The Memory Dividend: Why the Payoff From an Investment Doesn’t Have to be Financial

This month, I started reading the book, “Die With Zero: Getting All You Can From Your Money and Your Life” by Bill Perkins. The theme of this book is elegantly simple: “Invest in your life’s experiences - and start early, start early, start early.”

I instantly thought of a question I had posed on Instagram recently asking, “What is something you spent money on last year that brought you joy?” The answers I received were all tied to some experience rather than any material things. The overwhelming majority of the experiences people valued also involved spending time with the people they loved most. 

Perkins says we will retire on the priceless memories we curate in these moments; it’s not about the big pile of cash we have when we stop working, but rather “...you retire on your memories. When you’re too frail to do much of anything else, you can still look back on your life and experience immense pride, joy, and the bittersweet feeling of nostalgia.”

I’m reminded of something one of my clients mentioned during our first meeting. The husband looked at his wife and talked about how much joy he feels flipping through the family photo books she prints for them each year. It’s a way for them to relive the experiences of prior seasons of life, both the big and the small. It shows the immense value our memories continue to provide us in the long run. 

And so we have what Perkins calls “the memory dividend.” It’s not that this concept is revolutionary in any way, but I appreciate how he defines it further: 

“When you spend time or money on experiences, they are not only enjoyable in the moment - they pay an ongoing dividend, the memory dividend…When you have an experience, you get that current, in-the-moment enjoyment, but you also form memories that you get to re-live later. This is a big part of being present as a living human being: For better or worse, you re-experience that experience, often more than once.”

How can we increase our memory dividend? How do we ensure we don’t look back on our life and feel an overwhelming sense of regret at the experiences we wished we could’ve had? Perkins explains further in the book that early on, we should spend the time to “decide what makes you happy, and then convert your money into the experiences you choose.”

In theory, this sounds great, but we are bound to create hurdles and roadblocks that distract from building a system that aligns our money with what we value most. If you’re part of a dual-career household with young kids, I know that most days, your sanity is barking under the strain of your mental load.

How do you shift out of this survival mode? Here’s where the benefit of working with a financial planner can give you the exact guidance you need to thrive. 

A good financial planner will begin their work with you by exploring what’s most important to you - your “why” - to help you figure out your priorities and envision your best life. Only then do they start to build an effective financial plan that is specific to you and has all that information as the foundation.

From there, it’s a good idea to see if you’ve been spending your time and money in a way that represents what you truly value. Do your calendar and your credit card statement reflect that alignment?

When I work with individuals, couples & families, we create an intentional cash flow plan that aligns spending and saving with your values. We continue to check in on this forward-looking system as long as we work together. 

Author James Clear said it best: “Your goal is your desired outcome. Your system is the collection of daily habits that will get you there.” So much of my work with clients is taking small iterative steps that can feel insignificant. After a while, everything starts to compound. You take a step back to admire just how far you’ve come, all because of the guidance and accountability of sticking to a more systematic approach to your personal finances.   

Building on the foundational work of year one, we shift to the ongoing planning phase. This continued accountability is important because it allows us to monitor and adjust the many details of a person’s or couple’s financial strategy as life happens and priorities evolve. I continue to get to know families on a deeper level and make sure their financial resources are used in pursuit of what they value most.

Without this guidance and thoughtful visioning exercises, many of us are a product of our culture. Perkins explains in the book that we get stuck “overemphasiz[ing] the virtues of…hard work and delayed gratification - at the cost of other virtues.”

Don’t get me wrong, investing a portion of your assets and leveraging the long-term power of the stock market is extremely important. But Perkins continues, “The payoff from an investment does not have to be financial…Yes, you need money to survive in retirement, but the main thing you’ll be retiring on will be your memories - so make sure you invest enough in those.”

The traditional definition of “retirement” is fading, anyways. Most individuals and couples I’m working with have mentioned a desire to get off the hamster wheel of their corporate job sooner rather than later, even just to take a mini-sabbatical before rejoining the workforce.

These desires impact certain areas of their financial strategy, especially how much and in which types of accounts they’re building up investment assets.

For example, should you keep funneling money into your company 401k once you contribute at least enough to receive the employer match? What if you started building up your taxable brokerage account assets instead? This would give you more flexibility to access that money soon, especially to help fund a potential sabbatical or mini-retirement.

Ultimately, you’re strategically using your money as a tool to allow yourself to have more life experiences while you’re younger, thus increasing your memory dividends. 

Perkins again: “So much of our life is spent on autopilot - we move through the world as if someone else programmed our actions, and we don’t think nearly enough about how to spend our time and money…Even if you enjoyed every minute of the work that brought you that money, failing to spend it is still a waste.

The takeaways of Die With Zero are simple enough. But the question remains - how are you working to increase your memory dividends? Do you have a systematic way of balancing the role of your financial resources so you can be fully present and enjoy life RIGHT NOW while ensuring that your future is also protected?

If you’d like customized help using your financial resources effectively in order to make the most out of your wealth-building years, please schedule a free consultation here or email me with questions kelly@kkfp.co

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Disclaimer: This blog post is not intended to be a substitute for specific financial, tax or legal advice. The article is for general informational purposes only. Reproduction of this material is not permitted without written permission.

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