Episode Transcript
[00:00:00] Speaker A: For our call out this week, we take a look at the quote dai with zero strategy that's picked up some steam recently in wealth management and retirement circles.
All right, tune day, I saw a recent article that really piqued my interest and really I wanted to have a conversation with you about it because you're a person who's in the wealth management profession and it's a quote die with zero strategy. And this is hedge fund manager and best selling author Bill Perkins. He has a book, die with zero getting all you can from your money and your life. And in that he argues that life is better spent maximizing experiences, you know, as opposed to figuring out ways to maximize your mouth and continue to grow it over the course of your life, but actually to use it. And it can be using it to give to family members or to have to go places and do things and so forth, but just in general and obviously the overall objective being that when you die, you've used everything and there's nothing left at that point. So, you know, again, this is something that I'm sure in your field is like, okay, yeah, that's an approach that some people take and an approach that other people don't take. But what's kind of your, your thought process, when you see something like this and you see something like this kind of pick up steam in some, some.
[00:01:11] Speaker B: Circles, I get intrigued because to your point, I'm, I have a business that's in the wealth management space. I have clients that are retired clients approaching retirement.
So I've dealt with this. I've been in the business now 25 years. So I've dealt with hundreds of people gone through this, this experience. And it's very interesting because it's very unique to each individual going through it like many other important, you know, stages of life.
And, and it's very, I found that it's more emotional and psychological how people deal with money than anything else. Just like food and other topics we can talk about, you know, in general, I find that we relate to money most of us through experiences in our childhood and how, you know, our parents dealt with money and all that kind of stuff. So how people feel about their nest egg, their ability to live a life when they're not working, drawing income and all that, you know, all that emotional psychology and that baggage from their life comes into play with that. So know a bad joke that I tell clients when I work with them that I didn't invent and I stole, I'll say that. But it's has tell people no one ever died on time.
And the, the, the point of that joke is because, you know, like some people say, you know, they'll come to me and say, oh, Tula, you know, how much do I need to retire this and that? And I've kind of learned to say, well, if you can tell me what day you're going to die, then it'll be easy.
Show you a table? Yeah, yeah. Like, hey, look, if you tell me it's going to be, you know, January 3rd of 2000 and 42, then I, you got this much money now let's reverse engineer, put an interest rate factor of 4% or something. I know we can get then, hey, then, you know, this is exactly how much you can spend. So that's why the, the joke of no one ever died on time always stuck with me because it goes. This is where it gets to the psychology part. We, as humans, we want certainty. We want order out of the chaos of the world. And we've talked about this on other shows and other topics. You know, human beings look at clouds and we see patterns, right? Faces and things like that. We look into star. We see constellation or, you know, constellations when we look at the stars.
So when it comes to things like the scary unknown of the stock market and the ups and downs and interest rates and, and costs and inflation and all this stuff, and I, I'm, I've got to think about all these things if I'm in my 60s or something and I might be alive another 20 years and figure out how I'm going to make all this money last that I built up. That's scary. And, and that can cause a lot of emotions and fear and things like that to come out. So that's what I found. I'll hand it back, James, but I would say the kind of die with zero strategy, I can appreciate it because now that I'm middle age, I can appreciate enjoying the journey more than I did when I was younger. And I thought it was all going to be about piling up this, this money to do something when I'm this old guy at 65 or 70.
And, you know, now I can appreciate reading an article like that, like, nah, actually, you gotta do this when you're enjoy it along the way.
[00:04:14] Speaker A: Yeah, well, I mean, I think this really cuts to the heart of some really deep psychological and societal questions because it really does come down to what's, what's the money for? Like, that's, you know, like the unanswered question for many people, you know, like money, money for, for, for the vast majority of people, you know, in, in a society, money is for survival. It's for food, it's for shelter and all that and some joy, you know, like. But primarily that. But when we're talking about wealth management, we're not necessarily talking about the people that are paycheck to paycheck and maybe have a little bit of savings or something like that, or maybe using a little bit of debt in order to, to make it, make ends meet, so to speak. We're talking about people that are in the process of accumulating wealth.
And the question being is should that, what's that wealth accumulation for, you know, is that for, you know, is that just to pass down a big bunch of money, you know, after you die to your heirs? You know the article we're pulling from, from Kiplinger and it's by Jacob Schrader, we'll have it in the show notes. But he cites and over the next two decades you're having 90 trillion is going to pass. Like that's a bunch of people not dying with zero, you know. And so I think you're onto something though. And obviously, you know, you, you deal with this all the time and particularly the psychology of the people who are having this because it's like there seems to be some level of the money is for it make. The more that's there in someone's quote unquote nest egg, the more security they feel. Even if it's well beyond anything they could ever use. It's just like, okay, well if I feel ex secure if I have a million dollars in an account, then I'll feel twice that secure If I have 2 million. And it's like, well, but would the million or 2 million make a fundamental difference? Or maybe if I should say 10 or 20, you know, like, would that make a fundamental difference in anything that you actually do? Maybe or maybe not. But I think the money for when we're talking in this conversation, the money is for some level, it's like a blanket, it's some level of comfort. And so in this kind of dying with zero strategy questions that and saying, well, how much, how much comfort do you want to keep building up, so to speak, when you could actually experience things. And like actually as you, as you said, which I always love that and actually appreciate the journey you're on a little bit as opposed to just looking at this destination the whole time and which can be a very unfulfilling way to be because once you get to the destination a lot of Times it's like, all right, now what?
[00:06:34] Speaker B: Yeah, so that is interesting. So you made me think of a couple examples. Well, obviously the client will remain unnamed. But I remember one person that I spoke to that had that attitude of just wanting to stack everything and had to. She had to see it, you know.
And so I started asking her and I started probing her, you know, why? Like this and all this.
Turns out she went back to her childhood, told me a story. Her parents were immigrants.
And when she was 7.
And I say that to say that because I guess they were working, got here in the United States, started working, had. Didn't have the easiest time, and the house got foreclosed on when she was 7.
And she said she has this real, you know, visceral memory of, like, being evicted from the house when she was young and that day. I guess they must have been sleeping around a bit, you know, maybe families, houses and stuff like that for a while until her parents figured it out. Now, she's a very successful businesswoman. You know, she's doing fine herself. But it's interesting, that's what I mean by the psychology that I had to go back to a story that she shared when she was seven for me to really understand, okay, I gotta talk to her and deal with her a different way. Kind of walk her off the ledge of wanting to see all this money piled up in cash, or especially this was.
I learned this back a decade ago when interest rates were all at zero. You know, she was making, like, no money on her money, but she, she had this emotional need to just see her money. And I, I. And, you know, until I heard that story and understood it, I couldn't appreciate that because I'm sitting there trying to convince her, like, oh, you know, but this doesn't make sense.
[00:08:12] Speaker A: All these tools and mechanisms and, hey, I can make all.
You're like, yeah, yeah.
[00:08:17] Speaker B: And then you realize, no, actually, there's a real deep fear and emotional issue that has to be tackled first before.
[00:08:24] Speaker A: We deal with the thing where it comes down, what's the money for? And in that case, the money literally was for comfort.
[00:08:31] Speaker B: Yeah, well. And so I've got a couple of other examples as well. Again, unnaming, not naming the clients, but other people. I've seen this more where it's amazing, James. I've had clients, like, older. I'm talking about whatever their money got a chance to accumulate. And people in their late 70s and their 80s that make more money every year now on income, you know, half a million to a million dollars. A year just in just an income from their portfolios than they ever did when they were working. They'll tell me they only earned like 70 grand a year in salary on average and stuff when they were working. And so. But they still don't spend this money. And I've thought about it, James, the same way where what would, what would have happened if so. And so when they were 55, just decided, I mean, we're in South Florida for the audience. That's why I say this. What if they just had, had bought a little boat and enjoyed, you know, taking their family up and down Intercoastal and stopping at, for dinner at a restaurant on a Sunday evening and watching a sunset with their spouse? Would their life be much different? The answer is no. They'd still have millions of dollars and all that. And what I realize is the reason they can't do that is because of some deep seated fear. Again, either they were poor when they were little or they feel like people try to get over them on them and they want to hoard all their money. They. And that's what made me realize like you and I were still young enough that we're working, we're putting money away in our IRAs and 401k. So it's what I call the chuck it over the shoulder stage of life. We're running hard, we got the kids, we got the families. We're just chucking our extra money over our shoulder and figure it out. But there's a real paradigm shift that's needed once. It's kind of like once we ascend to the top of that mountain and get towards that quote unquote retirement, let's say in the 60s and where our culture feels people retire, there needs to be a paradigm shift to now income.
And it's kind of like the squirrel in the winter, if we can go to that analogy. The squirrel goes and stashes a bunch of nuts in the tree all summer and into the fall. And so it's in the winter they can have something to eat, right?
[00:10:31] Speaker A: Yeah.
[00:10:32] Speaker B: Imagine James talking about my clients. And for many of our fellow Americans that are older with their money piled up is like if they're the squirrel literally freezing half to death in the middle of the winter with a pile of nuts in the tree and they're just staring at it while they, while you could see their ribs and they're saying, I can't eat any of those nuts. Yeah, it makes me feel better to look at them there and know that they're there than for me to actually consume them, which is what I did all this piling them up for. And that's kind of the example. James will be taking income from your. Like turning your nest egg into an income stream.
Yeah, because if you have a million dollars and you have 10 years at no interest, that's 8, 300amonth. Because 8, 300amonth's a hundred thousand a year times 10 years, a million bucks. So if I'm 80, I could either stare at a million dollars and get my Social Security check for two grand a month, or I could turn that into income and go enjoy myself. Yeah, but emotionally it takes two different emotion emotional states to do one from the other.
[00:11:31] Speaker A: And I think that when you see a book like this, I mean, it is attempting to, to create or at least stimulate that kind of a paradigm shift. Because it's not just, I mean, what to me was very interesting about it is it's not just saying, hey, go spend it on yourself. It could be the things that you're planning to do after you pass away. Like, you can you say, oh yeah, I want to do this with, you know, for my, for my kid or something like that. And it's like, well, you could do that while you're alive. And then you can actually either experience it with them or see them enjoy it and stuff like that. And so it, there's a. This I think, gets into even deeper stuff with like our psychology around death as well. Like, well, you know, once I'm gone, I want them to do that, but I don't want them to do that while I'm still here and stuff like that. And so all of that stuff I think that we have to always keep in mind. And this actually can be in a food conversation. It can be in the wealth conversation. Again, we're talking about a small percentage of people by and large, anyway, relatively, but is that we are a species that evolved in a situation and circumstance of scarcity. And so we just have kind of funny reactions, interesting reactions when we're not in some, in a, in a situation of scarcity. And so we kind of are just more normal in scarcity situations. And then we become, we get interesting little ticks or interesting little kind of things that we do when we're in, where we're in a place of abundance that are. Because our, like our hard wiring, our genetics and everything are like, okay, all of this stuff that's that squirrel and had all those nuts. It's like that mentality is like, yeah, hey, if I don't have These. When the winter comes, I'm going to freeze. But what if that squirrel lives in South Florida and there's collect nuts all year round and he just keeps doing it, he never eats them. And it's like, well, why are you going around collecting nuts?
There's no winter coming. You know, but it's just kind of that.
[00:13:22] Speaker B: That's trying to show off to those female squirrels.
[00:13:26] Speaker A: Yeah. Whoever has. Oh, no, I'm not gonna say that.
[00:13:29] Speaker B: He's gonna have. He's gonna have that Ferrari in the tree.
[00:13:33] Speaker A: To the female.
[00:13:36] Speaker B: Hey, no, James, that's how the flying squirrel got invented in South America. A little bit more time he's like, man, I'm gonna show these chicks. I'm gonna fly around this place.
[00:13:44] Speaker A: But hey, man, that's always a motivation for a lot of.
[00:13:48] Speaker B: Yeah, sex has always been a motivator for.
There you go. You know, necessity is the mother of all invention. But yes. Real quick, James, I want to go to some things he said that I thought were pretty profound. In the article though, the hedge fund manager, because he called it like you said, that $90 trillion that's going to be passed down the trillions in unlived experiences. I found that profound because I'm going to share something with you and the audience personal that changed my view of this because I've been doing this since I was 22, I'm 47 now, so that 25 years of my life.
And so more than half my life now I've been in the financial services and financial planning. So my brain from a young age was always conditioned, like I said, to chuck it over my shoulder. Hey, I'm just going to be old one day and enjoy all this money and I'm going to just keep working hard and da, da, da. And I used to be younger, my 20s, my older kids were younger. My wife wanted me to show up to the kids, you know, rehearsal for something and I'd be in the office. No, I gotta, I gotta work. I gotta work. You know, I still show up, but I wouldn't be happy about it. But you know, I had two incidents in 2021 where I was in the hospital with COVID really bad, and I couldn't breathe. And it was the first time my life I felt that kind of vulnerability of, oh my God, you know, maybe I won't leave this hospital.
The second thing is last year, man, when I had a heart attack.
Those two experiences forced me to deal with the fact and I had some friends die young and heart attacks in the early 50s and stuff in recent years. So those kind of experiences all forced me to deal with the reality of my own mortality in a way I hadn't before. And understanding that I might be dead before I get to enjoy my retirement money now, I also know I could still live to 100, so I got to be smart about the future. So I'm not saying I'm just going to blow all my money, but it's when I really started doing things like spending a lot more money on travel with my family, taking the time to go see other family members, like going to see my cousins and stuff in other cities, and really just saying, I gotta enjoy this journey. Like, I. And also when I'm traveling, I see older people in their 70s and stuff on canes and they can't walk, you know, and go and see, do the excursions like we can do. So part of me says, okay, I want to try and exercise and stay in shape. But also, I got to do this stuff while I'm younger. I might not be in a position.
So that's why I just want to share that also with the audience is sometimes. That's why I say, at middle age, sometimes we go through certain experiences in life that teach us maybe how to deal with our money better in these experiences.
Because he said something profound as well, which was, spending along the way requires balance and flexibility.
That made me think of it, too. And that's what I mean by the emotional and mental flexibility. To say, yeah, I gotta have the confidence to spend some of it now knowing that I still gotta be prepared to be alive in 95. Yeah, I don't want to just off myself at 73 because I'm broke, you know, so.
So. So those are the things, too, James, that I feel like.
Like with everything else, like, I guess going back to food, right? Like, I know I'm going to cheat and eat some brownies and eat, you know, eat some stuff that's not that great for me. But I also got to make sure I eat the stuff that doesn't create a bunch of cardiovascular stuff to make me have five more heart attacks over the next 20 years. So it's about that. That equilibrium and that balance.
[00:17:08] Speaker A: No, no. And I. There were a couple things that stood out to me in this as well, as far as talking about the particulars of this strategy. Because, yeah, the strategy, the die with zero strategy is not to die after you've had zero for five years. You know, it's to adjust the planning part of it, as opposed to have the planning be set up to have this huge nest egg when you're gone, but to plan it so that. And again, you can't predict the future, but to plan it so that you can in a worst case scenario still. Well, best case scenario. Yeah, I guess best case scenario would be a long line. In the best case scenario, you still have money, but you didn't spend all your energies just sitting there waiting for that, you know, so to speak. So the one of the interesting things to me was like, if you're going to do have physical demanding experiences, you should do those while you can still move around. Like, like you were just saying, you know, you get older and you're not. You don't have the mobility. So there's things also the idea of using money to buy time, you know, meaning, so things that you can pay someone to do, so to speak. And again, this isn't being flippant and this isn't necessarily for everyone, you know, but just if you're in a situation where you, you're stacking up all this money that you can use money then to say, okay, well, I can either do this myself or I can have somebody else do it and free up time to go spend some time with.
[00:18:19] Speaker B: Family or something like that, you know, James, with that.
I grew up with a single mom in D.C. it was very hard for me when I started making decent money to actually hire a cleaning lady.
[00:18:30] Speaker A: Yeah.
[00:18:30] Speaker B: Because I, I thought like, nah, that shouldn't be doing. We should be cleaning our house. And it like you, I. That the idea of buying time, I had to instill that in myself and learn it because it wasn't something I was conditioned with. The way I brought up, I was brought up. So it's a very interesting point you make.
[00:18:46] Speaker A: Yeah, I mean, well, that hit me like once I, as an attorney, you know, once I'm billing time and so forth.
[00:18:53] Speaker B: Yeah.
[00:18:53] Speaker A: I'm like, oh, okay, yeah, I'm out here cutting my grass or something like that. Especially a couple times when I have busy weekends and I, oh, I got around like five on a, on a. It's like, hold up, how much money would I have billed for this time versus what I could pay somebody else to do it? It's like, okay, working out what I.
[00:19:09] Speaker B: Did in 21 after we were on lockdown. And remember I had the 550 Benz, I had a big car payment. I sold the car because I decided that it was not worth my time driving in South Florida traffic and not being productive. So I basically hired a driver called Uber and I found that to be a better use of my money, you know, and it's just interesting because the same thing with you. I don't build per hour like you. Professionally I can, but I usually don't. But it was the same thing like, well, I'm gonna be in traffic for 90 minutes coming home. I might as well outsource that. And then I can come home and not be miserable. I can be a nice person when I walk in the door.
[00:19:47] Speaker A: Yeah. So there's other stress from the track.
[00:19:49] Speaker B: Yeah, that's what I'm saying. There's other benefits to spending money for time. And that's what I'm saying, James, is I see that with some clients too, that have piled up a lot of money and they are miserable and stressed out. When I sometimes I look at it, well, you guys could pay people to do these things and you have more time, you know, but there's just this.
[00:20:06] Speaker A: It's like. No, it's psychological, like you said.
[00:20:08] Speaker B: Yeah. It's this inability to see that. So I do find it very interesting. And, you know, I think. I think this is a journey we'll continue to be on in our society. And I think you make a great point. It reminds me about the whole joke we have, you and I, in our various discussions. This joke's been coming up more and more about Maslow's hierarchy.
And this might be another example, like you said, of how a society looks when it's at the top. And the example of the squirrels. Whereas we're as humans, we're built to live in a. In an environment in nature of scarcity.
But when we have this kind of abundance, and I. I want to be very careful that I know anybody can be listening to us. I know everybody out there doesn't feel like they have abundance.
[00:20:50] Speaker A: Well, but you've got to make the mentality, though, because it also. That also plays into how people who don't have a lot, you know, like there are mechanisms in place and have been in society to try to. To try to make it so that we can have a more equitable distribution as far as people putting in work and stuff like that. The whole idea that you go back to a square deal, you know, like, which was. That's Teddy Roosevelt 100 something years ago. And the whole thing was, hey, if you put in a good day's work, then you should be able to live a nice life. And we've kind of lost that in many respects. And while at the same time, you know, like the, The. The overabundance has taken over in certain circles. And some of that, though, and that leads to problems like this a lot of times where it's just on one hand we can be a people that will stack endlessly, and on the other hand we have people that, you know, aren't. It's tough to make ends meet. And so the balance that as a society we need to, to be able to achieve involves, you know, like, trying to help out on one end and then also on the other end trying to, to, to, to not lean so much into certain excesses. And what we're talking about right now is just on, on one of those hands where leaning into certain, or trying, trying to find ways to not lean into those excesses to some degree without necessarily saying, hey, we're going to come down with a big heavy hand of regulation, which may be needed in some cases. And in other cases, maybe it's better from a cultural standpoint to just have values that can lean, lean away from certain excesses.
[00:22:14] Speaker B: I'm just gonna say this with a smile. I'm glad to read this about his $90 trillion wealth transfer that I accidentally got in the right business at the right time, the right age and at the right period in our, you know, American story.
So I'll probably need more people. So I'll be hiring. So anybody out there is a financial advisor and is looking for a home, give me a holler because.
[00:22:34] Speaker A: Yeah, but I think we can wrap from there. We appreciate it forever. Join us on this. Call out and subscribe to the podcast. Rate it, review it, tell us what you think, send it to a friend, and we'll talk soon.
