Should you die with zero?

“A few good dudes are gathering in El Salvador in April. The waves are expected to be 3ft-8ft, highly surf-able and fun for all levels.”

I read this email with great enthusiasm. And trepidation.

It was a semi-private destination. Lots of perfect waves. Not that many surfers. My mouth was salivating.

I kept reading.

“On average there are 1-2 dozen surfers in the lineup at peak hours. The resort has a limit of 20 surfing guests.”

Damn. This sounded delicious. But with 2 young kids and a growing business, it felt indulgent.

Unnecessary. And to be honest, impossible.

I kept reading.

“I know we all feel too busy, but as I enter my late 40s I am realizing that the time is short where I will have both the means and physical ability to do something like this.”

Yikes. Thankfully I’m “early forties.”

Phew.

But was the window on these adventures closing faster than I thought?

Expiration dates and magical windows

Is there an expiration date on my ability to take surf trips? (This is a $10K Question.)

Absolutely.

I mean, I’ve already got “shoulder impingement.”

And my lower back hurts after a 15 minute game of Gaga with my 7 year old and her friends.

Yet the business needs me. My family needs me. And I don’t want to miss out on the Magical Window of parenthood:

“There’s a magical window – 8 to 12 years – during which you and your wife are their__absolute favorite people in the world_. They wait by the door for you to come home like a puppy. There’s no one on earth they’d rather be with. And then it’s gone. Now it doesn’t mean that they don’t love you as much. They still need you just as much. But the magical window is gone.”_

But it would also be foolish to ignore the fact that many of life’s experiences have expiration dates.

Some of these expiration dates are welcomed. (The inability to stay up past 10 pm.)

Some of these expiration dates are un-welcomed. (The inability to listen to Rage Against the Machine in the car.)

And there’s one “big expiration date” that we rarely talk about.

Our own lives.

How much money should you leave behind?

Meet Bill Perkins and his provocative book Die With Zero: Getting All You Can from your money and your life. The concept is deceptively simple. If you die with > 0 in your bank account, you failed at fully optimizing your life.

There’s a lot here to unpack. A lot of nuance. And a lot of things we don’t like openly discussing.

But I’ll be honest. The philosophy vibes with me.

I also think it will be hard for Lisa and I to execute.

Perkins’ argument is that we’ve got a finite time on this earth. Money is not the end, but the means to an end. And whether your goal is to maximize experiences (ahem, surf trips) , set up future generations to live scot-free or to be the change you want to see in the world – you should do it while you’re alive.

The first impulse is to reject this premise as being egotistical , hedonistic and selfish. Why should you only optimize your experiences , you greedy bastard?!!?

This flat out misses Perkins’ point. Certainly, some people will want to have a life filled with experiences. Perkins would say, “You do you.”

Perkins’s argument is much broader. You should be intentional about what you want from your money. Or else life will just happen to you.

So if you’re passionate about fixing the homeless crisis in LA, use your money – today – to try to improve it.

If you want your kids to inherit a certain amount of money for homes, education and their own experiences – start thinking about it today. Or else it this wealth transfer will just “happen.”

(To make this point crystal clear, consider the following: If you had kids at 35 and pass at 80, your child will receive their inheritance at 55. Probably a bit late, for a lump sum of money?)

But the math… the math?!?!

The next criticism involves math. Specifically actuarial math.

There are a lot of variables to consider here: Life expectancy, inflation, healthcare, interest rates, stock market returns, your health, your spouse’s health.

So it follows that you should save your brains out to ensure that you are equipped for every possible scenario.

Let’s take an obvious variable, like life expectancy. The average male expectancy is 76 years old. But we all know many grandpas who live to be 85. Even 90. Who’s going to pay for those extra 14 years?

So you better save.

Save. Save. Save.

Perkins argues that this is misguided and we should stop “trying to be our own insurance companies.” In a capitalist society, there are plenty of companies that would a) insure that risk and b) can do it more effectively than a private individual.

So instead of worrying about the rising costs of nursing homes , you could buy long-term care insurance.

My cursory Reddit search revealed that for a defined monthly benefit of $5,000/month (i.e. you get $5,000 a month to pay for a nursing home until you pass) you’d pay a couple thousand dollars a year.

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(It’s more for females because they have longer life expectancies.)

It’s not cheap, but if you’re worried about needing expensive care later in life, it’s relatively easy way to buy peace of mind and eliminate this risk.

Similarly, if you think you’ll outlive your actuarial life expectancy, you can buy a permanent life insurance policy. These will pay out a fixed sum up until age 121. (Probably a safe bet.)

Perkins’ point is that it’s inefficient for you to try to model out, plan and save for all these permutations. You can insure them all away.

But the kids. What about the kids?

The next criticism lobbied against Die with Zero is about our precious cargo. The kids.

What about the kids?

Once again, Perkins says (and I paraphrase), “If you want to leave your kids money, you absolutely should.”

He just wants you to be intentional about it.

Lisa and I often talk about what we’d want to leave our kids. We want to leave them enough to lead comfortable lives, rich with opportunity. But not so much that they are entitled, ungrateful and unmotivated.

(We’re also completely sanguine about the fact that much of this is out of our control.)

For us, that seems to be:

Paying for all their education (debt-free)
Maybe(and this is a serious maybe) helping them with their first down-payment
Possibly, funding our future grand-kids’ 529 plans

Thankfully, the first two seem to be within striking distance given our current investment portfolio and current earnings potential.

If we assume that our kids will want to buy their first house at 30, Lisa and I will be 65 and 63 years old. Hopefully, we’ll have some time left on the clock.

Once again, Perkins is not saying “Don’t leave your kids anything.” Far from it.

On the contrary, he’s saying “we’ll just leave them what’s left” feels very sub-optimal.

Experiences are fleeting

As we continue to age, Perkins gives us the (painful) reminder that as we age “it becomes harder to convert money into experiences.” He tells the story about his grandma who currently is living in a nursing home. If he were to give her $10,000, there’s nothing she could do with it.

Her days are simple. She reads. Plays card games with her friends. And hosts an occasional visitor. She doesn’t want to “buy anything,” nor is it possible for her to “go out and have experiences.”

The Die with Zero argument is that if you’ve got money left after accounting for your kids, your charities and your experiences, you might’ve done it wrong.

So will we (try to) with zero?

Personally, the argument about insuring away the risks that scare you was a compelling one. I’ve made a note to further investigate long-term care insurance.

And we’ll continue to think about how we can intentionally support our kids during their changing seasons of life.

Perkins’ philosophy makes a lot of rational sense. But when you think about life, death, the passage of time, your kids, and the dent you want to leave in the world – you are faced with the limits of rational thinking.

Which is why I think it will be hard to put this fully into practice.

So about that surfing trip? I passed. (It was right after Easter break.)

But I immediately researched another one for the month of June. One with a kids’ club (for the girls). One with a spa (for Lisa).

And one with some sick-ass waves.