A while back, a well-off acquaintance of mine suggested that I read a book called ‘Die with zero,’ by an American former energy trader called Bill Perkins. It’s an intriguing title, so I read it and I’m reporting back to you on it, since it has some interesting suggestions. According to Perkins, his advice applies to everyone, rich or poor, so read on!
Bill Perkins’ main suggestion is that we should maximise our ‘life experience’ by dying with as close to zero in the bank as possible. Earning money through investment or through our working lives that remains in the bank when we die represents a lost opportunity. Bill suggests that we should plan more carefully to use our money to generate happy memories for ourselves while we still can, and to not delay gratification until it is too late. Gratification may come through giving away money to the causes that you care about most - for example your children, grandchildren or a charity close to your heart - and he points out that giving will almost always benefit the receiver more the earlier that you give them the money. Your kids, for example will find much greater joy in a cash handout when they are 25 (when they really need the money and are in a position to do a lot more with it), than they would in an inheritance when they are 60 or 70. All charities would rather have your money now than in the future, and they can start doing good with it now, too.
Bill makes the strong point that your wealth will almost certainly be taxed by the government when you die, and that they will then probably waste half of it and spend most of the rest of it on things that you don’t approve of and wouldn’t spend the money on yourself. So, to preserve your control of your money, spend it yourself on the things that you value.
The author encourages the reader to instead invest in life memories through memorable experiences at an early age, in order to gain a ‘memory dividend’ over as long a period as possible. He gives the example of a friend of his who took off for a trip around Europe when he was young, and who still enjoys reminiscing about it decades later. He even suggests that the youth might even borrow against their future earnings in order to enjoy travel (or education) dividends in future years, certainly prior to the child-bearing and -rearing years. Bill Perkins may be right about this: Many people have said to me over the years, “Travel when you are young.” I did, all over, and it certainly broadens the mind.
He points out that when we are young - say in our 20s - we typically have very little money, plenty of time (or less time pressure) and we are bounding with good health. This is the time - he says - to take big risks like starting a business, go on big (if low-cost) trips, and do those activities that require energy and vitality. In middle and later middle age (50s and 60s) we generally have more money, but the time pressures are typically greater, through work and family commitments. However, Bill suggests that this is the time when we should try to maximise our spending on life experiences, before we get too old to be able to enjoy the experiences that our money could buy. He suggests that poorer health and lower levels of energy will deplete our ability to spend and enjoy any wealth that we have accumulated into older age - and so that we had best spend it while we can.
Bill might be over-egging his case here, since, as they say, “80 is the new 50.” If you have kept yourself in good shape, there’s no strong reason why you can’t continue to enjoy an active life well into older age (check out Blue Zones on Netflix, to add 12 years to your life). A friend of a friend, Peter Langford, has just cycled the +1600km from Lands End to John O’Groats, the entire length of the UK, at the age of 90. And he started and ended the trip by downing a pint of ale.
Bill Perkins dedicates an entire chapter to the common fear of spending it all too soon, and dying in penury. (Evel Knievel once said, “I had a great life and made 50 million dollars. Only problem was, I spent 51.”) Bill suggests two actions: use the internet to find out when you are likely to die; and look into a financial product such as an annuity that is essentially insurance against dying too old, since it pays out a steady income until you ‘kick the bucket.’
Bill tells a number of personal anecdotes about how he has put his own advice into action - including once spending a huge amount on gathering friends and family for a Caribbean 45th birthday party. He was glad he spent that money - with his own mother’s declining health, it turns out that he was never able to gather the same people together again.
His final conclusion is that far too many people work for too long, when they would be better off (not materially, but personally) spending or giving away a chunk of their wealth at a much younger age. How that relates to people working in the gypsum industry remains to be seen. Anyway, it’s food for thought!
