Die With Zero

Richard Connor

WHAT’S THE PURPOSE of life? Is it to die with as much money as possible or, as magazine publisher Malcolm Forbes was quoted as saying, “He who dies with the most toys, wins”? An intriguing and provocative book, Die With Zero, says no.

The book’s author is Bill Perkins, a successful energy trader. In it, he argues that the purpose of life is to accumulate as many fulfilling experiences as possible, and in doing so we should aim to die with zero dollars.

The author is not a financial planner. He trained as an electrical engineer, but went to work on Wall Street and made a fortune trading energy. Perkins’s training as an engineer, and his nature, drive him to seek improvement in all aspects of his life. The book is a description of his philosophy on how to maximize our life’s fulfillment.

Perkins tells us, “Your life is the sum of your life experiences. Contrary to belief, this can be quantified and optimized.” The author presents his key concepts as a series of nine rules.

  • Rule No. 1: Maximize your positive life experiences.
  • Rule No. 2: Start investing in experiences early.
  • Rule No. 3: Aim to die with zero.
  • Rule No. 4: Use all available tools to help you die with zero.
  • Rule No. 5: Give money to your children or to charity when it has the most impact.
  • Rule No. 6: Don’t live your life on autopilot.
  • Rule No. 7: Think of your life as distinct seasons.
  • Rule No. 8: Know when to stop growing your wealth.
  • Rule No. 9: Take your biggest risks when you have little to lose.

Each rule gets its own chapter, with examples and personal anecdotes to illustrate the message, and the chapters end with recommendations summarizing Perkins’s key points. Many readers, including me, will initially recoil at some of his ideas. Perkins tries to address common complaints head on.

For example, a typical criticism he hears is that, in spending all your assets, you’ll leave nothing for your heirs. His response, encompassed in rule No. 5, is to give to those you care about as soon as you can, when they’ll most likely make better use of your gift.

Many of his themes align well with much of what’s written on HumbleDollar, including focusing on experiences, living mindfully and understanding risks. One of the more intriguing concepts he presents is encompassed in rule No. 7. In this chapter, he discusses the idea of time buckets. This topic intrigued me because, a few days before I read the chapter, my wife and I spent a few pleasant hours unknowingly creating time buckets for ourselves.

What’s a time bucket? Most of us are familiar with a bucket list, which is a list of the things we’d like to do or achieve before we die. Many HumbleDollar readers are also aware of the bucket strategy used for retirement-income planning. That strategy involves creating several buckets of assets, each designed to provide income for different time segments. For example, the first bucket usually holds several years of spending money in cash or safe assets. Later buckets are earmarked for intermediate and longer-term spending, and are held in riskier assets.

Time buckets are a bit of a combination of both concepts. It’s based on the idea that our abilities diminish over time. Some experiences are best enjoyed when we’re young, while others can be delayed until old age. In our youth, we usually have better health and energy, but less money. As we age, our health and energy wane, but our wealth should grow, allowing us to engage in more expensive activities.

Obviously, these are generalities, and there’s a wide range of abilities and household wealth at each age. But don’t let that distract you from the key message: We should think about what’s most important to us, and do our best to plan how and when we check off our bucket list items. Perkins encourages readers to create time buckets into which we organize our desired memorable moments. Climb mountains in our 20s and 30s. Take guided tours in our 70s and 80s.

A week ago, my wife and I sat down to plan out our travel for the next five years. We discussed how many trips per year, what time of year, where we wanted to go and what our priorities were. We’re thinking of two big trips a year, most likely in the spring and fall. Spread around the rest of the year will be visits with our children and their families, our annual Thanksgiving family trip, travel to see other family members, and shorter road trips to places we’ve been meaning to see.

Without realizing it, we were following Perkins’s advice. I like the idea of time buckets. What about dying with zero? Not so much. But it has got me thinking about rule No. 5.

Richard Connor is a semi-retired aerospace engineer with a keen interest in finance. He enjoys a wide variety of other interests, including chasing grandkids, space, sports, travel, winemaking and reading. Follow Rick on Twitter @RConnor609 and check out his earlier articles.

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