Here’s the point: Too many of us still view ourselves on an ongoing basis as being in our twenties, even though our real age is somewhere in our fifties, sixties, or even seventies. While it’s admirable to view oneself as “young at heart,” it’s also necessary to be more realistic and objective about your body and how it’s aging. You have to be mindful and aware of your physical limits, and how they are steadily encroaching upon you as you get older, whether you like it or not.

  I first started thinking about these things after that time I gave my grandmother $10,000 and discovered she just couldn’t spend it. All she really wanted to buy at that point was a sweater for me. I started noticing the same kind of thing with other older relatives, and I thought, These are my ancestors, so I’m probably going to be that person, too, at some point. And it occurred to me that everybody becomes like that eventually. As you get older, your health declines and your interests gradually narrow, just as your sex drive diminishes. Your creativity usually declines, too. And when you’re extremely old and frail, no matter what your level of interest is, just about all you can do is sit and eat tapioca pudding. At that point, money is useless to you, because all you need or want is to lie in bed and watch Jeopardy. This was my conclusion: The utility, or usefulness, of money declines with age.

  It was also clear to me that the decline doesn’t start from birth. When we’re infants, we get very little enjoyment out of money. Babies are expensive to take care of, true, but it’s not like they get a lot of enjoyment from spending money. When you’re a baby, there’s no greater happiness than Mom and the crib. In a way, the amount of utility that babies get from money is very similar to what the elderly get. Money is nearly worthless at the very beginning and the very end of life.

  What happens in between? When I was back in my twenties, I could always find new things to do with money. Cash in your twenties has a lot of utility. So when I looked at these three points—the baby, the twenty-something, and the old person—I realized that there must be a curve. In other words, if the horizontal axis on a graph represents your age, and the vertical axis represents your capacity to enjoy life experiences that money can buy, then if you were to plot your potential enjoyment by age, you would see some kind of curve. Think of it this way: Given the same amount of money each year (let’s say $100,000), you will be able to extract a lot more enjoyment out of that money at some points in your life than at others. The utility of money changes over time, and it does so in a fairly predictable way: Starting sometime in your twenties, your health very subtly starts to decline, causing a corresponding decline in your ability to enjoy money.

  Ability to Enjoy Experiences Based on Health

  Everyone's health declines with age. Wealth, on the other hand, tends to grow over the years as people save up more and more. But worsening health gradually constrains your enjoyment of that wealth as more and more physical activities become impossible to enjoy, no matter how much money you can afford to spend on them.

  This thought immediately suggested practical implications: If your capacity to enjoy life experiences is higher at some ages than others, then it makes sense to spend more of your money at certain ages than others! For example, because $100,000 has more value in your fifties than it does in your eighties, and your goal is to maximize your enjoyment of your money and your life, it’s in your best interest to shift at least some of that money from your eighties into your fifties. For the same reason, it’s in your best interest to shift some of it to your twenties, thirties, and forties, as well. Making these kinds of conscious financial shifts essentially creates a lifetime spending plan that takes into account the changing utility of money.

  Whenever you shift in order to spend money, you are necessarily also shifting when you save. So, for example, instead of saving 20 percent of your income throughout your working years, some people would be better off saving almost nothing in their early twenties (as we’ve discussed), then gradually ramping up their saving rate during their late twenties and thirties as their income begins to rise. Then they should save even more than 20 percent in their forties—and then slow down their savings so that eventually (as I explain in the next chapter) they actually start outspending their earnings.

  Notice that I am being careful to say that some people would be better off doing that. Everybody’s situation is different. For example, some people’s favorite activities, such as mere walking, are inexpensive; others don’t require tip-top physical health. How much you should save also depends on how fast your income grows from year to year, where you live, and how fast your savings grow. Because of all these variables, and all the possible combinations they produce, there is no one-size-fits-all rule.

  There you have it: It makes sense to spend more of your money at some ages than others, so it makes sense to adjust your balance of spending to saving over the years accordingly.

  The Real Golden Years

  We’ve all been told—like so many hardworking, diligent ants—that we need to save up our money for our “golden years” of retirement. But ironically, the real golden years—the period of maximum potential enjoyment because we have the most health and wealth—mostly come before the traditional retirement age of 65. And those real golden years are the years during which we should be doing most of our spending, not delaying gratification.

  Too many people are making the mistake of investing in their future well past the point when those investments will ever pay off in ways that increase their overall lifetime fulfillment. Why do they persist? I think a lot of it is just the inertia (or, as I call it, autopilot) of doing what’s worked in the past. Sometimes it’s better to spend now, and other times you’re better off saving up (and investing) your money for a potentially better experience in the future.

  At the extremes, this is easy to see: Obviously, if you keep hoarding your money and don’t spend any of it, your fulfillment curve will be minimal. And if you spend all your money now, you won’t have any for the future. It’s the Ant and the Grasshopper as I see the fable: There is a time to work (and save) and a time to play, and the optimal life requires planning for both survival and thriving. The grasshopper is so focused on thriving, on enjoying himself in the moment, that he forgets about survival and ends up living too short a life. But the ant is also making a big mistake: As a result of his hard work, he will live to see another year, but he is so preoccupied with survival that he doesn’t get to enjoy summer and thrive. Neither extreme optimizes for lifetime fulfillment.

  Understanding that moral is one thing, but putting it into practice is a different story. At any one point, it’s not easy to know which way to go. The optimal balance between saving and spending is not obvious at all. If you’ve spent decades dutifully saving and investing your money, it can be hard to stop—assuming you’re even aware that you should stop.

  So what do you do? How do you achieve more balance in your life? I suggest several ways of thinking about the problem. Depending on who you are and how you think, different ones will resonate with you.

  Balancing Health, Money, and Time Across Your Life

  Think about the three basics people need to have to get the most out of life: health, free time, and money. The problem is that these things rarely all come together at once. Young people tend to have abundant health and a good deal of free time, but they don’t usually have a lot of money. Retirees in their sixties, seventies, and beyond—the other end of the spectrum—have abundant time (and often more money than young people), but, unfortunately, they have less health, and thus a diminished ability to enjoy the time and money they do have than the young do.

  What happens in between these two extremes? I think of this period as the real golden years because it usually includes a good combination of health and wealth. For example, a 35-year-old is still healthy enough to do most of the things a 25-year-old can do but typically earns a lot more. A 40-year-old (and, even more so, a 50-year-old) generally has slightly worse health than a 30-year-old but still has a pretty high degree of health—and, generally, a higher income than either the 25-year-old or the 35-year-old. So people in these middle years—neither very young nor very old—typically have a different problem: They face a time crunch, especially if they have children at home. This time crunch is their biggest obstacle to having positive life experiences. Not that children don’t bring plenty of positive life experiences—they do—but between changing diapers, driving to various lessons and practices, and taking care of a larger household, there’s just less time for other experiences. The same is true if you don’t have children but find yourself working longer hours earning money than you did in your twenties.

  To get the most positive life experiences at any age, you must balance your life, and this requires you to exchange an abundant resource in order to get more of a scarce one.

  Shifting Balance of Health, Money, and Free Time

  Each age tends to have a different balance of health, money, and free time. Because fulfillment requires reasonable amounts of all three, it’s a good idea at every age to trade an abundance of one (such as money) to attain more of the other two (such as buying more health or free time).

  Every group already does this to some extent, though I believe they often get the magnitude wrong. Specifically, young people exchange their abundant time for money, sometimes to a fault—they should prize their free time more than most do. Old people spend a lot of their money trying to improve their health or to at least fight disease. People in the middle years sometimes trade money for time—and the more money they have, the more of it they should be using to buy time.

  Most working people focus too much on getting more money. Let me explain why focusing on health and free time will yield more personal fulfillment.

  Why Your Health Is More Valuable Than Your Money

  Nothing has a greater effect on your ability to enjoy experiences—at any age—than your health. In fact, health is actually a lot more valuable than money, because no amount of money can ever make up for very poor health—whereas people in good health but with little money can still have many wonderful experiences.

  And that’s not just true in the extreme case of terrible health. Just being significantly overweight can put a damper on your enjoyment of life, if only because of all the extra pressure additional weight puts on your knees. I’ll bet you know people who, because of bad knees or weak muscles or just self-consciousness about their bodies, avoid many experiences that others around them take pleasure in, such as hiking or ziplining or delighting in the water and the sun on the beach. Or they go on the hike with everyone else, but they’re huffing and puffing, really struggling to eke out any kind of enjoyment out of this potentially fun activity. Some of these people might even have been athletes when they were younger; it’s just that when they stopped being physically active, they continued to pile on the calories until they were 30 or 50 pounds overweight. It’s easy for that to happen, especially for people with jobs that consume most of their waking hours and energy and require sitting in front of a computer screen all day. And to what end? When the demanding job finally brings you financial success, do you still have the key ingredient (health) for enjoying that success?

  Healthcare providers understand this problem better than most of us, just because of the many suffering patients they see. But even people working in healthcare aren’t immune to neglecting their own health. Let me give you just one example, this one with a happy ending. Stephen Stern, a chiropractor in Massachusetts who went public with his own decades-long struggles with weight, had been treating aching patients for decades and yet allowed his weight to yo-yo. He’d take up exercise and lose some weight, but then he’d stop exercising and gain all the weight right back, losing whatever physical fitness he had worked hard to achieve.

  When Stern was 59, he finally realized he couldn’t let this pattern continue—not if he wanted to avoid the fate of his less fortunate patients. As an article about him put it, “he’d seen patients his age and younger who’d lost the ability to do things they loved—not just through injury or illness, but often through simple neglect of their bodies. He knew that when people at this stage of life lost physical capabilities, often they never got them back.”

  So Stern was determined to become fit again before he turned 60. This time he took a more gradual path to fitness than he had in the past; his body could no longer take the intense training regimens he’d put himself through in his younger years, but he could still regain a great deal of fitness through walking and calisthenics. And this slow but steady approach worked: His old knee pains disappeared, and by age 66 he found that he could perform impressive feats of strength and balance, like a bent-knees handstand. His efforts at improving his fitness paid off in renewed confidence and competence—and in joyous experiences he wouldn’t otherwise have, like summiting mountains with his daughter. Though he can now do things most 30-year-olds cannot, he knows he’s never going to be as fit as a fit 30-year-old. What he’s actually accomplished is peak health for his age. “I’m an older man and I move the way an older man can move!”

  Stories like Stephen Stern’s are inspiring—we all want to hear that it’s never too late. But that’s not why I’m telling you the story. The reality is that sometimes it really is too late to reverse decades of neglect and abuse, something Stern understood. And even when it’s not too late, it’s always better to have started investing in your health earlier. What I’m really trying to get across is that improved health improves everything in your life, makes every experience more enjoyable, at every age.

  In our three-pronged model—where fulfillment from a single experience is a function of health, money, and free time—health is the single biggest factor (or multiplier) affecting the size of a person’s lifetime fulfillment curve: Our simulations show that even a small permanent reduction in health at some point in a person’s life amounts to a large reduction in the person’s lifetime fulfillment score.

  Why would that be—why does health affect lifetime fulfillment more than either free time or money? When adjusting the health input, we are adjusting the rate at which your body will decline. How fast your body’s health declines depends on how in shape (or not) you are now. So if you are 2 percent from optimal health now, you may be 20 percent from optimal health 10 or 15 years from now. Basically, there is a compounding effect to being in poor health. I don’t claim to be a doctor, but here is an example of how I see it working, and how it impacts your enjoyment of activities.

  Let’s say you are 10 pounds overweight. That doesn’t seem so bad at first, but each pound of excess weight means four extra pounds of force on your knees. Ten pounds of excess weight is equivalent to 40 pounds of excess force your knees were not designed to handle. Naturally, over time, the cartilage in your knees will deteriorate and tear, and perhaps your bones will start to rub against each other. Your natural shock absorbers have been worn out, making it painful for you to walk for any extended period, and running is pretty much unbearable. This leads to more weight gain and other associated problems. It’s no wonder that knee replacement surgery is one of the fastest-growing surgeries in the USA, closely tracking the rise in obesity. In any case, that seemingly inconsequential ten pounds ballooned via compounding into other serious health problems and a lack of enjoyment of activities associated with walking.

  As I’ve stated before, movement is life, and your experiences will be greatly diminished when your movement becomes painful or limited. There are many paths of decay until we ultimately die. We all wish to have the greatest physical function until we die, yet many of us will have greater exponential decay at an earlier time in our lives—resulting in lower ability and lower enjoyment—as a result of how we have treated our bodies. Einstein supposedly called compound interest the greatest force in the universe. Small changes in health can lead to a negative compounding that has enormous impacts on your lifetime fulfillment and experience points.

  The good news from all this: If you take even small steps to improve your health now (improving even 1 percent and avoiding the negative compounding effects), you will have vastly increased your total experience points.

  There’s a clear implication in this observation, and it’s one you’ve doubtless heard before: People of all ages should be spending more time and money on their health. No age group spends more on health than the elderly, whose healthcare spending aims to treat degenerative diseases, manage pain, and prolong life. But earlier investments in health would actually yield greater lifetime fulfillment. Preventive steps like eating right and strengthening muscles helps you keep your health as high as possible for as long as possible—and makes every experience more enjoyable. I’m not just talking about being able to ski into your seventies instead of having to settle for shuffleboard, or playing tennis instead of pickleball. No, even simple, everyday activities like walking up and down stairs, getting up out of a chair, or carrying bags of groceries become easier and more pleasant when you’re physically fit and not carrying around excess body weight on weak bones and muscles. Just think: How quickly you get tired on a day of sightseeing, snowboarding, or playing with little kids will have an obvious impact on how much enjoyment you get out of that day. Now multiply that out to all your future potential days of such experiences!

  This is why I love making prop bets tied to health goals—the kind where I’ll bet a ridiculous amount of money that a buddy won’t manage to run a marathon or won’t be able to lose a certain amount of weight. I’ve made more of these kinds of bets than I can count, and I think they’re great, because the value of attaining a big, life-changing health goal far exceeds the money at stake. A recent favorite (despite the fact that I lost the bet) involved two young guys I know from the poker world, brothers Jaime and Matt Staples. At the start of the bet, Jaime was obese, and had made no secret of his past attempts at weight loss—whereas Matt was a bit underweight, and he wanted to build muscle. To motivate them both to move toward their goals, I placed a single bet: The pair would get a large sum from me if, in exactly one year, they reached the same weight (technically, within one pound of each other).