A New Concept: Die with Zero Review

*This post may contain affiliate links. This means if you purchase through the link I will receive a small commission at no cost to you. It is the way sites like this are funded, but does introduce a conflict of interest.  

Die with Zero by Bill Perkins

Bill Perkins is an American engineer, hedge fund creator and poker player. He published Die with Zero in 2020.

Who Should Read this Book?

Die with Zero, despite the controversial title, is about squeezing every drop of joy out of life. It turns around traditional financial advice and instead urges readers to loosen the purse strings and make hay while the sun shines.

If you are struggling to get out of consumer debt, or haven’t yet set up a money management system, savings routine and investment plan I would suggest writing this book suggestion down for a few years. The timing of reading this book is very important.

Timing

It was actually perfect timing when I pressed “Buy” on my kindle last month.

We have just finished reviewing our progress after 5 years of getting serious about saving, investing and paying down our mortgage. We’ve made significant progress, and more importantly, have a money management system with saving and investing automated. We are now Coast FI for traditional retirement at age 60, and ahead of schedule for me to be able to retire (if I want to) at 55.

We’re not close to full financial independence yet, but I don’t think we need to be.

I have always only had one foot in the financial independence philosophy. I only plan to retire a little early and may continue with voluntary or other work I love, regardless of pay.

The Financial Advice Gap

But the huge explosion in information, opinions and philosophies produced by the financial independence community in the US and now in Australia, is incredible.

Financial advice is unaffordable for those without many assets to start with. By the time investors have worked out to accumulate a good asset portfolio, most don’t need professional advice. Advice is often biased by hidden incentives and too narrow in its scope. Most financial advisors can only advise on “investment products” not property. Property advisors are largely unregulated.

It is extremely expensive to get good, independent unbiased holistic advice on the whole picture.

Finance bloggers have been helping to bridge the financial advice gap. Blogs also provide a forum for people interested in finance and investing to chat and share ideas. People tend to feel more comfortable without the judgment that can result from showing interest in a taboo topic like money in our “real lives”.

Financial Independence & Die with Zero

Financial independence means something different to everyone. For me, it is as much about getting value for money, squeezing every drop you can from your finite resources. And that’s where Die with Zero and Financial independence meet.

I feel like we have now done most of the heavy lifting with 5 years of focus on finances. We will continue paying down mortgages, investing in ETFs outside super, and into superannuation each year.

But the hustle of saving up for investment property deposits is done. We are on track (or ahead) and everything is automated. I feel like we can lift our eyes to the horizons and focus on other priorities whilst our investments continue to compound in the background.

This is why it was a perfect time to read “Die with Zero”.

Why Read Die with Zero?

It is common, particularly amongst the financial independence community to get rather single-minded, one might even say obsessive about saving and investing. It can start to take over, even damage relationships.

It is important to stop regularly and reflect on whether we can squeeze a little more joy from life, along the way. I’m looking at you (and me) type A personality!

Death Bed Regrets

The book spends some time exploring common deathbed regrets. After all, if we could look into our own futures and work out what we would regret in the end, it would surely change our behaviour in the present.

Bill Perkins quotes the work of a palliative care nurse Bronnie Ware who has published her own book about the 5 most common death bed regrets:

  1. I wish I’d had the courage to live a life true to myself, not the life others expected of me.
  2. I wish I hadn’t worked so hard.
  3. I wish I’d had the courage to express my feelings.
  4. I wish I had stayed in touch with my friends.
  5. I wish I had let myself be happier.

The author also points out that we too often feel there is all the time in the world to get round to those “one-day” aspirations. By considering one’s own mortality, and acknowledging our time is finite, we tend to pursue those dreams more aggressively and even enjoy everyday experiences more.

What would you do differently if this was your last week, year, or decade of health?

You can Have Time, Health, and Money, But Not All at the Same Time

Bill points out that most of us start out with plenty of time, hopefully, healthy but very little money. As the decades pass, responsibilities increase, our time disappears and our health falters.

He urges us to maximize these assets at the time. In my 20s I slept in the front seat of a small car backpacking. We had 3 weeks to get up the East coast of Australia, and very little money.

My travel companion and I still giggle about our ridiculous adventure. We had an awesome time, and the absence of luxury didn’t seem to bother us.

I can’t imagine enjoying this same mode of travel/accommodation in my 40s! Unfortunately, I have collected some musculoskeletal injuries that would make the trip very uncomfortable. The good news is, I could afford to stay in hotels and enjoy that little extra luxury nowadays. But I am so glad we took that crazy trip!

The author of Die with Zero prompts us to prioritize the active experiences whilst we are well enough to do it.

Memory Dividends

Bill Perkins points out that spending money on some of these experiences is, in a funny way, a kind of investment. These experiences pay “Memory dividends” for years to come. The earlier we have those experiences in life, the longer we have to enjoy the memory dividends. And things don’t need to be expensive to produce amazing memory dividends.

Contrast my crazy trip driving up the East coast and sleeping rough for 3 weeks in my 20s with the equivalent, in comfortable hotels in my 40s. Which do you think would pay better memory dividends? I have no doubt my travel companion and I would have a great time doing it again in a bit more luxury. But it would never feel as adventurous as the original trip. We wouldn’t have the same experiences as we did in our 20s, or I suspect meet as many people.

Risk-Taking

The author rejects the traditional advice to play it safe when leaving school. He points out, that if there is a time to take risks, it is when you are young, have few responsibilities, and have time to rebuild.

He gives the example of someone with a dream of becoming a professional actor. The young person’s parents may well advise them that the chances of success are slim, and encourage them to follow a more predictable and stable guarantee. But will that young person always live with the regret, and “what ifs” of not pursuing the dream? The author points out that a few years of trying to achieve their acting dream is a small sacrifice to have given it a try, even if they fail.

Prioritize Healthcare

Bill Perkins points out that without health, you have nothing. Money and time spent on health are very wise investments that you will never regret making.

I am 100% on board with this one. Look after yourself, get your teeth checked, eat healthily (most of the time), and exercise regularly. Be proactive with injuries or health symptoms.

As a doctor, I have had the privilege of working in areas with wealthy and poor communities. Money makes a huge, visible difference to health and ability to perform and enjoy activities in your 70s and beyond. The profound differences between the two populations are a result of better diet, leisure time, and exercise as well as proactive healthcare.

Bill Perkins points out that money is best spent on preventative health. He points out that spending large amounts of money on healthcare at the end of life (when he implies you are drooling in a nursing home) provides far less bang for your buck.


Planning Your Life

Die with Zero encourages us to take a long-term outlook when planning our lives. Instead of just planning the next 1-5 years, the author suggests we should plan our whole lives. His point is that it is easy to miss out on the optimal time for some of those “one-day” experiences you never quite get round to.

He suggests thinking about your life in 5 years “buckets”. Make a list of everything you want to do (and of course, this can change over time). Then work out when the best 5-year time bucket is to do each activity.

I particularly like this idea when planning experiences with kids, partially because I desperately don’t want to miss out on anything with my little ones. We had to time our trip to Lapland (I know, self-indulgent!) before they were too old to believe in Santa.

Small kids love camping. It’s amazing how entertained they can be finding sticks for the fire and exploring beaches for the perfect shells. Apart from our expensive trip to Lapland, most of our holidays while the kids are under 10 have been camping or visiting family.

As they get older, I imagine it will get harder to get them excited about a family holiday! Over the next few years, the perfect time to take our 1st family skiing holiday and to experience theme parks.

Spending during Retirement

The book describes data demonstrating that retirees spend most in the early years of retirement, even despite the challenging cost of healthcare in the US. The author asserts that dying with a full investment account represents wasted opportunities to enjoy oneself.

Bill Perkins encourages us to spend our money optimally, with the aim of running down our retirement accounts before death.

What about the Kids?

Instead of leaving an inheritance after death for the kids (usually in their 60s), he suggests giving that cash to them in their 20s and 30s when it can have maximal impact. If your kids have learned to manage money and invest well, they will not need that inheritance in their 60s. Almost everyone would appreciate a hand up in their 20s or 30s as there are so many competing expenses.

Charitable Giving

The author also sees a terrible waste in waiting to donate large amounts of cash to charities with your will. He suggests the charities could have put the money to good use far earlier.

Running out of Money

Bill Perkins suggests a solution to the obvious issue with the book – the risk of running out of money before death. This solution is to purchase an annuity so that you have guaranteed income to cover essential expenses as long as you live. With this increased certainty, retirees are more likely to live it up and spend their retirement savings without fear.

The Take-Home Message

There are so many uncertainties in life and investing. How could you possibly die with zero? Even the author admits it is impossible to get it perfect. But he does suggest that by aiming for zero we will all come a lot close to optimal use of our resources within our lifetime.

The obvious issue is the amount of uncertainty. You could die next year (in which case maybe you would quit work now and travel the world in luxury, using up all your funds). Investment returns could be 5% or 15% over the next 20 years. That makes a big difference to how much you should be spending.

I don’t think the book is supposed to be taken literally though. He challenges our thinking to remind us that life is finite, and we have to make the most of our resources (time, health, and money).

Die with Zero is definitely worth a read once you are well on your investment journey, to remind you that life is not all about money. Die with Zero regrets.

Aussie Doc Freedom is not a financial adviser and does not offer any advice.  Information on this website is purely a description of my experiences and learning.  Please check with your independent financial adviser or accountant before making any changes.

M&M: 5 Common Investing Mistakes (and How To Avoid Them)

*This post may contain affiliate links. This means if you purchase through the link I will receive a small commission at no cost to you. It is the way sites like this are funded, but does introduce a conflict of interest.  

If you have a money mistake you think readers could learn from me please get in touch at Admin@Aussiedocfreedom.com.

This week I have a generous guest post from Kate Campbell, Editor & Host of How To Money. Kate works in the finance industry and as a financial educator at How to Money. In today’s article, she shares 5 common investing mistakes, and how to avoid them.

When it comes to investing, one of the reasons that commonly holds people back from getting started is the fear of making a mistake.

This is understandable given your money is on the line, but something I’d really encourage you to dive deeper on.

Because at the end of the day, I truly believe the biggest mistake you can make is not actually starting at all.

But given we often learn through other peoples mistakes and can gain confidence by understanding all the ways we can go wrong. I wanted to share five common investing mistakes with you today, and how you can avoid them (because we’ve all made at least one of them at some point along our journey).

Investing Mistakes #1: Investing without a plan and decision-making process

One of my biggest suggestions for new investors is to write down a plan of attack before diving in. This gives you direction and keeps you focused. It’s easy to get distracted by every new shiny thing you come across.

I’d also encourage you to write down the reasons you make a particular investment, which you can review over time as you learn more along your journey.

Action Tip: Create a Google Doc to record your investment decisions and outline your investment plan.

Investing Mistakes #2: Investing money that you can’t afford to lose

Are you planning to invest your emergency fund or house deposit? If so, you’re playing with fire (and not the kind we like here in the financial independence community).

Make sure you’re not using any money you might need in the next few years. Otherwise, you might be forced to sell your investments during a market crash because you need the money.

Investing Mistakes #3: Investing in companies and products you don’t understand

Investing already involves risk, so why amplify that by investing in companies and products that you don’t understand?

If you’re planning to buy an ETF, make sure you understand how ETFs are constructed and managed before investing in them. If you’re planning to invest in an individual company, there’s plenty of research you should be doing first. By doing this homework, you’ll be much more comfortable with your investment decisions.

Action Tip: Take the free share and ETF investing courses on Rask Education to make sure you understand the foundations before starting.

Investing Mistakes #4: Investing all your money in one single investment

This is a mistake that investors of any age make (just read some of Scott Pape’s weekly columns), and a mistake that can financially wipe you out.

You might have heard the term diversification already. But if not, it’s the process of spreading your money across different areas (e.g. not putting 100% of your money in a single company).

Kate’s Tip: Spend some time learning about different investment options and ways you can diversify your investment portfolio. Plus, don’t bet the house on any one investment.

Investing Mistakes #5: Investing without keeping records and doing the work

This is a mistake I made starting out that I’d love to help others avoid. Every time you buy and sell an investment or are paid a dividend, you need to keep a record. This will help you down the track when doing your tax return and calculating capital gains/losses on your investments.

Plus, you need to make sure you’re updating the share registries for your investments so you’re getting paid any dividends and receiving key documents. Doing all of this will save you a massive headache at the end of each financial year.

Action Tip: Set up a Google Sheet doc or Sharesight account to track all your investments.

I hope learning more about some of the common investing mistakes and how to overcome them, will give you the boost you need to overcome the biggest investing mistake of all: never starting.

Do check out How to Money and Kate’s Aussie doc article outlining her individual wealth-building strategy here.

Aussie Doc Freedom is not a financial adviser and does not offer any advice.  Information on this website is purely a description of my experiences and learning.  Please check with your independent financial adviser or accountant before making any changes.

My 5 Year Plan Complete: Financial Progress since 2017

*This post may contain affiliate links. This means if you purchase through the link I will receive a small commission at no cost to you. It is the way sites like this are funded, but does introduce a conflict of interest.  

At the end of 2016, our family returned from 6 months travel with our then-toddler and baby. We had extended parental leave to allow us to travel Australia in a camper trailer, on the (dirt) cheap!

Background Before the Five Year Plan was Set

I am a doctor living in a regional town, married with 2 young kids. My financial five year plan began as I achieved my career goal of completing specialist qualifications and getting my 1st consultant post.

Until 2016 we had been pretty responsible with money. We brought far less home than we could afford in 2008 (on a combined income of $110K).

My income was unaffected by the GFC and increased annually. Interest rates also dropped steadily since home purchase until today!

The extra income earned through pay rises went directly into increased mortgage repayments. We never reduced our payments when rates dropped.

Eventually, we were paying double minimum repayments. Increasing them further didn’t seem to provide as much advantage in time to pay off the loan, so we paused further increases.

Here we entered a bit of a drift state. We were doing well with the mortgage and had no idea how to work out if we needed to put extra into superannuation. I liked the idea of investing but didn’t know where to start and didn’t have a lump of cash to start with.

We could generally pay for our reasonably modest lives (for a doctor household) without having to worry. I didn’t always pay off the full credit card every month, but would often use it to smooth spending over the year. For example, paying for a holiday on a credit card, and then paying it off over 2-3 months. Not ideal I know!

We saved cash for both our cars when we needed to replace them. His was second-hand (and a complete lemon, costing the same again in repairs). Mine was an ex-demo but only $20,000 and paid out of savings.

As my income jumped with the step up to consultant, we also became parents and I reduced my hours to part-time.

Time to See a Financial Advisor?

With a very good income, and now very grown-up responsibilities, we decided it was time to see a financial advisor.

I made every mistake in the book. I didn’t do any checks and booked in to see one that offered advice without charge.

The advisor-sold us lots of insurance, which as a single high-income household with small kids we definitely needed. But he also convinced me to move my super over to a wrap account with (in retrospect) extortionate fees and pain in the ass paperwork that they needed me to sign every few months.

I was aware I should avoid fees but advisors are excellent salespeople. He was using a lot of finance lingo I sort of understood, and I think I fell foul of the Dunning-Kruger effect. A little knowledge can be very dangerous! He convinced me “you get what you pay for”.

Between work, having and looking after babies, and our trip around Australia, I didn’t have a lot of free time to review the situation.

YOLO

We had long planned to renovate the house, which was poorly laid out and a bit small for our liking.

After years of delaying gratification, I had a huge YOLO moment and suggested to my partner that we should travel around Australia and renovate the house at the same time.

The Return to Reality before the Five Year Plan was Set

We returned in December 2016 for our first Christmas in our shiny, renovated at MUCH expense home. As a result of the huge reno, we were now 90% leveraged. We had no savings. The credit card was maxed out.

At the time it didn’t feel as bad as it sounds, I knew it was temporary and there was still regular income, which was about to increase significantly. In retrospect, it was irresponsible pushing this close to the edge!

Financial Situation @start of 2017 (Beginning of 5 Year Plan)

Super ~ Just over a year’s gross salary accumulated between both our accounts

House – 90% leveraged, low-interest rate though

Savings – 0

Investments outside super– 0

Credit card debt ~$5000

Getting Back on Track

Even at the time though, I knew we had to get back on track fast.

With returning to work, my income would receive a massive boost. I wanted to swing back to my financially responsible self and maximize this to get back on track.

I picked up the Barefoot Investor, read it cover to cover, and made notes. That night I started reorganizing bank accounts, opened a micro-investment account and worked out a fortnightly direct debit we could afford.

I have had an interest in finance, but finance became a new hobby for me over the next few years. I read blogs, and books and listened to podcasts.

Long-term Goals – Smart Goals

  • Retirement age 55 financially independent with $2.5M in assets between us
  • Kids education savings – Decided to put enough aside to cover worst case (most expensive) of medical school fees for both kids. If they don’t take part in tertiary education, they can use the money for a house deposit or business start-up.
  • Never work full-time again
  • Increase options/freedom to travel
  • Replace the cars when they need replacing

Five Year Plan – Financial Goals

Long-term goals need to be broken down.

I started with a 5-year plan, before breaking them down and identifying annual goals.

5-year goals:

  • Save money in offset to fund an investment property deposit for ~$600,000 property
  • Purchase investment property before my 40th birthday in 2020
  • Invest $125 per month towards the children’s tertiary education
  • Get the kids to Lapland!

Plan to Achieve the 5 Year Plan Financial Goals

  1. Increase income whilst improving control over income
  2. Reduce Spending
  3. Save a deposit for an investment property
  4. Research how to invest in property successfully whilst saving
  5. Research Lapland and find out how to do it without going bankrupt!

Five Year Plan: Increasing Income

Although I was returning to a wage well above average household contact, we had a lot of catching up to do! To find out why I decided to invest in property 1st, review my property vs shares article. To meet my goal of purchasing an investment property before 2020, I had to hustle.

Options to Increase Income

-Extra Shifts

Extra shifts are available from time to time at my regular work, but this was unpredictable. I worked overtime shifts when they came up and we didn’t have plans.

-Locum Work

Locum work was the obvious way to increase income dramatically, quickly, and reliably. There are loads of rural hospitals all over Australia that are desperate for staff, I happen to really enjoy working in them. By working in different hospitals, I got to experience different patient populations and perform a lot more clinical work than I do in my day job. I find it renews my enjoyment of practicing medicine.

Locum doctors also get control over when and where they work. In the future, increasing control and flexibility appeals to me.

Being paid in pre-tax dollars for my locum work also meant I could park those dollars in our offset account for up to 21 months, significantly reducing the interest incurred by the mortgage each month. The interest saved could then be used to pay the offset down further.

-Start a Blog

I was considering starting to write a blog to document my transformation from 90% leveraged broke doctor, to a financially responsible wonder woman fully in control of life. Again, the location flexibility of blogging appealed. If I could produce an income blogging (and that was a big if) I could maintain a modest income whilst we traveled further as a family.

But at the time, my 1st priority was getting cash flow in fast. There was no guarantee of producing any income with a blog, and if I did get to produce income it would grow very slowly. The idea of blogging was put on the backbench until 2017.

Five Year Plan: Reduce Spending

We had a chaotic banking system before I read Barefoot, even incurring overdrawn and dishonour fees occasionally.

Barefoot to the rescue. I opened multiple offsets, reorganized my accounts, and stopped paying bank fees. Most importantly, my partner and I agreed to separate a set amount each pay to go to our own splurge or fun account.

Next, it was time to look at cutting costs.

The biggest costs for many are housing, transport and groceries. Cuts in these areas can often be the most significant moves. I wasn’t wanting to cut spending on housing, our vehicles are 10 and 20 years old, so already pretty cheap. Grocery spending was reduced by buying things cost-effectively (in bulk and on sale).

I started listening to the Choose FI podcast. It is an American pod, so not all the content is completely relevant to Aussies. But their philosophy resonated with me, and Brad and Jonathon’s enthusiasm has a way of catching on.

One by one I worked through our expenditures, identifying wastage and eliminating as much as I could find. Every time costs were cut (No matter how small), savings were increased by a corresponding amount.

I did find repeating this process twice a year helpful, as I became more comfortable with cutting expenses as my mindset gradually shifted.

Five Year Plan: Save a Deposit for an Investment Property

It may seem a little strange that instead of saving for a house deposit I opened a microinvestment account and set up a direct debit to invest in the stock market.

We are generally advised not to invest in the stock market for less than 7-10 years, and not before saving an emergency fund.

I had a bad case of impatience, and couldn’t wait to get started!

I reasoned that the date for property investing wasn’t set in stone. If it had to be delayed because of a market crash it wasn’t the end of the world to me. But in the meantime, I could take advantage of market growth (hopefully) and save that property deposit faster.

It was a risky move, and it could (and probably should) have bitten me on the arse. But it didn’t, I got away with it. In fact, I’m such a jammy git I withdrew the whole lot (~40K) days before the COVID crash. Beginners luck! I am definitely becoming more risk-averse as time goes on!

At the same time, we aggressively paid down that pesky credit card debt in our mortgage offset account.

We have been credit card debt free since early 2017, and at the start of 2022 so damn close to fully offset our mortgage, I can almost taste that (PPOR) mortgage-free lifestyle (2023?)!

As regular readers are aware, I brought our first investment property in July 2019, 6 months before my self-imposed deadline. There was a lot of media doom and gloom at the time, and I was pretty scared I could be making a mistake. Knowing there were no further steps I could take to reduce the risk, I took the plunge.

The property has performed well so far, even before the COVID boom. It has been constantly tenanted (touch wood) and we ended up purchasing a second investment property in 2021.

Five Year Plan: Research how to invest in property successfully whilst saving

I always liked the idea of being a property investor. After learning about stock market volatility, I liked the idea of diversifying retirement income.

I had never taken the plunge before because

  1. Didn’t think we could afford it
  2. I didn’t know where to start and didn’t want to get ripped off.

I read every book on property and investing that I could find and was overwhelmed by all the different approaches.

Thankfully, I was pointed to the Property couch sometime in 2017. I devoured the episodes and felt confident I had found my guide to buying property for investment. Initially, we planned to do it all ourselves to save some money.

But the more I learned, the less I knew! Eventually, I had to admit to myself that I needed professional help.

5 Year Plan: Take the Kids to Lapland

This was my Carpe Diem goal. I’m a bit obsessed with my kids and a pretty cheesy mum.

Once it occurred to me I could take them to Lapland, a quick google search later I was hooked on planning. We have family in the UK and had planned to go back to visit, and decided our Lapland adventure could be a great side trip.

Personal goals should be planned around major life changes and events. Kids are small for a limited time frame, and it won’t be too long before they’re too old for certain experiences.

But these are very expensive trips. Holiday companies offer 1-day excursions to Lapland (Rovaniemi, Finland) to reduce the cost as accommodation can be pricey.

We booked bargain flights to Helsinki, where we caught the Santa Claus express overnight train (Oh, yes). I found a charming Airbnb log cottage that belonged in a fairy tale. I hired a car (with snow tires!)

We saw all the sites, met Santa, took an exhilarating sled dog ride, saw reindeer and had so much fun just playing in the snow. We even caught a brief glimpse of the Aurora in the 5 nights we stayed.

It was still expensive, and some parts were absolutely a rip-off (like the ice restaurant). But this was an experience of a lifetime and I am absolutely thrilled we did it.

Looking back, the pandemic was beginning in China as we were playing in the snow. I could not have imagined how life could change, and the ability to travel has been lost for so long. I am so glad we did not delay this trip in order to save more money!

Financial Situation @start of 2022 (End of 5 Year Plan)

Super ~ Just under two year’s gross salary accumulated between both our accounts (nearly doubled)

House – 90% offset, even lower interest rate

Savings – equivalent to 18 months spending in offset

Investments outside super– $85,000 between Pearler & kids education funds

Credit card debt ~0 of course

Summary of 5 Year Plan Achievements

It really is impressive how far a strong salary when you stay focused can get you in 5 years. It’s gone pretty quick! We have 90% offset our mortgage from being 90% leveraged. We have invested inside and outside super and purchased two investment properties. Limited ability to spend our money as a result of COVID travel restrictions and intermittent lockdowns have accelerated the progress as well.

What achievements have you got planned over the next five years? Five years is a long enough period to make huge progress towards your financial goals. Have you written down a five-year plan? What is your Carpe Diem goal? What will be your situation in 5 years – and will you look back at how far you have come with wonder?

Aussie Doc Freedom is not a financial adviser and does not offer any advice.  Information on this website is purely a description of my experiences and learning.  Please check with your independent financial adviser or accountant before making any changes.