Die With Zero by Bill Perkins

These are my notes from Die With Zero by Bill Perkins. Each one contains a core idea from the book that stood out. The goal of writing my notes this way is that each could be it's own independent idea with the need for the specific context within the book.

The art of consumption smoothing

Bill Perkins, a young Wall Street worker, proudly told his boss about saving $1,000 from his meager salary. To his surprise, his boss called him an "idiot." The boss explained that he came to make millions, not pennies. This eye-opening moment introduced the concept of consumption smoothing: balancing earning and spending over time, instead of depriving his struggling younger self to benefit his potentially wealthier future self. Perkins learned to enjoy his earnings in the present while anticipating future income growth. This shift in perspective challenged the conventional wisdom of saving at all costs, highlighting the importance of adapting financial strategies to one’s career trajectory and earning potential.

Time is Life: The True Cost of Spending

In Your Money or Your Life, Joe Dominguez and Vicki Robin challenge us to view money as life energy. Every dollar earned represents a slice of our finite existence spent working. This perspective transforms spending decisions into existential choices. Suddenly, that $50 dinner isn't just a meal; it's trading hours of your life for temporary satisfaction. The cliché "time is money" reveals a profound truth: we exchange irreplaceable moments for material goods. This realization can be as eye-opening as Neo seeing the Matrix for what it is. It prompts us to ask: Is this purchase worth the life energy it cost me?

Invest in experiences for memory dividends

Bill Perkins, author of Die With Zero, champions the power of experiences over material possessions. He argues that while experiences may cost money, they're more valuable than tangible items. Why? Experiences pay memory dividends, appreciating in value over time as we reflect on them. Unlike material goods that quickly lose their luster, a great career, an unforgettable trip, or pursuing a new hobby can enrich our lives. Perkins cautions against excessive frugality, noting it starves our world unnecessarily. Instead, he encourages us to see life as the sum of our experiences, suggesting that investing in memorable moments is key to a richer, more fulfilling existence. Each time the experience comes back up it becomes a residual experience. The dividend from the original.

The Balance Shift: Rethinking the 50:30:20 Rule

There isn’t a one-size-fits-all approach to saving, like Elizabeth Warren's 50:30:20 rule. Instead, your strategy should be more dynamic that adapts to your life stages. In your early twenties, saving little might be optimal, allowing you to invest in experiences and skills. As you age and earn more, gradually increase your savings rate, potentially exceeding 20% in your forties. Then, counterintuitively, slow down savings as you approach retirement. This flexible approach aims to maximize lifetime fulfillment while maintaining financial stability, recognizing that the ideal balance varies based on individual circumstances, income growth, and personal preferences.

The Golden Triangle: Balancing Health, Time, and Money

Life’s three essentials—health, time, and money—rarely align perfectly. Young people have health and time, but not money, while retirees often have time and money but declining health. The "golden years" are the middle ages when these three resources are most balanced. However, this period comes with its own challenges: a time crunch. You must trade your abundant resources for scarce ones. Young people should value their time more, retirees should invest in health, and those in the middle should consider using money to buy time.

Time Buckets: Designing Your Life’s Blueprint

Bill Perkins introduces a powerful tool for life planning: time buckets. Draw a timeline of your life, divide it into 5-10 year intervals, and fill each "bucket" with experiences you want to have. From running a marathon to starting a business, this exercise helps you envision your ideal life journey. Don’t worry about money; focus on what matters to you. As Perkins notes, "Your list will be your own unique expression of who you are." By organizing your dreams into these time buckets, you create a roadmap for a life rich with purpose and adventure.

Reading Suggestions

These books were mentioned in Die With Zero:

1. Your Money of Your Life By Joe Dominguez & Vicki Robin
2. The Top Five Regrets of Dying By Bronnie Ware