Die with Zero by Bill Perkins

Author:Bill Perkins
Language: eng
Format: epub
ISBN: 9780358100515
Publisher: HMH Books
Published: 2020-07-28T00:00:00+00:00

Ability to Enjoy Experiences Based on Health

Everyone's health declines with age. Wealth, on the other hand, tends to grow over the years as people save up more and more. But worsening health gradually constrains your enjoyment of that wealth as more and more physical activities become impossible to enjoy, no matter how much money you can afford to spend on them.

This thought immediately suggested practical implications: If your capacity to enjoy life experiences is higher at some ages than others, then it makes sense to spend more of your money at certain ages than others! For example, because $100,000 has more value in your fifties than it does in your eighties, and your goal is to maximize your enjoyment of your money and your life, it’s in your best interest to shift at least some of that money from your eighties into your fifties. For the same reason, it’s in your best interest to shift some of it to your twenties, thirties, and forties, as well. Making these kinds of conscious financial shifts essentially creates a lifetime spending plan that takes into account the changing utility of money.

Whenever you shift in order to spend money, you are necessarily also shifting when you save. So, for example, instead of saving 20 percent of your income throughout your working years, some people would be better off saving almost nothing in their early twenties (as we’ve discussed), then gradually ramping up their saving rate during their late twenties and thirties as their income begins to rise. Then they should save even more than 20 percent in their forties—and then slow down their savings so that eventually (as I explain in the next chapter) they actually start outspending their earnings.

Notice that I am being careful to say that some people would be better off doing that. Everybody’s situation is different. For example, some people’s favorite activities, such as mere walking, are inexpensive; others don’t require tip-top physical health. How much you should save also depends on how fast your income grows from year to year, where you live, and how fast your savings grow. Because of all these variables, and all the possible combinations they produce, there is no one-size-fits-all rule.

There you have it: It makes sense to spend more of your money at some ages than others, so it makes sense to adjust your balance of spending to saving over the years accordingly.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.