7 Life Lessons From “Die with Zero”

Die with Zero Summary

👇 Die with Zero video summary 👇

Die with Zero Lessons

1️⃣ Your time on Earth is finite

Let’s think about John. At just 35, he got devastating news: terminal cancer. When his family heard this, his wife Erin made a bold move – she quit her job so they could cherish every moment together before John’s time ran out.

After John passed away, Erin held onto those precious memories they made in their final days. This story might seem dramatic, but it carries a powerful message: our time on Earth is limited, so we must spend it wisely.

Yet, we often overlook time as a valuable resource, focusing instead on money. This mindset can lead to a life unlived.

Here’s the thing: while you can work to earn more money, time slips away no matter what. Imagine a 30-year-old dreaming of retirement – the time to travel, learn new skills, and explore the world.

But by waiting until later in life to chase these dreams, they might not enjoy them as much, or worse, miss out entirely.

Why? Because wealth means nothing without health. Sure, you might have the money and time, but will you truly relish climbing those ancient steps in Rome or trying water skiing in your later years?

So why do we wait? Why doesn’t that 30-year-old start living those dreams now, in the prime of life? It’s because we’re taught to save rather than spend.

The author learned this lesson too, back when he was a junior finance worker scrimping and saving every penny. But one conversation with a senior coworker changed everything.

The coworker pointed out the irony – why save now when the goal is to earn more later? Why not enjoy life a little along the way? This simple thought shifted the author’s perspective. He started using his extra money to savor life in his twenties.

In the next section, we’ll delve into how you can strike a balance between enjoying your money today while still securing your future.

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2️⃣ Invest in positive experiences

We’ve all heard of financial investments – putting money into stocks, shares, or property with hopes of making a profit. But what if there’s more to invest than just money? What if you could invest your experiences too?

Imagine splurging ten thousand dollars on a trip to Europe. During your adventure, you meet new people, soak in different cultures, and broaden your horizons.

By the time you return home, you feel like a whole new person. But how is this journey an investment? After all, you won’t get that ten thousand dollars back, and it’s not like a course that boosts your future earnings!

Here’s the thing: money isn’t the only dividend worth receiving.

The real treasure lies in the memories you create. Every time you reminisce about your European escapade or share stories with friends, you’re rewarded with a flood of joyful memories. And these memories keep paying dividends for a lifetime.

Sure, reminiscing won’t match the thrill of the actual experience, but that’s okay. If you fill your life with diverse and enriching experiences, all those little memory dividends will add up over time, making you rich in experiences rather than money.

Now, you might be tempted to postpone that big trip and focus on saving more cash. But consider this – the sooner you embark on your adventures, the more years you’ll have to relish those memories.

The author learned this lesson firsthand when his father’s health declined, and he could no longer create new memories. So, the author gifted him a highlight reel of his college football days. It turned out to be the best present his father ever received.

Investing in experiences brings clear benefits, but what if you’re too caught up in work to enjoy life? We’ll explore that in the next section.

Onwards.

3️⃣ Don’t forget to live

Imagine if your boss asked you to work without pay – you’d likely decline. Surprisingly, though, millions of Americans essentially do just that. They spend years laboring without reaping any financial rewards.

Take Elizabeth, for example. At 45, she’s childless and earns an annual net income of $49,000. However, Elizabeth only spends $33,000 of her earnings, stashing away the remaining $16,000 into her pension and savings accounts.

By the time she reaches retirement at 65, her net worth totals $770,000, including her home equity and savings.

In her retirement years, Elizabeth spends $32,000 annually. Twenty years later, at 85, she passes away, leaving behind $130,000 in savings. On the surface, this might seem like a decent situation, but let’s dig deeper into her financial picture.

During her working years, Elizabeth earned around $19 per hour. So, the $130,000 she leaves behind equates to over six thousand hours of labor – roughly two and a half years of work.

Yet, now that she’s gone, that money will never be used. Essentially, Elizabeth spent all those hours working for free.

Could Elizabeth have managed her money differently? Absolutely. Enter the Life-Cycle Hypothesis (LCH). According to this theory, the most efficient way to handle your finances is to spread out your spending evenly throughout your life.

This means your expenses should remain consistent over time, gradually diminishing your wealth until you reach a net worth of zero by the end of your life.

Of course, predicting when you’ll die is impossible, but the LCH theory suggests estimating how many years you have left. For Elizabeth, this would have meant enjoying her wealth throughout her entire life rather than letting it accumulate in her accounts.

As we’ve seen, Elizabeth’s unspent money amounted to six thousand hours of wasted labor – time she could have invested in creating rich experiences and memories. In the next section, we’ll delve into what happens when you prioritize accumulating wealth over experiencing life to the fullest.

Onwards.

4️⃣ Don’t spend your kids inheritance

The notion of dying with zero might seem appealing, but what if you have children? Many parents want to leave behind an inheritance for their kids, so isn’t spending all your money on yourself a bit selfish?

In short, no. Here’s why: ask yourself how much of your wealth you consider truly yours versus how much you see as your children’s.

The key message here is: Dying with zero doesn’t mean spending your children’s inheritance.

Let’s say you’ve decided you want to leave your daughter $50,000. Once you earmark this money for her, managing your finances becomes clearer.

This doesn’t mean you should hoard the $50,000 until you pass away. Instead, consider giving your children their inheritance while you’re still alive.

Research shows that most Americans only receive money from their parents after they’ve passed away, typically when they’re around 60 years old. But think about it – wouldn’t it make more sense to pass on the wealth earlier, while your children are younger?

For instance, if you give your daughter the money when she’s 30, she’ll likely benefit more from it. It could help her secure a comfortable family home or fund enriching experiences. As we’ve learned, investing in experiences is especially valuable when you’re young.

Yet, many parents hold onto their children’s inheritance, often out of fear of facing costly illnesses in old age. But consider this – it’s often more economical to invest in long-term care insurance than to save for hypothetical worst-case scenarios.

This approach not only allows you to give your children their inheritance early but also ensures your own future is secure. It’s a win-win solution.

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5️⃣ You die once multiple times

We often hear the saying “you only live once,” but in reality, we experience multiple “deaths” throughout our lives.

Consider this example from the author: when his daughter was young, they enjoyed watching movies together, with one film being her favorite. But one day, she declared she no longer liked that movie.

In that moment, the author’s life subtly but significantly changed. He transitioned from being a father to a small child to a father of an increasingly independent individual with her own interests.

The key message here is: Change is inevitable, so grasp every opportunity.

In a way, each significant change in our lives marks the “death” of a version of ourselves. Just as the carefree, childless version of the author “died” when his daughter was born, and the teenager he once was “died” years before.

But what does this have to do with money? Well, with each “death” comes the end of certain hobbies and passions associated with that particular phase of life.

To manage this, think of your life as a series of time-buckets, each spanning five to ten years. For example, if you’re currently 30, you might have six or seven more buckets remaining.

Once you’ve divided your life into these buckets, consider the experiences you still want to have and at what age you would most enjoy them. Then, allocate each experience to the relevant time-bucket.

This exercise helps you gauge how much of your wealth to spend in each phase of life. When you accept that each chapter of your life eventually closes, you can seize the opportunities each chapter presents and allocate your money accordingly.

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6️⃣ Don’t save everything for retirement

We’ve discussed the benefits of the “die with zero” approach, but for many, the fear of running out of money in old age overshadows these benefits.

It’s a valid concern – what happens if you reach retirement age and find yourself financially strapped? How much money do you actually need to retire comfortably?

To find out, take a look at your net worth. Calculate it by adding up all your assets and subtracting your debt. The resulting number is your net worth.

The key message here is: Save enough for retirement but not a cent more.

Over your lifetime, your net worth will likely increase. When you’re young, you may have student debt and a low-paying job, but as you progress in your career, pay off debts, and possibly become a homeowner, your net worth grows.

You might think increasing wealth is always positive, but there’s a point where it becomes too high. This happens when you’ve accumulated enough wealth to sustain yourself for the rest of your life without working. Let’s break it down with an example:

Suppose you need $12,000 per year to cover your expenses and anticipate living another 40 years. That means you’d need a net worth of $480,000 to retire comfortably.

However, you can likely retire with less because your assets will generate interest over time, allowing your net worth to decrease more slowly than expected.

In reality, you only need about 70% of your estimated amount to retire comfortably, as interest earnings will cover the rest.

To make the most of your time on Earth, aim to keep your net worth close to your survival amount. When it exceeds this threshold, consider reducing wealth rather than accumulating more. This might involve spending more on memorable experiences or scaling back on work commitments.

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7️⃣ Take risks while you are still young

You’ve probably heard the saying, “the bigger the risk, the greater the reward.” But in reality, taking risks is more like backpacking around the world – it’s best done when you’re young.

Why is it better to take bold risks earlier in life? Let’s consider a high-risk scenario.

Imagine your dream is to become a Hollywood star. To pursue this dream, you relocate to Los Angeles, attending auditions while working odd jobs to make ends meet.

The risks are clear: most aspiring actors never achieve fame, and many end up unemployed and financially strained.

The key message here is: The older you get, the more serious the consequences of risks become.

If you chase your acting dream at 21, the consequences of failure are minimal. You’re young enough to pivot and pursue another career if things don’t work out. You still have time to build a different path.

At 21, you face asymmetric risk – the potential rewards of success far outweigh the risks of failure. In fact, not pursuing your dreams at this age poses a greater risk – the risk of a lifetime spent wondering “what if?”

But as you age, the stakes change.

Consider pursuing acting at 35. By this point, you likely have a career, a family, and responsibilities. The consequences of failure would be far-reaching.

While it’s easy to understand that risks become more daunting with age, the potential rewards of success also diminish. Imagine breaking into acting at 55 – how much time would you have to enjoy your stardom?

The lesson here is to seize opportunities when they arise. If there’s something you’re passionate about, don’t wait for the perfect moment or more financial security.

Life is finite, and so are opportunities. But the power of your dreams is limitless. So, take the leap and pursue what sets your soul on fire.

Die with Zero Review

The key message from these insights is clear: don’t squander your life accumulating wealth for a distant future. While your financial status may improve with age, your health and capacity for new experiences will inevitably decline.

It’s wise to use your disposable income while you’re young, pursuing adventurous dreams and embracing enriching travel experiences. Remember, nothing lasts forever – including your own life. Prioritize happiness over endlessly growing your bank balance.

Reframe your perspective on the golden years. Society often teaches us to anticipate our peak enjoyment during retirement, typically after 65. However, this notion is misleading. The true “golden years” occur earlier, roughly between ages 50 and 65.

During this period, we possess both the time and resources to pursue our passions, coupled with relatively good health. Don’t wait for retirement to enjoy life fully.

Once you have the golden combination of money, time, and health, seize the moment and dive into all the activities you love without delay.

Die with Zero Quotes

🔥 Daily Inspiration 🔥

Your own mental attitude is your real boss.

While your time and your labor may be subject to the demands of your employer and others, your mind is the one thing that no one can control but you.

The thoughts you think, your attitude toward your job, and what you are willing to give in exchange for your compensation are entirely up to you.

It is up to you to determine whether you will be a slave to a negative attitude or the master of a positive one.

Your attitude, your only master in life, is entirely within your control.

When you control your attitude toward events, you control the eventual implication of those events.

— Napoleon Hill