Live Richly: Die with Zero
I recently read the book, “Die with Zero: Getting All You Can from Your Money and Your Life” by Bill Perkins, and it had a profound effect on me and how I view my relatively short life on this planet. The author’s philosophy is that instead of focusing on making the most money possible and saving like crazy, determine what is necessary to live a rich life, then spend it while you’re alive! What a concept, huh? It makes sense as he explains his points, but no doubt his views can be seen as controversial and in vast contrast to how many of us think about our “golden years.”
Dying with zero means optimizing your life, rather than waiting and leaving money on the table when you pass away. He is not saying be a spendthrift or “good luck kids!”. Instead, spend and gift money while you are alive and when your heirs need it most (when they’re young and just starting out) vs. when they’re in their 40’s, 50’s, and 60’s with already established lives. He also discourages this approach if you are already in a tight financial situation. His guidance applies to those who are already financially stable and comfortable. Most certainly, you cannot take care of others or spend money you do not have if you are drowning in debt.
I do not want to ruin the book if you would like to read it, so I will provide some highlights and discuss how it changed my perspective and perhaps give you some food for thought as you are mapping out your working years.
What Do I Want?
To begin, I had to think about how I want to spend my precious time. How can I make the most out of my life? That will vary from person to person, but having a plan is important and requires some thought. Writing down your goals can also be helpful and keep you focused. Some examples may be, travel to New Zealand in 5 years or pay for my daughter’s wedding. The key is not to wait. Traveling to New Zealand is a different experience in your 30s vs. your 60s. Obviously there is a cost involved, but that comes next. Do not think about cost in this exercise, just dream big!
This is probably the least fun part. Outside of your normal fixed expenses and ensuring you are prepared for retirement, set aside some money to enjoy life while you’re able to and calculate how much is required to do it. There is little argument that as we age, health problems are more likely to arise, we get stuck in our routines, and taking risks are not as easy. For example, if you are planning to leave money to your children, why not advance it and help them while you are alive and when they need it most? Weddings, kids, education, and homes are incredibly expensive and these events normally occur when we’re young. Giving them a leg up on these larger purchases will provide immediate help while you can actually see them use and appreciate it, rather than being saddled with these burdens in the future when it’s even more expensive or you’re no longer around!
Talk About It
Of course, it’s important to discuss your plans and goals with your partner, if you have one. But, if there are plans to provide for adult children or other loved ones, let them know. Think about it: if there is little to no money left when you pass away, there is nothing for your heirs to argue about. I have seen a lot of drama unfold as estates are settled. Even if a trust is set up, there can be some bitterness if there are conditions that the beneficiaries were not aware of or if someone receives less money than they anticipated. It can get ugly.
Die with Zero
If we know when we will die, we can easily calculate having $0 leftover. The reality is that none of us knows, so getting to zero is incredibly difficult, if not impossible, but that is not entirely the point. The point is to rethink how you spend your time on earth, how you want to spend your hard-earned money, and ensuring that you live your life to the fullest.
Another problem is working for decades and saving loads of money that you can’t even spend in your lifetime. Sounds like a good problem to have, but working and saving can be addicting for some folks. I'm guilty. How much is really enough? Imagine spending your prime years working 12 hour days, always under stress, avoiding vacations, ultimately developing health problems, and then spending your “golden years” in pain or unable to do those experiences you always wanted to do. Have you heard stories of people dying shortly after retiring? Horrifying.
In conclusion, I am rethinking how I work, save, and spend money or enjoy certain experiences until I am retired or age ‘x.’ I have had conversations with pre-retirees who love to talk about how much money they have in their investment accounts, but have absolutely no plans on using it. Why not?! Is there a loved one who could use it? Is there something you would regret not doing? It’s time to think about now and today because tomorrow may never come. Remember, I am talking about those who are already in a good financial state. Working hard and saving are great attributes, but remember "why" you are working and saving. Hopefully, it's not to tell others how large your account has grown. Enjoy your life, you earned it!