I’m one of those people who buys something new, puts it in the wardrobe and keeps it ‘for best’. Only to bring it out a year or two later and find it’s either gone out of fashion or no longer fits. I’m also a rainy day saver, convinced that a catastrophe is awaiting around the corner. Therefore, I save coffee shop loyalty free drinks, supermarket club card points, beautiful notebooks and any spare cash for when/if that catastrophe ever happens.

However, my mindset is changing after reading, ‘Die With Zero’ by Bill Perkins. The book reiterates what we all know but rarely act upon: There are no pockets in shrouds and You can’t take it with you. It advocates spending/using things so that you die with as little surplus as possible. This means that you get to enjoy everything that you’ve ever worked for over the years.
Bill’s advice is equally relevant to billionaires and those of us of more modest means.

He advocates maximising expenditure on travel and other active experiences in our younger, healthier years instead of hoarding money until we are too old or ill to enjoy hill walking, skiing, sightseeing or whatever it is that we’d like to try. Bill also explains that just as our money earns interest when invested in the financial markets, it can also earn us interest when invested in experiences. This latter type of interest comes in the form of memories and the pleasure we get at looking at photos and souvenirs of those experiences, holidays, meals with friends etc. And this interest, like financial interest, benefits from compounding over time, i.e., the earlier in life we create a memory, the longer we have to enjoy looking back on it.

Following this spending mindset sounds mean if you have people to whom you’d like to bequeath money when you die but Bill Perkins has an answer to that. Generally, people are in the latter half of their lives, say 50+, when they lose both parents and thus inherit. By that time most people are financially solvent after working hard and with children grown up. The time that most of us could use some extra money is around age 30, when we are setting up home, starting a family and struggling on the career ladder. Therefore, Bill argues, it’s better to give money to your children when they need it most and you can enjoy seeing how it’s helping them, rather than waiting until you’re dead.

The big hurdle to all this is knowing how long you are going to live, so that you can ensure that you don’t spend/gift too much money too soon and end up at zero but with several years of life remaining. The book suggests using one of the many online life expectancy calculators to estimate how long you might reasonably have left or some financial advisors suggest using the age of 90.

Most people probably come to this book later in life – but, in order to grow the compound interest on those experience investments, reading the book at an earlier age is recommended. However, as in my case, better late than never.

And tomorrow I’m going to start wearing the things in my wardrobe which still have labels on!