Die With Zero

Bill Perkins thinks so. His book Die With Zero, Getting the Most from Your Money and Your Life claims that dying with no money left is a worthy goal, though admittedly an impossible task. But is it? Is it a worthy goal? How possible is it to achieve? Let’s look at the pros and cons of his book and the concept.

Die With Zero Concepts

Bill Perkins presents several key ideas in his book.

Don’t Maximize; Optimize

Bill argues that far too many middle-class and above Americans try and maximize the amount of money they die with. They forgo many experiences, impactful actions, and events to build a bigger nest egg beyond what they can or will use.

Instead, we should be trying to opitimize our life. We should get as much out of our lives as we can while we can. And that means getting as much out of our money as we can. This doesn’t mean being foolish. Don’t avoid saving or spend too much. But we should find a better balance between them and be more intentional about how we spend.

Invest in Experiences

Many people fall into the trap of investing only in accounts. We accrue large sums of money for when we’re old, but by the time we get there, we don’t feel like doing anything with it. What a waste!

The data is clear: In the end, we value our relationships and experiences with those people the most. Things are things. Nice things are nice things. But relationships and experiences matter more. We can wait until the end of our lives to figure this out, or we can learn from others, believe it now, and act on that belief.

Experiences pay a “memory dividend.” When we have great experiences with the people we love, we don’t just enjoy it in the moment. We remember those experiences and enjoy them again. Often, the sum of all those re-lived experiences can be worth more than the original event. And when we’re too old to do anything new (no-go years), our memory dividends pay us a thick income in times remembered.

What About the Kids?

The most common objection Bill got was, “What about the kids?”

Many folk aim to leave an inheritance to their children and grandchildren. They believe that if they spend down their money, they are being selfish. Somehow, their children will be destitute if they don’t get an inheritance.

We know this is wrong on the face of it, but we can often still believe it. But think about this. Most children who get an inheritance at their parent’s death are already in their 50s or 60s. Their retirement is already set. And they are frequently beyond their optimal year for experiencing it anyway.

Instead of leaving money to kids when you die, beyond when they need it, and after you can enjoy it with them, why not give it to them now? Why not give it to them over time instead of a lump sum? Either they will be young enough to need it, or you will be young enough to enjoy it! And the memories they create with you from intentional giving may be worth more than a financial inheritance. Those dividends pay beyond your lifetime.

What About Charitable Gifting?

Bill’s argument is the same here. Rather than waiting until death, why not give more while alive? Enjoy the fruits of your giving instead of merely the thought of it.

Problems in Die With Zero

I thoroughly enjoyed Die With Zero and give it a hearty recommendation. But there were a couple of issues I wanted to touch on.

The Perspective of the 0.1%

Bill Perkins is a multi-millionaire, most of which was made as a hedge-fund manager. His ability to spend on experiences without any real threat of running out of money is far greater than my audience.

This doesn’t mean the whole message is wrong. It’s not. Money is relative. For one couple, dying with a quarter million left over would be the equivalent of dying with zero, while for another, it is their best scenario for which they gave up tons of experiences. The general principle must be applied to individual households on a case-by-case basis.

Still, far too many middle-class earners save and keep too much, and I believe they could benefit from this principle.

Annuities are Not the Answer

For those who worry about running out of money for themselves, Bill suggests (but doesn’t recommend) that they look at an annuity. With an annuity, you can have guaranteed income for life, and it doesn’t matter if your other assets drop to zero because you’ll never run out.

I recommend against annuities. They are very expensive and have long surrender periods. They may be a good way to run out of money, but they are a terrible way to make the most of your money, which is truly the goal.

The Real Goal: Make the Most of Your Money

There are ways to truly die with zero. Delaying Social Security and using annuities is the best way to have zero in our accounts without running out of income. But is that really what we want? Is the main goal to die with zero?

No. It’s about optimizing between two extremes. We don’t want to die with zero, and we don’t want to make the most money. We want to make the most of our money. For it to go the furthest. We can do that in three ways.

Fulfilling Relationships

We can’t buy relationships, but we often sacrifice relationships for money. We spend too much time earning and saving money and not enough investing in our relationships. Perhaps we should work less and invest in our relationships more. And if we’ve already traded relationships for money, how can we use that money now to restore and strengthen our relationships?

We don’t want to die with zero. We want to die a hero. A hero to those we love, respected and loved the most by those who know us best.

Meaningful Work

Is it worth it to work a job we hate for decades so that we can have more money in the end? I contend the answer is “no.” Meaningful work is better than lucrative work.

Amazing Experiences

No one on their deathbed looks back and thinks, “I wish I had upgraded my iPhone every year,” or “I should have driven better cars.” The things we amass rot and fade away. But the experiences we have, the memories we make, can last a lifetime.

How to Do This

How do we optimize? Is it possible to make the most of our money? How do we die a hero? How do we balance living now without jeopardizing our future selves?

Adopt the Right Mindset

Why do we have this money? What is its purpose? For many of us, the money represents status and achievement. We don’t like to admit it, but seeing a large nest egg proves to someone (even that one person is us) that we achieved something. We built wealth. And to see it go down, to spend toward zero, can be a hard pill to swallow if we have our identity wrapped up in the future to the left of the decimal point. We must remove our net worth from our human worth and live for what we truly care about.

(Re)Establish Your Goals

What are you trying to achieve? Is leaving an inheritance what you truly want? Or is there a better way to leave a legacy? Would it be a better goal if you left only half of your currently projected inheritance and spent the difference on dividend-producing memories and impacts? Only you can answer these questions.

Create a Plan to Get There

You need a plan to get there. Don’t buy a financial product. Get a financial strategy. The right plan can help you optimize your spending and giving today and across your life.

Follow and Adapt the Plan

Follow the plan and change the plan. Financial planning is not about being precisely right today but about being less wrong tomorrow. Your goals will change. Your life will change. And your plan will need to change with it. But you can get more out of your life and money with planning and follow-through.

If this has piqued your interest, I recommend you listen to or read Die With Zero by Bill Perkins. It will give you and your Financial Planner something to discuss.

This article is educational only and is not intended to be investment, legal, or tax advice or recommendations, whether direct or incidental. Again, this is not investment advice. Consult your financial, tax, and legal professionals for specific advice related to your specific situation. Never take investment advice from someone who doesn’t know you and your specific situation. All opinions expressed in this article are those of the people expressing them. Any performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be directly invested in.