Personal Interest Rate

---
name: personal-interest-rate
description: The compensation you'd demand to delay an experience — a rate that rises with age until no payment justifies waiting. Use to decide whether deferring something is actually profitable.
source: "Die With Zero — Bill Perkins (2020)"
type: mental-model
tags: [timing, delay, discount-rate, aging, decision-rule]
---

# Your Personal Interest Rate

## Core idea
Ask: how much would someone have to pay you to postpone this experience by a year? That premium — your personal interest rate — rises with age, because your remaining capacity to enjoy the experience is falling. At 20, a 10–25% sweetener might fairly buy a year's delay of a trip; at 80, even +50% should probably be refused; terminally ill, the rate is effectively infinite. The failure mode is behaving as if your personal rate were constant and low at every age — deferring by default because money grows, while ignoring that your ability to use it shrinks faster.

## When to use
- Any "do it now or bank the money" decision.
- Employer/investor/client asks you to postpone personal plans for compensation.
- Evaluating whether market returns justify deferring consumption.
- Older users defaulting to deferral out of habit.

## The framework
1. **Name the delay premium.** For the specific experience, state the percentage payment that would genuinely make waiting a year worthwhile to you.
2. **Age-adjust it.** Health decline, closing windows (see seasons-close-forever), and shrinking horizon all raise the rate. Recalculate per experience, per year of your life — never reuse last decade's rate.
3. **Compare against actual compensation.** Deferral pays you at best the market return on the money saved (~a few percent real). If your personal rate exceeds that — as it does for most experiences past midlife — deferral is a losing trade even though the account balance grows.
4. **Recognize the extremes.** Young + repeatable experience → low rate, delay freely. Old or non-repeatable → rate exceeds anything the market pays. Terminal → no finite payment suffices.
5. **Use it on offers, not just markets.** Boss offers a bonus to skip your planned trip: the bonus must beat your personal rate for that experience at your age — often it doesn't.

## Business application
- **Vesting/earnout negotiations:** an extra year of lockup or an earnout tail pays you X%; check X against your personal rate for the years of life the deal consumes — mid-career founders often accept rates far below their true premium.
- **"One more round before the sabbatical":** the expected value bump from delaying must exceed your rising personal rate; write both numbers down.
- **Client retainers vs. planned time off:** price the retainer against the experience it displaces, not against zero.
- **Investor pressure to extend timelines:** the fund's discount rate is not your discount rate; yours includes biological decay.

## Agent integration
When a user considers deferring an experience for money:
1. Elicit the specific experience and their age/health; ask "what payment would truly make a one-year delay worth it?" and record the answer as their personal rate.
2. Compute the actual return deferral offers (interest, bonus, deal terms) and compare directly. Recommend deferral only when payment ≥ personal rate.
3. Auto-raise the rate estimate with age, declining health, dependence on others' availability, and non-repeatability; state the adjustments.
4. If the user is past ~60 or the experience is window-bound, default the recommendation to "now" unless payment is extraordinary.
5. Log the decision; if the same experience gets deferred twice, flag habitual deferral rather than calculated deferral.