One of the many aspects of enjoyment I get from writing these blog posts is to consider questions that would never ordinarily cross my mind. I’d wager that most of you have never considered asking yourself the question this blog post is asking. And believe me, I hadn’t either, that is, until I came across a book called Die With Zero written by Bill Perkins. This post will explore what the Die With Zero philosophy is (I bet some of you astute readers may already have some idea), what the pros and cons are of this concept, the value of creating memories, and, perhaps, most importantly, consider the connection between what we earn and the meaning we can create in life.
Before we delve in, let’s spend a few moments looking at the basic premise of the die with zero philosophy. One of the main ideas Perkins writes about is to prioritise fulfilment over your bank balance. Perkins advocates spending money on experiences rather than material possessions. Experiences create memories, which can be reflected on fondly as we traverse our way through this crazy journey of life. Personally, this is something I very much advocate. I’m 52 now. I’m pretty sure that by the time I hit my 80’s (I’m being optimistic that I’ll get there) and reflect on the highlights of my life, my happy moments won’t be whether we had 3, 7 or 48 bedrooms, a car bigger than a 44 tonne truck, or 28 promotions that drove me to lose the plot. I believe it will be the simple pleasures that I reflect on. The walks, nights away, holidays, gigs, good conversations, the belly laughs. To me, those memories will resonate far more, I believe, than whether my smart robotic app-connected lawn mower is better than Steve’s Flymo next door. Which, just for clarity, it very much is.
“Making money is good, but there’s no pockets in a shroud.” – Terry Pratchett
Why I Like This Philosophy
Okay. Let me make one thing clear at this point. What I, and indeed this post, is not advocating is that we all spend every last penny we have before we head off this mortal coil. I mean, already, we can see one fairly large challenge with that approach. For those of you who remember, we would need the skills of someone like the departed Mystic Meg to predict when our time was up. Information, I for one, would rather not be privy to. So no, this post isn’t recommending dividing our days left by the bank account balance to set a daily spend budget. What we are really looking at is how we can use our money to create the richest life possible whilst retaining financial security.
As well as prioritising experiences over accumulating wealth, Perkins also highlights how our health declines as we age. This is knowledge we are all aware of, of course, but why is this important? For one thing, there is a danger we could fall into the trap of holding money back, perhaps due to being over-cautious and developing fears that our money could run out. As much as we need to consider our finances long-term, it’s important we don’t neglect our present, healthier years, including those years before we retire. Regrets in later years could start to develop if trips/experiences are not taken when health allows. Trekking through the Himalayas at 75 is going to be very different to doing it at 40. Having one eye on the future financially is important, but not at the expense of present-day needs being ignored. Consider partaking in active, physical activities while your age and body allow. Doing so will hopefully then hold off any regrets later in life.
From Miser to Mindful
Hopefully, by the time you reach retirement, you will have accumulated a little more savings than in the picture above. It is, of course, good to save diligently for retirement. This phase of life is a massive transition for many reasons, including financially, so being comfortable with your overall assets/disposable income is vital. But can the focus be too one-sided, where a reluctance to spend might creep in, whether that be for fear of financial resources running out, or perhaps protecting any legacy you wish to pass on to future generations? Perkins writes that some retirees can become so focused on preserving wealth that they deny themselves experiences they can very much afford. Balance is important, of course. To reiterate, the suggestion isn’t for you to go all gung-ho, spend every penny you’ve got before you go, “Ah, geez, that was a mistake. I’m only 68, extremely healthy, and I’ve now run out of money!” The idea is more that you consider a few thought-provoking questions, such as;
- Am I postponing experiences I might never get to enjoy?
- Would I rather leave money behind or memories?
- Am I protecting my future, or am I delaying my life?
I’ve mentioned the term regret already in this post, and I will reference it again. I believe that one of the most difficult challenges we will face in life as we age is looking back and wondering why we didn’t do things differently. Whether that be not commencing a hobby or a business venture that we always deep down wanted to. Or why a particular relationship failed when it could so easily have been salvaged. Or why we didn’t live life to the full, even though we had the financial ability to do so. In the cold light of day, with hindsight, these could be painful questions to consider. This is why we must consider how we spend our time and money before the opportunity passes us by.
But Matt, I Don’t Actually Know When I Am Going to Die!
Yep, a jolly good point! It’s a tough one to schedule, isn’t it? This, therefore, makes the philosophy of ‘dying with zero’ very hard to manage. I am saying this in a very tongue-in-cheek manner, of course – serious subjects sometimes need to be approached with a little bit of lightness – but it does highlight the danger of spending too much too soon.
And it’s not just our inability to calculate when we’re going to pop our clogs that we need to consider. Life throws a lot of uncertainty at us, as we well and truly know. Physical and mental health ailments could mean that our money priorities need to be shifted elsewhere as we age. This could be adapting our own homes for our changing physical needs. For others, it might be that home help care is needed, or for some, residential care. Costs such as these don’t come cheap. A recent article by carehome.co.uk shows that the UK average cost for residential care is £1298.00 per week, equating to an annual cost of £67,496. That is, quite simply, a lot of money.
As well as uncertainty as to what the future holds, creating a legacy to pass on to others may be considered an important part of wealth generation and savings. People will naturally gain satisfaction leaving something behind upon their passing, whether that be helping their children and their families, caregivers, close friends, charities or pet trusts. This can fill a fundamental human need as it allows individuals to support causes they care about and to find comfort in the idea that their life story, what they have gained financially, can continue to impact others.
I talk a lot in my blog posts about wellbeing and how we can develop and maintain good mental health in retirement. It’s not surprising to know there is a link between our financial status and our overall happiness levels. So yes, as much as this blog post advocates spending money on experiences, and doing so when health allows, it also recognises that we can gain comfort from knowing we have sufficient money behind us. A recent article highlighted research from an Edward Jones & Gallup survey showing that people who feel financially secure report better mental health, greater life satisfaction, and lower stress levels. And conversely, those experiencing financial stress were more likely to struggle with retirement planning and future confidence.
So again, it’s really striking that preverbial balance. Granted, that sweet spot isn’t always easy to find, but what this post is encouraging is that attention is given to both enjoying life by partaking in experiences, but also recognising that other demands on our money, such as our changing physical needs, legacy planning, market instabilities, etc, need to be considered.
So, What Is the Middle Ground Then?
Okay. So this post has the slightly playful title of considering spending every last penny we have before we bite the dust. We have established that, well, that’s just ridicolous! Not knocking Bill Perkins’ book, of course. The title is there to grab you (hopefully). It’s the content within regarding creating memories and trying to maximise your ‘return on life’ that is important. This post has looked at the pros and cons of spending, and has argued that ideally we need to aim for a middle ground.
So how can we achieve this then?
Here are some ideas which I’ll pop into bullet points so they stand out more.
- Spend more intentionally rather than recklessly
- Build a safety margin.
- Prioritise experiences whilst health is good
- Leave a legacy if that’s important to you
- Review spending regularly rather than hoarding money unnecessarily
Throughout life, it’s important that we try to use our time in meaningful ways, ways that bring us joy. This is accentuated even more in retirement purely due to the amount of ‘spare’ time we have available. I believe it’s important to remember that money is a tool – an important tool, of course – but it’s not the end goal. The ultimate objective might be to live a life well-lived rather than have the largest bank balance.
Perhaps the Goal is Not to Die With Zero, But to Die With Few Regrets
The Die With Zero philosophy raise important questions, even if you don’t fully agree with it. Financial security is important and should not be dismissed in any way. I’d say that’s a given. Equally, there is little value in accumulating wealth that doesn’t, in some way, improve your life. Therefore, we need to find a balance point. Everyone is likely to have different balance points, as it will depend on personal circumstances and individual preferences. Some will gain fulfilment by putting a lot of financial resources into experiences. Others will gain equal fulfilment by keeping money in reserve and ensuring sufficient is left for a legacy. The key to this is making conscious decisions rather than drifting into either excessive spending or excessive saving.
Retirement is not about having the biggest bank balance at the end of life, nor is it about spending recklessly while you can. It’s about finding the confidence to use money in ways that enhance your wellbeing, support the people you care about, and create a life you will look back on with satisfaction rather than regret.
I want to leave you with one question to consider, a question which links in with part of the theme of this post. Feel free either to go away and think about it, or add your thoughts/answer in the comments below. That question is;
What would I regret not doing ten years from now?
A simple question, but an important one. Ten years will fly by – we can all likely vouch for how quickly time passes. We need to try to pre-empt the future. And only by considering our possible future regrets will we be able to change our decisions to ensure those regrets are, at worst, minimised, or at best, eliminated.
Thank you as ever for reading.