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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.
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:
- I wish I’d had the courage to live a life true to myself, not the life others expected of me.
- I wish I hadn’t worked so hard.
- I wish I’d had the courage to express my feelings.
- I wish I had stayed in touch with my friends.
- 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.
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.
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.
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.
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.