How To Die…With Zero

What's up, everyone? Welcome back to another episode of The Crazy Ones. I am back with another journal-style episode where I talk through something going on in my world of running businesses, investing in businesses, talking to entrepreneurs. This episode is going to be a little bit different, though. I am in this group chat with a bunch of founders who sold their companies, and we have all sorts of discussions in there from things we're looking to invest in, what people are doing with their money to new business ideas. But in this group, there's a book that's been recommended over and over and over for people to read. Someone in the group got the author of the book to come speak to the group this week. So in advance of that, I decided I want to read it. The book is called Die with Zero. The subtitle is Getting All You Can from Your Money and Your Life. And it's by this guy, Bill Perkins. And Bill Perkins, the description of him is Bill Perkins is one of the most successful energy traders in history. He's also a hedge fund manager, Hollywood film producer, high-stakes tournament poker player, and the resident Indiana Jones for several charities. Perkins regularly travels the world with close friends and family. This guy has crazy range in terms of the stuff that he does. I read this book because I heard it was really good. I wanted to kind of understand everything about it before the author came to speak to the group, but also— The topic of the book and my understanding of the topic is something that very much resonates with things that I think about a lot in life. The whole gist of the book is Bill Perkins makes this argument for why people should die with $0 left in the bank. And basically the whole book is providing context on why he believes that's the case and nuance beyond just this very catchy title. And for me, one of the reasons I was so interested in reading it is that one of my biggest fears is the fear of running out of money. And when I think about why is it that I have some level of money insecurity, and I think also it's best described as money insecurity and money anxiety, because just an interesting fact that I think many of you would find just to be, I don't know, thought-provoking, is I actually have more anxiety today than I did before building Morning Brew or selling the business. Like, I would say money anxiety today on average is like a 6 out of 10, 7 out of 10. And before, like when I was just starting Morning Brew, is probably a 3 out of 10. Maybe part of my money anxiety comes from this idea that growing up, I grew up in a Wall Street family, yet I didn't have any idea of my family's money situation. And so like, I had no idea. Like, I knew, you know, we were well enough off. Like, I knew we took family vacation sometimes. We had a condo up in Vermont. I knew we were doing fine, but I really, to this day, I still have no idea how much my dad made or my mom made or how much my family had. So I think the lack of knowledge around my family's money created story in my head around not being in the perfect financial situation. And then I would say the second big piece that caused financial insecurity is that after my dad passed away a week before I was a junior in college, it pained me to think about the fact that there was only money leaving the Lieberman household and not entering it. Like, I constantly just visualize money out, no money in. And the final piece to all this money insecurity is I think some of it relates to my insecurity as a founder. You know, I've talked about this in the past with the old podcast. I've talked about it a little bit with The Crazy Ones. After leaving the CEO role of Morning Brew, I kind of had this ongoing obsessive thought of, am I a one-trick pony? How much did I contribute to the business's success? I don't know if I'll be able to replicate my success again. And so while I think I've come to terms with and I'm at peace with this anxiety and I understand it's a very common thing that founders experience, I do think it leads me to feel the need to hoard whatever money I do have today because I'm not confident that there will be more of it coming down down the road. So all of this to say, that is why I feel like a personal desire to dive into this book and to chat with this author. And so once I knew that he was coming on Zoom with us this week, um, I, I went through the book in probably 6 hours. It's, it's only 190 pages long, so I read it over the course of 24 hours. So that's the context for Die with Zero. But just quickly to all of the listeners out there, all the crazies, shoot me an email right now or after this episode and share a topic that you want myself or my co-host Jesse to talk about on one of these journal-style episodes. So it could be a business book you want us to break down. It could be a business you want us to break down, a specific company you find fascinating. You want to hear us take like a really complex topic or a complex company and break it down into simple components or just like a a really painful problem or challenge that you are going through or have gone through with your business. So that could be anything from, you know, how difficult it is to raise money right now to how to drum up demand or customers during a tough economic environment to how to fire employees who have been in the business for a long period of time when it's a really painful thing to do. So shoot us an email at thecrazyones@morningbrew.com and we want to use some of these ideas to inform what the future episodes will be. What's up, everyone? I'm Alex Lieberman. Yo, this is Jesse Pujji. And this is The Crazy Ones. Now let me talk about Die with Zero. If I had to summarize the book in one sentence, this book by Bill Perkins, I would say Bill Perkins tries to provide the reader a playbook for maximizing life enjoyment versus maximizing wealth. If I wanted to take it a step further and say, like, basically, what is this guy's advice? If I had to summarize it in a sentence or two, his advice through the book— this is like the most compact lesson of like the, the longer lessons in the book— is Bill Perkins would say that you should invest in experiences that yield long-lasting memories. You should always bear in mind that everyone's health declines with age. You should give your money to your children before you die instead of saving for their inheritance. And you should learn to balance current enjoyment With later gratification. So that is basically what he's saying to do. And he uses his book as basically the content and the context to make arguments for that. One thing I want to say before I jump into these lessons is I want to caveat that what I'm about to share in terms of these lessons within Die With Zero, it is most applicable to people that have enough financial cushion to evaluate saving or experiencing in life. Like, they can make the decisions and trade-offs of, do I save more or do I pay for certain experiences? If you are someone who is currently living paycheck to paycheck or you're currently in survival mode where you don't have the capacity to make decisions to just pay for experiences cheap to expensive, this is probably not the best book for you right now. So I just want to provide that context. Now let's talk about some of the biggest lessons from this book. Lesson number 1, life is not a game of Space Invaders. And basically what the author means by this is people live their lives as if they get points for all of the money they rack up in this game that is life. But that's not how life works. Your net worth isn't on your tombstone when you die. You don't get bonus points for making more money. And that's why the game you should be playing is not to rack up more points, as in rack up dollars. It should be about converting the dollars you have into the right experiences at the right times in your life and look at those experiences, assign points to those experiences, and try to rack up as many experience points as possible. Lesson number 2, experiences are investments, just like a stock that pays out a quarterly dividend or a piece of real estate like an Airbnb that you will rent out to short-term tenants. And it's so funny because it's obvious, but people don't follow this advice at all. The very simple evidence shows that material possessions— watches, cars, homes— material possessions tend to depreciate in value over time. You love them at first, and then you kind of get bored of them. You get sick of them. They don't accrue value over time in terms of intrinsic value. On the other side, experiences tend to appreciate in their value. Why is that? There's this thing that— I don't know if Bill Perkins invented it, but he named it in the book. It's called the memory dividend. And basically what it means is not only do you get happiness or fulfillment when you have a certain experience in life, whether it's going to a dance class with your partner, whether it's going to a new country, whatever it may be, you get happiness at the time of the experience, but you also get value every time that you have a memory about that experience for years to come. So let me just use an example. A few months ago, I went to Turks and Caicos with my fiancée's family, and I had this amazing experience there of jumping off the top of a 30-foot abandoned Russian cargo ship. It was not only this incredibly thrilling experience at the time, but now every time we talk about that trip or I look at photos of the boat that I have saved on my phone, I feel some percentage of the happiness that I felt at that time. And so the total value of that experience to me is the combination of the happiness or the fulfillment I got on that day that I jumped off the boat. But every subsequent month, quarter, and year that I remember jumping off the boat and I feel the emotions related to it, that accrues value onto the original experience. And so that's the idea of the memory dividend and why experiences appreciate. Third lesson, there is a huge cost to having money left over in life. So this is the crux of the die with zero argument. Bill Perkins tells the story of this guy, John Arnold. So John is a friend of Bill, and John became a billionaire. John was an incredibly gifted energy and natural gas trader, and he turned to Bill many years ago, and he basically said to him one day, after starting his own hedge fund that was focused on energy trading, he said, Bill, once I make $15 million, if I am still trading, punch me in the face. Well, I'm sure you can guess where the story is going. John did not stop; he just kept accumulating wealth over and over and over as a natural gas trader. And by 2010, he had reached $711 million in net worth. And by the time he quit his hedge fund, he was 38 years old and had a personal fortune of $4 billion. Now, if you're listening to this, you're like. Boo-hoo, poor John Arnold. Like, this sounds like an absolute dream to most people. It is a dream in some ways. But when you think about it from John's perspective and you think about it from the perspective of Bill saying you're looking to maximize fulfillment in your life, not maximize wealth, you can start to understand why John believed that he was a few years too late to retire from trading. The first reason that he felt he was too late is because he is never going to get back those years. That he had spent just focusing on making money. He will never be 30 years old again. He won't get to enjoy the experiences that are most optimal as a 30-year-old versus as a 38-year-old. Because I don't know, I'll just use a random example, like backpacking the world a lot easier as a 30-year-old, maybe when you don't have a family than when you're a 38-year-old and you do. Plus, when he was 30 years old or 33 years old and he had his young children who were just babies and he was focused on Building out his hedge fund, accumulating the next $100 million of wealth that wasn't actually going to get him more personal value in life. He could have been spending time with his children, raising them when they were babies, but he can't get that time back. The second big reason that he feels regret around this is he faces what's known as the Brewster's Millions problem, which basically means it's actually hard for him to spend his fortune fast enough because he's accumulated so much. The big thing with John's story is It is— while it is an extreme amount of wealth, John's behavior, I think, is symptomatic of so many people who get addicted to their profession or to work. When he was working at his hedge fund and accumulating all this money, he wasn't making a calculated choice where he was saying, I am willing to forego my life experiences for work right now because my work is going to give me X amount of capital to spend in experiences to make my life happiest. He kept working because he had developed this habit of working, much like the habit of smoking, and he just couldn't get off the flywheel. And so here's just one other way to think about this idea of the true cost of dying with money in your bank account. Let's say you die with some amount of money. Let's say you die with $1 million or $100,000 or $1,000. That money left over represents 2 things. It represents the extra hours that you worked in your life to accumulate that money that could have been spent doing things you truly enjoy, right? Because say you had $100,000 left, you spent time in your work getting that $100,000 after tax. You didn't end up getting any of the value of that money, and you had the tradeoff of not enjoying things in life because you were working for that money. And then the second piece of it is if you have $100,000 left in the bank, It also represents unlived experiences that the money you died with could have been spent on before you died. So of course, it's impossible to die with exactly zero. But understanding the cost associated with dying with some amount of money, I believe, is a really powerful concept. Lesson number 4 is that the human brain is irrational about death. What I mean by that is there is just clear evidence that not dying is our number one survival mechanism, just as a species. And it's So evident when you look at the lengths that we go as humans to not die. Just think about how crazy it is that we are willing to spend hundreds of thousands of dollars on ourselves to prolong our life for maybe a few more weeks at points where we can no longer enjoy life. And just think about it. Say you are in the tail end of life, you're sick, you're immobile, and you're spending hundreds of thousands of dollars just to live another few months. Think about how many years of your life when you were healthy and when you were vibrant, you worked to buy yourself a few extra weeks of sick and immobile life. And it's kind of crazy. It shows the lengths that we go to to keep ourselves from dying. So I just thought that was a really fascinating way that Bill kind of put into perspective the things we do to delay the inevitable. And how we forego some of our healthiest years in order to do that. Lesson five: You should save less money, especially when you're young. And the the three reasons that Bill gives for basically why you should save less money and why you should spend more, especially when you're young, are as follows. First, your earning power generally increases as you get older. So what seems like a big chunk of money when you're twenty. will likely feel less significant when you're 40. So even if when you're 20, you aren't saving much, you shouldn't necessarily be worried about that because at 20, that's when you're going to be able to enjoy your experiences most. And you're in 20 years from now likely going to be making way more where you'll be able to save way more. The second is it goes back to the point I made before about memory dividends. Every good experience you have has a return on investment because of the memories associated with the experience. And so the earlier that you have great experiences in life, the longer that these memories will pay dividends over time. And the third reason, as I kind of just alluded to, is as we get older, our actual ability to do all of the experiences that we love doing goes down. And so you should really optimize for having the experiences you want to have at the right time and the best time to have them. Lesson number 6. The number one pushback that Bill Perkins gets to this concept of die with zero is, are you just like a sociopath who doesn't care about your kids? Like, what's going on? Or you're not charitable, you don't want to give to philanthropy. And his whole thing is the whole notion of die with zero is an approach to life where the goal is to convert as much of your money into experiences that give you the most happiness. When you give money to kids or charity, That, that money is no longer your money. It is your kids' money or it is your charity's money. So when you die with zero, it's not that you're not passing money on to kids or charity. You've already earmarked what you're passing on to them, and that's not your money anymore. The other thing Bill Perkins would say is he argues that actually the traditional way of giving is half-assed and left to chance. His view is rather than do traditionally what people do when they give money to children or to charity, which is You have an inheritance, and when you die, your next of kin, your children, inherit the money that you leave behind. His view is that's totally backwards. And the reason it's backwards is because it's arbitrary and random, and you're giving money to your children at the wrong time in their life. And so instead, he believes that you should actually leave money to your children or to charity when you are still alive, because it forces you to think about exactly how much you want to give. And it allows you to optimize to give money to your children at the exact right time that it most benefits them. So let's just use an example. Let's say you die at 85 and you're— and you give to your kids when you die at 85, you're potentially giving to them when they're 60, which is well past the point that so many of their life experiences could have been optimized with money that you plan to give them, whether it was their wedding, vacation, other experiences that they could have enjoyed as a 20-something or a 30-something or a 40-something. If you give them money earlier in their life, it has a truly outsized impact on their life versus when they're 60 and they have way more in terms of savings from working their entire careers. So the argument here is basically that as your children age, every dollar that you give them goes less far. So that's the 5th lesson. The 6th lesson is that the optimal time to extract enjoyment from your money is 26 to 35. And the reason 26 to 35 is the range is basically it's a point in your life where you've potentially been able to save up a little bit, but you're also still young enough to fully enjoy the benefits of your money. He also argues that's the best time to give to your children when they're 26 or 35, because his view is that it's the point at which they can enjoy the money the most. Or the benefits of your money the most, but they can also be fiscally responsible with the money that you give them. If they were younger, they wouldn't necessarily have the mental maturity to handle money. Lesson number seven: Health is the number one factor affecting someone's lifetime fulfillment. So you should spend a lot of money on health. Basically, there are three things that create good experiences in life: free time, money, and health. And at any point in life, we typically have more of one or two of these. We rarely have all three when we're. Young, we typically have health and free time but not money. When we're old, we typically have money and free time but not health. But of these 3 legs of the— let's call it the fulfillment stool— health is the most important. And that is because there's a compounding effect to health issues where one issue leads to another. So let's just use the example of being overweight. If you're overweight, that can put more strain on your joints. If you put more strain on your joints, that can lead to not being able to exercise for a while. Which leads to more weight gain, which leads to more health issues. And so what the author has shared is he, he will make ridiculous bets with his friends that they won't be able to achieve certain health goals because his whole view is if they achieve it, he's happy to pay it out. And if they don't achieve it, if they've at least made progress in terms of their health, they are happy to pay out the money to him in terms of the bet because of the impact they've had on their health. And he told a story about 2 of his friends from poker playing. He made a huge bet with that one friend who is overweight, wouldn't be able to lose weight, and the other brother wouldn't be able to gain weight in terms of muscle. One of these brothers ended up losing 100 pounds and the other gained more than 50 pounds. More— much of it was in muscle, and they ended up winning the bet. But even if they didn't win the bet, they made such a massive transformation to their health that they would have paid such a high price because they would have been able to enjoy The experiences of their life from that point on so much more. Lesson number eight: You should find more and more ways to exchange money for free time. For those of you that have listened to the podcast for a little while, we had Jonathan Swanson on. He was one of the founders of Thumbtack. He founded Athena, and his kind of obsession is with delegation. He has seven executive assistants. He delegates so all of his activities in life out to these assistants, from booking travel to wishing people happy birthday. Like he delegates out crazy stuff. I originally thought he was a. Madman, but after reading this book, I do think he was onto something. And the idea here is that people who spend money on time-saving purchases have greater life satisfaction because you get your time back by paying to delegate out tasks. You not only get your time back, you also get rid of life experiences that you don't enjoy. So if I was to play around with this idea, a few things in my life that I would consider outsourcing or delegating would be things like laundry that I'm spending a few hours doing every week, or Posting on social media that not only am I taking many hours doing, but that leads me down the rabbit hole of addiction to social media, which I hate. Even delegate out having someone find interesting stuff for me to read so I don't have to spend hours every day curating the internet. Things like that. Lesson number 9, the 2 most common regrets that people have on their deathbed go as follows. One, I wish I had the courage to live the life that was true to myself versus what others expected of me. And 2, I wish I had not worked so hard. I missed my child's youth or time with my partner. As Bill says, he talked to someone who worked in palliative care with hundreds of people who were on their deathbed, and those were the 2 most common regrets that people had. I'm just going to leave that there. And then last but not least, the 10th lesson: a valuable way to spend your time that you want to is through something called time buckets. So this notion of time buckets is basically the opposite of a bucket list. And I'm going to describe how you create time buckets in your life. What I want you to do is whenever you get a second, take out a piece of paper and create a timeline of your life from today. So for me, I'd put it— I'm just about 30 years old. At the end of the timeline, I'd put, say, the approximate age that I'll die at. Let's just say 85. And I'll make hash marks for 5 to 10 years, from 30 to 85. Then what you end up doing is you create a list of all the experiences that you want to have throughout your life, and you start dropping them into age buckets. And what you start to find is you drop these activities in. So activities could be everything from traveling to India to bull riding to skydiving to hiking Mount Kilimanjaro. You start to find that for many activities, there is an optimal time bucket. Whereas for others, they're a little bit more flexible. Let's say one of my experiences that I want to have is to read a book a month in a year. Well, that's something I could do kind of in any time bucket. But let's say, for example, if I wanted to backpack across Asia, that's probably something that you would have to do in the 20 to 30-year-old bucket before you're married. It becomes way less realistic. Or let's say you want to skydive or ride a motorcycle across the US. That's probably something you drop in a bucket before the age of 60. And so time buckets are this incredibly good proactive and organized way of forcing you to think about how you want to spend your time over the next several decades and getting really good at prioritizing them in terms of when in your life is the best time to experience them. That is my Founder's Journal episode on Die with Zero. Once you get past the point of survival, money is just a bunch of shekels that you really just want to convert into experiences with the people you care most about in life, because that's what you take to the grave, are those memories and those people. And so I hope you enjoyed this episode. I hope it gave you some lessons to take with you, and maybe it even inspired you to, to read this book, which I definitely recommend. And as mentioned above, Shoot us an email. Let us know what you want us to talk about on kind of these narrative-style shorter episodes, whether it's problems in your business, whether it's books you want us to cover, whether it's complex topics. Shoot us an email at thecrazyones@morningbrew.com, and I will catch you next episode. Take it easy, everyone.