Die with Zero Chapter 8: Know Your Peak

As Perkins often reminds us, in order to enjoy an experience, we need some mixture of time, money, and health. The least flexible of these is health. The typical retiree has the most time and money in their late 60s and afterwards, but likely is not eager to go mountain bike riding, multi-day backpacking, cliff jumping, or a host of other things that require a level of health (or at least recuperating joints!). Because of this, Perkins recommends planning around that factor more than the others. “The vast majority of the experiences you want to have will have to happen within about 20 years of midlife, in either direction — in other words, roughly between 20 and 60. People so often talk about saving for retirement. But there are far fewer conversations about saving for excellent and memorable life experiences that need to happen much sooner than the typical retirement age.” In this sense, our peak is a date – a time/season in our life, not a number regarding our net worth or retirement savings.

He argues that if we are willing to be slightly unorthodox, we can often find the time and money for our most desired experiences during our peak health. While we shouldn’t be irresponsible financially, Perkins recommends that once we’ve accumulated a minimum net worth necessary for ongoing survival, we should shift the focus of working and earning more, to spending our extra income and extra time on those experiences that would lead to the most fulfilled life. (He gives a recommended way to calculate your necessary survival net worth. There are so many caveats and considerations that I won’t even share it here, otherwise I would feel obligated to write you another 10 pages on what may or may not work with his formula.)

Perkins offers himself as an example, and really does seem to practice what he preaches. He had wanted to throw a big party with all his friends and family, and when he was nearing his 45th birthday realized that some of his older family members might not be physically able to enjoy or even be alive for his 50th (what is typically a larger celebration). So he decided to pull out all the stops, and throw the biggest party he could afford. What’s important is not how lavish his party was, but how much of his liquid net worth he spent on it. Perkin’s doesn’t give a percentage, but it was so much that it even made him uneasy and he almost didn’t do it.

His favorite place is the Caribbean island of St. Barts. He invited many, many people, and offered to pay for those who couldn’t afford it. He paid for dozens of flights, rented out a secluded beach, reserved 20+ hotel rooms, and even hired Natalie Merchant to come and perform. Again, this is not because Perkins is a billionaire. It’s because he was willing to spend very much of his liquid net worth over his “necessary survival” amount. During the party he thought, “This might just be what heaven looks like.” And his feelings now about spending so much of his money on this party? “I would never change anything about that trip.”

His driving question in life is, “What’s the best way to spend our money for maximum enjoyment and in order to generate maximum memories?” Whether we have the same driving question or not, Perkins’ point is valid that some things in life simply can’t be enjoyed in typical retirement age due to the health factor. And given the fact that most people’s net worth continues to increase during retirement, there may be some validation to starting to spend more of your net worth before retiring and in yours 60s.

Perkins’ recommendations

• Calculate your annual survival cost based on where you plan to live in retirement. If you’re already past this, consider how you might best enjoy your wealth over this amount.

---Reflection---

In this chapter there are more comments about Perkins’ view of work as (most often) a necessary evil. I won’t belabor my position here again, but will add that it could be, once we hit a certain net worth (or at least liquid net worth), we may consider continuing to work in another position or industry we feel passionate about, even if it doesn’t fully cover our living expenses. We could slowly start pulling minimal amounts from retirement savings while still working in order to engage in this different type of work.

Much of this chapter is wanting us to realize we’re in our peak likely sometime in our 40s. Most of our clients are over 40, retired (or close to it), and likely past their physical prime. If there’s regret over missed opportunities, there may be a silver lining. Although no amount of money or time will allow you to get back to your physical prime, it might be fulfilling to give these experiences to someone you love, such as your children. If you see your children spending their time and health on accumulating wealth (which for Perkins may simply mean working full time, keeping busy on the weekends, not taking many if any vacations), offer to fund their top experiences that they won’t be able to have when they’re your age. Even if they don’t need your money to do so, they might need your perspective, your convincing, and maybe even your offer to help with grandchildren so they can get away to do the things they want.

Let us know

• What is the absolute minimum amount of expenses you would need in order to survive? What is that amount multiplied by your life expectancy? Is this more or less than your net worth? Your liquid net worth (excluding physical assets such as your home)?

Until next time, happy reading!