Bill Perkins says he made most of his money shorting natural gas, betting winter risk premiums would bleed out.
Perkins says your net worth peak is a date because the body is a decaying asset, so he prioritizes experiences now.
Perkins bought Ernie Barnes's Sugar Shack for $15M, seeing African American art as an arbitrage because museums wouldn't collect it.
A natural gas trader's case for spending it all
Bill Perkins made his fortune shorting natural gas and still runs a fund built to make investors rich rather than keep them rich. His book Die With Zero turns that appetite for risk into a rule for living. Money is only worth what it buys in experiences, and experiences belong to specific ages, so net worth peaks on a date rather than at a number. Perkins applies the same test to himself, and his health is where he is falling short.
Takeaways
He made his money shorting natural gas. Perkins started as a clerk on the New York Mercantile Exchange floor when the natural gas futures contract launched. He was generally short natural gas, because the winter risk premium buyers paid usually bled out and prices fell. He nearly lost it all a couple of times.
His fund is built for getting rich. Perkins calls it a high-volatility product where an investor can lose 100% while the fund returns 300%, like insurers who keep writing hurricane policies after being hit. He relied on temperament and information rather than arbitrage, and says he kept too little of his own money in the fund.
Your net worth peaks on a date. The number matters less than the age at which you stop earning, because the body is a decaying asset. Reading Your Money or Your Life started him thinking of money as hours of life. At 57, he does not want a party at 85.
Experiences belong to specific windows of life. Perkins calls these windows time buckets and says life works like Tetris, where the order matters. Deferring a trip or a physical feat can mean losing it entirely. Some readers have moved up retirement dates, and some have pushed their parents to retire.
Ego and status stop people taking risks. Perkins says the fear that holds most people back from risk is losing status, not money. His answer is maximum accountability, an ongoing practice of not apologizing and not needing to look right, which takes years to build.
His health is his biggest dissatisfaction. Perkins was 8% body fat with VO2 max in the top 1% when he married four years ago, and is now 16-18% with a mid-pack VO2 max. At that trajectory he cannot do 80% of the activities he picked for his last decade.
He saw African American art as an arbitrage. Perkins believed museums would not collect African American art, so the work traded below its cultural weight. John Arnold, an astute collector, tipped him off and guided him. Parr notes Stallone bought a Monet for $110,000 and it later sold for $130m.
The Sugar Shack auction
John Arnold, a collector Perkins trusted, saw the Ernie Barnes painting first and told him it was the one to own.
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On this episode 3
Show 1
Perkins flew to Sotheby's for his first live auction rather than bidding by phone, expecting to pay $3m to $5m.
A rival art consultant said she would not stop bidding. Perkins told his wife that if he fainted, she should keep bidding.
He won at $15m and felt he had arbitraged the market.
Barnes painted two copies, because Marvin Gaye saw the original and asked for it, so Barnes reworked that one and made an exact copy.