balance necessary retirement savings with deliberate spending on experiences while you can still enjoy them. Transcript: Bill Perkins Not only that, but the number of actual experiences available to you diminishes as you age. Yes, you need money to survive in retirement, but the main thing you’ll be retiring on will be your memories. So you better make sure you invest enough in those. Start early, start early, start early. 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 reap your memory dividends. (Time 0:54:13)
- Start Investing In Experiences Early
- Start investing in experiences early to maximize long memory tails and compound returns.
- Young people can gain outsized value from low-cost adventures like hostels, festivals, and local exploration. Transcript: Bill Perkins 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 reap your memory dividends. For example, if you start in your 20s rather than your 30s, you’ll have a long 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 when you start having wonderful experiences, the fewer memory dividends you will have. So when I say you should invest in experiences, my investment advice is pretty much standard. It’s kind of like what Warren Buffett says, invest early and by the time you get to a certain age, look at how much you’ve accumulated. Many investment advisors want you to start your 401k plan early. A lot of investment advice is like that, start early, start early, start early. Warren Buffett and other investment advisors are trying to grow money. I’m trying to grow the richest life I can. And when I say rich, I mean rich in experiences, in adventures, in memories, rich in all the reasons you acquire money. So here’s my investment advice in a nutshell. Invest in your life’s experiences and start early, start early, start early. Now you might be saying, how can you expect me to invest in experiences early in life when I’m broke? But investing in experiences doesn’t mean spending money you don’t have. (Time 0:54:33)
- Compare Habits To Big Experiences
- Make deliberate trade-offs between small habitual spending and bigger experiences by calculating true cost.
- Use the latte factor example to compare daily coffees versus multiple round-trip domestic flights. Transcript: Bill Perkins Choose your own adventure. A lot of experiences are thrust upon you, especially when you’re growing up. You have to go to school, and in science class, you’re told you have to dissect a frog. You might say, I don’t want to dissect this frog. But then your teacher says, if you don’t dissect this frog, you’re going to get an F in this course. So you say, okay, I’ll dissect the frog. You’re not given much of a choice there. But when you become an adult, you get to choose many of your experiences. You get to think about how you want to explore life and decide for yourself where to invest your time and your money and when to make these investments. Unfortunately, most people greatly underutilize this freedom. We do make some conscious choices to some extent. We choose our jobs, our hobbies, our relationships, our vacation destinations. But so much of our life is spent on autopilot. We move through the world as if someone else programmed our actions, and we don’t think nearly enough about how to spend our time and money. This is really easy to see with the coffee habit. Such a common example that it’s been given a name, the latte factor. So many people stop every day for a cup of gourmet coffee. And when they do, they barely realize that the cost of all those small indulgences add up to a lot of money over the course of a year. I’m not here to tell you to skip your daily coffee so you can save up that money to finish rich. In fact, the last thing I want for you is to finish rich in money and poor in enjoyable experiences. But imagine all the experiences you could have for the thousands of dollars you are spending on your daily mocha latte or frappuccino. Of course, when I bring this up, the response I usually get is, I like my daily Starbucks. How can I argue with that? How they feel is how they feel. But what I can and do say is this, at least be aware of what your Starbucks habit is costing you. For example, you might say to yourself, I can have a round-trip ticket to anywhere in the United States of America every few months based on what I’m spending on Starbucks. So would I rather have that round-trip ticket or would I rather keep up my coffee habit? The answer is up to you, and you might choose the lattes. (Time 0:57:02)
- Act Now And Enhance Your Memories
- Act now on experiences appropriate today and consider the risk of postponing them.
- Enhance memory dividends by taking photos, planning reunions, or compiling albums and videos. Transcript: Bill Perkins Remember that early is right now. Of those experiences you thought about earlier, think about which ones would be appropriate to invest in today, this month, or this year. If you’re resisting having them now, consider the risk of not having them now. Think about the people you’d like to have experiences with and picture the memory dividends you stand to gain from having those experiences sooner rather than later. Think about how you can actively enhance your memory dividends. Would it help you to take more photos of your experiences? To plan reunions with people you’ve shared good times with in the past? (Time 0:59:28)