Book Review: Die With Zero

Last month, my wife and I were in New Zealand for our honeymoon. 

We’d covered both the North and South Island. It was stunning and amazing. As a bookish person, apart from the scenery and the culture, I’d spent quality time reading “Die with Zero” written by Bill Perkins, a US based hedge fund manager and CEO of a consulting services firm. 

(No worries … I’ll share more of what we did in New Zealand in my coming articles). 

The title itself is a little peculiar, especially in our culture where we work, strive, and hustle to save, stash, and accumulate wealth for our future. The motivation can be either a fear of not having enough or to fulfill an unsatisfiable desire and want for greater wealth. It is always about the next dollar. Die with Zero doesn’t sound “exciting” to one who is driven to be a million or deca-millionaire. 

After I read it, I gained some new perspective. In this article, I’ll share what “Die with Zero” is all about and 3 concepts that I find to be interesting that allows us to be more thoughtful of how we plan our finances and ultimately, our lifes. 

What Is This Book All About?

I find this book is about getting the most value out of our wealth. This is so that we can maximize the satisfaction of our life while minimizing regrets in life. This is done by allocating our resources efficiently. The resources include our health, our time and our money. 

The tricky part is always to strike a balance between our level of wealth and the utility of our wealth as we continue to age over time. Simply put, our wealth, as we age, will most likely increase as our ability to earn income rises. However, as we age, our physical health deteriorates (each with varying degree) and it could impact how we enjoy our accumulated wealth (the utility of wealth). 

Let’s take my recent trip to New Zealand as an example. 

Many in their 20s today have the physical health to fly, drive, trek, and try out a series of extreme outdoor sporting activities in New Zealand. But, most lack the finances to pay for them. On the other hand, many in their 60s have the money to travel to New Zealand. But, there are activities that are too extreme for most people in the 60s. 

Hence, the book encourages us to be purposeful, not just in building wealth but also in maximizing the utility of our wealth. 

Now, here are the concepts: 

Concept 1 – Memory Dividends

According to Bill Perkins, our life is the sum of our experiences. “Experience”, to him, is likened to an investment that is similar to a stock or property that would yield dividends or rental income over time. To him, experience is an investment which can yield “memory dividends” over time. 

So, my recent trip to New Zealand is a form of investing in “experiences”. Yes, as of now, my trip has ended. But, there are memories created from this trip. They include the stunning views of mountain ranges, the greens, the rivers, the skies, the people my wife and I met, and our shared experience of skydiving. They live on in our memories, add onto who we are and pay “dividends” whenever we’re sharing our experiences to our family and friends. 

The ability to relive an experience like this is a form of “memory dividend”. And, such memory dividends are not one-off but very much recurring in our lifetime. 

Concept 2 – Personal Interest Rate

We are more familiar with the concept of interest rate. Simply put, let’s assume we have RM 25k and can invest it for an annual return (interest rate) of 10%. So by Year 7-8, we could 2x our capital to RM 50k. As such, the question is: “Would it be better to invest the RM 25k or to spend it on experiences that would bring memory dividends for life?” 

The answer lies also in our personal interest rate. 

For instance, a 30-year old intends to travel across Europe with RM 25k. What if he chooses to delay his trip and invest the money? Well, he would have RM 50k in cash when he is 38 years old. Can he still travel across Europe at 38? Yes. Also with RM 50k, he could even afford some luxury in his travel itineraries such as a better flight, nicer hotels, fine-dining, and so on. 

Now, compare this to a 60-year old who wishes to travel across Europe. He may invest his money and delay his dream of traveling. By 68, he will have RM 50k in cash to travel across Europe. But, the question is: “Could he enjoy Europe much better at 68 years old than now, when he is 60?”. Yup, you get the picture. 

In brief, the younger guy may delay his trip and still enjoy Europe. The older guy may delay his trip for 8-10 years but has a higher probability of not enjoying the trip as much. As such, the older guy’s personal interest rate for delaying the trip is significantly much higher than the younger guy. 

Thus, the main takeaway is to assess the experiences that we intend to invest in  based on our personal interest rate. We could then focus on experiences with a much higher personal interest rate as delaying them can be more costly.  

Concept 3 – Our Real Golden Years

The above charts are simple but they certainly paint our stories. Most who now are young have health and time but may lack money. Most who are old do have ample time and wealth but lack physical health. So, what about people who are middle aged? The middle aged may have more money than the young and have more energy than the old. But, how much time do we have outside of work and other responsibilities?

Recently, I went on a short solo-trek at Wawasan Hill. It was late afternoon on a weekday. I noticed many elderly hikers as I strolled along, enjoying the greens. I then wonder – “How much of our time (as people between 31-60 who’d already built some level of financial stability and possess health) are being spent on the pursuit of having more money or material wealth?”.

I supposed there is more to life than just the 5, 6, 7, 8, 9 or 10-figure net worth. It would be helpful if we start to rethink our allocation of time and use it wisely. Perhaps, our golden years are not exactly 60 and above, when we have millions in net worth. Rather it is now when we are younger even though we have less. 

Conclusion: 

Honestly, I’m still digesting the contents of “Die with Zero”. But, I appreciate the need to be strategic on our health, time, and money. There are many ideas that I find interesting in this book and I believe it is helpful, if we can take some time to sit down, read it and contemplate on them. Here’s the link to this book: 

Link: Die With Zero by Bill Perkins