There were many valuable insights from the book “Die with Zero” by Bill Perkins. Here’s a crash course on the book and why we like it.
Before we get started, you may want to check out these financial planning blogs we’ve written:
Filing your tax return: traps to avoid
Retirement Account Contribution Amounts – 2024 changes!
Do I have to pay taxes on an inherited annuity?
Let’s get into it!
#1 Think about health span in addition to life span
Everybody knows what a lifespan is: the amount of time you’re reasonably likely to live. Simply put, it’s the “amount of years you have left.”
But almost nobody thinks about what a healthspan is. It is the amount of time you are likely to live in good health, free of disability and disease. While lifespan is the amount of years you have left, healthspan may be defined as “the amount of good years you have left.”
Healthspan is often neglected, but the reality is that the years you are healthy (and hence able to work, earn money, and function without assistance) have a big impact on your ability to earn and save money, and consequently, on your financial planning.
#2 Bucket your goals
Many of us have a list of all the things we want to do before we perish. The problem is that many times we think about our goals in random order. Perkins suggests grouping these desires into buckets based on 5-10 year intervals. This helps to align your healthspan with what you want to accomplish in your life.
Use the bucketing approach to align your healthspan with lifespan, and then put a financial plan in place to make these dreams become a reality.
#3 Think about what you are actually saving for
Do you really want to die with all those millions in the bank? What are you actually piling up all this money for?
Are you sacrificing experiences that would enrich you and your family’s life, for the sake of being able to satisfy some retirement planning graph?
Think about what opportunities are once-in-a-lifetime chances that you may never get again. Is there a trip you want to take with your teenage kids, before they go off to college? Could you be spending more time caring for your elderly parents instead of putting in extra time at work?
“Die with Zero” also discusses the idea of gifting assets not as an inheritance but as gifts for you to see your beneficiaries enjoy while you are living. Would it make more sense to buy your kids a house now, while they are a young family strapped for cash, rather than wait for them to get an inheritance check in 30 years? Perkins advocates that while it’s never a good idea to act imprudently, it makes sense to exchange money for time and health because that improves the quality of the life experiences you have.
What are you going to die with?
Managing your finances and your life is a delicate process. There’s no one book that holds all the answers. Needs can change. Situations are sometimes out of your control. The best solution is to work collaboratively with the necessary experts and use a dynamic approach that evolves as your life path does.
We are financial advisors in Morristown, NJ serving the local community and beyond. If you have questions about how to save for your life goals, retire, or plan an inheritance in New Jersey or elsewhere, or wish to help your heirs to do so…or (like us) are just plain old Bruce Springsteen fans, reach out and send us a message.
Sources
Tae Kim. 2023, Nov 9. Die with Zero // 8 Amazing Lessons + 2 Okay Ones. [Video]. YouTube. https://www.youtube.com/watch?v=-7wEy-UiVsI
Marriage Kids and Money. 2022, March 30. Die with Zero: A FIRE Journey Reboot. [Video]. YouTube. https://www.youtube.com/watch?v=RRgS2VzU5tA