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You’re Saving for a Life You’ll Never Live

2022-06-30 · Book summary (Book Club) · Ali · recording, 12:06 · watch on YouTube

Topic: Money and investing · mode: Explanation and tutorial · tags: Lesson from a book, Sponsor segment present

In a Book Club episode on Bill Perkins's Die With Zero, Ali explains why the book says to spend more on experiences while young (earning power, memory dividends, old age), answers objections about running out of money, children and charity, gives its tips (time buckets, bold risks while young) and names where he disagrees: money is not always life energy, and cash buys optionality.

What is said

The parts of the video and what is said in each (★ — how much it matters to the video).

00:00:00 — Die With Zero's core message: money as a middleman between life energy and experiences

  • ★★★ Bill Perkins (quoted): The core message of Bill Perkins's Die With Zero: if you have any money left in your bank account when you die, you have done something wrong. — 00:00:00

    “If you've got any money left in your bank account by the time you die, you have done something wrong.”

  • ★★ Ali calls Die With Zero pretty controversial but says it has genuinely changed his approach to spending and saving money. — 00:00:00

  • ★★ This Book Club episode, in Ali's series distilling and discussing highlights from his favourite books, is on Bill Perkins's Die With Zero. — 00:00:00 · Book Club · first in: 2021-12-09, The Book That Changed My Financial Life 🤑
  • ★★ Bill Perkins (quoted): Die With Zero says that once basic needs are covered, life is about meaningful experiences, and money is a middleman between our life energy and those experiences. — 00:00:29
  • ★★ Bill Perkins (quoted): Bill Perkins would say that money left in the bank at death, such as $10,000 at 85, is wasted life energy: months of work and experiences never had. — 00:00:58

00:01:27 — Why spend more when young: earning power, memory dividends and old age

  • ★★ Bill Perkins (quoted): Bill Perkins notes that people with no disposable income must spend their money now just to survive, so Die With Zero is not for them. — 00:01:27
  • ★★ Bill Perkins (quoted): Bill Perkins thinks that in our 20s and 30s we should spend more on fun experiences such as adventures with friends, for three reasons: earning power, memory dividends and old age. — 00:01:27
  • ★★★ Because earning power rises with age and the happiness from spending the same money falls, Ali says the young need not obsess about saving: money is better spent on experiences now than 40 years later. — 00:02:10
  • ★★ Bill Perkins (quoted): Die With Zero's memory dividends: good experiences pay a return every year as memories, so taking a two-month hike through Italy at 20 rather than at 40 gives almost 20 more years of memories. — 00:02:10
  • ★★ Bill Perkins (quoted): Die With Zero's old-age argument: when we are old we cannot do everything we want, and even if we can afford it we may not be fit enough to enjoy it. — 00:02:59

00:03:44 — Objections: running out of money, the kids, charity

  • ★★ Bill Perkins (quoted): Bill Perkins says he is not telling anyone to literally die with zero: aiming for it makes you think twice about what you do with your money and your life. — 00:03:44
  • ★★ Ali says most high earners have a profound tendency to over-save and under-spend because they are very risk averse. — 00:03:44
  • ★★ Bill Perkins (quoted): Against the fear of running out of money in old age, Die With Zero cites studies showing that we fear running out far more than it is likely to happen. — 00:04:42
  • ★★★ Agreeing with Bill Perkins, Ali says that if you want to give money to your children, give it to them when they are young rather than when you die. — 00:04:42
  • ★★ An inheritance at 60 helps little, Ali says, since by then you are established; a windfall between 25 and 35 is ridiculously helpful, for a house deposit, a company or children. — 00:05:12
  • ★★★ Charities need money now, Ali says: waiting until you die to give money to charity is a bit pointless, so you might as well give while you are alive. — 00:05:41

00:06:12 — Tip one, time bucket your life; tip two, be bold, not foolish

  • ★★ Bill Perkins (quoted): Die With Zero's three resources for good experiences are free time, money and health: the young have time and health but little money; those over 60 have money and time but less health. — 00:06:39
  • ★★★ Ali calls Die With Zero's time buckets great advice: it makes sense to have different time buckets for each part of your life, to use time, money and health best at each stage. — 00:07:09
  • ★★ Bill Perkins (quoted): Bill Perkins says to chop your life into five-to-ten-year chunks and decide which experiences you want in each: active ones like cycling or climbing before 50, a cruise for later. — 00:07:09
  • ★★★ Bill Perkins (quoted): Die With Zero's second tip, be bold, not foolish: take your biggest risks when young, when you have little to lose and a lifetime to recover or enjoy the profits. — 00:07:38
  • ★★ Bill Perkins (quoted): Bill Perkins points out that the downside of not taking a chance is emotional: potentially a lifetime of wondering what if. — 00:08:07

00:08:36 — Weaknesses of the book: money is not always life energy, money is optionality

  • ★★ Ali really likes Die With Zero and finds interesting lessons in it, provided it is not taken too literally; such self-help books offer ideas to take with a pinch of salt. — 00:08:36
  • ★★ Ali's first disagreement with Die With Zero: money does not necessarily equal life energy, the book's main point at its start. — 00:08:36
  • ★★ With passive income, Ali says, a small initial effort can snowball into more and more wealth almost effortlessly; growing The Millionaire Fastlane's money trees could in theory make you a millionaire without working past 30. — 00:09:23 · passive income
  • ★★ Ali spent much of his youth building a business, making websites, growing his channel, playing World of Warcraft and podcasting, which he would do even if he won the lottery, so he sees no exchange of money for life energy. — 00:09:52 · World of Warcraft
  • ★★ Ali's second disagreement with Die With Zero: money equals optionality, since cash in the bank or safe investments lets you act quickly on an opportunity or an emergency. — 00:09:52
  • ★ Ali's third criticism of Die With Zero: it talks a lot about spending money on experiences but not enough about investing it in education. — 00:10:22

00:10:51 — Skillshare sponsor read and sign-off

Threads in this video

Mentioned

Central: Bill Perkins · Die With Zero · life energy · time buckets

Also: Book Club · Italy · money tree · optionality · passive income · The Millionaire Fastlane · World of Warcraft

Also centred on Die With Zero: 15 Books To Read to Change Your Life · The 4 Best Books About Money - Part 2 📚

Also centred on life energy: The Book That Changed My Relationship With Money · The 4 Best Books About Money - Part 4 📚

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