Bill Perkins, Clint Murphy
Clint Murphy 00:03
Today I had an amazing conversation with Bill Perkins, a successful hedge fund manager, entrepreneur and author of Die with Zero. Getting All You Can from Your Money and Your life, which teaches you a plan for optimizing your life, stage by stage so you’re fully engaged and enjoying what you’ve worked and saved for, with the goal being to optimize our lives, for net fulfillment at the right time. At each stage of life, this conversation will change how you think about saving and retirement forever. I hope you enjoy. Bill, welcome to the growth guide podcast. Before we start by diving into your book Die with Zero. Can you give the audience a brief introduction to yourself so they know your background and history before we start talking the book?
Bill Perkins 01:00Wow, thanks for having me. But being 54, that’s a lot. Let me, let me give you this super condensed version. I grew up in Jersey City, went to school at University of Iowa, started as a assistant peon on the New York Mercantile Exchange, which means I was a clerks assistant. I was a bottom of the barrel speaking sandwiches on the floor, kind of worked my way through learning clerking. brokering, eventually got recruited to come to Houston as a trader, worked at a company called El Paso Energy, journeyman through trading, my friend, John Arnold started a hedge fund called Centaurs Energy, joined there, got rich, he got richer, he called in Rich, retired. I started my own hedge fund, family office, done movies, played poker, have startups, you know, have family office, that type of stuff. So here I am, still have today, some startups that I do some small, small, small VC investments, for the family office, living life trying to find balance,
Clint Murphy 02:03
Trying to find balance and trying to die with zero. So we’re gonna dive into what that means. And it seems like one of the fables or stories that you heard growing up, somewhat tied into your desire to get to this answer. And that was the story of The Ant and the Grasshopper, and you having a realization, well, wait a second, when does the ant actually get to play? Can you tell her readers about that and how it had such an impact on you?
Bill Perkins 02:35
I would say like that was kind of, I’d never had like this one epiphany moment, right? It’s not just this one thing. It’s kind of all these things. Like, when you’re thinking about it, like the story, The Grasshopper and the Ant, it’s just like work, work, work. And I was like, well, what kind of life is that? Right? But that was in conjunction with being broke going to Wall Street, particularly commodities trying to get rich and thinking about, well, what is it for? What am I getting rich for? You know, why do I want to be rich before I’m 30? You know, and all these kinds of thoughts about, I think everybody has these thoughts, like, what is it for and what does all mean? What am I here to do with my life? Right? And you kind of, even in college, when I was in engineering school, they would have career day and I remember the IBM rep coming in, and I asked a question about entrepreneurialism inside of IBM, like, could you, if you had an idea, and they were like, no, you’d be working on it just as your career path, you know, you’d work on a subsection of a chip, right? And you would be tasked with making that part, you know, better, stronger, faster, whatever it is, what you were doing in signal processing, or whatever, whatever it was, and after X year, this is your salary next year, and whatever it was what kind of laid out and it was, like, felt like death to me. Right? And I was kind of thinking about, like, what fulfills me? What does it mean? What time, I didn’t, you know, work to play, etc. So I was always having questions of like, balance and how to get the most out of life. Right? From, from college, to first job, etc. And then I was thinking, as you know, you’re going to make money. How does that relate to money? Like, what’s the proper amount of money to have, what is enough? And I think the concept of enough didn’t even come to me until I read the book, Your Money or Your Life, very impactful, very, very impactful on my thought process.
Clint Murphy 04:33
And when you look at that the thing that you said jumped out at you in Your Money or Your Life, and we’re fast forwarding, but we’ll probably jump around a lot in our convo was the idea of trading consumption for hours worked. So you start to look at it and say, well, wait a second that’s two hours of my life. I’m not doing that. And then you took it a step further, which I loved and there’s a theme of your engineering mind really coming out throughout this book and the concepts you had because you not only did it for money, which I’ve heard before, but you took it to calories. So am I, am I going to eat that cookie or not? Well, wait a second, that’s another two hours on the treadmill. Do I want the cookie? Let’s test the cookie, let’s have a bite. And then let’s figure out if we want the whole cookie or not. So how did that have such an influence? And can you explain to the listeners like what is this concept of trading X hours of work for Y hours of consumption that you want to buy?
Bill Perkins 05:38
Yeah, so in the book, they go through kind of one of the things you figure out is, what is an hour of your time worth. And it’s a very didactic painful process. So they have you list all your sources of income and your after tax income, then all that it takes to get there, including your costumes, whether you have to wear a suit or not, your transportation time, decompression time, anything associated with work, right? So and then you divide that out, right, it’s just simple division, once you sat down thought, okay, to work after, you know, I commute an hour, plus eight hours of work, plus, after these expenses with getting to work, right, those get subtracted out, and then you come up with your true hourly wage. And then the next step is you look at every single expense and dollars, okay, so you have, these are the things you’re buying. And then the next exercise, since you’re so well versed, and like your time is to remove the money, and just think of it an hour’s work. Right. So once you know you’re so that that you have this visceral experience, and I understand why they make you go through, it’s so painfully, so detailed for a week is because when you convert it the time, it literally is like stepping into the matrix, you see the whole world differently, right? Everything you think in time, like you go to the dentist, and it’s like, oh, I have to spend, you know, a day and a half to go see my dentist, you know, this shirt costs an hour of my time, this movie an hour and a half of my time and you start to think, wow, would I work an hour and a half to have an hour and a half of entertainment, you quickly start to get your values start to pop up. Right, you’re like, wait, what I really, you know, do I really want that shirt that bad? Do I really want to go to this movie that bad? Well, I need to go to the dentist. So so be it. You know, and that made me think, I need to increase the value of an hour of my time. Cause you know, You know, I also thought about in terms of like, I have an optimal health that I want to maintain, right, extra calories that you don’t consume wind up through some process being shoved into stored as fat. Right? If and so, And then that causes all type of health concerns. And so if I’m going to have this chocolate chip cookie and they’re not 200 calories nowadays, they’re like, you know, they’re 400, 5. You know, it’s these, these cookies are calorically dense, nutrient light. I’m like, is it worth you know, I when I work on a treadmill, pretty hard, you know, on an incline three now, about an hour is 600 calories, right? Hard, right? Three and a half, let’s call it a three 3.3, 3.5 miles per hour pace walking on a 15 degree incline, right? And so it’s about 600 calories, right? And then I have to subtract out 100 calories. Because if I just sit around and do nothing, I burn 100 calories so it’s only 500 extra calories a burn. Right? So so when I sit there and I look at the cookie I’m like, shit I really don’t like walking on the treadmill do I really want an extra hour on the treadmill or treadmill equivalent right of work expenditure in order to burn this cookie. And that concept came from like time, like everything is time, to uh you know, a conversion of time. Like we’re all exchanging time. And you’re getting fractured. Like when I go fly on a plane I’m getting fractions of people’s time. Right? The pilot, the stewardess, the person who made the plane, the Boeing, you know, amortize right and I’m like exchanging whatever the ticket cost, right, you know, 10, 20, 30, 40 hours of your time, depending on what it is, exchanged for this transportation, rapid transportation to another destination. Right? That was probably one of the most impactful things that it me just, you know, my way of thinking change, but it also changed my motivation. So most people when they read Your Money or Your Life, they it spawns a sense of frugality. right away. That’s right, aligned with your values and you get this concept of enough like, I don’t really like, do I really need that fancy car? Do I really like it? You know, like, you start like, do I really give up hours of my life, the only thing I have right like for this and you, it really forces you to think about what your values are. And that book spawned the FIRE movement, the financial independence, retire early, which is people who are extremely frugal, and then look to be independently wealthy, wealthy, and I’m air quoting, because wealth is defined by each person, like it’s the concept of enough plus a little bit more, right. But what I took away from that being that I’m kind of a disturbed human being is that I want an hour of my time to be worth 1000s of hours of other people’s time, right. So I didn’t say, hey, I want to be frugal, I just want I want to be extremely wealthy. So I don’t have to worry, I don’t want to do these calculations, I don’t want to have to think about it, right. Like it’s immaterial, I don’t think in seconds, I think in hours, and this is a second or five seconds, or 10 seconds of my time. That’s the kind of the direction. That was my motivation after reading the book.
Clint Murphy 11:00
And that’s what I what I really zoned in on while you were talking about it is, is the significant difference between your approach and the FIRE approach. And whenever I write about financial independence, so many people talk about the lower your expenses side of the equation, but we can only lower our expenses so much, and there’s only so much fun in living a life of austerity. The only people that seem to enjoy it, or are monks or people that are in the Lean FIRE movement, what you’re advocating aligns with what I tend to advocate, which is the number one way to reach the financial independence, is to just increase your earnings, because there is effectively no cap on how much money we can make. Now, that’s obviously a little bit outside of the book, but do you want to share and then we’ll bring it back on course, some of the ways that you’ve looked at in your life of, well, how do I increase the value of one hour of Bill Perkins’ time? What are my methods for developing rare skills, habits that make me more valuable than the average person is?
Bill Perkins 12:14
I think, you know, across all industries, I tell I tell people this, they’re like, oh, you know, how to make my assets, whether you’re a shoelaster in the garbage business, in the pizza business, there’s a millionaire in every single vertical, every single one of them, there’s a millionaire. And so what it really turns down to, at least my finding, is that leverage, being something and finding leverage. So how do you lever your time? Right? And so there are two, you know, people do it all kinds of ways, right? Oh, they levered up, and they became, instead of being a pizza parlor, they became Pizza Hut. Right. And so, you know, there’s all types of books about there about working on your business, not in your business and leveraging yourself up. But the way I went about it is there’s two areas where there’s inherent leverage, real estate and, and trading, commodities trading, you know, you put down a 10% of the commodity value as a good faith deposit. Right. So it comes with this leverage. And so a small change in the value of the commodity results in outsized percentage changes and gains, right. And so the same thing is in leverage and why real estate is so popular amongst people to get wealthy, it’s one of the few areas where the average person can get extreme leverage. You know, sometimes people use their first time homebuyer plus the 5%, plus the match to have like, 20 to one leverage on a house, rent it out, and then just keep rolling that leverage, right. And then the next thing you know, they have 10, 20 30, 40 rental properties, you know, some good cash flow, and they’re doing, they’re leveraging their experience, and then putting out a video of course, right? They’re really leveraging themselves instead of teaching one class, right, where they can fit 30 people that like, I can teach the whole world, you know, and go on the internet and using that leverage, right? And so being good at something, being right, and levering works well to get wealthy and, you know, leverage works horribly in reverse, right? When you’re wrong, you go bust up, right. But yes, yeah, here’s the thing, like, it’s asymmetric. Don’t die when you go busto, you get a job, right? And you go and you swing the bat again, right? You get a job and it sucks and maybe your ego’s bruised, but, you know, you build up your cushion and you get to go at that and the leverage game. Right? But the rewards are ludicrous. They’re unlimited. Right? You can become a multi multi multi billionaire, right, in playing the leverage game. And so I you know, for people who you know, their concept of enough is a very large lifestyle, very expensive lifestyle. I always recommend the you know, find leverage in your business and your vertical that you can be good at.
Clint Murphy 15:03
And for the listeners who don’t necessarily understand asymmetrical upside, what we’re talking about is the value to the upside is significantly larger than the pain of the downside. And so using your example, Bill, even looking at becoming a content creator, my goal over the next, let’s say three to five years is to do this full time. And everyone will tell you why that won’t work, what the risks are. And finally, the realization that my wife understood where we were going with this when she responded to them and said, well, the worst that happens is he becomes a CFO, again, as already a CFO, he’s been doing this for 23 years. It’s not as if he’s unemployable. So, so people need to realize when you when you take bets on yourself, there’s always a fallback, there’s always you just go back to doing what you already were doing. But let’s rewind now, let’s go back in the book, because there’s a couple concepts that you talk about that I think drive a lot of the conversation throughout the book, and throughout our conversation, that it’ll be good for our listeners or listeners to have. And one of them I think, fell a little bit out of the Vicki Robbins book based on what you were saying, in they’re both very engineering. The first one is your optimization problem, which is you want to maximize fulfillment while minimizing waste. The second one is, and this one is big, because I’m realizing where I make some mistakes in my life based on what you’re saying here is, although we all have potential to make more money in the future, we can’t go back and recapture time that’s gone. So squandering our lives should be the greater worry. Can you tackle each of those concepts? And which I think drive the whole conversation we’re about to have.
Bill Perkins 16:50
Yeah, so I’ll start with the first one. It’s, I think it’s easier like we’re trying to optimize, we’re trying to optimize our life, acquire positive experiences without being wasteful, right. And I get, I’ll give you an example, a personal example, I go on trips. Travel is one of the things that fulfills me. So I think it’s one of the things that you spend money on, and you actually are richer for spending the money and taking the trip. But I do it in a way that is, no matter where I go, beautiful vista, taking a boat ride in Italy, there’s somebody doing it for 1/100th of the price, and they’re having 95%, the same fulfillment. So I’m pretty wasteful, right, because I’m a bougie guy now. I’m just and, you know, what we’re trying to do is like, optimize and understand the things that fulfill us, right, the discoveries that you know, the random, we’re going to do without with being wasteful, right, without just lighting money on fire, right. And so, I think that’s a fairly easy concept to get like, you should be taking a trip, there’s ways to do every single trip I’ve done for 1/100th costs, and everywhere I go, there’s some student backpacker right now, you’re maybe not going to be a backpacker, stay in a youth hostel, do the Super Saver, but in between that in between myself and gap, you’re a student backpacking, right? There’s, I’m just using the trip example. There’s a place for people, right to not be wasteful, right. But if let’s say you get so much fulfillment out of the bougie experience, but then it’s not wasteful. Your money is a tool to fulfill your life, not the other way around. And so, you have to be deeply in touch with what actually fulfills you, and what is just fluff. Right? And that’s a whole sub segment people like, well, how do you know that? And that’s all they’ve written books on this, right? Like, how do you, you know, unplug and figure out what really fulfills you. But once you know that, then let’s go optimize for that fulfillment, right. And I don’t tell people how to live, you could be playing chess or checkers, or traveling or not traveling or, you know, eating Pizza Hut, or whatever it is, I’m like, this is how we optimize. Right
Clint Murphy 18:56
But you do point out before we jump to the second part, because you had a friend who was a good example, the hedge fund guy who said, well, I get I get enjoyment out of life out of not not doing any of these things that you’re talking about. And one of your points to him was, well, wait a second, you have enough money to test whether that’s true. You don’t actually know whether you’re going to love X, Y or Z because you haven’t done any of them, because you’ve been so consumed by work. So there is a little bit of a hey, at least test your boundaries, at least try things before you say this is what you love.
Bill Perkins 19:29
Well, part of the optimization is discovery, right? You don’t come out of the womb, knowing what you want. You discover what you want, right like you we have these organic space suits, right? You know, these are our bodies right? In which we process energy that allow us to explore our world, right then space time, actually. So we are out there exploring, we are humans exploring this this universe, right that we’re in and as we explore this universe and we interact with other beings exploring this universe and situations and places, we discover what we like. You do not come out of the womb going, I hate onions, I like chocolate. You know, I like to travel, I love Prague, I don’t like this city, you know, I’m using myself as an example. I discovered that, right. And so I realized that obviously, I have not discovered the entire planet, and I have not done all things and it will not be possible. So a lot of my fulfillment, my future fulfillment will come from experiments, discoveries, random events, and I have to plan for that as well.
Clint Murphy 20:32
Yes, and so encouraging people to have that discovery, and sorry, I distracted you as you’re going into, as you’re going into the second one, which is the time squandering, being the more important than the money.
Bill Perkins 20:48
You know, my greatest fear is wasting my life as I get one ride, we’re here on vacation on planet earth, and the vacation ends. And so just as you would go on a trip to I don’t know, Italy, or Europe, or who knows Chicago, that week, you don’t want to waste your vacation, right? You spent your time, you got your ticket, you got your hotel, you’re gonna go see the sights, do the thing and do the Chicago thing, whatever that means to you, or the Italy thing, whatever that means to you, while I’m here on planet Earth, and I have limited time. And I do not want to squander that. And so, you know, some of that came from looking at other people’s lives. And so my father used to say you can learn the hard way, which is learning from your own mistakes, you can learn the easy way, which is learning from other people’s mistakes, or you can never learn. And he said, just don’t be in the third bucket, right? With respect to your life, okay, I don’t get to go backwards in time, I can’t learn from my own mistakes, I don’t get my 40s back or my 30s back. And so one of the things I did, I was like, wow, I have to, I have to really learn the easy way, I have to learn from other people’s mistakes. So there’s a bunch of books and a lot of articles written about interviews with people who are 100, 90 years old, etc. And they speak on their regrets. And I would say, by and large, every single regret has to do with something they did not do, not something they did, and a risk they did not take. Not I took too much risk, or I did this or I said I love you first, or I took a risk on this job or whatever, there’s none of that. But there are, I had a chance to go move away, whatever. But I was too scared or whatever and I didn’t do it. And I regret this, I didn’t take this chance or I didn’t whatever or I or some regret related to not being kind or forgiving. Those are basically the regrets in these centenarians that they interview or people in their 90s took that to heart, right? Because I don’t want to waste this one ride, I only get one vacation here. So I don’t want to waste my vacation. And not only that, my body and the state of my physical health, my ability to enjoy this vacation changes with time, there’s this forcing function of doing activities at certain times in your life. Because yeah, the natural decay of our bodies, right, we reach mental peak at 28 and physical peak at 33. And from there, we’re in plateau and decline. And so certain activities, are you get more fulfillment, or more ability to do them at certain periods in your life. And because life has many dynamic decisions, not static decisions. And so let me just define what those are. A static decision would be and my definition would be, whether you had water or tea this morning, it doesn’t affect anything down the line. A dynamic decision would be you had kids, it affects 100s and 1000s of decisions later on life, where you go, where you live, whether you come home from a vacation or not, you know, whether you come home for dinner, like decisions that you never knew you were making at that time. But you know, you know that I’m flipping a switch that is changing several decisions dynamic decisions, and there are static decisions. And because life is like Tetris, in order to get the high score, you gotta get the order right. I tell people, right, if you if you’re like, hey, you’re in heaven, and you’re like, God goes, here are the bucket of experiences you can have on your vacation on planet Earth, you have 84 years, you know, and you go, I want to, I want to do this and I’m gonna go to the strip club, and I’m gonna go dancing and I’m gonna go climb Mount Kilimanjaro and I want to have kids and I’m gonna get a degree I’m gonna start a business and then I’m gonna blah blah, blah, you know, you throw them all in there, right? All the numbers and everything, God goes perfect. You can have them all you just got to get the order, right. And so the guy goes, Hey, I want to get married and have kids but he you know his strip lub partying days came after his marriage, he didn’t get that order, right?
Clint Murphy 25:02
That doesn’t work.
Bill Perkins 25:03
The guy says, I’m gonna go heliskiing in Mount Kilimanjaro at 82 doesn’t work, right? Right, his body doesn’t work, right? He got the order wrong, right. And so he can’t fit all those activities, he can’t get the fulfillment, high score that he outlined for himself while he was in heaven, because he didn’t get the order, right. And so I think, you know, I know we’re wandering a little bit, but in the concept of the book, when you’re thinking about, like, the things you want out of life, the when is extremely important, extremely important. Not only just from an ability to do it, but also your enjoyment. Like, if you’re like, hey, we’re gonna go to club, we’re gonna rave all night, we’re gonna do glow sticks. I’m like, that doesn’t really doesn’t do it for me. 20 something years ago, I’d be like, let’s go, you know, let’s go, you know, I’m up all night, I got the energy, right. But even though I could do it, I just don’t have the attitude or the liking to do it. So certain things fall out of flavor, you know.
Clint Murphy 26:01
And so when you look at that, it sounds bill, like a lot of this is the concept a lot of people write about, regret minimization frameworks, if you will. And so a lot of what we’re talking about is minimizing our future regrets. And one of the ways you, you talked about doing it, as I think about it, is the idea of the time buckets. Correct? And so can you bring the listeners up to speed? It is a lot of what you were just talking about, which is, what do I want to do? What order do I want to do it, but you had a very visual way of doing that across a timeline of our life. So we think about, hey, in my 20s, in my 30s, in my 40s, in my 50s, what am I going to want to be doing? And how do I make sure that I live life in a way that allows me to do it, which in our brings you to that tangent of the three pronged approach of time, money, age, and making sure or health, sorry, and optimizing those to be able to do the time buckets when we get there? So we’re gonna throw that at you and see where we come up with.
Bill Perkins 27:13
Yeah, yeah. So the whole book, the mental models is basically a counterfactual regret minimization algorithm, which solves for net fulfillment. So like, just the broad strokes, right? If I can go technical or jargony. Right, there are three variables, your wealth, your health and your time. And what we’re trying to maximize for is net fulfillment. And so these mental models are basically what if, what if, what if what if tree right to do counterfactual regret minimization to solve for max fulfilment? So when you play a chess computer, it’s a counterfactual regret minimization algorithm to solve for checkmate, right, not lose the game, right? I’m not solving for maximum health, I’m not solving for maximum wealth, not even maximum time, I’m solving for maximum fulfillment, and I’m using these variables, and I’m looking how they change throughout time to keep getting that high fulfillment score. So one of those things is you have to know, right, in order to do this, like, what fulfills you, what activities fulfill you and what order they belong? Right? So instead of having a bucket list where it’s like, before I die, I’m going to do all these things, right? And people think it’s like the movie, The Bucket List, like, oh, you’re gonna die in, you know, a year, okay, let me run around the globe and do the things I always wanted to do. It doesn’t work that way. That won’t be the most fulfilling thing. I’d say from now, to the grave, let’s do five year increments. When you get later further out, you can do 10 year increments, because it’s pretty hard to predict, right, there’s going to be a lot of things that you’re going to discover that are going to show up in those time buckets. We have one bucket, so let’s say you’re 30 to 35, 35 to 40, 40 to 45. What experiences and activities that you want to happen that belong there, right, that are going to fulfill you and you can break them out into like, that could be intellectual learning, spiritual, health, vacation, career, you know, emotional can be anything, right? It can be all these listeners who say, well, I want to get married. Think I wanna have a my second kid, I want to see my grandmother, you know, my daughters go to school, I want to go to Jamaica, I would like to complete this, I want to get my PhD, then you just keep going, each period in this period, these are the things you’re not going to know everything, right? This is something you’re going to keep revisiting over time, right? Because a CFRM is always recursive. It just keeps going right? Like when the computer it makes a move that you make another move. Well, we got another, we got another algo right. So as time goes on, you’re gonna keep visiting this and updating it as you discover things and as things happen and as you discover things in the world, right And so by doing that, you get an idea of one – what your capital needs are, some of these things will be free, like, I want to call my mother X amount of times, I want to say I love you to my wife, X amount of times, right? Like, some of these things will be free. And some of these things will be expensive. I want to, you know, go to France and bike the Tour de France route, right? Or I want to, I want to go to Africa, or I want to do a charity mission, or etc, right? And so, and then as you do it, you start to say, wait a minute, that doesn’t fit here, right? This belongs here. Why do I have this activity further out in life when my health is poor, when I would really rather enjoy this now? Right, and to have that and so I’ve done that myself, you know, one of the things I discovered that I didn’t think I would like was training and and what I mean is riding on a train. And so I went, Okay, I went on an Orient Express trip, as my travel agent who tries to find interesting things that I might do. And I was like, I don’t want go on a train I hate right, riding in a suit is gonna be a bunch of strangers, and you have to get dressed up to go into bar carts, it’s gonna be terrible, but whatever I’m gonna go, so I reluctantly, go. Invite two friends and I fucking loved it. Loved it, I had the best time, I didn’t mind the suit, you get to see things that you cannot see because there’s no roads, and the planes don’t fly low enough. And it’s all these towns is beautiful. It’s relaxing. It was amazing. I raved about it. I was like, Oh, my gosh, I want to do this. And then do all these other trains, etc. And so my wife and I, my fiancee, we’re like, oh, we should do this. And then there’s this whole train society, is Rovio. Since South Africa, you can take the train across Canada. And it’s just, this is a thing. I didn’t even know it was a thing. And there’s a seven star prefecture train that goes through Japan, that I have seven prefecture train that goes to Japan, it’s a five star train. I’m like, we have to do this, we have to do this. But one of the things we did, we’re like, Hey, we’re gonna do this Peru trip, we had a vacation coming up. We’re like, we’re going to take the train in Peru, it’s going to go up and then it’s going to Machu Picchu to and then we’re going to Machu Picchu. And we’ll do this and Lara goes to me, we can train, meaning we can ride these trains til you’re in your 80s 70s. Yes. Shouldn’t we be taking this trip that has more physical demands that you know, we’re going to be walking to cities, and we’re going to be wakesurfing and blah, blah, blah, the things other things that fulfill me and push the train trip further forward in life? And I was like, You’re right. So we raised our hand. I mean, we rearranged it, so I’m gonna get the most fulfillment. Because if I don’t do the more physically demanding trip now, I can’t do it later in my 80s. Right, so I get more of both just by rearranging the order, right. And so that’s what what a time bucket of your life does, it also allows you to make decisions like, hey, I’m saving money, I’m earning this return. And I’m going to dip into the memory dividends. Is it better to take two trips 10 years from now, two ski trips 10 years from now or one ski trip now and have the associated memory dividends and conversation and adventure etc, then saving and having two ski trips 10 years later in life? And depending on how old you are, that answer may be different, right? If I’m if I’m 65, it’s one ski trip now not two, like now my knees can’t even get that many runs in. But if I’m 20, it might be, you know, maybe I’ll save and take to ski strips later, I’ll have my stuff together, the women will like me better. I mean, like, I’ll be more mature, I’ll be like, So who knows your reasons or your logic? Your reasons will be your reasons. And my reason will be my reasons. But it helps you figure out should I be having delayed gratificationo r should I be having gratification now is just pushing gratification further into the future, actually less gratification or no gratification?
Clint Murphy 33:52
So there’s three things I want to tackle in there with you. There’s so much, Bill. So the the first one in you didn’t necessarily talk about this in the book, but I believe I believe I’ve heard it on another podcast. So when you were speaking in there, you talked about for example, you have mental improvement, emotional, spiritual, physical, financial. And often, we can get too caught up in only one of those. So for example, looking at you on the Zoom call, this will only be audio but you’re a physically fit guy. You’ve done well financially, but you’ve also balanced that with your love of travel and enjoying experiences. Whereas some people seem to own they want to be the most fit triathlete or the most financially wealthy person and they focus only in one bucket. How do you use these concepts of net fulfillment to say well wait a second, don’t optimize 100% in one, use the Pareto principle as an example and get the 80% by putting x effort in to each bucket, how do you Look at that?
Bill Perkins 35:01
I mean, for me, I’m like, what, how does this affect my net fulfillment like that every variable is a tool to get net fulfillment. And I have, and I’m, you know, there’s no set formula, each one, I have to think about it deeply like, okay, I can be in better shape than I am, I can be 7.9 body fat, you know, XYZ, but then I look at the time to put in that. And I’m like, wouldn’t it be better just taking a nice walk with my kid? Do I want to be in the gym? Or do I want to be four hours a day, or, you know, to be in the best shape? Like David Goggins style, right? Versus would that time be more fulfilling and will I look back in the future, it had I spent it with my loved ones are doing X, Y, and Z activity. And then I also look at the incremental dollar, you know, particularly with money, this is how I do it. I tell my friends, it’s okay to work, but what are you working for? I’m always attached every dollar to something I am working for. If I can’t identify what I’m working for, then I’ll quit. Or I’ll work less. Right? I tend to work less, right. So I know, there’s people that are making up numbers, they really don’t know what they’re working for. But if you ask the question, they’ll start making stuff up. Right? Like, identify, it’s like, okay, I’m working to survive, okay, I got my survival. I’m surviving. Okay, what experience I’m working on puyting my kids through college you know, I’m working, you know, to maintain this level of lifestyle and the house and whatever. I’m working, because I want to go on these trips. I’m working because I want this thing that I can’t afford. Yeah. Right. So I’m working for that. I’m working for this charity that I want, you know, but I have to tie that to something. Right? And half the time, and then once I’ve tied it to something, then I can go, Okay, do I really want it? Does that really fulfill me? Am I giving up hours of my life where I can do something fulfilling for a thing in the future, that, eh. I recently there was a thing that I thought I wanted, I rented it. And I was like, no, I don’t really want to work for this thing. And it was, it was kind of a relief. It’s like, I don’t have to make the money for this thing does not fulfill me, I’m wasting my time I shouldn’t be I could either (a) allocate the money I have to other things that fulfill me or donate them to charity, or, which is another form of fulfillment, it’s another form of consumption, or not work, you know, and just use the time to, you know, goof off, meditate, explore, read books, you know, allocate my time more effectively. And so, as I allocate my hours here on life, and part of it is to acquire capital to to get the things that fulfill me, if I’m working for no fulfillment, that’s, that’s a no no, right away. Absolute No, no. So then we get into this debate or argument is that wish I get into with a lot of my friends who have been habituated about work, they’re like, but work itself fulfills me. And so you know, and I get it, I get into this. I don’t know of the successful people. This is kinda like that heroin addict conversation that I have all the time. I’m like, Look, I understand it, you’re on heroin, and you’re fine. And I have a problem with your heroin addiction, you don’t have a problem, you’re having fun, or at least you think you’re having fun, right. And so because I love them, and they’re close to my, they’re my close friends, you know, I call bullshit on them. I think you have been habituated to this work, the other muscles, the fulfillment muscles of whatever they be, whether it be travel, or reading books, or interacting with friends or going to the dinner, those have atrophied. And this work is destroying your life. So like a heroin addict is happy, but he’s destroying his life, all the other parts of his life are falling apart, in exchange for the heroin, right. And so what I have to do, through this long argument and debate and insults and whatever is that you are similar to heroin addicts, these habits that you have formed, to be good at your job have consumed you and atrophied every single part of your life and it’s continuing. And you’re wasting your life. Because we are very good at taking complex things and shifting them into default mode network. Right? And the habit of work, right? Like, we’re very good at that, like driving a car is pretty complex, like you got to signal, you got to do this, whatever. But eventually, it just goes into default mode network. You’re you’re driving, one hand, you’re doing this, you’re turning the radio on, you don’t even know how you got home, you just auto signal, you auto turn. And the same thing goes with more complex tasks like guys who are accountants or lawyers or CFAs, just goes into default mode network, you know how to do things, you’re doing the thing and just doing it. You’re on auto pilot, drags you completely into this zombie state of productivity for no reward.
Clint Murphy 40:06
Well, it goes even beyond that Bill, right? Because we’re, we are creatures of justification. And we’re wired to justify whatever it is that we do. So if you say to me, hey, you don’t like work? If I agree with you, then I have to now go through a reconciliation process of well, wait a second, why do I go into this building for 60 to 70 hours a week, and what am I giving up my life for, I have to like, if I don’t like it, then then I’m making a mistake. And I can’t be making a mistake, because I’m a smart, intelligent human. So I have to love what I’m doing. And I’m just gonna keep saying it, even if Bill has strong arguments to the contrary, I’m going to say I love it because that justifies what I do with 60 to 70 hours a week. I’m assuming for your friends, they’re not working 35 to 40 hours, these these are people who are working all out long hours, long weeks and so they’re using it as a as a means to justify what they’re spending their time on.
Bill Perkins 41:16
Yes. And actually, I have to deconstruct it even further, because there are elements of work that are enjoyable, but are replaceable, and better outside of work. So a lot of people, like when you go to work, right? Your whole life revolves around work, where you eat, who you socialize with, where you eat lunch in the places you like, around it, the neighborhood, you’re familiar with, who you socialize with, etc. Right? When the pandemic health happens, people got to know their neighbors and socialize in different ways and etc, right? They broke those habits. A lot of people were like holy shit, I don’t need work for this, right. So people not only become dependent on work, because of the habit, they formed to be the rat, the cheese and the justification that but all their life, their social life, and other things that they enjoy have become dependent on work. Now, you know, I’ve had this discussion when someone says, but I like the people, and I was like, you can quit work and take those people on vacation and see them even more there’s, there’s nothing stopping you from interacting with those people, many hours, right? Not what you’re, you know, occasionally buried in the screen and the occasional whatever, like, you can take them out to dinner, you can take them out on trips, you can meet them all the time, right? Like, you don’t have to do that. Right? It’s and other things. Well, I like the mental stimulation, like you want some mental stimulation, the world has lots of puzzles, that you can stop solve, right, that you can apply yourself, etc. Right? But this is what they’ve been doing. And this is the habit and it’s hard to break those habits. And so, you know, a lot of these conversations are not just hey, a lot of the conversation is identifying what muscles, they atrophy, your social muscle, you don’t know how to meet anybody unless it comes to work. You don’t know how to pick a restaurant, let’s say you don’t mean like eat a lunch and let’s it’s around work. Like or you know what I’m saying? You don’t you know, where you drive, the route you drive, this, you know all these things, right? Like you don’t know your neighbors, you don’t know. You don’t know how to solve any of the puzzle. Because you haven’t solved any other puzzles you just don’t even attempt because you’re so obsessed with the work puzzle, right? You can apply your difference engine, your AI carbon based supercomputer to all these other puzzles that will you can have a massive impact on are just for fun. Just because learning is fun. Right? And so that’s a long conversation that I’ve had with people just kind of like, oh, you know, it takes a while to go. Yeah, you get it. You got it. And then you know, habits are hard to break. Right? And so I’ve had them, and it has taken time for people to kind of break away like, yeah, I need to start, they have started breaking away, they have started exploring and building up those other muscles, right, those other social muscles, those other puzzles to solve other the adventure muscle, the travel muscle, right? Like nobody at 17 or 21 was like, Hey, this is what I want to be doing. You know, I want to be in a room for 60 hours, like really getting to the nitty gritty of the thing to make $1 to never spend it like nobody was thinking about in the beginning. Right? Yeah, at the beginning, the dollars had a purpose. If somehow in the middle, the dollars have no purpose except for themselves.
Clint Murphy 44:20
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Clint Murphy 44:37
So one of the things you talk about with these people, I’m assuming and you brought up earlier is this idea of investing in the experiences themselves. And then you mentioned it, but we didn’t dive into it was the concept of memory dividends. Can you share what you mean by that because that really starts to unfold and compound over our life, I thought that was a beautiful example that you gave.
Bill Perkins 45:05
So when you when you have an experience, there’s the consumption of experience itself, right? You go on a first date, and you go to the movies, right? And you have a first kiss. I’m just using this example. And that was great. And it was enjoyable. But you also, and you get fulfillment from that. But you also get fulfillment for every time we recall that experience and discuss it, you tell a story, how did you meet? Oh, we met and you know, we bumped into each other on a train station, he knocked my coat, whatever, you tell the thing. And he invited me to dinner, take it out whatever. And we had a bit and a kiss and then hh, that’s great story, whatever, then, you know, you’re getting fulfillment from that original experience. Every time you know, later on, you get married, like remember when we first met, you know, and every time you recall and you get a little bit of the joy and fulfillment of the original experience, right? Ask anybody who’s had a game winning home run with high school or any kind of event. And we also get memory dividends just in a mundane way. Like when you walk up to a door, you’re never like, what is this thing protruding with a handle and that shape, you’re like, oh, it’s the door, you open the door, and you’re able to go through the door, right? That’s part of the memory dividend, right? Just having that functionality. And so that gives you fulfillment. So because you’re able to go through doors, and so when we, you know, if the purpose of money is to have fulfillment, right, and you’re attaching the money to drive your fulfillment, we have to consider that when we invest in an experience, the dividends that are paid out over time, versus investing in, let’s say, a money market, in order to buy a future and experience what interest rate that will pay.
Bill Perkins 46:50
Right? It’s the same thing. Right? The purpose, the money is there to be consumed and drive your fulfillment. And so we’re happy we’re, we’re solving for net fulfillment. And so when you save, what you’re saying is, is that the future consumption of an experience is greater than the current consumption plus the memory dividends, right. Right. So, so that rate, you know, and so, you know, I introduced this concept called your own personal interest rate, right? And so you have you, you’re like, Okay, I’m 25 years old, you know, my future consumption of these experiences, and the market rate is greater than just having this one experience now. But as time goes on, the future consumption of experiences are not as valuable, or not as fulfilling as the current consumption of experience plus the associated memory dividends and memory dividends, they compound, they’re actually radioactive, right? Like, when you go to dinner with somebody, and you have a conversation most a significant portion of the conversation of things that have happened, experiences you’ve had, right? If you ever get a group of friends together, I mean, how much did they talk about the old days, or the thing that happened? And we threw Tom in the water, and remember, this happened, and the shark came, and we barely survived, you know, whatever, I’m just making this up. Right? Like, remember, in college, or remember this. And, you know, some of my friends, I hear the same stories, 30, 40, 50, 60, 70, 80,100 times, you know, and each time a little bit, a little bit of enjoyment, a little bit of the memory dividend. And I’m like, wow, man, that that, that trip, that experience really paid off. Like it’s really kicking out dividends, like what a great investment, right? I’m glad I didn’t go, nah, let’s not go do that and save that. 10 years. Now, we’ll do another trip, right? I’m glad that money is converted into that experience. And those memory dividends because it’s driving a metric, fuck ton of fulfillment, right, of dividends and fulfillment, right? And so I’m like, What a great investment. And so, you know, one of the things I say in the book, and I tell people is like, invest in it, just like Warren Buffett says, you know, when’s the time, invest, invest early, now, right? Invest early, invest early, invest early, I say, invest in experiences and your fulfillment early in order to get the maximum out of the memory dividends.
Clint Murphy 49:05
And I want to tie that to something you talked about early in the conversation, which was early in your career, actually, when you were excited that you’d saved 1000 bucks. And your boss told you, you were an idiot, because you weren’t using the concept of consumption smoothing, which is the exact opposite of almost anything you read in the FIRE world, right, which is start saving early, save as much as you can, invest. And he told you well, wait a second, like Bill, eventually you’re going to be making a million bucks a year. Like why are you worried about $1,000 today when you’re not living life, and why this jumped out at me is I was that guy, right? I grew up with no money, started as an accountant, started at 36 grand then it was 41. Then it was 46. It just went up 20% a year every year for the last 21 years roughly. But I never thought to say let’s borrow from future Clint to do cool shit today. And so I didn’t start traveling the world until I was probably mid 30s. And then I realized, I love nothing more, nor does my wife who was with me on that entire journey. So we scrimped for 16 years and then realized we love nothing more than seeing cities throughout the world. And now we want to do it the rest of our lives, but we wasted 16 years, and we could have just been consumption smoothing for so. So what is consumption smoothing? And why should a lot more young people be doing it?
Bill Perkins 50:41
Oh, yeah, it’s so like, I think you said perfectly is that, you know, you’re going to have times, assuming you, you know, for most people, their income is going to increase over time. And so the mistake I was making and a lot of people make is that we borrow from our poorer selves to give to our future richer selves, right? That that was saving, right. And what you want to try and do is equilibrate your income over the lifespan of your life, in order to get the most out of it. Right, I add in my book another adjustment, which is, you know, your health, and your ability to consume experiences, so you’re not completely equilibrating so it’s equal each year, you’re like, hey, most of my consumption of experiences that costs money, if we just use the physical capability, or attitude or lung capacity, etc. is going to happen between, you know, our adult lives from 20 to say, 55, right, and then it starts really tapering down. And I throw out that number because, you know, I’m using American numbers. I mean, if you’re, if it’s your biological age, your health age, not your numerical age, right, like some people are 30, who are really like 55, you know, and some people are 55, who are really 40, you know, or 44. So, what we’re trying not to do is borrow from our poorest selves and give to our richer selves, right? We’re trying to take money from our future richer selves and give to our poorer selves and so that we can have the experience that belong in our 20s, right, that don’t necessarily transfer well into our 30s or 40s. Right. And depending on who you are and what you would like, that’s going to be something different for everybody. Right? Like I use the wakeboarding, my last wakeboarding experience and for the rest of my life was when I was 50. Okay, because back and might, you know, injuries and just the speed at which you travel wakeboarding. Now I wake surf. And so I recall sitting on a beach and my friends were like, we’re gonna go wakeboarding. It was on my 50th birthday. And I said, nah, I’m gonna hang out here and love and you know, do whatever. And then I thought, I thought about it again, I said, Wait a minute. If I don’t go wakeboarding now, in this setting, when am I ever going to go wakeboarding again, given the status of my back and my age, etc. So I decided to get up and go wakeboarding one with them. And that was my last wakeboarding day, I actually got to jump the wake, did a nice trick. And that was it. And now I live off the memory dividends associated. Now I’m a wake surfer. And that’s it. But let’s say that cost money. You know, there was money trips, like if I didn’t spend my wakeboarding dollars, then I’m never getting to spend them later. Right. And so when you’re younger, when we’re like, consumption smoothing, and you’re in your 20s, there are certain activities that are best made fit in your 20s. Like, I don’t know, traveling around Europe in the youth hostel and backpacking etc. Right? Yeah, it’s probably for me, that would be better in my 20s and not in my 30s. Right. And so I’m like, Oh, I don’t have the money. I don’t want to spend the money, it’s too tight. I don’t want to do X Y and Z. Had I been smarter at that time, I would have been like, hey, why don’t you borrow from your future richer self? Why don’t you borrow from your future richer self? I can, it’s a good idea. Let’s borrow from that guy. Why does he need it? $1,000 means nothing to that guy. Let’s borrow from him. Take that $1,000 and go make the trip. Right? And that’s kind of the idea, right? Just breaking it down simply it’s like, there’s this future richer guy that we can borrow from that makes our total life fulfillment all of us happier.
Clint Murphy 54:21
So, so I’m going to try to use that with using something you talked about earlier and see if we can walk through an example with you. So we have two boys 14 and 11. We have a cottage we go to in the summers and when we’re not there, we rent it out. So it’s in good shape. I did the example your friend did, I get good enjoyment of it while I’m there and create those memories with our boys. And I make an argument with my wife. I think we should invest in a boat for one we’re up there. She says well, that makes no sense. Why would we take on debt now for a boat? Only buy a boat if we have the cash for it. And then I think, but by the time that happens, the boys won’t be there with us. They won’t get that enjoyment. But I go back to your idea where you said you rented something, to test out the theory. So should I say, hey, why don’t we rent a boat for two weeks next time, we’re up there, and just see what the experience is with the boys every day, the smiles on their faces, the memories we create. And then next year, we make a decision on whether that is the right investment to create net fulfillment in our lives, in the lives of our boys, because it’s fully at this stage partially about us. It’s also going to be partially about them.
Bill Perkins 55:40
Yeah, I’m so biased in this example. It’s crazy. I so I lived in St. Thomas. And I always tell people get the boat. One of the most fulfilling things I’ve ever done is buy the boat. It is the ultimate memory maker social thing you’re going to do, most enjoyable memories. I wouldn’t trade those for anything. I’ve gotten so much enjoyment. So let me try and remove my bias on the boat, I definitely think that’s the correct thing to do is is you’re like I’m trying to explore without being wasteful. I’m going to rent and see does this produce the experiences that belong in this bucket that we want to have? Do we have enjoyment do we use it enough to x, y and z. I tend to think you’re gonna rent the boat, you’re gonna have the absolute time of your life with your kids. Irreplaceable moments that your future cells will be like, thank FUCKING GOD, we got the boat. But that’s me. I’m a biased guy. You know, we experience and every I will say that every person has come to St. Thomas. So listen, islands are great. But when you have your own dinghy, even just a dinghy scooting around the islands, it completely changes the experience completely. It opens the world up your, your exploration, you’re fun, your goofing off, you’re social, you know, inviting friends on that will produce memory dividends that are just outstanding, that you would never, you would give up your right arm to never give those memories out right to keep them. And so I’m too biased. But I say you’re doing the process of what you’re doing, which you’re going about it. I think that is correct. Right. You’re tasting the cookie before you eat the whole cookie.
Bill Perkins 56:16
Let Lesley when you’re editing this, Bill is absolutely right. We should probably talk to Aveen about the boat, he wants to sell us and maybe test run it for a summer at a price. So factor this in while you’re editing the show. My wife edits. So this will, this will this will be very, very good for that.
Bill Perkins 57:49
You’re basically like, hey, is this cookie worth an hour on the treadmill? You know, like you guys are like, well, we’re gonna have to work this, this takes this many hours of our life to make this money to get a boat, do we really want to exchange it for this fulfillment? And I think when you test it, you’ll come to the answer. Yes, but your process is 100% correct.
Clint Murphy 58:06
Well, the the thing that jumps out at me, and there’s a couple of graphs I’ve seen where they show our time with our children, and how we get to the age of 19. And we’ve spent 95% of the time we will with them for the rest of our their lives already. And then the last 5% is 19 and above. And it makes me think, well, my oldest is 14 and a half, I’ve only got four and a half years with this guy. Like I want those four and a half years to be the best four and a half years we can ever have. And I know that can change if we have money because we can do annual family trips and things but but maximizing that time to 19.
Bill Perkins 58:48
It’s also like you’re taking it one sided. Like you’re also looking at it from the standpoint that your kid even wants to be around you. Yeah, he’s gonna have a girlfriend and trips and buddies and his own adventure that he wants to go live. So you may have all the money in the world, but they got different, they have their own adventure that they want to live that probably does not include you. That’s true. That’s true. So and also you’re using the biggest term, like four and a half years. I would use the smaller terms. You have four summers.
Clint Murphy 59:18
Ah. Oh, dagger to the heart, Bill. I’m getting emotional now.
Bill Perkins 59:25
Maybe, maybe three. I don’t know what you’re, you know, what year is 14 is freshman. Right?
Clint Murphy 59:29
So he’s in grade nine or in America. We say the ninth grade. Yeah. So yeah, he’s only got 3 summers, right.
Bill Perkins 59:37
So you have three summers, and you know, some of that might be camp or with other friends or in another trip, like you have three, four trips like this left, you know, maybe there’s other breaks, etc. So I would use the correct unit because you’re like, oh, four and a half years. I’m like, Yeah, that’s three, three summers, three trips. You know, we talked about that. You know, we just talked about us like, wow, we get two more spring breaks with our daughters and on these spring breaks, they want to interact with their friends, like we get like a day or two out of that spring break. So I get like, really, if you think about it, like, I get six days, I get six days over the next X years related to spring break, summer, you know, it’s like, I gotta force them to, you know, different kids are different with different families, but like, you know, they, they become their own independent person, and mom and dad aren’t that cool anymore, and their friends are etc. And you know, maybe your kids are attached at the hip, and they want to hang out with you all the time. But you know, you know, the typical American experience is your kids don’t want to know you at 15. You know, it’s like, forced interaction. So like, if you can get something cool, like a boat and get those experiences in, I’m like, for God’s sakes, do not miss that opportunity. Whatever you do.
Clint Murphy 1:00:46
Okay, I’m sold. And then that ties to the next concept. What’s the next rule you have is the title of the book. And I have to admit, it scares the crap out of me. Growing up without much money, I’ve spent a lot of my time trying to amass a certain amount of wealth, and I have goals to like, get that number to a certain point. But then you say, well, well, why, like, you should be dying with zero. So you know that you didn’t waste one iota. And the idea that I can outspend my net worth, which ties a bit to rule four as well, is it just scares me that it could run out. Right, which, which is one of the biggest things that people raised with you about their fear on this journey. And you have this concept of the three R’s like how do I overcome that fear? And get that willingness to let go of the big nut or chest of wealth Scrooge McDuck vault that I’m trying to build?
Bill Perkins 1:01:48
Yeah, I mean, well, the three R’s are random people, random date, and time, random amount in terms of leaving money to your kids. And I talked about the deliberate giving to kids. But this fear, you know, fears hard to overcome, what I try and do is mitigate that fears in the most efficient way. Right. And so a lot of people basically are trying to act as their own insurance agent by wasting their lives accumulating capital and be like, okay, I am insuring against x bad things and running out of money, right? And, you know, I try and say, well, let’s think rationally about it, like how much you’re going to spend, what are the experiences you want to have? If you’re worried about running out of money, let’s buy an annuity, let’s think about the insurance product that’s out there, that’s better than you being your own insurance agent. So for every risk that’s out there, generally, there’s an insurance product, right? There’s long term care insurance people like, what if I, you know, could need help, or whatever I was like, it’s actually very cheap. If you buy long term care insurance, you’re 20, 30, 40 it’s very cheap. Okay, much cheaper than you trying to, then you’re wasting your life. Okay. If you’re worried about outliving, like, what if I live to 110, you can buy an annuity, it’s much cheaper than you wasting your life, right? The mark the edge, you know, they’re making 6% or 5%, it’s nothing compared to you, who are not an actuarial, don’t have a lot of large numbers, don’t have a whole bunch of customers and all these, whatever the edge they’re extracting from that product is teeny relative to you wasting your life and not renting a boat and going with your kids. Right and having that fulfillment moment, right? And so, what I try and do is, you know, because fear, I’m not going to tell people, I’m never going to convince people not to be afraid, but what I can do is help them mitigate the fear in the most optimal way, right? I can’t take people and like I did with my daughter’s like, they could swim, but they were scared to swim in the deep end, I was like, why you’re still gonna swim well, to deep well, you’re gonna be on top of water, you can still swim, no amount of logic was going to get them over their fear until I just threw him in the deep end. And then they started swimming around and they were like, okay. Or I was with them. And they were swimming holding on my neck. I was the insurance agent of the deep end, even though they didn’t need me. And they’d be holding on to my neck and the deep end. I was the insurance agent. Right? And so, you know, I offer I look at, okay, what is your exact fear? Let’s identify it, oh, you’re afraid of outliving your money. Okay, well, there’s an insurance product called an annuity we can we can do that. How much would you like to purchase in order to mitigate this risk, or I’m worried about long term health and my nurse or whatever, there’s a thing called Long Term Care Insurance. A lot of people offer these products, it’s well regulated, we can dig into them, spend some time on it. And the time you spend on digging into these products, and buying long term care insurance will be much better than you wasting your life trying to act as your insurance agent for long term care insurance. As a matter of fact, you’re probably ill suited because if the prices explode. You’re out of money anyway. And the insurance company can withstand that hit so you’re not even, you know, a stable insurance agent, right? And so this is the way I go about addressing fears, right, like the fears are largely irrational, right? Sometimes rooted in something that could happen but is overblown. And so I look to the products in the market for ways that can mitigate that fear that minimizes them wasting their life. So, you know, my goal is for you to minimize you wasting your life. So we go through a process of like, how can how can we do this? How can we do that? How can we not? How can we not mess up this one ride? You have this one vacation, I think, probably your listeners at most 60 year vacation, you know, 25? And, really, we’re being generous if you look at life expectancy in the US, right? It’s not it’s not it’s declining. It’s, I mean, it’s, you know, people, people are not as healthy as they should be. We tend to over eat, I mean, everybody can go, and I recommend they actually figure out what their expected life outcome is. Because knowing having a good range, and when the end helps you plan better and helps you get the most out of your life. Right? Like if you have a vacation, I go, you’re on vacation, but it’s a random number, you don’t really optimize your vacation. Likewise, do I have a day? Well, if you have two days left, or, or 10 day vacation, or you know, a 10 month vacation, what you do each day is different, right? How you allocate your time is different with things you do, how you prioritize things are different. And so knowing when your expiration date is as close as possible here on planet earth, will help you optimize your vacation here on Earth and get the most out of it.
Clint Murphy 1:06:29
And I haven’t done it. But I love the idea. I’ve seen the visual a few times when people get the poster with the number of weeks, I have that. And then they gray out well, what’s already happened. So how many weeks do I have left in my life? It’s a little scary when you look at it that way, Bill, but it gives you perspective on hey, how should you be optimizing these weeks?
Bill Perkins 1:06:48
Yeah, I have I have that I think about these, you know, quantifying these things is sometimes scary for people. Because particularly in Western culture, death isn’t talked about people just kind of it’s this far off thing that’s just gonna happen to me, or getting old or decaying is this far off thing. And anybody who’s 40 will tell you, No, it’s not this far off thing. I can feel it.
Clint Murphy 1:07:10
You know what I mean? Yeah. Oh, yeah, absolutely
Bill Perkins 1:07:11
They know the difference. It’s coming. Right. And so that, to me, is free, and liberating, and gives me permission to be me and be fulfilling and not care. Right, like to lose my ego and share about what other people think about what I say they’re like, no, I only get one ride I’m gonna do what I want to do, right? Those movies where everybody’s on a plane, and it’s about the crash, they’re due to, you know, it’s kind of comical, they’re like, I love you, and blah, blah, blah, they’re confessing their sins and doing whatever they want to do, because it’s the last moments, right, like, in a tiny bit of way, like knowing your death date, and being viscerally aware of it. And the weeks going by, it’s kind of liberating, it liberates you to be yourself and really get you in touch with what are your priorities, what do you really want out of life? And by going through that process, right? Like, we talked about the big death, right, I want to go back to that little death, right? There is the death, there’s lots of little deaths in your life. And for you, the one we just talked about, there’s going to be the death of you with kids in the house. Right? And that’s coming. And it’s four years away, and you have four summers, x spring breaks for you know, four Christmases, whatever, if you’re lucky, because they might say no, I’m gonna do, I’m gonna do the summer with my friends this trip, you know, whatever, right? That wakes you up, and you’re like, shit, I gotta make the most out of these four summers, I’m going to rent the boat, I’m going to try my best, I’m going to do my best to make the most out of this period. And then there’s, you know, that happened to you with the young kids. And that’s going to be with you that you were a CFA and now you’re the podcast you and then the future, you know, you have all these little deaths, right? These periods coming up. And then there’s the big death, like, there is no no future experiences here on planet Earth. And so realizing that that’s what time bucketing does is like realizing like, I need to maximize and make the most of this segment, right? Like kind of calculus, we’re going to calculus, like the integral, right? Like I need to make the most of this time period. And these are the experiences that belong here. And I have two kids that actually kind of want to hang out with me still, you know, or at least a little bit, you know, and I get to go on vacation, they have to go with me, you know, with them, and I get to spend time and enjoy them at this time period in life like that wakes you up, and you are going to do your best to make the most of it. And just as that happens in the little deaths, even with the big death like I have this period left, and these, I’m going to do my best to get the most fulfillment out of it. And I think that wakes people up out of autopilot out of just hey, I’m just gonna maximize for wealth, I’m gonna throw my life away to maximize for the biggest number, which a lot of people do.
Clint Murphy 1:07:21
And a lot of what we’re talking about is that right there, we’re trying to get people off autopilot and to live their life with intention. And one of the ways you talked about the little deaths is this idea that people should reflect on, there’s a last time for everything correct, the last time and so the more they can think of the concept of the last time I’ll have with my kid in high school, the last time I’ll be able to wakeboard. Last time, I’ll be physically fit. So that that was a beautiful way to think about it. And then even we talked about Western philosophy. But when we go to Eastern, you go to stoicism, you go to Buddhism, a lot of that is meditating on the fact that remember, I must die, or I will die, which I tattooed onto myself, because it’s this concept, like we are all going to die, we are all impermanent, until they figure out how to stick us into a computer, we get to that stage, and that might happen in our lifetime. Who knows.
Bill Perkins 1:11:04
And even if, even if that was there, it would be a different time bucket, right? Like the human you that wasn’t in a computer. Now we go into this, you know, this book is about optimizing your life for net fulfillment. And you need to like break these down into discrete periods that match your decay, right? That that that kind of, kind of, you can get the most out of it. Now, some people that might be a two year period or three year period, it doesn’t matter. As long as you’re off autopilot and thinking about it, you’re not in default mode network, you’re already optimizing your life, like a lot of people they won’t, I have a lot of concepts in the book, right, that help you, you know, mental models that help you minimize waste and optimize your life. And some people will reject it, I don’t care, I’m not dying, once you’re on, I’m gonna die with a million dollars in the bank or whatever I’m not going to do, I’m not going to give money to my kids, at between 28 and 33, I’m gonna wait till I die, which is suboptimal. But if you’re just thinking about it, being intentional about it, you’re already optimizing your life, you’ve already I’m already saving a little bit of your life.
Clint Murphy 1:12:10
That’s beautiful in so this, throw a last one out at you, it’ll be a little bit of a longer one, because it’s really emotional for me. And then we’ll fire the final for you. So you talk about in the book, the idea of the cat’s in the cradle, which for a lot of dads is such an emotional song. And it reminds me I was I was my oldest was about eight or nine years old. Stop looking me in the eye, stop saying I love you. You know, we said I love you to each other every single night of his life up until then it wasn’t until I said to him, Hey, I’ve been noticing, you know, you’re not looking at me. You’re not saying I love you is this because I work too much. And he said, Yeah, you’re not here. And it up until that age, as a father, you’re their hero just for being their father. But then all of a sudden, they hit an age where you’re only their hero, if you’re in their life. And I’d been sacrificing wealth accumulation and desire ahead of my head of my kids. And you talk about in the book, you say, I do believe firmly your real legacy for your kids consists of the experiences you’ve shared with your children, especially when they’re growing up. The lessons and other memories you’ve imparted to them. Of all the experiences you are trying to bequeath to your child, one of those experiences is time with you. So that resonated because of the past. And also one of the goals I have is to become a solopreneur and to spend the last years of their high school with them. Can we talk about your experience with your kids and why you think this one is so important to the people that are listening, who are parents and who are chasing, possibly the wrong things, when their children aren’t getting the full benefit of them?
Bill Perkins 1:14:03
So I’ll start with the macro model, I’ll go back, I’ll go into my own personal experience. So going back to
money is a tool for your own fulfillment, right? Your money, your time, your money, that’s a tool for fulfillment. And one of the things that fulfill you is time with your kids, but also one of the things that fulfill your kids is time with you. So a lot of people say I’m working hard and it’s for my children and I’m going to give them money. And that money, they would take that money and they would convert it into experiences that fulfill them. Right. But one of the experiences that they want to have is time with you. So by actually going out to work for more money to give it to them, you’re actually giving them less fulfillment and less of what they want, the experiences they want to have. Right? There’s a balance, you know, but if you pass away, you know, you can’t do this up until infinity, if you pass away, they would probably give a significant portion of the money that you left them or when you give them at 30 if you do it optimal, left them for more time with you when they were 14, 15, 16 whatever age it is, right? They say I don’t want the money. I want the time. And the money that you know, I want the time that you use to convert that into money. Let’s rerun that back, Hey, God, can I give you the money and rewind the clock back? You can’t do that. So you have to think about that. Right? And I hear that excuse a lot, well I’m working for the kids. I’m like, the kids. Are you really working for the kids? Are you really thinking about the experiences they want to have? Like, you know, particularly people that have already covered the school and etc, right? They don’t want the house, they don’t want the extra floof, they want this experience, right? And their balance, and I can’t speak for everyone or whatever, some kids I hate them. I don’t really like my dad. I think this is just something to consider. And so this something hit me hard. Later on. I realized like, you know, in the book, I talk about watching Pooh movies with my daughter and how I really loved it and til my daughter said, you know, that’s that’s a baby movie. I don’t want to watch that movie anymore. Right? Like, I missed that time, right? Maybe I shouldn’t have been out playing poker with the boys. Maybe I should have been home watching Poohovies or reading books with my kids that I didn’t properly allocate the time, right? I can play poker until 90 right? Old guys at the table that are you know, on their deathbed playing poker, right? And but I don’t get to read books or watch Pooh movies with my kids. Right? So I did a suboptimal job of allocating my time and time bucketing, right. It is before I had the concept of time bucketing, right, this is why that concept comes out, right. And so I am not the Dalai Lama of being off autopilot. I wrote this book for me. I had all these thoughts and ideas, you know, not in an organized format, right? But these concepts that I wanted to save my own life, right, like my fear is wasting my own life. And this helps me snap out of autopilot. And I have a now a spouse that keeps me accountable. Like, hey, wake up, you’re on autopilot. You’re an NPC, non playable character mode, you know, right, like, let’s, let’s, let’s get back on, let’s get back to intention. What’s What do we what do we really want to be doing here? What do we want out of this period of our life? What experiences should we be having? And so that was one of the things that is my, my experience. And I do it all the time like I am I going to do this with my kids. Will I go on this trip? I mean that it’s a constant question. And I’ll never get it perfectly right. Right. But I do believe by being intentional thinking about it. I am minimizing waste and I’m getting it. Less wrong, I’m getting it less wrong, right. Like I’m getting it less wrong. And so that is driving more fulfillment in my life, a much richer life for both myself and my children.
Clint Murphy 1:18:05
Yeah. And I think Bill, you and I could spend an entire show talking about how to not be an NPC, which is a conversation that I have with my children all the time now because it’s becoming such a big vernacular within the youth is NPCs and living your life. So I talk to them all the time about how to not be an NPC. But let’s just shift it in a different direction as we wind up. And so I’ll throw four rapid fire questions at you. Your Mney or Your Life, very impactful for you. What’s one other book that’s had a huge impact on your life
Bill Perkins 1:18:40
Number one book is The Four Agreements, The Four Agreements, so whenever somebody asked me about trading, you’re a trader trade and I want to learn how to trade, I was like, what the first book I recommend is the Four Agreements. It’s, it’s always the first book I recommend.
Clint Murphy 1:18:53
Okay, I’m gonna explore that one.
Bill Perkins 1:18:55
Whatever, it’s the Four Agreements.
Clint Murphy 1:18:57
Okay, I will give that one a read. And what’s on the bookshelf right now? I see a number of books behind you. But what is Bill reading right at the moment?
Bill Perkins 1:19:04
Well, I have Out Live and I think it’s The Open Road. But Peter Atea wrote a book called Out Live and you know what, you know, there are three variables, right, and each variable, your wealth, your health and time, which drive you know, drive your fulfillment, those macro variables and the health is so important, right? It’s not only longevity, but your ability to do things, your health span as opposed to your lifespan. And so, you know, I use the example like when I when I was younger, I used to date the summer in a city, a foreign city. I thought if I went to a different city each year, for the summer, after like 10 years, I would be an interesting person. So I went to Paris I used to walk like 1250 a sidewalk Paris all day with a backpack on and when you stay there for three months, and you’re walking and you’re taking immersive learning, you really get to know Paris, right? As opposed to the tourists like hey, I went to the Eiffel Tower. I went to the Louvre. I went you know that kind of that McDonald’s cookie cutter version, now, I can walk five miles a day before it starts to get like that feeling it, my knees bother me, it’s not that it couldn’t walk 12 miles, but it would be painful, I wouldn’t get as much fulfillment. So now when I go to Paris, it’s actually a less fulfilling trip than before. It’s still fulfilling, but it’s less fulfilling. Okay, so getting that, right, like thinking about these things, it might decay, right? Like, where did things go? So like, my go city, my walking cities, like now I prioritize walking cities, over non you know, not your more driving cities or, you know, public transportation cities, then, you know, that order because, you know, I won’t be able to do the walk, if you put the walking cities last and you know, the subway and bus cities early, then you kind of don’t get the locking cities as well, you don’t get the maximum fulfillment. Right. And so that’s, that’s one of the things
Clint Murphy 1:20:55
I mean, digression, but you also notice it. And I think this does tie to what we’re talking about with food and obesity. Most of the walking cities tend to be European cities, because we’re in Vancouver, BC, very walkable. And we’re always considering what might be a future home base. And we, you know, we just spent a week in Texas and loved it and had a great time with our boys, but eliminated it from the list because there was there was no, there was very little walking.
Bill Perkins 1:21:24
Very few cities, I mean, Austin can be downtown in that area, but there’s very few walking neighborhoods, you know, and not that much around there. And the ones that are very expensive or, you know, cleaved off, etc,
Clint Murphy 1:21:35
Which basically brings you home,
Bill Perkins 1:21:37
I used to walk, you know, 72 blocks when I was in Manhattan.
Clint Murphy 1:21:41
Yes. And that’s what Lesley always brings up is she’s like other than New York, we haven’t found an American city where we walk. But when we go to Europe, we walk everywhere. Yeah, it’s beautiful that way. What’s one thing you’ve spent less than $1,000 on in the last 12-18 months that you’ve thought, wow, I wish Bill had bought this earlier.
Bill Perkins 1:21:59
Wow. What a question.
Clint Murphy 1:22:03
You probably bought it two years ago, because you were like, I’m gonna want that in two years.
Bill Perkins 1:22:08
I can I’ll give you something that you use, the digital picture frames. Okay, so I’m big on the memory dividend. And so basically, that induces the memory dividend, increases my fulfilment. So today, when I got up, was getting dressed, this funny picture popped up, we have we have, we have a couple we have one for our wedding. And that’s just that one and just friends. And goofing off. And there was this picture that like, from seven years ago, with my then, girl I was dating who’s now my wife, you know, goofing off on her birthday party, etc. And, and I chatted in the group and brought it up. And I was like, Look at this crazy picture. And they’re like, laughing and look how young, you know, and it sparked conversation. And that to me, is I was like, wow, I wish I had that earlier.
Clint Murphy 1:22:54
Oh, beautiful. I love it. And because this show is about growth, what’s one habit, mindset shift, behavior change you’ve made in your life that’s had an oversized impact for you?
Bill Perkins 1:23:05
Well, I wrote the whole book to do it. I think, I think the habit of thinking when is the best time for an activity, but I think that’s almost a cop out. Because I think there’s a better habit I have, it’s probably going to be health related. I think putting the phone in the bathroom, when you go to sleep at night or away from you. So you cannot reach it. That that is probably some of the best. I mean, it’s gonna sound like kind of crazy, like what did he just, but sleep is so important. And I am a, a constant diddle on the phone guy in the bed. Yeah, and if the phone is there, I will think of something. And then I will grab the phone, then I’m gonna go to sleep. And then I have five hours of sleep, and then I’m miserable the next day, etc. So making sure that phone is put away, because if you change the difficulty and behavior design, right, like we were all trying to behavior design ourselves into success, the more difficult an action is, the less likely is going to be done. Consequently, the more easy it is. It’ll just happen. Just put a bag of chips out, it’ll be in your pantry, but if you open it put a chip you’ll start eating the chips. Century you want to you would have made a decision to go to pantry. And if it’s not in your house, you won’t eat them at all right? Like you won’t, I’m not going to drive to the store, even though driving to the store is not that big of a deal. Right? And so, the same thing happens like small changes in difficulty lead to drastic changes in behavior. And we can use that to our advantage to stop unwanted behaviors or induce behaviors that we enjoy. Could’ve said putting the Peloton in my house. massive change behavior. I don’t have an excuse like oh, it’s raining there’s a lot of traffic or whatever. It’s like nope, no excuse straight there. Go get on it. That’s small change in difficulty. Big change in results moving the phone. So I think things like that are you know me thinking about how, how am I going to take motivation out of it and just behavior design around. So motivation goes up and down, up and up and down. But if I can change the difficulty, back and forth, I can really change what my behavior will be, and designed for success.
Clint Murphy 1:25:15
Oh, I love that one and Bill, as we wind up, we went pretty wide. We went pretty deep on some of these things. Are there any final thoughts that we missed that you want to leave people with?
Bill Perkins 1:25:26
I would say, I mean, we’ve been talking about them. But I would really think about the fact that you have one life and one ride. And no matter how you want to live, live your life, make sure you’re thinking about it, and you’re off autopilot. This book really is about living intentionally. Right. It’s mathematical is others mental models. It’s a counterfactual regret minimization algorithm for fulfillment. But none of that will get done unless you’re off autopilot and thinking about and being intentional.
Clint Murphy 1:25:56
That is a wonderful way to end it. And where can people find you?
Bill Perkins 1:26:00
Oh, wow. Well, if you like hot takes, I’m @bp22 on Twitter. I don’t know if they can handle it. I’m on Instagram. I’m Bill Perkins. And that’s just my life. I use Instagram as kind of like my memory, my future self memory dividend giver. Right? So I, wherever whatever I’m doing, I have random stories of my life and trips. Sometimes it’s glamorous. Sometimes it’s mundane. Sometimes it’s very interesting. And sometimes it’s like, what, what the hell? But that’s me, Bill Perkins on Instagram. And that’s generally where you can find me.
Clint Murphy 1:26:32
Awesome. We’ll get all that in the show notes. And thank you for joining me today on the growth guide that was a blast.
Bill Perkins 1:26:37
Thanks for having me.
Clint Murphy 1:26:42
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