Just finished the book ‘Die with Zero’ by Bill Perkins and the book presents a startling new and provocative philosophy about money and life. This book really made me think about my relationship with money, and more so about saving money and enjoying my money. I thought this might be a good subject for the 50th issue of the newsletter. A thought provoking theme and different way of looking at money than what most of us are told to do.
How many times have you been told that you need to work hard, save every penny, and enjoy a peaceful retirement? How many people have lectured you about this “responsible way to live”?
You can probably earn more money, but you can never recapture time. Our time on Earth is finite. We must spend it carefully. But, when we think about the limited resources we all have, we rarely focus on time itself. Sadly, this approach can mean a wasted life. We delay gratification when we treat time as infinite. Everyone’s health generally declines with time, and sooner or later we all die. Wealth is nothing without health. Even if you have the money and the time, will you relish climbing Eiffel Tower when you’re old? Forget about enjoying, will you able to do scuba diving or sky diving in your seventies?
Your life is the sum of your experiences. This just means that everything you do in life—all the daily, weekly, monthly, annual, and once-in-a-lifetime experiences you have—adds up to who you are. When you look back and reflect on your life, the richness of those experiences will determine your judgment of how full a life you’ve led. Your experiences will pay you valuable memory dividends. Whenever you look at a photograph from an experiential holiday or talk to a friend about the trip, you’ll get a rush of pleasurable memories. And these memories will keep paying out for the rest of your life. Maybe you’re thinking that you will take that big trip one day – but you should put it off for now and focus on building up more cash. Well, here’s one thing to consider: the earlier you set off on your travels, the more years you’ll have to enjoy the memories of them. I see everyday at my home with my parents’ declining health, they no longer have the ability to make meaningful new memories.
Aim to die with zero. If you spend hours and hours of your life acquiring money and then die without spending all of that money, then you’ve needlessly wasted too many precious hours of your life. There is just no way to get those hours back. People, who tend to save too much for too late in their lives, are depriving themselves now, just to care for a much, much older future self—a future self that may never live long enough to enjoy that money. The most efficient way to use your money is to spread out your spending. In other words, your outgoings should remain more or less the same throughout your entire life. This means that your wealth will dwindle as you get older, and, eventually, you will die with a net worth of zero.
Dying with zero doesn’t mean spending your children’s inheritance. Most parents want to ensure they leave enough of an inheritance for their children. It maybe a good idea to define the amount and give the children that amount in your lifetime. Say you want to give X amount of money to your children from your wealth. Well, just think about this money as no longer yours to spend. And once you’ve made this decision, managing your wealth should become simpler. To simply put, by the time I get inheritance from my parents I will be way over 65. And most of that money may not be any use to me. Most parents hang on to their children’s money. Sometimes this is because they fear developing chronic – and expensive – illnesses in later life. It’s cheaper to take out long-term health insurance than it is to save for a worst-case scenario that may never happen.
Don’t live your life on autopilot. Think of your life as distinct seasons. Change is inevitable, so grasp every opportunity. We all are doing something or the other last time. I am never going to drop my boys to school bus any more. How is this related to the way in which you spend your money? Well, each time one version of you ceases to exist, so do the hobbies and passions that particular person had. Now that my boys are grown up, rarely we are going to have holidays together. Draw a timeline of your life from now to the grave, then divide it into intervals of five or ten years. Each of those intervals—say, from age 30 to 40, or from 70 to 75—is a time bucket, which is just a random grouping of years. Then think about what key experiences—activities or events—you definitely want to have during your lifetime. This will give you a good indicator of how much of your wealth you should aim to spend in each period of your life.
When you come to terms with the fact that each chapter of your life eventually closes, you can start to make the most of each chapter’s opportunities and spend your money accordingly. By dividing goals into time buckets, you are taking a much more proactive approach to your life.
Know when to stop growing your wealth. Save enough for retirement but not a cent more. We all have fear of what will happen if we end up living with zero in pursuit of dying with zero. Net worth of most working professionals increases in their lifetime. From student debt to house loans and low salaries in early part of life, most people get to a debt free life and high salaries. Most people become home owners and valuation of these assets also increase over time. Getting wealthier is a good thing? Well, yes, but only to an extent. Money beyond that is always a matter of stress. This moment comes when you have accumulated enough wealth that you could survive for the rest of your life without working. That’s called Net worth peak. Most of us are afraid to dip much into their principal even after retirement. You must start spending down, or decumulating.
Rethink your golden years
We’re taught to think that our golden years come when we retire, perhaps after the age of 65. This is – we’re told – the precious moment when we have both time and money to do everything we’d always wanted.
But don’t be fooled.
The golden years actually arrive much earlier, roughly between the ages of 50 and 65. It is during this time that we have more time and resources than we did in our younger days – but, crucially, a lot of us also remain fairly fit.
So don’t wait until retirement. As soon as you have the golden combination of money, time, and health, go for it – start doing all the things you love!
Think about your current physical health: What life experiences can you have now that you might not be able to have later? Think of one way in which you can invest your time or your money to improve your health and thereby improve all of your future life experiences. Learn about how to improve your eating habits to improve your health. Do more of the physical activities that you already enjoy (such as dancing or running) that will also improve your enjoyment of future experiences. If your ability to enjoy experiences is more constrained by time than by money or by health, think of one or two ways you can spend some money now to free up more of your time.
You may want to hear more on this from Bill Perkins himself.
We all have limited time on Earth, so how should we spend it? Financial advisors urge us to be more like the ant than the grasshopper: work hard to maximize our earnings, save early and often, and, in retirement, reap the fruits of our labors and the rewards of compound interest.
“What a monumental waste of human life,” says multi- millionaire Bill Perkins. If you spend a lifetime working and die with lots of money left over, you’ve squandered a huge amount of life energy, bypassing the opportunity to enjoy your money — or to give it away — during your lifetime. Our lives are only as fulfilling as the sum of our experiences, Perkins argues, so the more time and money we invest in experiences during our lifetime, the richer our lives become. Bill Perkins’ ‘Die With Zero’ opens up a completely different avenue of thinking to realise that your life can be maximised through memorable experiences.
How to brush your teeth properly?
Do you brush for two minutes, with the correct type of brush and toothpaste? Did you know you’re supposed to spit, not rinse after brushing? And that brushing at the wrong time can cause damage. Though all of us have been brushing our teeth but many still are not aware the right way. Found this article of good help to understand about dental care.
How to Declutter?
Recently we moved to our renovated room and in the process found we have been storing so much of clutter over the years. Things we have not used or were not even aware of. So we did a minimalist drive to clear up the clutter. Almost 6 boxes of good we identified to donate. Decluttering is just editing your home. I found this article very helpful while doing decluttering.
How to set up your phone for maximum productivity?
Few months back in one of the issues of Good Vibes, I had shared about this wonderful setting for optimising productivity with your phone. A dear friend shared again and I believe it’s worth resharing here as it is a very well explained, step by step guide on How to Configure Your iPhone to Work for You, Not Against You.
Physics, Maths and Chemistry of Work-Life Balance
by Sivakumar Surampudi
An imbalance between work and life basically means spending more time on one at the cost of the other. Often you may not really have a choice, because a day has only so many hours and there are competing demands from your professional pursuits and personal life on the same limited time, leading to stress. Balance is obviously a desirable goal, because the resultant harmony increases your energy and improves productivity. After all, you cannot add more hours to a day, but you can certainly bring more energy into those hours. And, the hours saved by productivity, in effect, are the hours added back to your day.
In the above argument, three aspects require delayering, if we intend achieving the desired balance and benefitting from it. The what, the when and the how.
The what: Work and life are very broad buckets, so it’s important to appreciate their multiple components while figuring out “what all do I need to balance”. Work includes managing today’s tasks as well as working towards longer term professional goals, which means continuously strengthening different competences, as also building and expanding your social networks. You need to concentrate not just on your own work, but also develop the team’s capabilities. On the other hand, life means family – both immediate and extended, as well as friends – both old and new, besides self – time for the many personal interests, in addition to making time for fitness.
The when: Priorities and right balance vary depending on the phase of life and the stage of professional pursuits, as also the nature of work. In that context an interesting angle is about the time period over which you are trying to balance them. Is it a 9 to 5 work and 5 to 9 life? Or is it a Monday to Friday and the weekend combo? It could also be spread over a month if that’s what your work allows, and so on. Often, just changing the balancing-window can make all the difference.
The how: Whatever you intend balancing must be fully aligned with whomever you want to balance it with. Your family or colleagues must know your rhythm and adapt. If that doesn’t work for them, you have to adapt. It’s an iterative process based on empathy for each other’s context and a reality check from time to time. When done this way, it’s not actually balancing work and life, but it becomes a more seamless work-life integration or confluence.
If the title is still a puzzle, the what is physics, the when is maths, and the how is chemistry.
Sivakumar heads the Agri and IT Businesses of ITC Limited, a three billion dollar portfolio out of the group’s ten. Sivakumar also oversees ITC’s Social Investments Programme and Corporate Sustainability Initiatives, that helped ITC achieve the distinction of being water positive, carbon positive and solid waste recycling positive for nearly two decades in a row – the only enterprise in the world to do so. ITC’s trailblazing ‘e-Choupal’ initiative was also developed and executed under his leadership. Sivakumar also serves on the Advisory Council to the Ministry of Rural Development, the Commodity Derivatives Advisory Committee of SEBI, and on the Management Committee of National Agricultural Higher Education Project of the Ministry of Agriculture & Farmers Welfare. He has been on the boards of NABARD and IRMA (Institute of Rural Management – also his alma mater, where he topped the Class of 1983). He has been the Chairman of the National Agricultural Council of the CII, Vice Chairman of the WEF’s Global Agenda Council on Social Innovation and UN Global Compact’s Core Advisory Group to develop Sustainable Agriculture Business Principles. Sivakumar blogs at shivsthirdeye.in
You can connect with him on twitter @S_Sivakumar
We are now 50 issues old. When I started this I was not even sure if I can continue for couple of months. But the tremendous response to the newsletter has been a great motivation. Each issue is read by over 60% of subscribers which is huge. Also the best part has been its being such a new learning tool for me. I had to research extensively on every topic that I have written about in Good Vibes, which has increased my knowledge and improved my reading habit exponentially. Thank you all.
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We have also archived all the old issues and you can access them at www.sandeepmall.com. They contain some very good tool kits to take charge of your well being.
See you next week .
The information provided in this newsletter is not medical advice, nor it should be taken as a replacement for medical advice. I am not a medical Doctor so I don’t prescribe anything. Most of the tools suggested are based out of scientific research and my experiments with them. Your healthcare, your wellbeing is your responsibility. Anything we suggest here, please filter it through that responsibility.