Willy Walker:
Good afternoon, and welcome to another Walker Webcast. It is my great joy to have Bill Perkins join me today to talk about his career and his book, Die With Zero.
Bill, let me do a quick bio on you to give a little bit of background to our listeners, and then you and I can dive into the conversation. Bill Perkins is an American hedge fund manager, film producer, author, and poker player known as the natural gas king and cowboy of Wall Street. Perkins is the founder, managing partner, and head trader for Skylar Capital. He began his career on the floor of the New York Mercantile Exchange and now has more than two decades of experience in the energy trading industry, specializing in options trading in natural gas, crude oil, power, and other energy-related trades.
Bill has produced several movies, including Afterlife, Unthinkable, and Cat Run, and wrote the book, Die With Zero, which gives strategic advice on pursuing personal goals, regardless of income. Perkins is dedicated to a variety of charities, including the International Rescue Committee, Race to Erase MS, and the Dave Thomas Foundation.
He received his bachelor’s in electrical engineering from the University of Iowa, where he played on the Iowa Hawkeyes football team. He's the proud father of two daughters and currently resides in Austin with his wife, Laura. He owns four giant tortoises and spends a great deal of time and money on longevity.
Bill, as I did my research on you, your career, the various impact points, what comes out of it is a person who is, A, wildly self-confident, and B, willing to take risks. The fact that you are a hedge fund energy trader, in your day-to-day life, you are consistently taking risks. Yet, Die With Zero talks about balance and the balance between the money you make, the life experiences you want to have, and how to manage when to use that money to further your life experiences.
I kind of had this; it was like two sides of a coin, if you will. This guy is all about the adrenaline rush of making a great trade and making great money. He's got a high beta for risk tolerance. Yet the whole book is all about that balance of life experiences. Talk about that. Which one is the true Bill Perkins? Is it the risk taker or is it the balance creator finder?
Bill Perkins:
Life is risky in everything, whether it's a relationship, a job, an investment, even entertainment. There's always an opportunity cost associated with that, which is also a risk of missing out on something. The book is supposed to be agnostic towards your values and who you are.
I generally enjoy taking risks. I always look at what opportunity costs am I giving up out of inaction, as opposed to what can go wrong. Generally, what can go wrong is really limited to a learning session or a bruised ego, given where I live, the resources I have in terms of being in the United States of America, ability to get another job, etc.
But the book is written for everyone. Other people may have different risk tolerances, different values, different things they want. So it's very formulaic to drop in the mental models to whatever your life is.
Willy Walker:
Before we dive deep into the book, I really do want to spend a bunch of time on it, because I think that so many people, to be blunt, miss the lessons in the book. They hold onto their money longer than they should. They're not as generous with their money at a time when that money can have a real impact on the lives of the people in their lives. And a bunch of other things that I think are so spot on. I want to dive into that in a moment. But let's rewind the tape to what makes Bill Perkins, Bill Perkins.
Growing up in New Jersey, being a standout football player and going to the University of Iowa.
Bill Perkins:
I wouldn't say standout football player, but I played.
Willy Walker:
Come on, let's be real here. You went and played D1 football in Iowa.
How important was that football experience to you as it relates to the person that Bill is, as it relates to your confidence in yourself, going and playing D1 football. I mean, there are many of us who played college sports or other people who are listening who never got to any level of athletic competition in college. But we hire a lot of former college athletes at Walker & Dunlop because we love what they have done in their undergraduate experience of both playing sports and learning how to operate on teams, as well as presumably being good students.
How important was playing football at Iowa to who Bill Perkins is today?
Bill Perkins:
Let me talk about the concepts that I got from it that I think helped me in my life. It is one, learning how to be a member of a team. That was, I think, very important. And two, the concept of doing your best in a visceral way.
Being part of a team requires you to be, the coaches, everyone, you're constantly being inculcated with doing your best. How are you performing when nobody is watching? How are you measuring yourself? How are you pushing yourself to get better? I think those concepts and things that playing sports instilled in me were very critical to help me succeed. In order to be like, yeah, you're right. I'm not doing my best. To actually be self-reflective when I'm kind of slacking off. And being called out when slacking off on the team.
I was on the D1 team, but I played on the bench. You know what I mean? I was not like a standout, all-star, all-American at D1 level. But I was a contributor. I was doing my best. At times when I wasn't doing my best, I had a bunch of teammates and a bunch of coaches to let me know. So I think that was crucial.
Willy Walker:
Did playing at that level being on a, I mean, whether you're on the bench or whether you're a starter, being in a D1 program at a school like the University of Iowa, you're a special person on that campus. Very special. You go to parties and everyone's like, hey, he plays on the football team. Did that give you, if you will, somewhat of an ego or an arrogance at that level that may have been oversized for where you were from a skill standpoint as you entered the work world?
Bill Perkins:
I think it definitely gives you an ego boost. There was also a sense of pride. Hayden Fry would always say, hey, you can be a normal student, just go to class, etc.
But you're out here up in the morning working out training. Then in the afternoon, working out in training and then reviewing film and then having to study your positions and formations, etc. But you're doing something special.
There was this kind of instilled, you're special here. But it wasn't just like, oh, you're special. We picked you randomly. You're special because of your contributions and what you did. The work you put in. So, yeah, it was fun and people looked up to me and it definitely helped on the dating scene. But that might actually ruin me a little bit in college. I would have gotten better grades. But it wasn't just, you weren't entitled to that specialness. You had to earn it. That was the message.
Willy Walker:
So you get out of college and you go to New York and you're working two jobs, kind of trying to make a way on the mercantile exchange floor and you're driving a limo at night and you read the book, Your Money or Your Life. Why was that book so impactful to you?
Bill Perkins:
I didn't have a mental model of what money was. What that book did was give me the model that money is essentially a representation of my time. I exchange hours of my life and then I get money of which then I'm able to take that money and exchange it for hours or minutes of somebody else's life.
So that concept, one, when you do the exercises, has you think of everything in terms of hours of your life, instead of dollars. So you get in touch with your values very quickly when you're like, oh, I'm going to buy this shirt and it's going to take me two hours of my life to buy this shirt or whatever the thing is. You're like, do I really want to spend two hours of my life for this shirt? The other thing was that I realized that I wanted one hour of my life to represent a lot of hours of somebody else's life. I didn't want to have to spend my life working very hard to get very little effort in return from other people. So I really wanted leverage at that time. I really wanted to leverage my time.
Willy Walker:
Yeah, explain that a little bit more. In other words, you realized that you wanted to make money so that you could take that money and invest in others and then have them leverage your time. Is that essentially what you're saying?
Bill Perkins:
No. If you go around and if you went through the exercise and found out what your hourly wage was. Like you took in all the expenses, the suits or whatever, your transportation to work. The commute time, and then took your salary, took out the taxes, your net, and you divided that out. You come up with a true hourly wage. Let's just for the sake, say it was $20 an hour net. Then when you went to go buy, let's say, I don't know, two movie tickets, let's just call them $20. It was an hour of your time.
The idea is that after you do that enough, you don't think of things in terms of dollars. You think of them in terms of minutes and hours. This vacation costs 100 hours. This car costs two years. Whatever it is, whatever the number is. I’m not doing the math in my head. So you realize like, oh, I'm giving up my life for the experiences and purchases around me. What I wanted to do is have an hour of my time converted into many, many experiences and many, many other things. If I wanted an hour of my time to be in a car. I wanted an hour of my time to be a trip to France. I wanted an hour of my time to cover many more experiences and items than the average person. I didn't want to worry about how many hours I would have to work in order to have an experience.
So that's what it is, if I wanted leverage of my time. So the real question is, like, if I'm making $20 an hour, or $30 an hour, or 40, or 50 or whatever the number is, I'm not going to have the life that I had in my head at the time. I needed somehow to leverage my time. I needed an hour to represent 10,000 hours of somebody else's time or 1,000 hours of somebody else's time. That way I can exchange with the dentist and I can exchange with the pilot and I can exchange with the people that make my clothes at a rate that I didn't worry about.
Willy Walker:
It's fascinating. You decide to move from New York to Texas with really your hourly rate at that time being pretty low. You didn't have a lot of money in your pockets and you didn't know anyone in Texas.
What was it that made you move to Texas post Enron? That's an important sort of.
Bill Perkins:
That was actually pre-Enron when I moved.
Willy Walker:
It was pre-Enron when you moved. Then the job you got with John Arnold is post Enron. But talk about why you left New York and went to Texas.
Bill Perkins:
Purely the opportunity. At that age of my life, I was extremely ambitious and driven. I had gotten out of my slacker phase. Being broke is a necessity is the mother of all inventions. I invented myself as like, I am a hustler and I will go anywhere for an opportunity. So prior I was like, I would never go south of the Mason-Dixon line.
Who would leave New York City to go to Texas? But in my 20s, I would have gone to Siberia or Kathmandu for the opportunity. So I got an opportunity to be a trader at a company that was called El Paso Energy. It was actually Eastex, but Eastex was going to be the management arm of El Paso Energy in a buyout. It was a huge opportunity and there was no way I was going to miss it. I packed up and left.
Willy Walker:
So you get down there just before Enron, then Enron happens and you end up going to join John Arnold at Centaurus Advisors, which seems to be sort of that inflection point in your career as it relates to getting on a platform that could really allow you to do exactly what you just talked about. Why'd you end up joining John? That's not your first experience, but that clearly seems to be in the history and chapters of your success, a seminal moment.
Bill Perkins:
Yeah, I think prior to that, I had become rich, but I think Centaurus made me wealthy. It was one of the most successful hedge funds in commodity trading ever.
So it was an interesting period in natural gas. It was a growing new market and we had a lot of fun. We were very successful. So that was kind of the turning point in terms of the amount of capital I had deployed, going from I have enough to live comfortably, I have enough to put my kids through college to I have possibly generational wealth, that type of wealth. So you go from a high net worth individual to an ultra high net worth individual. I don't know the acronyms they use nowadays, but that type of thing.
Willy Walker:
Talk for a moment about the culture at that firm in the sense that this is sort of in the ashes of Enron. Enron had a massive impact on Houston and the overall ecosystem of Houston. There was barely a company in Houston that was not somehow impacted by the bankruptcy of Enron. Here are these firms that are, if you will, coming out of that.
Was the culture, hey, this is a great opportunity, or was it due to having had the Enron crash that everyone was making both good bets and prudent bets? Was there anything there in the aftermath of it that changed the culture?
Bill Perkins:
I think a lot of the large energy companies kind of got out of their risk departments, got out of their energy trading departments, even though it was kind of like the fine arts arm that blew up Enron. There are a lot of traders kind of without jobs. Looking for something to do and people were setting up their hedge funds and John was one of them, but a lot of people were kind of reluctant to invest in the firm at that point because people didn't know, is it your skill or was it the chair of being an Enron that produced the money for John?
So John started the fund with $8 million of his own money. The investors didn't even show up on day one. Then we were off to the races and then we had a significant return over 100 and something percent or 200%. The investors started to come in and then we continued to make 100% or 200% a year thereafter. The market was new and growing. I like to compare ourselves to insurance agents.
The premiums that we were charged for warehousing risk were quite large. So if you didn't blow up, you didn't lose all your money and you were able to stay in the game, you produce outsized returns.
Willy Walker:
Then decided to jump out on your own and start a number of companies, including Skylar Capital. Where was that? I mean, it sounds like you had a lot of self-confidence, but that doesn't always translate into having an entrepreneurial spirit of going and doing your own thing. Plenty of people are very confident in themselves and spend their entire career working, if you will, in large corporations and for other people. What was it that made you decide it's time for me to go sort of create my own platform and run my own show?
Bill Perkins:
I think it was a future regret minimization. If I was going to start a fund and do it on my own, it was going to be then. I did have confidence that I could do it, even though I understood the risk that starting a fund is kind of path dependent.
You can have eight good years and two bad years, but if the two bad years are first, your fund's going to fail. Or even if the first year is bad, it's really hard to raise money. So I am okay with taking risks. I am okay with being broke. I am okay with whatever station in life that falls. I'm very much into the ride of life and enjoying the ride and doing my best. I felt it was a path that I needed to take.
John had become successful. He called it rich. He wanted to retire. He moved on to philanthropy and solving other puzzles. I was still in a stage of like, okay, I can't call it rich. I'd like to start a hedge fund. I think I can do this. I think I have an edge. I think I can produce money for the investors. So I did it. It was just the natural thing for me to do. That doesn't mean it's the natural thing for everyone to do, but it was natural for me to do.
Willy Walker:
Double click on that comment you made, regret minimization. There are not many people who sit there and say, I'm going to start something or be an entrepreneur or whatever because I want to minimize my regrets. That's a super important piece to your story and why you wrote the book. So go down that path for a second.
Bill Perkins:
Yeah, counterfactual regret minimization is basically a fancy word for “what if analysis.” What I'm trying to do is, when you play a chess computer, it's doing regret minimization and it's solving for winning the chess game. So for a human being, the game is maximum fulfillment. What is the best path for you? So in this simple decision, start a hedge fund, don't start a hedge fund.
How does my future self look back on that given all the things that, okay, can go wrong or go right with starting a hedge fund and all the things can go right or go wrong and not starting a hedge fund. For me, the regret minimization is to start the hedge fund. Even if it fails, I can get another job. I'm not going to die. It's not as catastrophic. I'll learn things. If it's successful, then wow, I've crushed it. I've made a lot of money, etc. If I don't start the hedge fund, I'm constantly like, what if I started a hedge fund? I could have done this, etc. I'm regretting it. I missed my chance to start a hedge fund. These people would have invested in me, etc.
So in my mind, the regret minimization or the most fulfilling path for me, given all that I knew at the time and I'm not throwing everything in there, was to start the hedge fund. You can run counterfactual regret minimization on anything. You could be like, should I ask the girl out for a date or not ask the girl out for a date? Well, if I don't, I'm always what if, maybe could have been a wife, that thing, etc. If I do, she could say no, she could say yes. It could go bad, but you know what? This is kind of the tools computers use, but humans can also use in order to kind of make decisions about what's the best path for them.
Willy Walker:
So when you decide to write Die With Zero, the book talks about balance and balance between money, health, and time. What was it at that moment, Bill, that said to you, hold it, I got to put this sort of what I would call an ‘ethos,’ the ethos that drives Bill Perkins as it relates to that balance down to paper. I got to take all the things that you've just talked about that have sort of impacted your career, the way you have invested, the risks you have taken, jumping out on your own and creating your own firm, building the life for your family, for your two daughters and for your wife that you had hoped to do.
Then all of a sudden you're sitting there saying, man, I've not only done it, I've done it in spades where I've gotten to the point where I'm generating generational wealth, not just wealth for today. What was the main driver of saying, all right, now I got to, on Die With Zero, this is sort of flipping it to some degree. At that point, you're like, okay, there are all these life lessons as it relates to kind of how to create generational wealth that I could write a book about. And you've just talked about a lot of the different markers on it, but now it's a totally different one, which is how do you create that balance between the money you have, the health you have and the time you have to be able to spend your life the way you want to live your life and writing this book, Die With Zero.
Bill Perkins:
I have to go back to get to that. Ever since I read Your Money or Your Life, one of the concepts I got out of it is, it's not about the money, it's about what the money affords you. You don't really need that much money if you don't really want that many things. Like if I just wanted to raise begonias on a farm, I don't need that much money. So, and if I'm giving up hours of my life in exchange for money, or things I'm never going to buy, that's a waste of my life.
The goal that I decided on was not money, but what's life. What life do I want? Back when I was younger I was like, oh, I want my life to look like a rap video and this and that. Whatever was advertised to me. So I was pursuing sums of money for a lifestyle I really didn't even like. I really didn't even want to. So over time you get in touch with yourself and you try and figure out what you want, but the goal is a fulfilling life. It's not a pile of money.
So what I'm minimizing is to have the most fulfilling life I possibly could have according to my values, and then it should be agnostic. If somebody else had different values, they should have the most fulfilling life possible.
So I wanted to make a computer program to tell me how much money I should be spending, how much I'd be working, etc, when to retire, and all these questions. There's no computer with enough power to tell me that, and it's also garbage in, garbage out. Because there's just so many variables.
But what you can have is the mental models on how to approach every situation and how these things relate. What's the purpose of being super healthy? It's in order to have more experiences, both in longevity and also the ability to do certain things.
Most of us who've played football or something have some cartilage issues, little things that are like they're decreasing our ability in the future to enjoy certain things. Like we won't want to walk up that mountain or hike the Himalayas or, you know what I mean? Maybe not even sit in a plane for more than six hours at a certain point in our lives.
Money that is being saved for a trip to, let's say, Hong Kong from here is probably wasted for a football player after a certain age, because they're like, I'm not sitting in a plane for 10 hours. And I don't want to waste my time working for money that I'm not going to use. Like if I go to Chuck E. Cheese and I get the tickets I want to use all the tickets in Chuck E. Cheese. They don't transfer well to the grave. That's what I always say. Like these units, you lay it all on the field. Like you've heard that all the time if you played sports. You leave it all on the field. You put all your effort on the field. The field of life is right now. You lay it all on the field. So, I needed a way, I needed mental models in order to not waste my life. I was like, okay, what are my resources here? I got my wealth, my health, and my time. Time to the grave. Those things are going to change throughout my life. How do they interplay? How do they drive fulfillment? Obviously no health, your fulfillment's zero. That's a huge, hugely important variable. But I'm not writing a health book. And your wealth. Your wealth affects the experiences that you're able to afford, the number of people you're allowed to bring on to those experiences, etc. But I'm not writing a get rich book either.
Your time. Like how you spend your time. Do I go play cards with my friends or do I spend time with my mother? My mother's not going to be here forever but my friends will be here longer. Like how do I order my life. Because life is like Tetris. You have to get the order right in order to get the high score. I always tell people, you're partying, clubbing, strip club days or before you get married, not after. Certain things go at a certain time like reading books to your kids or not when they're 15, it's when they're two and three. So if you don't order your time right, it's not necessarily that you have a terrible life. You just don't have the most fulfilling life. You don't get the experiences that you want to have.
I wanted to, while I was in the doctor's office talking about a psychological exam saying, hey, do you fear running out of money? I said, I hope I run out of money. They were like, wait, what? So I gave them a spiel and they were like, nobody's ever answered the question that way. You need to write a book. I was like, yeah, I probably need to write a book about this because I need to get all these thoughts out so I can save my own life.
So I wrote the book to save my own life. That's why the book is there. Then I reasoned that if I could save my own life, I could save other people's lives.
Now, a question, I know this is a long, long answer. You should ask, what do you mean to save your life? You should be like, what the hell are you talking about, Bill Perkins, save your life.
When somebody is struggling swimming and they're about to drown and you pull them out, you give them mouth to mouth, they spit out the water, it's all dramatic. You're like, oh my God, you saved my life. Guess what's going to happen? That person is still going to die. 100% they're going to die. They're just not going to die that day.
So what did you do? What does it mean when you save someone's life? You basically give them more time. What are you going to do with that time? They're going to have more I love yous, more trips, more experiences, more choices. More adventures. That's what it means to save somebody's life is to give them more experiences. So if I write a book that's like, hey, you're not on a course of maximum fulfillment. You're not going to get the high score because you're ordering things wrong or you're hoarding your money. It's just sitting over there and you're going to die with a pile of money that you never use. I'm doing the same thing. I'm giving you more experiences, more fulfillment.
So I wanted to save my life. I wanted to have the book out in the world and save other people's lives. That's why I wrote the book.
Willy Walker:
Fascinating. It's so good. But I want to get into the practical things in the book, which are fantastic as it relates to giving money away earlier and truly dying with zero.
But before that, you talked Bill about just the shift in your understanding of what was meaningful to you from the sort of images of whether it was the rap videos you talked about growing up or whatever it was like being in New York to actually identifying the things that really did mean something to you. There had to have been a or several life experiences that sort of shifted. I went to the chiropractor yesterday as I was leaving Denver and he pushed into my back and my whole spine went and I felt my spine kind of get back in line.
There was a moment there where someone pushed on your back and got your spine in line. Give us one example of something that shifted your thinking about what life was supposed to be, which is that pile of cash that you put away in the bank account and die with a lot of money or you weren't out there doing various experiences. Was there a seminal moment where all of a sudden a lot of these issues kind of came to light where you said, now I understand what this thing's all about?
Bill Perkins:
I would say not really. I'd say it's multiple experiences. It wasn't like I was riding on my horse to Damascus and I fell off it and oh, I got religion.
It was a different experience. I noticed if I went through a breakup or I had problems with friends, the quality of my life was highly, highly correlated with the quality of my relationships. It doesn't matter the wealth.
It doesn't matter, at a time when I was on a high, I was at kind of one of the more miserable points in my life and I compared it to when I was hustling, having to drive a limo at night, and couldn't afford popcorn at a theater. I was like, man, I had a blast back then. I was having a great time.
And then also like small things, like I remember a friend of mine, he was really into cars and I thought I was into cars too because cars get the girls and all this other things and that kind of like subroutine ran in my head that I like cars and he was like, hey, you want to cop a McLaren with me or whatever? I bought it. Oh no, it was like a Lamborghini and I was driving around in the car and I felt like an asshole. I hated the car. It wasn't until I'm like, I don't even like cars. Like, why am I buying cars? You know what I mean? Like, I'm not a car guy.
So I just realized like, all the other things and concepts out there, I realized like most of the things I like, they're just marketed to me. They're just cultural. The reason why I don't like fried crickets is because I didn't grow up in China. If I grew up in China, I'd like fried crickets.
Like the music I listen to, it's because this is what I grew up listening to. It's imprinted on me. It's not that that's bad. Like some of those things work, but a lot of things don't work. I was like, I need to spend some time actually thinking about what experiences I want to have before I die. I think also getting in touch with remembering that I'm going to die, that this ride is going to end, that you probably need to know what you want out of this ride. You probably need to think about it.
Now you can't know everything because life is discovery. You discover what you like. You don't know what you like. But I probably need to take it seriously and do my best and think about things like, what do I really want to have over the total arc of my life? Given that my life has seasons, like there's my 20s, the young parent you, your 30s, your 40s, your 50s. What do I want each season of my life? Because those seasons pass and you don't get them back. You don't get your college years back. You don't get your 20s back. You don't get your first job back. You don't get your single you back or sometimes you do, you know what I mean? You don't get your marriage. So I like each period going back to, I need to do my best. I need to really think about this. I don't need to be on autopilot. I need to kind of separate what programming and what I really want and what I really like so I don't waste this ride. So that kind of happened over time.
Willy Walker:
As it relates to, you say in the book that many people are not comfortable with the ups and downs of life. And a lot of people are definitely afraid of losing all their money or even changing their station in life. You seem to have no concern about that. Where's that come from?
Many people are definitely afraid of, oh, I grew up with this or there were these expectations on me or I've got to be a member of this country club or I've got to be able to show that, I mean, to your point about having a fancy car, there are plenty of people who get caught in the trappings of image and wealth and status. You're someone who seems to say, that's all BS.
I remember distinctly, I'll just give you one quick anecdote, Bill.
Bill Perkins:
Oh, it's 100% bullshit.
Willy Walker:
I'll just give you one quick anecdote, Bill, about these things that are like the trappings of life. That is that my ex-wife and I were trying to decide whether we're going to move from Washington, D.C. To Denver, Colorado. She's from Denver. Walker & Dunlop has grown from one office to being 45 offices and I was on the road all the time. I was like, where I am, whether I'm at corporate or whether I'm on the road, we can maybe move back to her hometown.
So I'm sitting there with my son who just graduated from college this past weekend, but at that time was a freshman in high school. He's like, dad, what are you thinking about as it relates to the move to Denver? I say, first of all, corporate headquarters is in D.C. Second of all, your grandparents live there and I love being close to our parents. I made a lot of friends there. Then there are certain things like we're members of the Metropolitan Club and the Chevy Chase Club. My son at the time, he was in ninth grade, cut across me at the dinner.
He goes, hang on a second, you're potentially not moving from Washington, D.C. To Denver, Colorado because of some club memberships. It was so funny because here was my son sort of being like, let's get priorities in place. Hanging out close to your parents and all that stuff sounds perfectly good, dad. I understand why you're struggling with that. But like giving up on some country club membership is one of the reasons you wouldn't move. It was so, I think back on that and I'm just like, how wise was my son to say, like, get your priorities straight.
We ended up moving to Denver, Colorado. It was a great move for all of us. But I just, to your point about, how did you get to the point where you didn't have those trappings, if you will?
Bill Perkins:
I think part of it is, wow, I say this often. I grew up there, I was born in 69. I grew up in Jersey City. It was a lot thicker back then, the racial tension. When I was a kid, people cheered when you saw a black person on TV. So there were a lot of stereotypes and the floor when I worked on it was extremely racist, extremely, racist and sexist. They wouldn't hire women. I wasn't a woman, but they would be like, yeah, we don't hire women, they cry. It was openly said.
And there were a lot of views about different people. I'm not saying this to riot or whatever, but the one benefit of that was that people had opinions of me growing up that had nothing to do with me. So what I got from that, the superpower I got from that was not caring what other people think. Because you already think what you think. Like, I'm like, I don't care. It's like, yeah, this is what they think of us. This is what they think of me. This is the guy teasing me on the floor always doing.
So when you don't give a shit what other people think, it's a superpower. It allows you to attempt things and do things because you're not afraid of the judgment of others. Most people that I encounter in my experience, they don't try something, not because they can't take the financial risk. It's because they can't take the ego risk from the judgment of others or the ego risk of the judgment of their own ego, telling, oh, you're an idiot. You know what I mean? That type of thing.
Those two things really freeze people from attempting great things or risky things. So that's kind of where I got it. That's where I'm kind of like, I don't give a shit about looking like a clown. You know what I mean? You already think I'm an idiot, unintelligent, whatever it is. What do I have to lose here? That superpower I think is something that I got growing up on the East Coast in post-civil rights in that period.
Willy Walker:
It's so fascinating. It's so great. I want to tell a quick anecdote from an engagement I had in the last month. I spent a bunch of time with senators and congressmen and women and mayors and people of that nature. One of my friends who's a political leader who will remain nameless because of the anecdote, but had had a tough time kind of getting going in the role that he's in. I asked him recently, I said, when was it when things kind of shifted for you?
Because it looks like what you're doing and the path you're on is so much clearer today. He looked at me, he went, I stopped worrying about what people thought about me. He said, as a politician, I always was worried about where the polls were and where people were saying you're doing right or you're doing wrong.
He said, the moment that I gave up on having people hate me, having people say that they didn't agree with what I was doing and I got to focusing on what I thought was right, freed me up to actually start pursuing that vision. It's made me a much better leader. I was like, if you read the polls too much, it's going to hold you back from doing what you need to actually go do. Clearly you figured that out at an early age.
Bill Perkins:
Yeah it was kind of luck. It's usually unlucky to be in that situation, but it was like luck to get that out. The job of worrying about what other people think is a more than full-time job. It's in your head constantly. It paralyzes people.
Willy Walker:
Let me jump into what your survival number is. The book talks about what your survival number is, what number do people need to calculate in their survival number?
Bill Perkins:
This is a number of things like food, shelter, and health. Like just to maintain yourself. Like the basic necessities. And that's dependent on where you live, like surviving in Des Moines, Iowa or Denison, Iowa is totally different than Jersey City, New Jersey or Manhattan or Brooklyn. That is not my choice, not my entertainment, not my movie, not whatever. But like I read books from the library for free. I feed myself and I have shelter and health. The reason why is like after your survival number, everything is your choices. It's like, what do you want out of life?
Willy Walker:
Once you've gotten to your survival number, in the book, you talk about, first of all, trying to get people out of the thought of you've got to have this great nest egg because you're going to live longer than you're actually going to live. You're going to need more money at the end of life than you're actually going to need. Also you've got that trip to exactly your point previously if you've got that trip to China planned for when you're 82 years old. But by the time you're 82 years old, the knees and the back aren't working to the point where you want to hop in that plane and travel for all that distance to go to China and you're not going to spend that money.
Once someone gets to that survival number and says, okay, now I need to use this money more effectively. One of the points you make in the book that I find to be so interesting is about giving money away earlier when it actually has an impact on the lives of the people you're giving it to, rather than waiting until it really doesn't impact their lives.
A perfect example is in my situation, my parents have been unbelievable as it relates to being extremely proactive on giving away their wealth when it can be used by the people it impacts and not waiting until they, my parents thankfully are both still with us. My dad is 87, my mom is 84. But if I were to inherit some money from my parents, and fortunately I don't need to wait for that, but if I were to inherit it when I was 65 or 70 years old, it's not going to impact my life.
My kids are already through college. I've already made the investments in a second home or an experience or a life. Maybe I will go on some vacation because I've inherited some money when I'm 65 years old, but it's really not going to impact my life.
Whereas getting that money when I'm paying for my kids' school tuition, getting that money when it might make the difference between having the home I want to live in and the dream home that I can actually now afford, that really has a huge impact. How did you get to that? Because that message in the book of estate planning and giving money away earlier, I found to be just so incredibly compelling because so few people do it.
Bill Perkins:
I’ll go two parts. One, the data is overwhelming that those who save, save too much. People's net worth is rising when they're 72. I'm just like, that's interesting. When's the party? What are we saving for here?
I always ask my friends, when's the party? That's okay, you can save whatever, great investment, 20 year investment. When's the party? Like, what are you saving for? Savings is delayed gratification. When is the gratification?
Who is it for? So the same physics that governs my body, governs everybody else's body, governs our children's body. Our ability to use money to a human declines with age because of their physical decline. Your ability to convert that money into experiences, it starts to decline till it goes to zero, till you're on your deathbed. Like I can't ski anymore. I can't wake up surfing anymore.
I can't my back, whatever. Like our lung capacity shrinks, our mental acuity sinks, our bone density goes down. So even just our attitude, you just don't want to do certain things.
I could still go to the club and glow sticks and rave, but I don't want to go to the club as much and glow sticks and rave. So that applies to my children, too. Like they will reach a peak mental acuity at 28 and physical maturity at 33 and then they plateau and decline. So if I’m going to give them a gift, just on that alone, their dollar at 30 is much different than a dollar at 55, 60, 65. Just in their ability. You can give them $2 at 65 and it doesn't buy the same amount of experiences because certain experiences are off the table and certain experiences are unenjoyable.
Aside from also the life ordering impact, like this is when they need it. This is when it's going to have the most impact, etc. So the question is, is like, okay, I love my kids and there's a certain amount of money I want to give them.
When is the best time to give it to them. That's intentional living. That's not autopilot. Like, oh, whatever happens to be left over when I die. Okay. I reason it’s between 28 and 33, no later than 33, period, end of sentence, for any reason whatsoever. Either you're not giving it to them or you're giving it to them at 33.
Willy Walker:
And you don't think that there's a risk, as somebody who has hustled as hard as you have to create the life that you've created. One of the big sort of conflicts in the thinking that you just said that I got from all of my friends in YPO, when I was in YPO, and would go to my YPO forum, we'd all sit around and say, what's the perfect day to the model that you talked about of, I want a computer model to tell me how to live this life balance. The question that always would come up in my YPO forum discussions was how much money do I leave my kids and when do they get it? Everyone who would ask that question would sit there and say, if I give them too much too early, they're going to get lazy, that they're not going to like pursuing the dreams that I'm expecting them to pursue. They're not going to have that grit that got me what I got. So as a result of it, I've got to hold back rather than give up. How do you reconcile that?
Bill Perkins:
I'm going to answer this one pretty harshly. Two points. One, the dreams I expected of them. You're trying to control somebody. You don't love somebody.
You're trying to control them. They get to live their own life. I say that very harshly. You want to control somebody with money or whatever, that's your choice. You can do that, but that's not me.
Two, if you haven't given the tools and trained your kids by the age of 33 to handle those tools, give up. It's over. They're in their life. They're adults now.
They're not kids. You expect somehow at 45, that's going to be the right time. Give up. Check the job that you've done prior.
The question is, you're going to give a gift. It's a gift. To your kids. you're like, the amount, you can figure out the amount, whatever amount you want to give. But the timing is unmistakable to me. These are adults now.
They're not really, they're your kids. They're your young adults. We call them kids because they own them. But nobody looks at them like, hey, kid. These are grown men and women.
There's no retraining. You're not even going to spend enough time with them to train. 80% of the time you spend with them is like age 14. Are you going to move in with them and live upstairs? You guys are going to have eight hours a day on training how to use money and whatever you want to do and the tool at that point? Like what fairy is going to come from outer space to teach them the lessons so that you want to give them the money?
I'm like, listen, at that age, they get to make their own mistakes, live their own adventure, choose their own ride. If you don't want to give them the money based on the choices that they want to make for their life, don't give it to them. 65 when life is pretty much over. I'm 57. I'm looking at my death clock. 75.6% of my life is gone. Do you want to wait?
Willy Walker:
That gets to longevity because you spend a lot of time and a lot of money on longevity. What's your personal goal now as it relates to what age you live to?
Bill Perkins:
I mean, obviously if I could live to 150, I want to live to 150.
Willy Walker:
Like you have an explicit goal. I've got an Instagram account that's lived to 120 and I'm very focused on trying to live to 120 years old.
Bill Perkins:
I mean, if I could make it 120, but my realistic number right now, current technology, things I'm going to do, adjusting for wealth, the actual terrible tables will say 86, 87. That's what that number is up there. But if you go and adjust it for wealth, my current diet, things that are going on, my VO2 max, it's probably like 95, 96.
I am just as hopeful as the next guy on small molecules and all the things that are coming out now that would get me to 120. But that hope is not a plan. Hope is not a plan. So the mental models and they're not static. Like if I'm 75 and I'm looking good and running and healthy and the numbers, you adjust. Like you're constantly, this is a daily, monthly, weekly adjustment. Like, so the day you live changes the odds. If you make it to 86 it changes the odds on whether you're going to make it to 96. You live at 96, change the odds, you can make the 106 and so on.
The model is continuously updating. Like I said, I'm hopeful and I'm doing the things to get there with you. But that's not the plan. I don't say, hey, I'm not going to go skiing with my friends right now. I'm going to save that to 120 or 119, 110. I have to model my life, model what time period, what I'm going to do in each time period of life based on current science and technology.
Willy Walker:
Your daughters are relatively young as it relates to having a conversation on your net worth, how much they should expect to get. But how do you frame that discussion, Bill? I have a very good friend of mine whose father-in-law is wildly wealthy, wildly, wildly wealthy.
He and all of his brothers and sisters-in-law have absolutely no insight, no insight whatsoever into what they're getting, when they're getting it, how much they get, nothing. They're all in their early 40s and late 30s, and they have no visibility into what's coming their way. I, and I sit there and I just go, are you kidding me?
Like, literally, there's like no transparency whatsoever. You're going to get this at this point or whatever else. It's just baffling to me. But there are actually tons of people who are like, oh no, I can't show my kids how much they're going to get or when they're going to get it. What's your plan as it relates to that type of transparency?
Bill Perkins:
They know, right around 21, they get a very small amount of trust that I sent, and I want to train them on the tool. I figured like, it's really hard. Like, I'm an average parent. I'm not the guru. The people, it's like, I didn't train them well to be like, oh, 21, like you're on top of it. But what I have now is nine years to train them on the tool, to give them exposure.
Here's your own money. They'll probably light it on fire. Here's here's investment. Here's getting in touch with the things you want. Here's thinking about the next year. Here's thinking about what in your thirties, like what will happen. So that when the true inheritance comes at 30, that they have the skills to use the tool according to what they want to do. So my goal was to raise strong, independent, kind, loving women, so that they can navigate the world on their terms, not my terms. Then I'm going to hand them this tool. I want to make sure that from age 21 until 30, that they know how to use the tool. Then they'll cut their own heads off with the tool. Like they don't, they don't destroy themselves with the tool.
I think at 21, they need to know like, hey, this is coming. You're going to have a substantial estate. We need to practice. We need to be talking about things. You need to understand the concept of future present value and net present value. You need to understand the impact it has on you and your interpersonal relationships. You need to understand what you really want, not what's marketed to you. Out of life. You need to understand how quickly it can go. You need to understand all these things. So I figure I have nine years to train them for the handoff, for the mandatory handoff date.
Willy Walker:
It's fantastic. The one thing is that, there are a lot of people who are listening to this who are yours and my age. There are also a lot of people who are listening to this who are in their 20s and 30s who are trying to figure out sort of how do you, how do you plan towards these things?
We were really fortunate to A, invested in UTMA accounts for our kids decades ago and just put a small amount of money into the UTMAs and the UTMAs kept then growing and growing and growing because they just sat there. One thing that your book talks about and I can't underscore enough to people who are listening to this is just the compounding effect of wealth is undeniable. Just put it away, leave it, don't touch it and it will grow.
Bill Perkins:
That's the small amount that transfers to them when they're 21, is there—
Willy Walker:
And it's 21 and it's forced. All my kids, my second kid just turned 21 and he just got his UTMA account. The other one is 529 accounts as it relates to saving for college. We were fortunate enough to put money away in 2010 when Walker & Dunlop went public to fund 529 accounts.
Now I've got three kids, one who just graduated from college, but when I've got three kids in college, I don't even think about it because it's already pre-funded because we funded the 529 account. Those are those types of things that will make a huge impact as it relates to how much money you can then end up giving your kids later on because you've saved for it and you've had it compounding itself over time by just putting a certain amount of money aside to be able to pay for that.
So those are two things at 59 years old that I look back and say, hey, that was really smart to do that back then when you weren't kind of thinking about funding college educations or to your point, when they turned 21, having a forced, if you will, sum of money that comes to them for them to start engaging and managing it and either spending it or saving it, which I've watched my now 22 year old son not touch the money he got at 21.
I sit there and go, that's kind of cool that he was going to go on vacation last summer with his girlfriend and he's sitting there fishing around for some economy class ticket on a long haul flight. I said to him, Jack, you can use that money to go buy business class. He looks at me like I'm from outer space.
He's like, why would I ever use my money to upgrade? We can hang out in economy on the way to Chile. We're just going to fly down there, dad. I got some really good seats. I'm like, that is, to your point, that's wonderful for me to see is him being able to have that money and he's not just out buying the fancy car, if you will.
Bill Perkins:
Yeah, yeah, I worry with my daughters that they'll try and use me as like, use my money and keep that going on. I do want them to experiment with like, hey, was that experience worth it? Or did I like it? Was that upgrade worth it?
Was this trip worth it? I had to learn the hard way. Maybe they've learned from my mistakes.
I also did the 529 plan. I reasoned, I did the prepay one. It's like the universal one for schools. I reasoned that I take enough risks that I can't have investment risks, but I can prepay and buy four years of college at the most expensive school in this plan. That'll cover every single school and every single school that gets added. I don't have to worry about it. If I go dead broke, my kids still go to college. So I separated that out as well. I just wanted to point that out, that that's a good plan, those 529 plans.
Willy Walker:
What's been the most rewarding either feedback, commentary, or life change that you've seen since writing the book in the sense that you've clearly gotten people who've said, whoa, it opened my eyes. I've done this, I've done that.
What's something you've gotten back as feedback, Bill, that sort of said, man, that makes me feel really good that I stopped and spent the time and gave my gift of my insight on this to others. What have you gotten back on?
Bill Perkins:
I get a lot of that. Both DMs or Twitters or people stop me. The book is about, in all copies by probably last year, 2 million people will have read the book in some form, listened to it or read it. Then I've done like, I think 54 podcasts on it or more. But I think one of my favorites is that we told our grandparents that their sole job is to quit work, their sole job is to hang out with their grandkids. We had to convince them. They convinced their grandparents, you're coming down and you're just going to hang out with your grandkids. So this was a younger couple that had means and they're like, what are we doing? Why are my grandparents working? They thought about what they wanted in the arc of their life and their family unit. It was like, this is what we're going to do.
But I've had tons of, I retired, I quit my job, I moved these things. I'm taking a group that I never would have done. I brought my whole family and we had this experience. I've had the founder of Picasso become like my Peter to my church.
This is just the wildest story. I was going to visit a friend in Boulder and he's at their house. He's like, what do you hear? He goes, I'm going to a Goldman Sachs conference. I go, great, like, what do you do? Yeah, I'm going to go talk about Die With Zero. He brings like a bunch of books and he talks about Die With Zero, Goldman Sachs conference, because it had such an impact on his life and he shares it. Then two weeks later, somebody from Goldman Sachs is like, yeah, I found out about your book. It was a great book.
It's kind of this radioactive thing that's kind of impacting people's lives in different ways. That makes me happy because I didn't write the book to get rich or get famous. I don't want to be that guy.
I wrote the book to save my life and I wanted the message to get out so that people can have a more fulfilling life. But I don't want to be like the Suze Orman of Die With Zero, or the Dave Ramsey, because that would just ruin my life. Like you don't want to get too famous. Like you just don't. Being famous would rob me of the things I like doing. It would actually be less fulfilling. And nobody writes books to get rich. Nobody, unless you're like Obama or somebody who's really famous, they give you a big advance. That is great because it's like, oh, the book is on mission. Like it's accomplishing its goals.
Willy Walker:
Very much so. Bill, you literally save lives every day by having written the book that talks to people. The anecdote you used as it relates to saving a life about allowing people to continue to experience this world that we're in is just fantastic.
I'm super appreciative of you spending an hour, which is worth a ton of money to talk with me on this podcast. I'm just super thankful for it. Thank you for the book. Thanks for your thoughts. I hope the two of us can get together at some point and either go do a workout together or just talk about dying with zero.
Bill Perkins:
Yeah, I appreciate it. Thanks for having me. We should go wake surfing instead.
Willy Walker:
I'd love it. It'd be great. I'm actually looking out at the Potomac River right now and there's actually somebody on a foil on the Potomac and they're zipping around in front of me and I'm sitting there going, I just hope they don't fall on the river. It's great, Bill. Thank you so much. Thanks. Have a great day.
