Should You Die With Zero?

We thought to share something a little different for this week’s money in minutes.

Introducing Die With Zero, a book written by Bill Perkins, which for us, as money nerds, was a much more interesting read than most finance books. We feel it has a lot of good to offer our members (and of course some less good) so we want to provide a quick overview, list Bill’s 9 rules, and we’ll share our opinion in the hope you can take some positive action to enhance your financial journey.

Bill Perkins is an ex-hedge fund manager who is of the opinion that the majority of hard-working humans, work too hard for too long, building too much wealth – as ultimately most of us don’t get around to spending our hard earned wealth.

The Die With Zero philosophy suggests that once you've saved enough to fund your retirement, you should start focusing more on creating memorable life experiences. That's the time to live life to its fullest, not to be working more, or waiting until you're too old to be able to enjoy doing what might be important to you.

There are nine rules to apply to live Bill’s Die With Zero philosophy:

1. Rule #1 — Maximize positive life experiences.Don't wait until you retire to start doing stuff you like. Start actively having the life experiences you want to have now. Have lots of meaningful and memorable experiences.
   
   NW: Of course this is in theory a no-brainer! To help you do this, we suggest you ensure you become aware of your income and spending, don’t buy too much house and use debt wisely. This will ensure you have money to invest in life.
2. Rule #2 — Invest in experiences early.Your life is the sum of your experiences, and when you look back you'll remember the richness of those experiences. Plan the experiences you want to fit in and start now.
   
   NW: We feel balance is key here. Having adventures early in life is invaluable, but don’t forget that the most sure-fire way to achieve financial freedom and security is to start investing early. Time is that one commodity you cannot buy, so if you can balance living large whilst also starting to save and investing, you’ve likely got it nailed.
3. Rule #3 — Aim to die with zero.Ideally, you should aim to die with zero — having spent your money on having great personal experiences, taking care of your family, and leaving a legacy. That's the aim.
   
   NW: This is too simple. The book does elaborate, but the takeaway for us is that firstly, you become engaged in retirement planning, know what you need and leave a margin of safety. This will give you peace of mind and the confidence to then start investing more in life knowing your financial future is on track.
4. Rule #4 — Use all available planning tools.You don't know exactly when you will die, but there are tools available which will give you a rough idea of what your life expectancy is. Use those tools as part of your planning.
   
   NW: We suggest you assume you’ll live to a ripe old age. Planning tools are invaluable and we strongly encourage you to start working out how your future wealth building is tracking. For us, it seems like madness to work so hard year in year out, without having at least a reasonable idea of how much you need to retire, when you wish to retire, and how are you tracking for this retirement. Every super provider has tools so you can get clarity.
5. Rule #5 — Give money to kids/charity early.Give your children whatever you have allocated for them before you die. There's no point in waiting until you're gone. That way you can give when it has the most impact on their lives as well.
   
   NW: This is a great idea! The only thing better than providing loved ones with an inheritance would be the ability to watch them enjoy it. We appreciate it’s not so easy in practice and it needs to ideally be factored into your retirement planning considerations (discussed above). As an aside, you may consider starting to invest for your children, get them engaged early and let time do its thing. We have a lot of detail on this within the Wages to Wealth program (Module 6).
6. Rule #6 — Don't live life on autopilot.There are no universal laws when it comes to personal finance and balancing competing demands. Don't live on autopilot, be prepared to make constant, personalized changes.
   
   NW: We can all agree with Bill on this. A great step forward to help achieve this, in our opinion, is to first get your money sorted. Create a plan for your money, put it on autopilot, so then you have more time and peace of mind to get out there and live your life with confidence!
7. Rule #7 — Plan in terms of seasons.We all die eventually, and you'll pass through several stages or seasons before then. Make sure you plan your experiences accordingly, rather than blithely assuming you'll go forever.
   
   NW: Plan your money to fund these life stages. You will have a lot of trouble planning life stages if you don’t plan the money to fuel the life. This is somewhat essential and actually quite easy to do. Consider downloading our Money Plan, start listing life stages or objectives, add timelines and how much money you need and you’re off and running.
8. Rule #8 — Know when to stop.There is an optimal point at which you should stop working for maximum lifetime fulfillment. Figure out what that is before you blow right past it. Nobody on their death beds wishes they had spent more time at the office.
   
   NW: Based on our experience, we can agree with Bill. We have spoken to many people who have accumulated wealth well beyond what they needed to address lifestyle costs. Again, this comes back to planning and awareness.
9. Rule #9 — Take big risks early, not later.The younger you are, the more risks you should be taking, and the bolder you should be. Identify opportunities that pose little risk and go for it. You won't be able to do this once you get older.
   
   NW: It makes sense to take risks earlier in life (than later), but, as we suggested above, if you are young and have time, you have an amazing opportunity to get the best of both worlds (living life and building wealth) by acting intentionally and having a game plan. By doing such, there isn’t a need to take “risks” unless you’re unfulfilled and feel a need for such.

Our takeaway:

Put simply, we agree with Bill. To “Die with Zero” isn’t what he is suggesting, it’s a catchy title. More so, the takeaway needs to be about the value in becoming aware of the life you want to live and using your money as the fuel to live that life. Get clear on when you want to retire, how much money you need to retire. By getting organised and making a simple plan for your money, you will then allow yourself the opportunity to live your best life.

Too many people accumulate more wealth than they need, and therefore spend many extra years working when they perhaps didn’t need to. And to be clear, there is absolutely no issue with working longer than you need to, it’s more so about ensuring you’re making an informed choice to do so.

Time’s up! if you wish to get financially organised, create a plan and be intentional with your money, the Wages to Wealth program is ready to help you.

Cheers,

Dan and Dave