Thread by @The_ReadingApe

Here's part #2 of the highlights of the book @DieWithZero by author @bp22. This book drastically changes the way in which I see money and life, so I highly recommend reading it, especially if you're the 'financial freedom' type.

We've covered 4 points in finding the sweet spot to balance and optimise your life for fulfilment. To refresh your memory, you can read part #1 of the thread here:

link:

https://twitter.com/The_ReadingApe/status/1597621485673205760

We're going to cover the rest of the points 👇 let's go!

Ⓔ Give money when it has the most impact

This point literally hits me in the face. We don't have to give inheritance only when we're dead. Just don't do the 3 Rs when giving inheritance:

👉Random amount to Random people at a Random time!

Getting a will/trust sorted out will solve all three issues (fixed amount to certain people at a particular age).

Or, opt to give to them when you are still alive.

Yes, read that point again. Inheritance need not have to be given out when you're no longer around.

After settling all these, whatever money you have left will be yours to spend to zero when you die. We do not want to leave money to our children only after we die, because the inheritance you leave for them may not be the time they needed it the most.

The optimum age is between 26 to 35. Why?

👉They are not too young to be immature about money and not too old and of declining health to enjoy the money.

Too young - they might lose motivation. Too old - they might not need it or enjoy it anymore.

Also, think of inheritance in terms of experience spent with your children too. There is a point where working an hour to earn more money for your kids is not worth as much as spending an hour with them.

👉 Inheritance can be memories of experiences shared together too

Ⓕ Present vs future

Strike the right balance between spending on the present on what you value and saving for the future. A person's ability to extract enjoyment from their money declines with age. $1000 in your 20s is going to be different from $1000 in your 80s.

We need to constantly balance health, money and free time in different periods of our life.

We also tend to overestimate our health and think we still have the same health status throughout our lives. That might or might not be true for you.

if you suffer from a permanent injury, it'll lead to other unhealthy aspects to rapidly decrease your health.

👉Always spend money on health at all ages. If you are constrained by time, think of ways to spend money to free up time.

Ⓖ Life as distinct seasons

There will be a last time for everything, and we can only delay some of these experiences for as long as the window of opportunity on these experiences still opens.

Once the window is closed, it's too late to do anything.

We have a finite number of phases with a finite number of days. Stop thinking that we can postpone indefinitely the things we are delaying right now to the future.

A good way to plan is to use a time bucket method (instead of a bucket list). What's that?

A time bucket not only lists down the things you want to do in your life (like a bucket list) but also includes a time period to do those activities.

Going to Antarctica in your 20s is an adventure. But doing it in your 80s is going to be #missionimpossible.

Spread out your bucket list over different periods in your life. Divide up your life into different years (say 10 yrs each) then plan what you intend to do in each period.

👉 Plan more activities when younger to take into account the fact that health declines.

Ⓗ Know when to stop accumulating

Instead of having a traditional always-increasing networth vs time graph, try a peak networth graph where you pick a date that you start spending more than you earn.

Do this so that you can die with zero.

This date depends on the amount of money that you earn and your health level, but optimally it should be around 45 to 60 years old.

The more money that you have and the more unhealthy you are, the earlier it should be.

Focus on a specific date and not a specific number in your bank account.

👉A specific number should not be the target before decumulating, because that target can be pushed back higher and higher, to justify having a higher quality of life.

By wanting a higher number, you are exchanging free time and health for money. This might be a good exchange when we're younger but it will increasingly be a lousier and lousier exchange when we get older.

Ⓘ Risk/Reward at different age

Our risk/rewards changes according to our age. In general, take a risk when there's a huge upside and a low downside. When we're younger, there are more asymmetrical risk/reward situations, so we should be bolder.

Even a negative experience can be a good experience when we're younger.

However, an older person should be bold enough to spend their hard-earned money. Why? The biggest fear should be wasting your life and time, NOT your money.

That's it. Here's a quick recap on all 9 points:

a) Optimising our life
b) Investing in experiences early
c) Aim to die with zero
d) Use tools to help you
e) Give at the right time
f) Present vs future
g) Distinct seasons in life
h) When to stop
i) Risk/rewards at diff ages

Hope you enjoyed this book highlights as much as we enjoyed writing it! Again, I highly recommend that you read this book, especially if you're the financial freedom type of dude. It'll give you a balanced view of other aspects of life.

Take this as a blind spot check.

I hope you've found this thread helpful.

Follow me @The_ReadingApe for more.

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https://twitter.com/The_ReadingApe/status/1598346219557830656