Awkward Timing, but the Financial Ideas Are Still Sound - The New York Times

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It’s easy to see why the publisher delayed releasing“Die With Zero” (Houghton Mifflin Harcourt, $27), which was originally supposed to be on sale in early May.

By that point, the coronavirus pandemic had hit with a vengeance, and close to 40 million people had filed for unemployment in the United States alone.

“Die With Zero” was intended to imply that you could live a long life and voluntarily spend all of your savings before coming to a happy ending. Suddenly an intriguing title became a scary one. It sounded like the nightmare goal of the coronavirus itself: death and impoverishment for millions.

With a title like that, publication even now is tricky, but I’m glad the book is out, because the ideas contained within are worth pondering for a future that may eventually include a return to a somewhat normal financial life.

I say that even though the book contains almost no investing advice. There is no substantive discussion of the merits of index funds versus picking individual stocks. And the subject of whether you need a financial adviser doesn’t come up at all.

Credit...Houghton Mifflin Harcourt

So why is this book by Bill Perkins, a former energy trader who now heads a small consulting firm that primarily looks after his financial interests, worth your time?

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Because it gets to the heart of two extremely important issues that you may be thinking about during these strange times: why you save and how you live.

Mr. Perkins wants to make sure, as the book says in its subtitle, that you are “getting all you can from your money and your life.” And he is fairly certain you are not.

“The premise of this book is that you should be focusing on maximizing your life enjoyment, rather than on maximizing your wealth,” Mr. Perkins writes. “Those are two very different goals. Money is just a means to an end. Having money helps you achieve the more important goal of enjoying your life. But trying to maximize money actually gets in the way of the more important goal,” because you keep putting off spending it.

“Your life is the sum of your experiences,” he adds. And he says if you are spending most of your time working to accumulate money, you are, by definition, shortchanging yourself on those experiences.

That’s why he argues that you should try to die with $0 in the bank, having spent the rest on living your best life.

Unfortunately, there are unanswered questions.

Now, the argument — summed up nicely by the book’s title — raises a bunch of questions, and Mr. Perkins addresses them, but not always as completely as I would have liked.

Question 1, does he practice what he preaches? The answer seems to be yes.

“Some of my friends call me an ‘honorary billionaire,’ which means exactly what you think it does,” writes Mr. Perkins. “I’m not actually a billionaire, but I spend like one.”

And he gives examples, such as throwing himself an elaborate party in St. Barts for his 45th birthday. He flew in guests, took over a “secluded hotel” and hired the singer Natalie Merchant to perform.

But while Mr. Perkins, 51, says the party’s expense, which he does not quantify, gave him pause, we have no idea what percentage of his net worth it represented. If it were 50 percent, it would be an impressive demonstration of his premise. If it were 1 percent, not so much. He neither tells us the cost of the party, nor his net worth.

Then there is the very real problem of running out of money before you die, an issue brought to the fore by the economic havoc accompanying the coronavirus. Mr. Perkins says that actuarial tables can give you a good idea of how long you are going to live, so you can estimate how much you will need. If you are still scared, you can buy an annuity to offset your risk, he says, although he doesn’t suggest any or what to look for in the investment.

The Coronavirus Outbreak

• Frequently Asked Questions

  Updated July 7, 2020

  • Is the coronavirus airborne?

    The coronavirus can stay aloft for hours in tiny droplets in stagnant air, infecting people as they inhale, mounting scientific evidence suggests. This risk is highest in crowded indoor spaces with poor ventilation, and may help explain super-spreading events reported in meatpacking plants, churches and restaurants. It’s unclear how often the virus is spread via these tiny droplets, or aerosols, compared with larger droplets that are expelled when a sick person coughs or sneezes, or transmitted through contact with contaminated surfaces, said Linsey Marr, an aerosol expert at Virginia Tech. Aerosols are released even when a person without symptoms exhales, talks or sings, according to Dr. Marr and more than 200 other experts, who have outlined the evidence in an open letter to the World Health Organization.

  • What are the symptoms of coronavirus?

    Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.

  • What’s the best material for a mask?

    Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles.

  • Is it harder to exercise while wearing a mask?

    A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico.

  • I’ve heard about a treatment called dexamethasone. Does it work?

    The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth.

  • What is pandemic paid leave?

    The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.

  • Does asymptomatic transmission of Covid-19 happen?

    So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.

  • What’s the risk of catching coronavirus from a surface?

    Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.

  • How does blood type influence coronavirus?

    A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.

  • How can I protect myself while flying?

    If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)

  • What should I do if I feel sick?

    If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.

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Annuities can indeed provide you with a lifetime income. But that guarantee can be expensive, especially with today’s low interest rates. Say you are a 60-year-old Florida resident who wants to live on $6,000 a month for the rest of your life starting at age 65, and you decide to take Mr. Perkins’s idea to heart and spend all your money, using an annuity as your safety net. The annuity would cost you slightly more than $1 million today, according to the calculator found on the Charles Schwab website. If you wanted to have the annuity start immediately, the price would more than $1.3 million.

What about bequests?

One of the reasons people try to die with more than zero is that they want to leave bequests to family members, especially their children, or to charities.

Mr. Perkins isn’t against that. But he argues that it is better to give as soon as you can, as opposed to waiting until you die, since family members, friends and the causes you wish to support can probably put the gift to good use immediately.

I don’t doubt that. But what he glosses over is that the value of your gift could probably be larger if you wait.

By delaying, you give the size of your gift time to grow, and if you invest the money earmarked for the bequest in something that produces annual returns greater than the inflation rate — as stocks traditionally do — the gift will end up being larger in real terms than if you gave the money now.

Mr. Perkins really doesn’t discuss this, or the power of compound interest, the fact that the interest on your money earns additional interest if you don’t withdraw it, another reason to defer making a gift or spending on yourself.

None of my objections negate the value of thinking about Mr. Perkins’s idea. But they do show that dying with $0 is a bit more complicated than it initially appears.

You can’t do it, but you can try.

Mr. Perkins readily agrees he has given readers “an impossible task,” to die with no money left.

“You can closely track your health and life expectancy and you can recalculate your financials every day — yet you are not going to hit exactly zero. When you take your last breath, you might still have a few dollars in your pocket and maybe even hundreds more in the bank. And it’s OK,” he says. “By aiming to die with zero, you will forever change your autopilot focus from earnings and savings and maximizing your wealth to living the best life you possibly can.

“That’s why dying with zero is a worthy goal,” he adds. “With this goal in mind, you are sure to get more out of your life than you otherwise would have.”

It’s an intriguing idea, one that you may want to consider as the economy gets back closer to normal.

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