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WHAT’S THE PURPOSE of life? Is it to die with as much money as possible or, as magazine publisher Malcolm Forbes was quoted as saying, “He who dies with the most toys, wins”? An intriguing and provocative book, Die With Zero, says no.
The book’s author is Bill Perkins, a successful energy trader. In it, he argues that the purpose of life is to accumulate as many fulfilling experiences as possible, and in doing so we should aim to die with zero dollars.
The author is not a financial planner. He trained as an electrical engineer, but went to work on Wall Street and made a fortune trading energy. Perkins’s training as an engineer, and his nature, drive him to seek improvement in all aspects of his life. The book is a description of his philosophy on how to maximize our life’s fulfillment.
Perkins tells us, “Your life is the sum of your life experiences. Contrary to belief, this can be quantified and optimized.” The author presents his key concepts as a series of nine rules.
Each rule gets its own chapter, with examples and personal anecdotes to illustrate the message, and the chapters end with recommendations summarizing Perkins’s key points. Many readers, including me, will initially recoil at some of his ideas. Perkins tries to address common complaints head on.
For example, a typical criticism he hears is that, in spending all your assets, you’ll leave nothing for your heirs. His response, encompassed in rule No. 5, is to give to those you care about as soon as you can, when they’ll most likely make better use of your gift.
Many of his themes align well with much of what’s written on HumbleDollar, including focusing on experiences, living mindfully and understanding risks. One of the more intriguing concepts he presents is encompassed in rule No. 7. In this chapter, he discusses the idea of time buckets. This topic intrigued me because, a few days before I read the chapter, my wife and I spent a few pleasant hours unknowingly creating time buckets for ourselves.
What’s a time bucket? Most of us are familiar with a bucket list, which is a list of the things we’d like to do or achieve before we die. Many HumbleDollar readers are also aware of the bucket strategy used for retirement-income planning. That strategy involves creating several buckets of assets, each designed to provide income for different time segments. For example, the first bucket usually holds several years of spending money in cash or safe assets. Later buckets are earmarked for intermediate and longer-term spending, and are held in riskier assets.
Time buckets are a bit of a combination of both concepts. It’s based on the idea that our abilities diminish over time. Some experiences are best enjoyed when we’re young, while others can be delayed until old age. In our youth, we usually have better health and energy, but less money. As we age, our health and energy wane, but our wealth should grow, allowing us to engage in more expensive activities.
Obviously, these are generalities, and there’s a wide range of abilities and household wealth at each age. But don’t let that distract you from the key message: We should think about what’s most important to us, and do our best to plan how and when we check off our bucket list items. Perkins encourages readers to create time buckets into which we organize our desired memorable moments. Climb mountains in our 20s and 30s. Take guided tours in our 70s and 80s.
A week ago, my wife and I sat down to plan out our travel for the next five years. We discussed how many trips per year, what time of year, where we wanted to go and what our priorities were. We’re thinking of two big trips a year, most likely in the spring and fall. Spread around the rest of the year will be visits with our children and their families, our annual Thanksgiving family trip, travel to see other family members, and shorter road trips to places we’ve been meaning to see.
Without realizing it, we were following Perkins’s advice. I like the idea of time buckets. What about dying with zero? Not so much. But it has got me thinking about rule No. 5.
Richard Connor is a semi-retired aerospace engineer with a keen interest in finance. He enjoys a wide variety of other interests, including chasing grandkids, space, sports, travel, winemaking and reading. Follow Rick on Twitter @RConnor609 and check out his earlier articles.
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I’d been advised ‘enjoy stock market returns as long as you can accept the risk’, then buy 2 annuities splitting the risk of even their insolvency. We all remember A.I.G.
I haven’t read the book, but one way to die broke is to invest the whole portfolio in annuities. You have all the income with no performance monitoring needed. No worries about the markets and its fickle nature. Now, that’s not what I do or advocate, but I can see how it might be a convincing argument for those seeking simplicity and safety.
I refer to retirement as the SKI trip – Spending the Kids Inheritance. S
My contrarian point of view is that I’d rather live a simple life enjoying friends and family rather than spending my money on fleeting experiences and possessions. Sitting around a large table enjoying a communal potluck with family and friends is my greatest joy. Not to mention that I chose to live in a beautiful area of Montana that I love to explore, very cheaply. I’m looking forward to bestowing my money on my kids at death, knowing that it will fund college educations and down-payments on homes. And yes, I give some of that with a ‘warm hand’. Somehow, spending large sums of money dealing with airlines and being a gadfly in the pursuit of ‘seeing things’ here, there and everywhere has no appeal to me whatsoever.
Great article. I just downloaded the book. My husband and I have made a similar travel grid for upcoming years, including both wish list destinations and best times of the year to travel there (example: winter here for South America or Downunder, which are on alternate seasons to us; fall for Europe when it’s less hot and crowded). We also want to visit many baseball stadiums, so we’ll plan shorter trips around those. I don’t think we necessarily want to go to all of them, but I found a website that will help you plan your ballpark trips.
I also am interested to read #8. After the discussion here the other day about target retirement funds, I was talking to my husband about maybe adjusting our dates for those to be more aggressive. His response was that we have enough for our own retirement years and to leave a legacy, and we don’t need to get greedy. I need to think more about what responsibility, we have (if any) to be prudently aggressive (so that we have more to leave, I guess).
Thanks for your summary and comments, Richard, on what sounds like an interesting book. Without realizing it, I have also utilized the time bucket concept. Additional advice I would give: Don’t put off those experiences that you most want to have with the people you love. I’m forever grateful that Doug and I visited both Morocco and the Greek Islands soon after we retired. There’s plenty of places I still hope to visit on my own or with family members, but those two were really special to us and they just wouldn’t have been the same without him.
Great article Rick. As time becomes our most important asset as we grow older, it only makes sense to plan use of it in new ways.
So many books, so little time. I enjoy reading a well written and concise summary of a book I probably won’t read. This book is provocative, it stimulates one to think. Personally, I’d ignore numbers 3, 4 and 8 because it clashes with my all important concept of “margin of safety”.
The other items provide food for thought, especially number 5. We balance our intention of leaving a large sum for our kids to inherit some day, against thoughtful gifts to them and to charity along the way.
Nice article Richard!
Jack, thanks for reading and your kind words. I’m a big fan of margins of safety. I even wrote an article about it.
https://humbledollar.com/2020/10/margin-of-safety/
Good article. I think the author’s message is to put more emphasis on the now and minimize the “some day” rather than literally dying broke. It seems so much is written about planning for worse case scenarios as we age but not enough about the risk of missing out on living the only life we have. Taking advantage of our healthy years can not be emphasized enough.
Scott, thanks for reading and commenting. The title is definitely provocative, and many of the HD community (me included) will react negatively to the concept. But he does make some good points about balancing the future with the present.
As to #5, a previous HD author talked about, “giving with a warm hand instead of a cold one.” That notion has stayed with me ever since.
B – thanks for reading and commenting. That previous HD author is a wise person.
As I have written, I took early retirement so I could travel before I got too decrepit, and when I was grounded by rheumatoid arthritis and Covid precautions I was very glad I had. So I definitely buy part of this, but “dying with zero”? The guy has to be kidding.
There will be more than enough to worry about as death approaches (assuming you aren’t felled by an accident) without adding finances to the mix. Only a very wealthy gambler would come up with such a stupid idea. All too many people actually wind up in that situation without wanting to, and I bet they would choose differently if they could.
Kathy, thanks for reading and commenting. I’ve seen many seniors with little assets or income, and I thought of them as I read this book. MY wife and I are fortunate enough to have sufficient assets to retire comfortably (but not lavishly) and hope to use our years wisely. I’ve spent the last two days chasing a 3-year old grandson around the beach, building sand castles, and playing baseball. I’ve also spent a significant amount of time on the floor with a precocious 8-month old playing blocks and peek-a-boo. I’ll keep doing it as long as this old body lets me.
My wife and I have pretty much followed the idea of buckets both financially and with our time. We had one big trip a year and several smaller ones and then road trips. We are now trying to figure out a couple of more trips, but it is getting harder as my wife faces significant mobility issues these days.
As we are learning first hand, aging has it consequences, but if we can’t make that next trip to Europe or cruise, there will be no regrets. We had our shot at the brass ring and grabbed it quite often.
This die with zero is not my cup of tea. As has been said, you don’t know your expiration date and unlike on packages of cookies ours actually means something.
We give money to grandchildren via 529 and we have given a portion of our RMDs to our children, but I am very reluctant to go further and start depleting accumulating funds. I just figured out how much steady income my wife would receive as a survivor. It is substantial, but not sufficient to pay for a decent nursing home or in home aids should that become necessary and our LTC insurance is minimal in the scheme of things.
My priority is to account for every possible “what if” while either of us is living and NOT to ever become a financial burden on our children. With that in mind, they can wait for the cash.
“… substantial, but not sufficient to pay for a decent nursing home or in home aids should that become necessary”
One reason I am moving to a CCRC that promises not to throw me out if I run out of money. I will be able to move to Assisted Living and/or Skilled Nursing on site, knowing that I can stay there even if I am dying with zero. The CCRC in question has good financials and a benevolent fund. But it sounds like your investments will be sufficient.
Dick, thanks for reading and sharing. I tend to be very conservative, and look for multiple ways to provide a margin of safety. De-cumulation of our assets in retirement is a challenge because of the uncertainties.
Rick – great article and summary of Perkin’s concepts. After reading his book, I tried to write this same article but just couldn’t develop a worthy set of take-aways. Humble Dollar writing well presents the concepts of maximize experiences, share wealth while alive and wealth may grow to more than you think. Perkin’s does make a good case to spend extra money while young on activities and experiences that may not be physically possible later.
The title sounds good, but it is unrealistic to Die With Zero since we don’t know the end date and are wise to retain some contingency wealth until the end. Also, the book is written by a zillionaire so the free-wheeling concepts likely won’t work for many. While somewhat interesting, I found the book quite repetitive. My recommendation is to read your article, skip this book and read one of the other great books discussed on HD in the past.
John, thanks for reading and your kind words. My initial reaction to the title was negative for similar reasons – it’s unrealistic due to so much uncertainty. But I think the author is promoting an attitude as much as a financial / life plan. I’m glad I read it, but it won’t likely be a book I read again.
Edmund, thanks for reading and you insightful comments. I found the idea of time buckets one of the most useful parts of this book. At this time of year I often find myself looking ahead to fall – my favorite season. I’m trying to just enjoy these last days of summer. All of a sudden our crop of tomatoes is amazing – and we just had a few cooler days that hint of fall. Have a great day.
Intriguing article, Rick. Number seven stands out for me. Just like we have little control over how the seasons affect our gardens, we can’t keep our lives from moving from spring to winter. Each of can just make the most of the time and activities that are appropriate to each season. Regret is a futile use of thinking time, but I might wish I had realized this earlier in my life.
No day is so good that it can’t be improved by picking a fresh tomato from the garden. Enjoy!
Oh no, did I follow suit with my reply? I don’t have a three year old as an excuse. I sometimes distract myself!
Edmund, sorry I replied above. I’m having Cheerios with my three-year old grandson and got distracted. He told me it’s OK to make mistakes.
No better way to start the day than with a grand child.