Weekly Reading

Perkins rightly draws a distinction: “We all die a multitude of deaths throughout our lives. [...] The day I die and the day I stop being able to enjoy certain experiences are two distinctly different dates.” With each passing year through retirement, it is more likely than not that the list of things we can experience gets shorter. He acknowledges that we ought to delay gratification given the practical reality that consuming 100% of income/available funds immediately often

This chapter is a bit refreshing after what we’ve been reading. Perkins acknowledges that, especially when we’re young, we can indeed overspend on present enjoyments. We should not be on auto-pilot saving mode, delaying all gratification, nor should we be on auto-pilot spending mode just because we’re young and free. His recommendation is to “Strike the right balance between spending on the present (and only on what you value) and saving smartly for the future.” While he woul

To summarize this chapter in one sentence: decide how much of your wealth you’d like to give to your children, charities, or other beneficiaries, and do that now rather than waiting until you’re gone. Most inheritances (from small bank accounts, to the sale of mom and dad’s home, to leftover IRA money, etc.) occur around the age of 60. Often at this time in their life, the “children” are close to or already retired themselves. They’ve saved up their own money, and while the i

Perkins acknowledges, “dying with exactly zero is an impossible goal.” By this he doesn’t mean spending all your money now and living destitute the rest of your life. He means spending your last dollar as you take your last breath. His recommendation is to use two primary tools to get as close as we reasonably can. Firstly, life insurance companies make it their business (literally) to estimate how long you will live. While almost nobody is “average”, with nearly 100% falling

This chapter answers “why” we should aim to die with zero, while the next addresses “how”. For Perkins, the “why” is simple: If we have money left over, we did not efficiently maximize our “enjoyable experiences”, which, for him, seems to be the meaning of life. To illustrate: Imagine you take home $100,000/year while working. After a happy retirement, you die and have $200,000 left to your name. For Perkins, the waste is not necessarily that you did not spend that $200,000,

What are your favorite memories? A few come to mind for me, including the trips we’ve taken as a family. When Kelli and I were teachers, we would spend a good deal of our summer break on road trips. We drove to places from LA to Vermont, and many in between. Traveling with small children (often at least one baby) wasn’t easy, but looking back that’s part of the fun we have when reminiscing. There was one day in particular we bit off more than we could chew. We left the Philad

Perkins used to be an engineer and, like all engineers, was trained to optimize for accomplishing a particular goal in the most efficient way. In this book, he is applying his engineering to life and wealth. In his words, this book answers the question: “What is the best way to spend your life energy before you die?” In order to answer this, Perkins must take a stance on other, prior questions such as: What is the goal/meaning of life? One of Perkins’ acknowledged premises is

Housel’s Postscript answers the question: How did we get to where we are today (the current U.S. economy and especially the state of the American consumer)? He answers this question with a story containing 10 scenes that take us from the end of WWII to the present: August, 1945. WWII ends. Low interest rates and the intentional birth of the American consumer. Pent-up demand for stuff fed by a credit boom and a hidden 1930s productivity boom led to an economic boom. Gains are

In 2011 professor of medicine Ken Murray wrote an article called “How Doctors Die.” He researched how doctors make decisions when they are the patient regarding their own terminal illnesses. He notes, “What’s usual about them is not how much treatment they get compared to most Americans, but how little.” It’s a common theme in professional services that the professionals don’t always take their own advice. All the biases and mix of personal values do not go away just because

Eat healthy. Exercise. Manage stress. Don’t smoke. These are common health recommendations that are broad and can be given to a large audience. It’s also understood that there are exceptions: for those about to go into heart surgery, don’t run a marathon. Kids can have some candy on Halloween. Recovering alcoholics are often encouraged to continue smoking while in rehab. Beyond exceptions, there also is nuance for individuals based on their specific circumstances. Allergies o

In a 2009 documentary How to Live Forever, interviewers asked a centenarian what the happiest day of her life was. Her answer? “Armistice Day [...] We knew there would be no more wars ever again.” Of course, having lived over 100 years, she was aware at the time of the interview that the 1918 agreement ending World War I was anything but the end of war. It was the happiest day for her because, after the devastation she had just seen in WWI, she hoped with every fiber of her b

Airplanes “appear impossible”, wrote an article in 1889. Four years later in 1903, the Wright Brothers recorded their first flight. Many thought it was a trick, and nearly everyone was still skeptical about air travel for years. As long as six years later, another article said, “There will never be such a thing as commercial aerial freighters.” Just five months after that article, the first cargo plane took flight. It goes without saying that air travel has changed the world.

As I write this, the Brewers just started their series against the Dodgers, and the Packers just celebrated their win over the Commanders. As Wisconsinites, we enjoy our sports teams. But could you imagine if the Packers had to put on hats and gloves and play the Dodgers? Or if the Brewers had to throw pads on and line up against the Commanders? Likely this would not be pretty. Even worse, imagine if each team played by the rules of their own game? Half the players on the fie

Imagine it’s time for another car. The car you’d like to buy costs $50,000 new. Your options: spend $50,000 to buy new, spend $30,000 to buy used, or steal the car. Hopefully nobody reading this considers the third option, and hopefully that’s because of a moral compass. But beyond that, we’d recognize that if we tried to steal a car, the bill would come due soon enough. With prison sentences potentially reading multiple years for grand theft auto, this route likely would end

10 years from now, how different will your life be? Will you live in the same place? Spend your time doing the same things? Have the same hobbies/interests? Now think about your life 10 years ago. Did you live in the same place? Did you work at the same place? How did you spend your time? Who and what was important to you? Would or could you have guessed 10 years ago what your life would be like now? Most people between 18-68 assume that their life will not be very different

At the battle of Stalingrad in WWII, Germany had over 100 tanks waiting to be deployed at just the right time. When that time came, less than 20 worked. Despite the best engineering, those tanks (as they later found out) were susceptible to field mice nesting inside and chewing through the wires. Would Germany have won Stalingrad, and would the war have played out differently had it not been for those mice? As Housel comments on this strange course of events, “You can plan fo

Between the years 1800 and 2000, roughly 15 billion people were born. Consider how different the world would be if the following 0.00000000004% of those 15 billion had not been born. Adolf Hitler Joseph Stalin Mao Zedong Gavrilo Princip Thomas Edison Bill Gates Martin Luther King As we read in chapter 6 regarding tail events, there are a very small number of things that have an outsized impact. This is true with financial markets, and as we study the history of investing, we

Julius Wagner-Jauregg was a Nobel Prize winning physician who, in the early 1900’s before the invention of penicillin, learned how to treat neurosyphilis. It was often fatal, but Wagner-Jauregg increased the survival rate from 30% to 60%. Believe it or not, he accomplished this by injecting his patients with another disease: malaria. He found out that if patients had a high fever (which occurred with malaria), the fever would also help kill the neurosyphilis and double their

In 1989 a Ford Taurus, which is a sedan, got 18.0 miles per gallon. In 2019 when Housel was writing, a Chevy Suburban, which is a much larger SUV, got 18.1 MPG. Today, you can get fully electric trucks. In the 70s, there were projections that the world would run out of oil before 2025, where we are today. While there’s still a lot of conversations around oil use and production, we haven’t run out like the projections once estimated. Part of the reason is that we’ve found more

Last chapter we explored what happens to us when we see someone else driving a really expensive car. This chapter, let’s talk about the person actually driving the car. Assuming they bought the car (didn’t rent or lease it), there’s still far less information conferred than we might otherwise assume. If you see someone driving a $100,000 car that they bought, you don’t yet know their level of wealth or income. As Housel points out, “the only data point you have about their we