The Personal Interest Rate
As you age, the price someone must pay you to delay an experience rises toward infinity.
The Personal Interest Rate is a decision-making framework that helps you evaluate whether to have an experience now or delay it for later. Unlike financial interest rates which are set by markets, your personal interest rate is determined by your age and health, and it rises over time. When you are 20, someone does not need to pay you much to convince you to delay a trip by a year — you will still be healthy and the experience will still be available. Your personal interest rate is low.
But when you are 80, the same one-year delay could mean the experience is no longer possible due to declining health. Your personal interest rate is extremely high — perhaps infinite. Someone would have to pay you an enormous amount (or offer an incredibly superior alternative) to justify waiting. When you are terminally ill, there is literally no amount of money that could compensate you for delaying a valued experience.
This framework corrects the common pattern where people apply the same willingness to delay at every age. A 60-year-old who defers a trip 'until next year' is making a much more costly choice than a 25-year-old making the same deferral, even though it feels identical. By explicitly tracking your rising personal interest rate, you naturally accelerate experiences as you age rather than perpetually postponing them.
- Your willingness to delay experiences should decrease as you age
- At 20, your personal interest rate is low; at 80, it approaches infinity
- When terminally ill, no amount of money can justify delaying a valued experience
- Once-in-a-lifetime experiences (weddings, graduations) have infinite personal interest rates at any age
- The framework is the experiential equivalent of the financial time value of money
- Habitually deferring experiences at a constant rate across all ages is irrational
- Assess your current personal interest rateConsider your age, health, and remaining capacity for the experiences you value most. Be honest about whether you are treating time as scarce (high rate) or abundant (low rate). Most people over 40 underestimate their rate.
- Apply the 'Would I Rather?' testWhen considering whether to have an experience now or save the money for later, ask: 'Would I rather have one trip now, or two trips X years from now?' If you are young and healthy, two trips later may win. If you are older, one trip now almost always wins.
- Flag experiences with closing windowsIdentify experiences whose availability is declining due to your age, health, or changing circumstances. These have the highest personal interest rates and should be prioritized immediately.
If your boss asks you to delay a planned Mexico trip by one year and offers to compensate you, how much would they need to pay? At 20, perhaps 10-25% of the trip cost would suffice. At 80, even 100% might not be enough, because you might not be alive or healthy enough next year.
Perkins drew an analogy from financial interest rates to personal time value, noting that people in finance understand the time value of money instinctively but fail to apply the same logic to the time value of experiences.