Memory Dividends: Why You May Be Saving Too Much and Missing Out on Life's Riches

You're standing right in front of what could be your best years, yet there's a chance you're shackled by the invisible chains of too much saving and too little living.

Chances are that you merely focus on the following:

• Living below your means
• Saving your money
• Investing your savings
• Depriving yourself from experiences until retirement
• Waiting for a retirement which may never come

It's a trap where your bank balance grows but not your life.

It’s not that you should not live below your means and save money.

It’s that you probably overdo it.

To the point where you are missing out on what life has to offer you.

There’s the concept of memory dividends, introduced by Bill Perkins in his book Die With Zero which you must read if you want more out of life for your buck.

It's about the returns on investment that you can't quantify on a spreadsheet.

The ones you collect from rich experiences and moments well spent.

Not dollars hoarded for a rainy day or a retirement that may never come.

Let's be real: your life is happening right now, this very second, and that clock doesn't do any refunds.

The time that has just passed will never be available to you again.

Let that sink in. It should scare the hell out of you.

If you're constantly deferring the meaningful to gather the material, you may end up wealthy in money but poor in experiences.

You must rethink the value of a moment—how will the taste, scent, or joy from an experience today reward you with memories and nostalgia years down the line? How will that experience contribute to personal growth?

You might wonder if you're bracing for a future that's abundant with cash, but scarce in lived experiences.

This is what leaves you thinking 'what if' in regret in your older years.

Take a hard look at your current savings strategy and ask yourself whether it's feeding your future self with memories.

Are you actually setting yourself up for a fulfilling life, or are you preparing to be a rich person in a graveyard?

If you’re not saving any money and live paycheck-to-paycheck, then this advice is not applicable to you so take this with a grain of salt.

This is for those who do have discretionary income and are over-planning their lives and constantly living in the future.This is for those who deprive themselves in order to retire early.

This is a reminder for myself since I’ve spent too much time in FIRE/FI (Financial Independance Retire Early/Financial Independance) communities.

The Concept of Memory Dividends Explained

You've been saving for that "rainy day", but have you ever stopped to consider you might be overdoing it?

Let’s look at the idea of memory dividends and see why investing in experiences could pay dividends for your mind and soul.

Investing in Experiences vs. Material Wealth

Experiences trump possessions.

You know that excitement of a last-minute road trip, early morning hike or event with your buddies? Those are your memory dividends.

You must invest more in moments that'll stick with you, rather than stuff that'll gather dust.

These experiences are a form of wealth - an investment into your personal happiness bank.

The returns are the flashbacks and stories you'll retell time and time again.

Consider this:

• Investing in Material Wealth: 1 laptop or phone = fleeting satisfaction
• Investing in Experiences: 1 trip = countless storytelling moments for the rest of your life

The difference between the two is that you don’t adapt to occasional experiences but you will adapt to whatever new thing you just bought.

It’s fleeting and only a matter of time before you feel the urge to buy more stuff again.

Understanding the 'Die With Zero' Philosophy

"Dying with zero" might sound extreme, but hold on.

It's not about splurging every dime without a care - it's about balance.

Again, if you do not have discretionary income and are not saving money, take this advice with a grain of salt.

Think about it. You want zero regrets when reflecting on your past, and that takes mindful investment.

Each experience is a deposit into your memory bank, with dividends paid out every time you recall that day, conversation, event, or food from your travels.

Why lean into this philosophy? Because you must find the balance between saving for the future and living for today.

Your wealth is not just your bank balance; it’s also the compilation of experiences that define your life.

Don't let the fear of future scarcity rob your present of adventures. Your mind is enriched from them. It’s what create your life story.

You’ll thank yourself later, seriously.

Are You Over-Saving?

Your hard-earned cash could be doing more for you right now.

In this section, let’s unpack the pitfalls of locking away too much money for a future date that's not promised.

Diminishing Life Returns

You stack your cash diligently, hoping for comfort and security in retirement.

But what if your best years are passing you by, untouched by the experiences your savings could have unlocked?

It's a concept that goes against conventional wisdom but hanging onto every penny might not bring the growth you want.

Your life's ROI isn't just measured in money, but in memory dividends.

The same money you spend in your 20s will bring a lot more happiness than it would in your 50s, 60s or later.

Just like how $10 meant the world to you as a kid, $100 means a lot more now than in 40 years.

Leveraging Money for More Happiness

You should not only use your hard-earned dollars to grow your bank account but to enhance your joy.

Money is a tool and if you use it wisely, it could open up a world of happiness by funding experiences that pay back in rich memories.

Balancing Saving and Spending for Enjoyment

Your bank balance might be climbing, but are you investing in Saturday mornings that you’ll remember?

Do you remember the figures on your last bank statement or the laughter shared over an outing with friends?

Allocate funds for experiences that bring joy now. The value of a memory never plummets.

I have a “fun fund” just for this. Whatever amount I put in there gets spent guilt-free.

On your death bed, you will not regret not having worked harder. In fact, working too hard is the second greatest regret of the dying.

You will not think about your bank account other than giving it to others.

The Psychology Behind Memory Investing

When you invest money in experiences that are enjoyable, you're investing in your mind’s happiness portfolio.

That trip you’ve been debating? It's not frivolous spending; it's acquiring stock in your growth and wellbeing.

Again, if you don’t have any savings, you must learn to save so please don’t listen to this advice. It’s so easy to tell yourself that every single purchase you make is an investment and ruin your financial future so take it with a grain of salt.

The psychology of memory investing is where the return is measured in happiness, not dollars.

What you're really gaining is a story to retell years later.

Focus on creating a treasury of moments that will continue to pay dividends in joy and satisfaction as the years pass by.

Your life's ledger should be about more than numbers; it should reflect a life fully lived.

Budget Your Money For Experiences

Think of your savings as a pie. Sure, a big slice should go towards financial security, but allotting a piece for experiential investments is crucial.

You're investing in the market of family adventures, travelling, and learning, ultimately diversifying your portfolio of life experiences.

Here's the kicker: the returns on these investments? They are the memories and stories that make up your life.

I’m a big fan of the 50/30/20 rule and here’s how I would apply the “die with zero” approach to it.

You should always be saving 20% of your net income but let’s divide your savings further with another 50/30/20 breakdown:

From your savings, allocate:

• 50% Savings: Financial stability and retirement
• 30% Experiences: Travel, learning, family adventures
• 20% Buffer: Unexpected expenses, opportunities, or debt

This makes sure that you cover future you with both money and memory dividends.

Don’t just save for retirement, you have to allocate money towards your experiences.It is foolish to think that you will have all the time in the world to enjoy it later on. Nothing is guaranteed so you need to balance it out now.

3 Steps to Enjoy More of Your Money

Let’s review the three main steps to allow yourself more room to enjoy your money:

1. Audit Your Current Expenses: Take a deep dive into your finances. Where could you cut back to free up cash for experiences?
   • TV subscription
   • Other subscriptions you rarely use
   • Eating out
   • Designer clothing
   • Expensive car
   • Expensive apartment
   • Your daily 5$ latte
2. Create an Experience Fund: As mention above, allocating up to 30% of your savings is a good place to start. But again, this is only applicable if you do have savings every month.
3. Embrace Carpe Diem Responsibly: Live in the present, but don't derail your future. Optimizing enjoyment today doesn't mean throwing away all caution and spending all your money. It’s a balance between seizing the day and securing tomorrow.

Redefining Retirement: Embracing Mini-Retirements

In a lifetime, the concept of retirement evolves, and lately, it's become clear that taking periodic mini-retirements can serve as an ongoing dividend in your life's journey, enriching it with moments of travel, family, and enjoyment.

The Benefits of Mini-Retirements Throughout Life

You've been fed the retirement script since you first started working: save now, enjoy later.

But what if later is too late? What if you never make it to later?

Mini-retirements challenge this one-size-fits-all script society tries to sell you.

I don’t know about you, but I am not waiting until I’m 65 to start enjoying my life. Neither should you.

Imagine taking control of your life every few years or multiple times a year instead of waiting for a distant future that isn't promised.

• Prioritize travel and experiences: You get the freedom to explore the world now when your energy is high and your responsibilities are low.
• Strengthen family ties: Those 'one day' family moments? Make them 'today'. A mini-retirement gives you time to reconnect and create unforgettable memories.
• Learn and grow: It's not just a break; it's a chance to acquire new skills or dive into hobbies unrelated your 9-to-5 or business.
• Enhance mental health: It counteracts burnout, rejuvenates your spirit, and keeps you motivated for the long haul.

Find Your Balance

In the pursuit of a cushioned future, are you sacrificing your present life?

It's true, having a healthy stash of savings is crucial. Yet, every penny pinched today is a moment of enjoyment that could slip right through your fingers.

Shift the lens—think of your savings as a means, not an end.

Every road trip, every laugh, is a deposit into your memory vault that pays out in happiness and stories for years.

Consider this: one day, you might meet regret—not for lack of savings, but for excessive caution.

For experiences not lived that no amount of money can buy back.

• Time with your family and friends
• Time for yourself
• Time for your health

Money’s temporary, but experiences, those are forever.

As you read this, you're spending time, the ultimate currency.

Spend it well. Make every moment and dollar count.