Time, Energy and Money: A balancing act

American singer and actor Meatloaf famously sang “Two out of three ain’t bad.” When it comes to the triad of time, energy and money, it often feels like we have two out of three depending on what stage of life we’re currently in.

Generally when we’re young, we have time and energy, but very little money. In our working/career years, we have energy and money, but no time. Post career and working life, we may find ourselves with abundant time and (hopefully) money, but little energy. 

Focus on net fulfillment as much as net worth

Is it possible to optimize our lives so we can balance all three in each stage of life? That’s the premise of a book I recently read called “Die with Zero: Getting all you can from your money and your life” by Bill Perkins.

While conventional wisdom is to grind it out at a job (more likely a series of jobs) over a long period of time diligently building as big of a nest egg as you can in hopes you never run out of money, Perkins advocates net fulfillment over net worth. He makes a compelling argument that it’s inefficient and sad to spend too much of your life making money that you’ll never spend before you die. He has a point. And he provides some research from the Federal Reserve Board’s Survey of Consumer Finances and the Employee Benefit Research Institute to support the idea that this is happening to more people than we are led to believe. From these sources, he cites:

• the pattern that median net worth tends to continue to rise as people get older,
• people tend to be slow to spend down their assets,
• And, one-third of all retirees actually increased their assets after retirement. 

Spend on the memorable and give while you’re alive so you can enjoy these experiences

Based on this information, his premise is that we should spend our money on memorable experiences that we can do at the times in our lives when we can get the most enjoyment out of them. In the book, Perkins makes it clear he is NOT encouraging out-of-control spending on stuff you don’t need. He provides some suggestions and links to resources to help you identify your projected life expectancy and how much money you may need if the longevity calculation predicts your demise accurately. He throws in a few resources that may help you optimize your health. For those concerned about the importance of leaving inheritances for their children or a legacy to their favorite charity, he argues it’s better to distribute your money while you’re still alive.

For the most part, I agree with his premise. It’s a fact of life that for the vast majority of people, there are things you may want to do – and are physically able to do – in your 20s, 30s or 40s  that you may not be able to do in your 60s, 70s or older. By then, you may not even want to do some of those things. But, Perkins argues, having the memories because you did these things and enjoyed them when you could will sustain you as you age.

Time bucketing: a valuable exercise

To optimize the balancing of time, money and energy across all stages of your life, he recommends a useful exercise he calls time bucketing. You start by creating a list of all of the things you’d like to do (similar to a bucket list). However, instead of it remaining a static “someday” list, you plot this list on a proposed timeline of your life in either 10-year increments (if you’re younger) or 5-year increments (if you’re older). In cases where you want to enjoy the memorable experience with someone else whose age differs, plot their timeline under yours. This is a powerful exercise that I recommend everyone do. It was key in helping me determine the ideal time for me to retire. 

Hits and misses of his book

This is an interesting book which I’m adding to the retirement recommended reading list with a few caveats: 

• I disagree with the idea that young people starting out in their careers have less need to save because their earning potential is likely to increase over time. I believe that advice forgets about the power of compound interest, ignoring the benefit of growth over time and its tremendous snowballing effect. 
• The concepts may mistakenly provide a false sense of tacit approval to continue spending for those who carry credit card debt, do not have an emergency fund and are not actively saving for retirement.

This is a good book for people who:

• Are diligent about saving and investing, and despite being in a good place financially, remain fearful of retiring.
• Want a good reminder that we should be living our best lives every day and at every stage instead of waiting for some distant date in the future to do the things we want to do.

I believe the book’s chapter entitled “Start to Time-Bucket Your Life” is a great read for anyone who is interested in thoroughly thriving in life and making the best use of their time.

Engage with us! In the comments share something you’ve done that you’re glad you did while you were still able. Or, make a time bucket commitment right now: share one thing you plan to do within the next 5 years.