Welcome to Cultivating Clarity, where I share a weekly lesson to help you live better, longer. If you're new here: Welcome. FYI--all previous editions of Cultivating Clarity are available on my website.
Background
It was around this time last year that I first discovered the book Die With Zero. The premise of the book–that you should spend your money while you’re here on earth–is fairly straightforward. It’s a needed challenge to the common arc of working from 22-65, to have only a few good years to enjoy the trappings of 40 years worth of saving and investing.
The concept that changed how I live my life is “memory dividends”. Yes, it sounds weird. But we all know about dividends when it comes to stocks. You hold a stock for a while, and it pays you a little money on a regular basis, usually annually. The same concept applies to memories.
The case for memory dividends
Once you have made a memory, it continues to provide you joy well after the experience. Every time you reflect on it, it can bring a smile to your face. And when you tell others the story, you’re able to bring them a slice of that joy as well. Even better is when the memory was created alongside a friend or loved one and you can recount it together, filling in the gaps and reliving the experience.
Sounds pretty good, right? I thought so, too.
It’s a concept that propelled me to take my girlfriend to New York City for a quick 24-hour trip to see a show for her birthday last year. To go on an elk hunting trip to Idaho with my brother. To take my mom on a canoe camping trip to northern Minnesota. Trips I knew I’d never regret.
Here’s how you can do the same…
4 rules to maximize your memory dividends:
Whether you're trying to eat clean, work out regularly, take charge of your financial life, learn a language, or something entirely different, these mindset tips will help you become more consistent.
The general premise: You have more health when you're younger. And more wealth when you're older. Use them wisely. Image from Die With Zero
Take big trips early in life Perkins recounts the story of a friend who borrowed money from a loan shark to backpack Europe in his 20s. This isn't the kind of risk most parents encourage their kids to take, but... 2 reasons this is actually a wise idea: -Our standards increase as we age (you can see and do a lot more for a lot less money when you’re willing to stay in shared hostel rooms instead of private hotel rooms) -His friend will have this memory to bring him joy for 50+ years (if he had waited until his 50s to take the trip, he would’ve only had 20+ years of dividends from this memory)
Know what season of life you’re in If you’re a skier, your best days are likely behind you by the time you’re 70. Make sure you hit the slopes early and often to glean as much joy as possible from your skiing hobby. At the same time, if you’re also a train enthusiast and enjoy seeing the country by train, you might safely postpone the bulk of your train trips for your later years, since you don’t need to be fully able-bodied to enjoy such trips.
Aim to Die With Zero Your last shirt has no pockets. Perkins outlines exactly how to manage your money so you’re not taking money with you to the grave (and missing out on life experiences). While this may cause some of us to flinch, the logic is sound: instead of amassing more and more wealth as you age, you’re better off hitting a “peak net worth” sometime in late middle age and strategically spending down from there. And if you’re worried about running out of money–buy an annuity!
Give gifts when they’re most impactful The earlier you give the money, the sooner it will have an impact (you’ll help people today instead of in 10 years from now). The average age of an inheritance recipient in the US is 51, an age at which most folks are on sound financial footing. If you really want to help your kids, Perkins suggests a gift between the ages of 26 and 35 is most impactful, because they’ve yet to establish a solid financial foundation. If you’ve ever given someone money, you know how great it feels. Why not add this experience to the list of memory dividends you’re able to draw upon for the rest of your life? That’s it for this week. Thanks for reading.
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