This article is an excerpt from the Shortform book guide to "Die With Zero" by Bill Perkins. Shortform has the world's best summaries and analyses of books you should be reading.
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In Die With Zero, Bill Perkins argues that experiences and relationships give life meaning, and people should aim to invest all their money in them before they die. Perkins believes that you should be strategic about spending and saving with the goal of squeezing every cent’s worth of value from life.
Read on for an overview of Bill Perkins’s Die With Zero: Getting All You Can From Your Money and Your Life.
Bill Perkins’s Die With Zero
In Bill Perkins’s Die With Zero, he argues that experiences and relationships are what give your life meaning. Therefore, you should aim to invest all your money in enriching experiences and relationships before you die.
To do this, you must be cognizant of whether your spending and saving habits are facilitating or hindering your living the fullest possible life. As a hedge-fund manager and energy trader, Perkins argues that saving money you never intend to spend isn’t smart financial planning because it represents missed opportunities. Instead, you should be strategic about spending and saving to maximize your experiences with the ultimate goal of squeezing every cent’s worth of value you can from your life.
Why You Should Spend All of Your Money by the Time You Die
Bill Perkins argues in Die With Zero that saving money you’ll never spend means sacrificing the value that money could have added to your life. First, we’ll discuss Perkins’s ideas about why saving for the sake of saving shouldn’t be your default financial plan. Then we’ll look at what he suggests spending your money on instead: facilitating enriching experiences and advancing the causes and relationships you care about.
Saving Money Might be Costing You Experiences and Relationships
Perkins questions the wisdom of saving as much money as possible for the sake of saving. He advises you to ask yourself whether the money you’re saving from your job is worth what you’re giving up to save it. This sacrifice might be the hours you could have spent doing something you enjoy more than working or the money you could have spent on an enriching experience or humane cause.
Another way Perkins suggests thinking about saving is that you want to balance saving money and accruing new experiences so that your savings account doesn’t continue to grow while your balances of rich experiences and important relationships stagnate.
Money Can Facilitate Enriching Experiences
Perkins notes that balancing saving with experiences is important because as you reach the end of your life, you’ll value the experiences you had more than the money you saved. Therefore, leaving money unspent means you forwent potentially fulfilling experiences and a richer life.
Another reason experiences are excellent long-term investments is that you don’t enjoy an experience only while you’re having it; you enjoy the memory of the experience forever. As Perkins explains, memories build a richer life because they become more valuable as time passes, particularly as you age and your physical abilities wane.
You can also think of investing in positive experiences as investments in yourself because they make you a more engaging and dynamic person. For example, say you take the trip to Fiji and come home with a new passion for scuba diving. This might lead you to pursue additional diving experiences and form new relationships with people who share your interests.
Money Can Advance Causes and Relationships You Care About
Refraining from saving money also lets you use it to help others. Perkins explains that most people save money to pass down to their family members, charities, or other organizations they care about in their will. However, he argues that waiting until your death to do this isn’t necessarily in anyone’s best interest: What’s more helpful, he argues, is to give money to others earlier, when they can benefit from it more. Waiting to give away your money until after your death might mean missing the opportunity to put your money to its ‘best’ use. Therefore, even if you’re saving money to give to others, your goal should still be to have no funds left at the end of your life.
How to Spend All Your Money by the Time You Die
Now that we’ve explored why Bill Perkins argues that you should spend all of your money by the time you die, we’ll look at his advice in Die With Zero on how to do so strategically and responsibly. We’ll break his recommendations into three sections, all of which revolve around proper timing: spend while you’re young, plan your long-term spending trajectory, and spend on the ‘right’ things at the right time.
Spend While You’re Young
In Die With Zero, Bill Perkins writes that one good way to die with zero is to spend more money when you’re young. If you don’t invest in experiences while you’re young, you risk missing out on many of the best moments in your life. For Perkins, forgoing experiences when you’re young just to save money is illogical. You might not get the chance to have those experiences again, and they won’t be the same when you’re older. For instance, your 25-year-old self might be thrilled to go skydiving, while your 65-year-old self might not be.
The other reason you should start spending young is that if you wait until you’re deep into retirement, you’ll likely run out of time to spend all your money in a meaningful way. Perkins explains that many, if not most, Americans increase their net worth up to and sometimes through their retirement years. At this point, your physical abilities and desire to spend money on many experiences are likely lower than in previous decades. Therefore, you may die with a balance in your bank account. For example, by age 80, you might prefer to stay home and read a good book than to take a road trip to a National Park, so the money you could have spent on the trip will sit in your bank account.
Plan Your Long-Term Spending Trajectory
Another way Perkins advises you to spend all your money before you die is to plan how and when you’ll spend and save over the long term. While Perkins advises you to not forgo valuable experiences in your youth, he doesn’t advise you to spend recklessly throughout your entire life. Instead, you should spend the first part of your life saving more than you spend and the second part of your life spending more than you save.
The best way to precisely plan your saving and spending trajectory would be to know exactly when you’re going to die and then plan backward so that you’ll have spent all your money by then. Since this isn’t possible, Perkins suggests making an educated guess about when you’ll die and then planning your spending and savings based on your results. He suggests using the Actuaries Longevity Illustrator or the Life Expectancy Calculator to estimate how long you can expect to live and how long your money will need to last.
Once you have a rough idea of when you’ll likely die, you can determine when it’s ‘safe’ to start spending more than you’re saving. For instance, you’ll want to start spending more earlier if you think you’ll live to 70 than if you expect to live to 95.
Spend Money on the Right Things at the Right Time
The idea that you can’t possibly fit all the life experiences you’d like to have into retirement is central to Perkins’s argument. Your physical abilities, risk tolerance, and energy levels tend to decline as you age, making certain experiences time-sensitive. Therefore, you should do the things that interest you—and spend money on them—when you’re most physically able to.
The time-sensitive nature of many experiences is why Perkins urges you not to fall into a pattern of saving every cent and thinking you’ll get to enjoy your money when you retire. To combat this tendency, Perkins suggests writing down the experiences you want to have and the corresponding time in your life when it makes the most sense to have them. For example, you probably should take up skydiving in your 30s or 40s rather than waiting until 70, but you can play chess through retirement.
Along with the book, Bill Perkins has developed an app called the Time Buckets Toolkit App, which can be accessed on the Die With Zero website. This app helps you organize your desired experiences into “buckets,” or time periods, so you can time when you should invest in them.
Consider Your Risk Tolerance and Take Precautions
Your financial risk tolerance will likely shape your response to Perkins’s recommendations on how to spend all your money before you die. Readers with a low risk tolerance might find some of his advice difficult to digest, citing, for example, potential medical complications, damage to property, or a stock market crash as reasons to save instead of spend. Perkins acknowledges the possibility of negative unforeseen circumstances and suggests looking into insurance policies that guard against unforeseen circumstances. This will allow you to invest in experiences while minimizing catastrophic financial risks.
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Like what you just read? Read the rest of the world's best book summary and analysis of Bill Perkins's "Die With Zero" at Shortform.
Here's what you'll find in our full Die With Zero summary:
- Why your goal in life should be to die with zero dollars in your bank account
- Why you should use your money to the fullest, instead of saving it all
- How to maximize enriching experiences throughout your life
