9 simple rules for getting all you can from your money and your life- Die with zero book review

One third of all retirees actually increase their assets after retirement. Instead of slowly or quickly decumilating, they continue to accumulate wealth.

The funding of retirement is important and as we get closer to this point, our focus on this increases. However, if we die without spending all of that money that we have worked so hard to accumulate throughout our life, then surely we have wasted some of our time?

The key lesson of Die with Zero is to ensure we know when to stop working and when to start living. It is vitally important that we carefully consider the balance between our wealth, our health and the time we have available throughout our lives. In this book Perkins makes it abundantly clear that there are no prizes for being the richest person in the cemetery.

Key rules from Die with Zero and how we have applied them

1. Maximize positive life experiences- Ensure that you spend your life building meaningful & memorable experiences. Don't wait until you retire to start doing the stuff you like. Start actively having the life experiences you want to have now.

We had a long held ambition to buy a campervan upon retirement and travel the world. Before reading this book, we made the scary decision to draw down from some of our assets and invest in a high end VW campervan prior to retirement. We never regretted this move, it is one of the things that got us to eventually come to the decision to retire at 50. Similarly, when our kids were little, and we were younger, we invested heavily in ski holidays. The memories we accumulated over the years of family holidays in the snow are now priceless and can never be taken away from us.

As we get older, we have to recognise that our potential skiing years are dwindling. We know at the moment that we still have a lot skiing in us, but our natural health decline in old age will eventually preclude skiing holidays as an adventure option. Skiing is one of many examples of activities that should definitely not be pushed forward into our golden years of statutory pension age and should be done now!

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.

Perkin’s draws an interesting parallel between the investment of money with that of investing in memories. Just like when we invest money over time, there is a similar cumulative benefit to investing in memories over time.

The impact of memories are more than the sum of each individual memory, they compound on each other to create a more positive effect overall. For example, the benefit of taking a long family holiday to the gulf coast in Florida lasts longer than just the time it was taken. That memory compounds into the memory bank of future years- adding to the memory dividends we experience over a lifetime.

All too often we see the benefits of experiences in the here and now. In reality, the experiences that we choose to take now, are the investment gift that keeps on giving year after year. We believe there is no point in keeping those potential memory deposits held back until the point of retirement.

3. Aim to die with zero. Ideally, Perkins states we should aim to die with zero- anything less should be seen as a waste of our life’s valuable efforts.

We should all aim to have spent our money on having great experiences, making sure our families and loved ones are well cared for and leaving some form of legacy from our lives. For us, this is a clear definition of a meaningful life, and something that we are willing to strive and aspire for.

The biggest question that we all have to ask is how much money is enough? If we spend too much time and effort accumulating wealth and too little time spending it, we are wasteful. Conversely, a common worry is if we spend too little time and effort accumulating wealth, what will we do when we run out of money in our old age?

Perkins offers some valuable advice- as we move through the various phases of retirement pointing out that our spending demands reduce significantly as our health steadily deteriorates and we do less as we age. As we approach retirement, we should find ourselves in the optimal position- our wealth/income is maximised and our sound health allows us the very best opportunities to use that wealth for building meaningful and memorable experiences.

4. Use all the available planning tools. Thankfully, none of us know when we will die, but Perkins highlights tools that are available which will give us a rough idea of what our life expectancy is.

Personally, this is one aspect of the book that we are not too sure about. Life (and health) is not an exact science. Things happen that are not predictable. Life can throw some curve balls at us that science or algorithms cannot possibly predict. For us, we are happy to accept that life is short and thankfully we have no idea of the end date, so we need to make as much out of the present that we have.

5. Give money to kids early. When we spoke with our children about our plans of retiring early, one of their natural concerns was understandably Oh brilliant…you are going to spend all of our inheritance and we will have nothing. (Don’t you just love kids!)

Luckily for the kids, the book covers this topic in detail, advocating that it is in fact irresponsible to wait until the point of death to gift your children the things that they need.

There is no point in waiting to pass on our assets until we are gone for a number of reasons. Firstly, you do not get to see the benefit of your benevolence on your loved ones. In addition, looking at the pure facts, most parents are about 25 years older than their children. At the point of average life expectancy of 80(ish), our children should be at a place in their lives when they no longer need a lump sum of inheritance to enhance their lives. To maximise the benefit of their inheritance, they need it earlier in their lives when their income is lower, and their health is better to gain the full benefit of the additional funds.

6. Don't live life on autopilot. We liked this rule, as the book questions the commonly accepted norms for investing and saving. Ironically, it actually described pretty accurately our financial management up to this point in our lives. This gave us a lot of comfort as we previously felt that we had just stumbled through our lives, spending and saving in a rather chaotic and shambolic way!

Universal financial plans such as targetting 10% savings and the 50/30/20 rule cannot apply across all stages of our personal finance journey. Perkins argues that investment planning cannot be linear- our income and expenditures change through the different phases of our lives.

It is fine not to be able to save extensively in our youth- in fact it could be foolhardy to try and do so. When we are young, we have the health, energy and time to take risks. Our income is relatively low, but the world is our oyster and we should look to max out our experience- even at the cost of incurring potential debt.

As we grow older, our income grows exponentially, thus our potential to save and accumulate wealth for retirement also grows. Aligned with this, ironically, our costs during the retirement phase of life reduce significantly. For us, a prime example of this was when our mortgage was eventually paid off. A huge chunk of monthly expenditure disappeared overnight and our surplus income/investment potential increased significantly.

Another really important aspect of this rule is the need to invest in our health. There is no point in making all the financial investments for a long life if we neglect the health investments that will get us to achieve that long life. This investment can come in the form of maintaining a healthy diet, having enough daily exercise, managing our overall wellbeing and ensuring that we take advantage of regular health checks.

This rule is perfectly summed up in the very real conflict between rising wealth and declining health in our retirement years.

7. Plan in terms of seasons. We all die eventually, and we all pass through several phases or seasons before then. This rule advocates making sure we plan our experiences accordingly, rather than blindly assuming we’ll live forever.

We like the way Perkins questions the traditional concept of bucket lists. Perkins looks at establishing separate bucket lists for each phase of our life. Essentially, these lists must directly reflect the varying health and wealth assets of each particular phase.

This thinking particularly resonated with us. We have since carved up our generic bucket list into the separate phases of our retirement- 50 to 55 (pre-pension budget), 55 to 67 (teachers pension income) and 67+ (teachers and state pension income). Each list reflects the income we will have and also our predicted levels of health and energy for adventure!

8. Know when to stop growing wealth. There is an optimal point at which we should stop working for maximum lifetime income. The trick is to figure out what that is before we blow right past it.

For us that time is at the age of 51, and the book provided valuable reassurance that we are doing the right thing. Nobody on their death bed wished they had spent more time at the office.

An interesting observed issue in retirement can be a resistance to halting the savings habit of a lifetime and having to break open their much coveted nest egg. Surprisingly to us, many people struggle with the concept of no longer saving money. The resistance to spending one’s wealth in retirement is apparently very common with many people.

9. Take big risks early, not later. The younger we are, the more risks we should be taking, and the bolder we should be as we have little to lose, and more time to recover if things don't go to plan.

We have identified that we are now at the point that we can leave our careers with little risk. We have only a few years to survive until we can access our teachers pension early at the age of 55. The risk is minimal (yet still scary for a risk adverse couple).

We have made a conscious decision to maximise the time that we have to do the things that we love, whilst we still have the health to be able to do it. Will we have regrets over not working our final few years up to 55? Probably not, but we do know that we will never be able to claim those years back after we reach the age of 55 if we do not do it now.

The underlying theme of this book repeatedly emphasises and explores the importance of balancing health, money and time across our lives. The title could be seen by some as morose- please do not be put off by this and look beyond the title.

In summary, this book is a simple, quick and entertaining read, packed with easy to understand illustrations of the basic philosophy of dying with zero. I consumed the book in 48 hours and find myself constantly revisiting it for tips, insights and reassurance in our preparations to retire at 50.

Your life is the sum of your experiences.