Key Takeaways - Die With Zero

"Life is not a game of Space Invaders - you don't get points for all of the money that you rack up in the game - but many people treat it as though it were." -Bill Perkins

Perkins admits that he is an engineer and looks at life as an efficiency equation to solve. The question for him on life is, how do we maximize fulfillment and minimize waste. His greatest worry is squandering his life by allowing great life experiences pass him by.

He is governed by a concept that he learned from the book, "Your Money or Your Life," in which your money represents life energy. Life energy represents all of the time that you have in your life so when you earn money it means that you traded a certain amount of life energy to receive it. The application is on the consumption side. When you look at something at the store, Perkins would ask himself, "Is this worth two hours of my life energy?" His goal is to only spend his money, and his life, on things that really matter. Again, he's maximizing fulfillment and minimizing waste.

The takeaway here is do we have a model for optimizing our life? Are we maximizing fulfillment and minimizing waste? Are we spending our life energy on things that matter? Helping people? Living experiences that will grow in value over time? Find your model and use "Life Energy" until you develop your own.

"Here's a radical idea: The payoff from an investment does not have to be financial." -Bill Perkins

What Bill was talking about was a concept he calls, "Memory Dividend." Everyone gets an immediate return on their experience in the moment, but what they fail to consider is the dividend that pays out every time you remember the experience. His argument is the experiences that you invest in build value over time just like a traditional investment compounds over time. Every time you go to the photo album and enjoy those experiences the value builds.

The Memory Dividend is why Bill identified his second Rule in the book as "Start investing in experiences early." The key part of the rule is "early." There are things that you can (and care) to do only when you are young. He told a story in the book of a young man in his 20's that lived out of a backpack and stayed in hostels for months. By the time most are in their 40's, they won't stay in hostels so the experience is different. Also, the older we all get the more responsibilities we tend to have so taking off for months is nearly impossible. This is why he encourages us to consider experiences as early as possible.

What experiences are we delaying that we run the risk of missing altogether? Are we considering experiences as an investment? What experiences have we already had that are producing a memory dividend?

"Rule 3: Die with Zero"

This is the name of the book so you know it was coming up at some point. Perkins's goal in this book, and really his life from what I can gather, is to eliminate waste. He's a true engineer in that he is constantly looking to optimize output while minimizing waste. Waste in this chapter is having money in the bank when you pass away.

He's not saying to eliminate saving or investing. His arguments are that many people save too much today and that there is a point where you might not need to work anymore.

Is it possible that you are saving so much today that your family doesn't get to enjoy any of the reason why you leave them to go to work? Perkins reminds us that our babies are only babies once and that we are only in our 30s once. We need to maximize output in those years too.

Again, as our savings builds and our lives slow down do we need to continue to work? Work, as Perkins describes it, can turn into a habit that is one of the hardest ones to break. He has many friends that have more money than they could spend in a lifetime, and yet they go to work daily out of habit. He wants us to break that habit and enjoy what we have accumulated.

But what if I love what I do? Well, do it in the nicest places, with the nicest equipment, with the best coaches and on and on. The point is don't deprive yourself of living your best life today for the future. Plan for the future, but execute on creating happiness today.

Why do people's net worth continue to grow into their seventies?

Perkins explains that people have the best intentions of spending their hard earned savings at the end of their lives, but things change. At a certain age their wants and needs change or diminish. Experts in retirement planning call the transition moving from your "go-go" years to your "slow-go" years to your "no-go" years. It's not that they didn't desire to spend their money on fun. These people ran out of gas before they could do it.

The other argument why someone might not spend their savings is preparing for unknown health complications in the future. Perkins argues that in the most extreme circumstances that most of us won't be able to spend our way out of that anyways. Healthcare for extreme situations is too costly. He also points out that life on a ventilator is not a life at all. He'd rather spend his money on living a bigger life when he is younger instead of that money being spent to limp his life further by a few more months.

If you read the above and say yeah, but... remember that there is insurance for just about everything. Plan for the expenses down the road with insurance if it matters that much to you. The point is to enjoy what you have worked hard for and acknowledge when you have enough.

"Having money helps you achieve the more important goal of enjoying your life." -Bill Perkins

Perkins dove into the "how" of dying with zero in this next chapter. His approach was to be as scientific as possible. He encouraged us to go to life expectancy calculators to understand the range of our life length. From there, we need to understand the annual cost of "just staying alive." With those two numbers you can derive a bare minimum number to have to take you to the end of your life. The money beyond that amount you should spend down "aggressively" until the end of your life understand that the older you get the less you can physically do.

This approach is super simple to understand and execute, but many will not do it. The point is to be clear so you don't waste your "life energy" trading time to earn money beyond what you need. Spend your life energy doing things you enjoy in the most enjoyable way possible.

I think about this constantly while reading the book so I am going to say it now. Don't forget to keep giving (time, treasure, and talent) as a part of your equation. Those of us that are blessed have the opportunity to bless others and it should be a focus for us. The joy that comes from that will trump any other experience anyways.

"People are irrational about death even when they are not close to death. That's why they have outsize fears of running out of money before they die - big enough to compel many people to oversave for the distant future and, as a result, fail to enjoy their present as much as they could." -Bill Perkins

Perkins continues to drive home the point that when we make future stability our number one priority, we miss the opportunities of today. The brain's number one priority is survival if you leave it to its own operation. It's focus on survival is "irrational." Thinking survival nonstop is an inefficient way to operate if your number one priority is to live your best life.

Perkins worked hard to make the point that our lives are shorter than we think even in the situations where we live a "full" life. He even uses an app that reminds him every day how many days, weeks, and years he has to live if his life meets the expectancy period. He agrees that it can be a little unnerving, but the "in-your-face" reminders have changed my thoughts and the things I do - like people I reach out to, and how often I tell people I love them." The point is to not put off wonderful experiences as if in our final month we should shove them all in. That's irrational.

How do we think about balancing our life enjoyment today versus our future security? Is our outlook on death rational? Do we know our approximate life expectancy and is that motivating to us? I wanted to high five him when he said that the in-your-face reminders got him to go tell people that he loved them more often. Let's all go do that!

"Optimization doesn't care whether we're talking about parents or children: The principles, such as the declining value of money, apply to everyone." -Bill Perkins

Perkins wrote the message above in response to people who argue they want to leave their children an inheritance one day. Money is most useful when we need it and when we can actually use it to its greatest value. Most people will live till their 80s which means their kids will be in their 50s and 60s. Our kids likely won't need our money once they are in their 50s so we should consider passing them their inheritance when they need it most. Help them pay for college, help them pay for their first car, help them buy their first house, and on and on. Delaying your children's inheritance till the end of your life actually diminishes the value of the gift. Let's follow Perkins's instructions and maximize the value!

Do you have a plan for passing your wealth to your children in the appropriate timeline? Do your children understand how to make the most of the gift that you are giving them? Do they understand the value of money and the responsibility that comes from being a person who has more than most?

"The purpose of money is to have experiences, and one of those experiences for your kids is time with you. Therefore, if you are earning money but not having experiences with your kids, you are actually depriving your kids. And yourself." -Bill Perkins

Time and attention with your kids are "experiences." It may not be easy to interpret it that way, but we need to treat the decisions we make about earning more or spending the time with our kids that way. They'll remember the little moments that we just hang out with them. They'll remember when we taught them about life. It doesn't matter that there's no dollar amount tied to them. It's still an investment of your time and it's well worth it. Remember, our kids are learning who they will be in their early years. If it's not from you, then who, or what, will the learning be from? Make the investment in them.

This chapter was all about timing and Perkins makes it simple. The timing is now no matter how you slice it. Invest in your charity now because they can help more people over time. Invest in your children now because they won't need you or your money as much later. Have a plan to build your legacy now. It doesn't have to wait.

Do you have a sense of urgency to build your legacy now? Are you spending enough time with your children today? What's your plan?

There's an optimal time to use your money for experiences based on health. Perkins is pointing to the range of 25-45 for being the best time to leverage your money mainly because of maturity and physical health. Before 25, your maturity to really enjoy your experiences isn't fully developed. After 45, your physical health starts to decline rapidly. There are those few that are outside of the normal trend, but most of us can use this chart to plan with.

I've said this for almost every chapter so far, but my take on this is to be thoughtful and intentional with every part of your life. How can I maximize my health? How can I maximize my savings while I maximize my life experiences? How can I increase my maturity? How can I increase my earnings today? Don't let the normal curve dictate to you. Understand the factors of the curve and manipulate them in all ways. The goal is to maximize your life. Be thoughtful about it.

Here's another tactic shared by Bill Perkins to make the most of your life. He encourages the reader to create "Time Buckets" for your remaining life. Once completed, we are to go through each bucket and put experiences that we'd like to complete into each bucket. The exercise will help us acknowledge more easily the constraint that time and health have on our ability to execute on our desires. Perkins's goal is to decrease your focus on being able to accomplish the experiences monetarily. People tend to delay certain experiences because it doesn't make sense fiscally. Money needs to be a factor, but some experiences can be delayed to the point where we can't physically do them enjoyable anymore. Think climbing a mountain or volunteering as a "Big Brother" - the example Perkins used in his 25-30 bucket.

Time and health are not unlimited resources so we cannot treat them that way. Be intentional with your life and make sure there's a plan in place to maximize the value.?

The title of today's chapter was, "Know Your Peak." The sub header was, "know when to stop growing your wealth." Most people, like me, will go to a dollar amount that we have assigned as our monetary goal for "living free." Living free meaning that we no longer HAVE TO work to be secure. Perkins has a different approach. His "Peak" is a date, not a dollar about.

Perkins continues to drive home the point that there's a balance between money, time, and health. At some point, your "costs" from loss of health and time outweigh the "benefit" of earning more money. Where those factors meet is the peak date. Again, Perkins doesn't say to stop working if you love what you do. He just points out that your focus on maximizing experiences needs to be at its highest point at that date. If you truly intend to "die with zero," then you need to get focused on chasing those experiences.

Autopilot is the enemy here. Are you letting your habits drive you past your peak date? Do you need more money at this stage in your life? What do your resources of time and health look like? Use Perkins's mindset to bring awareness and intentionality to your life.

"People are more afraid of running out of money than wasting their life, and that's got to switch." -Bill Perkins

The quote above is the point. There's a difference between risk tolerance and fear. Fear tends to take the actual risk and blow it out of proportion. We should pursue life to the fullest in the face of whatever fear we have. Remember, feelings tell us things. If you have fear, then we need to do more work mitigating risk.

What actions can we take to mitigate risk? Is the risk greater than the reward? How can we plan so that the risk of living a full life of experiences is lessened? How do our money, health, and time factor in?

Every day I spend time in the early morning reading books to grow my knowledge in business, wealth, religion and more. I share the key takeaways from my week of reading with in?Exclusive Weekly Leader Note?to a group of motivated business professionals – if you would like to join the group, you can sign up here.

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