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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Why should you spend money on experiences? What are the long-term benefits?
Hedge-fund manager Bill Perkins thinks that people tend to over-save and under-experience, but you should aim to die with zero dollars in your bank account. In Die With Zero, Perkins proposes a strategy for maximizing enriching experiences throughout your life and minimizing unspent funds.
Read on to learn why you should spend money on experiences, according to Perkins.
Why Spend Money on Experiences?
According to hedge-fund manager and energy trader Bill Perkins, your goal should be to die with zero dollars in your bank account because you’ve used all your money to lead the fullest possible life. Perkins explains that people generally tend to over-save and under-experience. But, why spend money on experiences? He argues that at the end of our lives, we’ll actually value experiences more than the money we saved. In Die With Zero, he proposes a strategy for maximizing enriching experiences throughout your life and minimizing unspent funds.
The Benefits of Using Money to Enrich Your Life
Perkins notes that balancing saving with spending money on 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.
For example, say you’ve always dreamed of traveling to Fiji. You could spend the money on the trip and have fond memories to look back on for the rest of your life. Or you could save that money until it’s too late in life to fully enjoy traveling. In retrospect, it’s unlikely you’d regret taking the trip, but you probably would regret not taking it when you had the time, energy, and money.
(Shortform note: Interviews with people on their deathbeds confirm Perkins’s claim that people will value experiences more than money saved. In fact, some of the most common end-of-life regrets are that people spent too much time working and not enough time having meaningful experiences with loved ones. Many people also regret not having taken more risks in life and not having pursued their dreams—further evidence that you’ll probably feel that your life was well-lived if you prioritize meaningful experiences over saving.)
Another reason you should spend money on experiences 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.
(Shortform note: Others agree with Perkins that memories add value to your life and will increase in value as you age. Some even describe trawling through memories as a form of self-care because it allows you to access happier times and counteract negative thoughts. Perkins, however, doesn’t address how to ensure memories stay with you in their fullest forms possible so that you can cherish them later. One simple way to do this is to pay more attention when you’re having a positive experience. Do this by engaging all your senses—pay attention to colors, smells, and textures. You can also take mental pictures of a happy occasion, which helps you recall it later.)
You can also think of spending money on 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.
(Shortform note: When you spend money on positive experiences, it can be an important part of having a growth mindset. When you have a growth mindset, you believe you can improve your skills over time. Having new experiences can be one way you achieve that goal, since, as Perkins points out, new experiences can help you grow and increase your knowledge and talents.)
Perkins isn’t simply encouraging you to spend money for the sake of spending, and he doesn’t dismiss the value of less extravagant experiences than a trip to Fiji. There are plenty of low or no-cost experiences to be had no matter where you live, and there are plenty of opportunities to build relationships with people without spending money. For example, church groups form the backbone of many people’s social circles, and church events can create lifelong positive memories. Similarly, you can enjoy hiking, yoga, local festivals, and so on.
(Shortform note: Perkins’s argument that you can enjoy meaningful experiences without breaking the bank may not apply to everyone. In Stumbling on Happiness, Daniel Gilbert argues that once you’ve had a highly enjoyable experience—going to Fiji, for instance—other, cheaper experiences that previously might have also been highly enjoyable to you (going for a swim in the local pool, for example) become less enjoyable. This is because you’re now comparing all your previous experiences (swimming at the local pool) to the new experience (Fiji) and find them lacking. So, it might even behoove you to avoid highly expensive, highly enjoyable experiences because they’ll reduce your ability to enjoy more mundane experiences.)
Whatever activity you might enjoy, Perkins simply asks you to examine how your money can help you get the most out of the experience you spend it on. For example, say you love art. Perkins might encourage you to buy tickets to a prominent art museum or event. Or if you love mountain biking, he might urge you to invest in lessons or the entry fee for a mountain biking race. The memories you take away from these investments will last a lifetime and, chances are, they’ll make you appreciate your hobbies and interests even more.
(Shortform note: Perkins’s advice to only spend the money that lets you enhance an experience is a good way to counter the effects of lifestyle creep: the tendency for your lifestyle to become more expensive as you increase your income. If, like most people, you earn money over time, you don’t have to spend it recklessly on things you think will make you happier, thereby making your lifestyle more expensive. Instead, you can carefully consider what expenditures will allow you to optimally enjoy a favorite activity. So, for instance, if you love baking, you could renovate your entire kitchen, which would contribute to lifestyle creep. Or, you could consider what new appliance or tool would be enough for you to enjoy baking more and only invest in that.)
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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
