Like me, Jason knows he timed that European trip exactly right. “I wouldn’t enjoy sleeping in a youth hostel with 20 guys on a shitty bunk bed now, and I wouldn’t enjoy carrying a 60-pound backpack around on trains and through the streets.”

  But unlike me, he actually took the trip, so he doesn’t have to live with second thoughts. In fact, despite the high-interest loan, he has the opposite of regret about the expense. “Whatever I paid, I feel it was a bargain because of the life experiences I gained,” he tells me. “You can’t take those away, and I would never have them erased for any amount of money.” What he gained from that trip, in other words, is priceless.

  Back when Jason first decided to take that trip, he was flying by the seat of his pants. He wasn’t planning out his whole life and consciously deciding to invest in experiences when he was young. In a way, he was lucky that his instincts led him to such a great decision. But more typically, instincts aren’t enough, and they often steer us the wrong way. My aim throughout this book, on the other hand, is to make you much more deliberate in your life choices—to use data and reason to figure out what to do. That’s how you’ll make the best decisions. And in this chapter, that means showing you how to think about your life experiences in a more quantitative way than you’re probably used to ever doing.

  The Business of Your Life

  The main idea here is that your life is the sum of your experiences. This just means that everything you do in life—all the daily, weekly, monthly, annual, and once-in-a-lifetime experiences you have—adds up to who you are. When you look back on your life, the richness of those experiences will determine your judgment of how full a life you’ve led. So it stands to reason that you should put some serious thought and effort into planning the kinds of experiences that you want for yourself. Without that kind of deliberate planning, you’re bound to just follow our culture’s well-trodden, default path through life—to coast on autopilot. You’ll get to your destination (death) but probably without having the kind of journey you would have actively chosen for yourself.

  Sadly, that is how too many people spend their lives. To switch metaphors: They build a well, they get a pump, and as the pump pumps water into a cup, the cup quickly fills, so the water starts overflowing. They take a sip and they keep pumping. And at the end of their lives, after a lifetime of pumping, they see that they’re still thirsty. What a waste! Imagine the regret you would feel if you got to the end of your days only to realize you haven’t managed to live a life full of satisfying experiences. In the wise words of Carson, the butler of Downton Abbey, “The business of life is the acquisition of memories. In the end that’s all there is.”

  That sounds really nice, but it’s also the sort of thought that tends to go in one ear and out the other. You hear it, maybe nod approvingly, and then go back to business as usual. Toward the end of my father’s life, though, this idea that life is about acquiring memories really hit home.

  Dad could not have enjoyed any kind of vacation at that point—his physical ability was greatly diminished, and travel would have posed too great a risk to his life. Instead I gave him a shamelessly sentimental gift: an iPad full of memories. As a college student, he had played football for the University of Iowa, including 1959, the year the Hawkeyes won the Rose Bowl. So I took a highlight reel from that glorious season, had it digitized, and put it on the iPad. We’re always reliving parts of our lives through memories, and I figured that this format would make the memories more vivid and easily accessible to him. Sure enough, he loved it. As he sat holding the iPad and watching the video, he laughed, he cried, he reminisced. Too old to acquire significant new experiences, he could still derive great enjoyment from the highlight video. In fact, he thought it was the best gift ever. That was when I realized that you retire on your memories. When you’re too frail to do much of anything else, you can still look back on the life you’ve lived and experience immense pride, joy, and the bittersweet feeling of nostalgia.

  Between the Ant and the Grasshopper

  The idea that you retire on your memories runs completely counter to most of what we normally hear about retirement. As workers in the United States, we’re constantly getting the message that we must save for retirement, that we need to regularly sock money away into a 401(k) plan or IRA. That’s just the grown-up version of lessons we learned as kids about the need to save for a rainy day.

  The best-remembered variant of the fable of the Ant and the Grasshopper, for example, has the ant sitting pretty (and pretty smug) after harvesting his grain, while the grasshopper goes hungry after spending his whole summer playing. That retelling leaves no doubt about which of the two insects had done the right thing, and it sure wasn’t the fun-loving, shortsighted grasshopper.

  But don’t get me wrong: My point isn’t that we should be just like the grasshopper, failing to save for the winter of our life, or that any amount we spend on experiences is worth it because experiences are the stuff of life. That would be foolish. What I’m saying is that our culture tends to overemphasize the virtues of the ant—of hard work and delayed gratification—at the cost of other virtues. As a result, we fail to appreciate that the grasshopper was onto something, too. So, yes, the grasshopper would be better off to save a little—and, yes, the ant would be better off to live a little! I’m here to bridge the ant and the grasshopper, to help you find the right balance between the two. In fact, the stated moral of my favorite version of the fable is just this: “There is a time for work and a time for play.” In a later chapter, I will present actual tools to help you figure out the right time (and the right amount of time) for work and for play—for earning money and for spending it.

  What’s an Experience Worth?

  Earlier I said that life is the sum of all experiences. Well, I wasn’t just speaking figuratively: If you were to put a numerical value on each experience, you could then actually add up the value of multiple experiences. Doing that makes it possible to compare bundles of disparate experiences, which is a step toward maximizing your lifetime fulfillment.

  How do you place a numerical value on an experience? For starters, think about the enjoyment you get from each experience in terms of points, like the points you’d earn in a game. Peak experiences will bring you many experience points. Small pleasures will get only a few points. How many points you assign to an activity is totally up to you, because everybody’s values and interests are different. Some people like nothing more than tending their garden, so they would say that every day they spend gardening gets a high number of points. Other people would say you’d have to pay them to prune plants or pull weeds, so for them any time spent gardening would get zero points. (There are no negative points in this system.)

  If you take all of your positive experiences from a given year—say, last year—and add up their point values, you get a number (for example, 5,090 points). You can represent this number as a bar on a bar chart. The higher the number, the higher the bar. It’s as simple as that.

  You can do the same for every year of your life so far. Some years are better than others, for various reasons, and some of these reasons are out of your control. (If an accident left you confined to a hospital bed for 12 months, for example, you probably wouldn’t have many enjoyable experiences that year.) But this book focuses on managing what is under your control through the decisions you make—so realize that a few factors are in your control, and one of the biggest is how much time at each age you devote to earning money versus having enjoyable experiences. It’s just like the work-play trade-off faced by the ant and the grasshopper. As you take control of these decisions, you change the heights of the bars and therefore the shape of your curve. We’ll talk more about how to make these trade-offs later—for now, I just want you to understand that I literally mean that life is the sum of your experiences.

  Example of a Fulfillment Curve for a 7-Year Period

  Each bar represents the number of experience points for one year. All the bars together help make up your fulfillment curve. So increasing your total fulfillment increases the area under the curve—and by shaping the curve, you shape your life.

  The Memory Dividend

  This chapter tells you to invest in experiences—but are experiences really an investment? I mean, it’s easy to see that experiences take time and money, and that they can bring enjoyment during the days and years you are having those experiences, which makes them worthwhile for that reason alone. But let me tell you why I say that they’re also an investment in your future.

  First, let’s talk about what an investment is. Most of us hear that word and right away think of the stock market. Or bonds. Or a portfolio of different investments, such as stocks, bonds, and real estate. What do all investments have in common? They are just mechanisms for generating future income. When you buy stock in, say, IBM, you are hoping that you will be able to sell the stock later for more than you bought it for or at least be able to earn dividends that IBM issues to shareholders, a teeny-tiny fraction of the company’s profits every year. Are you with me so far? The same with real estate: You buy a house that you think you can resell for a profit in a few years, and in the meantime you can rent it out and generate passive income every month, as long as your tenants pay the rent. If you own a business that makes widgets, and you buy a new machine that will crank out widgets twice as fast, with fewer defects, then the new machine is an investment in your business.

  Standard, right? Now think about how to extend this idea, which we do all the time without necessarily thinking about it in terms of investment. For example, let’s say you’re a parent paying for your kid to go to college or graduate school. Why are you paying tens of thousands each year? Because you think it’s worth it. You probably believe your son or daughter will graduate with the kinds of skills and degree that will help them earn a much higher income than they would without the university education. But maybe you’re skeptical that their degree will ever pay off: Let’s say your son wants to study Himalayan basket weaving, and you hear that robots are getting so good at making baskets that all those lucrative basket-weaving jobs are disappearing. In that case, you will probably be a lot less eager to write the big checks to the university. When you’re thinking about these things, you are making investment decisions just as surely as if you were looking at rental properties or factory machines to buy. Economists even call expenditures on education “investment in human capital.”

  So you see that you can invest in yourself or in other people. You do this whenever you think the investment will pay off in the future. Now, here’s a more radical idea: The payoff from an investment does not have to be financial. When you teach your daughter to swim or to ride a bike, it’s not because you think she’ll get a better-paying job with those new skills. Experiences are like that: When you spend time or money on experiences, they are not only enjoyable in the moment—they pay an ongoing dividend, the memory dividend I mentioned in chapter 1.

  Experiences yield dividends because we humans have memory. We don’t start every day with a blank brain, like characters in so many sci-fi movies. We wake up every morning preloaded with a bunch of memories that we can access at any time—mainly to get around and navigate the world. When you face a large rectangular panel with a protruding round knob, you don’t ask yourself, What is this thing? No, you know it’s a door. And you know how to open that door. So there’s a huge dividend from having once learned what a door is—think of all the doors you can open!

  That’s a silly example, but it really shows what memories do for us. They are an investment in our future selves, paying dividends and helping us live richer lives. You see the person making coffee in your kitchen and you don’t start from scratch with them, as if you’re meeting a stranger. You know this is a person you love, and you know why you love this person. All the history that went into your relationship, all your past conversations and shared experiences, built the current feeling you have toward this person.

  It’s the same thing when you’re investing in any experience. When you have an experience, you get that current, in-the-moment enjoyment, but you also form memories that you get to relive 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. You might hear a favorite song, get a whiff of a familiar scent, look at an old photo, and suddenly your memory’s triggered and you are reliving that experience. You think of your first kiss, and if that was a pleasant experience, then you might feel warm and fuzzy. Or you might chuckle because you had braces and the whole experience was embarrassing but also sweet. So every time you remember the original experience, you get an additional experience from mentally and emotionally reliving the original experience.

  The recollection may bring you just a tiny fraction of the enjoyment that the original experience did, but those memories add up to make you who you are. That’s why Jason, whose story I opened this chapter with, wouldn’t erase his backpacking trip through Europe for anything. It’s also why people keep photo albums—and why, if their house is on fire, they usually grab their albums before trying to save just about any other possession. In that moment of crisis, people quickly realize that, whereas material objects can be replaced, memories are priceless.

  The memory dividend is so powerful and valuable that tech companies are monetizing it and creating billions in wealth. Anyone who’s used Facebook or Google Photos has seen the occasional “On this day 3 years ago” message, with accompanying photos from that day. Through this feature, the companies tap into your memory dividend, sparking good feelings and a desire to reach out to those included in the photos. This whole process makes you happy—and makes you a more loyal customer. Before Facebook and the like, it used to be our friends and family who’d spark the “remember when” conversation—but now FB plays that role and cashes in financially on that all-important memory dividend. You can cash in on the memory dividend yourself, non-financially—but to do that, you first need to create those valuable memories.

  Think back to one of the best vacations you ever had, and let’s say it lasted a full week. Now think about how much time you spent showing pictures of that trip to your friends back home. Add to that all the times you and the people you traveled with reminisced about that trip, and all the times you’ve thought about it yourself or given advice to other people considering going on a similar trip. All those residual experiences from the original experience are the dividends I’m talking about—they’re your memory dividends, and they add up. In fact, some of these memories, upon repeat reflection, may actually bring more enjoyment than the original experience itself.

  So buying an experience doesn’t just buy you the experience itself—it also buys you the sum of all the dividends that experience will bring for the rest of your life.

  This becomes really clear when you think in terms of experience points—my way of quantifying how much enjoyment you got out of an experience. Remember how you can represent the number of experience points with a vertical bar? Okay, now think about that bar as just the beginning of the enjoyment you are getting from the experience. Because of the memory dividend, you also receive an additional little bar every time you recall the original experience. If you stack up all those little bars—all the ongoing memory dividends from an experience—you get a second bar that might be as tall as the bar that represents the original experience.

  In fact, sometimes the second bar is even taller. One way this can happen is through compounding, just like with money in the bank. Due to compounding, your financial savings don’t just add up—they begin to snowball. And the same thing can happen with your memory dividends—they also can and will compound. This happens whenever you share the memory of the experience with other people. That’s because whenever you interact with someone, sharing an experience you’ve had, that is an experience in itself. You’re communicating, laughing, bonding, giving advice, helping them, being vulnerable—you’re doing the stuff of everyday life. By having experiences, you not only live a more engaged and interesting life yourself, but you also have more of yourself to share with others. It’s like the idea that business begets more business. Positive experiences are radioactive and contagious in a good way; they start a chain reaction that releases more energy than you thought you had. One plus one can be more than two. That’s one of the reasons I say that you should invest in experiences.

  Example of a 7-Year Fulfillment Curve with Memory Dividends

  Experiences keep on giving in the form of fulfillment from your memories: Over time, the ongoing memory dividend can sometimes add up to more experience points than the original experience provided.

  But most of us are not used to thinking about investing in experiences—so if we are investors at all, we focus too much on the financial payoff of an investment. A good example is my friend Paulie, who a while back asked me for advice about a vacation property he was considering buying in Central America. I won’t bore you with the financial gobbledygook—he was weighing things like interest rates and tax breaks and other considerations that made it all seem like a difficult investment decision. I will just say that he was looking at the opportunity from a very conservative and traditional point of view: Is this a good real estate investment, meaning will I get a good financial return on it over the next 10 to 15 years?

  My advice to my friend was to reject that whole framework. “Forget the money,” I told him, “and let’s just talk about what you’re going to get out of it. You’re my age,” I reminded him (no spring chicken). “So how much are you going to use this property to invest in your own personal experiences—how often do you plan to stay there, and what will you do when you’re there? If you’re going to go there many times and you’re going to have wonderful vacations and bond with your kids and have irreplaceable moments with your family and friends, well, that sounds like the greatest deal on planet Earth to me!”