Summary: Die With Zero

The GIST

Die With Zero by Bill Perkins is a personal finance book that barely mentions how to invest. Almost every other title on the shelf tells you how to save more and let compound interest do its work. Perkins, a former hedge fund manager, avid poker player and enthusiast of skydiving and deep-sea diving, asks the question those books skip: what is all the saving for? His answer gives the book its provocative title. If you die with money in the bank, you have wasted the hours of your life you spent earning it. The aim should be to arrive at the end having used it all, on yourself, on the people you love and on the causes you care about.

He does not mean it recklessly, and he admits nobody will hit zero exactly. The point is the direction of travel. The business of life, he writes, "is the acquisition of memories," and money is merely the tool for acquiring them. The book has circulated widely among investors and the financial-independence crowd precisely because it challenges their deepest habit. One wealth advisor notes that there are hundreds of books about budgeting and investing and almost none about how to spend. This is that book.

The Big Ideas

Money is stored life energy

Perkins starts from a simple chain. We trade hours of our lives, our life energy, for money. We use some of that money to survive. Whatever is left can be turned into experiences: travel, meals, time with friends, learning, adventure. Experiences, added up, are what a life consists of. Money is the middleman, valuable only because of what it can become.

Seen that way, unspent money is not a neutral cushion. Suppose you die at 85 with a sum sitting in your account. That sum stands for two losses at once: the months you worked to earn money you never used, and all the experiences it could have bought, including the simplest one, more time not working. Perkins calls for measuring choices by net fulfillment, the enjoyment an experience gives weighed against what it costs in money, time and health, and for aiming to get the most fulfillment out of a lifetime's resources, not the largest balance.

The trouble is that earning becomes its own reward. As he puts it, 'Once you're in the habit of working for money to live, the thrill of making money exceeds the thrill of actually living.' He illustrates the cost of that autopilot with the story of a man told at thirty-five that his cancer was terminal. His wife left her job and they spent the time that remained together, and afterward she was grateful for every shared memory. Most of us, Perkins says, only think this way when the end is in sight; until then we behave as though we had all the time in the world.

Experiences pay a memory dividend

Possessions thrill us and then fade. Experiences behave differently: you enjoy them once when they happen and again every time you remember or retell them. Perkins calls that recurring return the memory dividend. A long trip with friends at twenty goes on paying out for fifty years, in stories, in closeness, in the person it made you. The same trip at forty pays for thirty.

That is why he says to invest in experiences early. The earlier the experience, the longer it compounds. It also explains his scorn for extreme frugality in youth. Earnings usually rise with age, so a sum that feels enormous at twenty will feel trivial at forty. Denying your younger self a cheap adventure in order to pad an older self who will not notice the difference is, in one reader's image, like taking a child's pocket money to help with the rent. Perkins sums up the mistake in a sentence: "The sad truth is that too many people delay gratification for too long, or indefinitely."

He is clear that experiences need not be expensive or exotic, and that the best ones are usually shared. Time with the people you love, respect and admire is where he thinks money does the most good.

Why zero: the cost of oversaving

The obvious objection is fear. What if I live a long time and run out? Perkins takes the worry seriously but argues it is badly out of proportion. People who save diligently tend to save far too much, keep working longer than they need to, and then spend less in retirement than they expected, partly because by then they are able to do less. The result is the opposite of what they feared: not an empty account at ninety, but a full one that outlasts them. In his words, people are more afraid of running out of money than of wasting their lives, and it ought to be the other way round.

His answer is to plan deliberately instead of hoarding by default. Estimate honestly what you will need. Protect yourself against the real risks; reviewers point to guaranteed income such as Social Security and pensions, and to insurance for long-term care, as tools that fit his approach. Then give yourself permission to spend the remainder on purpose. He also says your net worth should peak and then decline, and that the peak should come well before the end, sometime in your fifties instead of your late sixties, because that is when you still have the health to convert money into living.

Give while you are alive

The second objection is that dying with zero sounds selfish. What about the children? Perkins turns the question around. Money left in a will arrives when its recipients are typically around sixty, with careers and savings of their own, when it changes little. The same money given decades sooner, in early adulthood, could mean a deposit on a home, a business started, a family begun, or the freedom to choose interesting work over a miserable job. So decide what you want your children to have, and give it to them when it will matter most, which is not when you die.

He adds a pointed reminder to busy parents: "The purpose of money is to have experiences, and one of those experiences for your kids is time with you." Earning for your children while missing their childhood deprives both sides.

The same logic covers charity. The needs exist now, and a gift made today starts doing good today, while a bequest waits. Give while you are living and you also get to see the effect.

Match your spending to your seasons

A good life, Perkins says, needs three things at once: money, free time and health, and we rarely have all three. The young have time and health but little money. In midlife money improves while time is squeezed. In old age there may be both time and money, but health is failing. "Most people can't go water-skiing in their 90s," he observes, and you can earn more money but never buy back time. Each experience therefore has a right age, and the skill is to have it then.

His practical tool is the time bucket. Divide the rest of your life into periods of five or ten years, and place the things you want to do into the bucket where they fit best. Physically demanding dreams, such as backpacking, climbing a high mountain or cycling across a continent, go early. Comfortable ones, such as a cruise, can wait. Some have hard deadlines: your children will only want to spend their holidays with you for a few years, your own parents will not be here forever, and the band you love will stop touring. Laid out this way, a vague someday list becomes a schedule, and you can see at a glance what will be lost by waiting. He also ties spending to health: since the body is what makes experiences possible, either do the demanding things early or work at staying fit for longer.

Be bold, not foolish

Finally, Perkins argues for taking your biggest risks when you are young. The arithmetic is lopsided in your favor. If a venture fails at twenty, whether a small business, a move to a new city or a career change, you have decades to recover and little to lose. If it succeeds, you have a lifetime to enjoy the result. And the cost of never trying is emotional: a long stretch of wondering what might have been. Even a failed attempt, pursued wholeheartedly, leaves pride and good memories behind.

The balance shifts with age. Later in life, with dependents and less time to rebuild, large financial gambles are rarely worth it. Hence his motto: be bold, not foolish.

Putting It to Work

• Ask what the money is for. Before saving more, name the experiences you actually want.
• Build time buckets. Sketch your life in five- or ten-year blocks and assign each dream to the period when you will have the health, time and money for it.
• Do the time-sensitive things first. Anything that depends on youth, on your kids being small or on someone else's lifespan cannot wait.
• Keep a record of your memory dividends. Notice which past experiences keep paying, and plan more like them.
• Work out what you really need for retirement, insure against the big risks, and stop saving beyond that out of habit.
• Plan gifts to children and charities for now or soon, not for your will.
• Spend on health as an investment in every future experience.
• Take your big swings early and grow more cautious as your obligations grow.

Who Should Read It

This book is aimed at people who are already good at saving: steady earners with some security, diligent investors, and followers of early-retirement plans who find it hard to switch from accumulating to enjoying. It is also valuable for young adults mapping out the decades ahead and for parents thinking about inheritance. Readers agree on who it is not for. If you are living paycheck to paycheck, Perkins himself says you are probably already getting all you can from your money; and if you already spend everything you earn, your lesson is the opposite one. For the careful saver who keeps postponing life, though, it can be a jolt in the best sense.