Robert Powell: What does dying with zero actually mean and is it a goal worth pursuing? Well, here to talk with me about that is Amy Shepard from Sensible Money. Amy, welcome.
Amy Shepard: Hi, Bob. Thanks so much for having me.
Robert Powell: Uh, it’s a pleasure. And I know this is a favorite book of yours. You talk to clients about this book all the time, and I’m curious, what does it mean to die with zero?
Amy Shepard: It’s a great question. Yeah, a client actually recommended the book to me, I read it, and then have since probably sent it to at least a dozen clients, but Um, what it means is I think up for some interpretation, my interpretation of it is like really to stop and smell the roses, like to enjoy the journey of life and not always be so focused on like, Oh, I have to make sure I’m saving for later.
Oh, I have to say no to this because it’s going to cost too much money. And I, you know, I have to make sure I have this money saved for my, my golden years or whatever people think of it. So, um, you know, I don’t think it really means like dying with nothing to your name. But I think what it means is just finding balance, making sure you are enjoying the journey, you’re enjoying life today, but also, you know, balancing that with making sure you are still, you know, able to have a, a successful financial future.
Robert Powell: Yeah. And how do you apply it by chance?
Amy Shepard: Well, so it, you know, the intention when I read the book, I work, you know, with retirees. And so a client shared it with me, they are getting ready to retire. And then when I read the book, that was the main lens I read it through was I’m a retirement planner. How can I use this book to better serve my clients?
So, you know, that’s the, the main thing that I apply it to is working with clients and helping them understand, like, when, when do they know they have enough financially saved to be able to not worry? And then how can we translate that in that idea of knowing you have enough to, you know, not worrying and actually enjoying this next chapter of your life.
And so that’s. You know, my, my work day is really where I apply it, but you, you can’t read the book and then not apply it to your personal life, obviously I’m not anywhere near retirement quite yet, but in my personal life, it has impacted me quite a bit because that same advice I give clients, I apply it to my own life.
And I think I see it most. With my family, you know, we have three kids, eight and under. And I always try to remind myself, like, when can I say yes to taking advantage of an opportunity with my family? Yes. I of course want to make sure I save enough for my own retirement, but not at the cost of like missing my kid’s childhood.
Robert Powell: Yeah. The book mentions something called memory dividends. What’s that about?
Amy Shepard: The memory dividends idea was one of my favorite things I read in the book. So, it’s this idea that, you know, if you picture yourself when you’re 90, you’re sitting on a rocking chair and you’re thinking back over your life. Most people are not going to sit there and think, you know, man, I’m really glad my portfolio averaged 9%.
You know, they’re going to sit there and think back on the life they lived. They’re going to think back on, you know, did I do enough with my spouse? Did I do enough with my children? You know, was, did I enjoy life enough? Did I say yes to things that brought me joy and made me smile? And that’s really the idea of memory dividends is, you know, as you get older and you get towards the end of your life.
The thing that matters most is not the returns in your portfolio, but it’s, it’s the memories you’ve created in the life that you live.
Robert Powell: Yeah. A lot of times people often say, I, I, uh, I’d never go to my grave thinking I wish I had worked more or whatever the case may be. Right. Something like that.
Amy Shepard: Yeah.
That’s, I think a really good concept. Yeah.
Robert Powell: Yeah. What about this notion of dying with zero almost implies that you’re not going to leave an inheritance to your children, which is something that people always say, I’d like to leave something behind.
Amy Shepard: Yeah. Yeah, so this is can be a tough one, so the way I think about it is, you know, like, again, it’s not truly to die with nothing left, but the idea of an inheritance specifically is like, you know, yes, if you, if you pass away, you have money left and it goes to your kids, that’s great, but what if there’s so much left?
And then again, that’s like translate to man, all this money left at the end was life missed out. And so in the book, they talk a lot about spending that inheritance while you’re living, doing family vacations, um, you know, helping adult children when they need it. We all know how expensive housing is right now.
You know, a lot of people are helping their adult children with down payments or buying new appliances. And so it’s really this idea of rather than waiting until you die to, to give the money to your kids, why not? Or, you know, or your loved ones, why not? Like, see them enjoy it when you’re living, if you can.
Robert Powell: Yeah. I’m also reminded of how often times people retire and then at the end of their lives actually have more money at the end than when they started retirement in part because they didn’t enjoy their money and, uh, and if they could give it away while they were alive, maybe they don’t have to worry about, uh, Uh, you know, not having an inheritance, right?
They’ve already given their inheritance away over the course of their life.
Amy Shepard: Yeah. Yeah. And they can see the impact it has on people. You know, that’s, I think one of the big things in the book too, is like they mention, you know, when, when you have, if you have the resources and you can see an impact, like helping with a down payment or sending a kid or a grandkid to college, like you can, you actually get to see the help that that gives to somebody else, which I think, you know, feels a lot better than wondering what’s going to happen after you’re gone.
Robert Powell: Yeah. So what about some of the common criticisms of the book and how do you address them?
Amy Shepard: Yeah, I think a big one is when people take it literally. Um, you know, again, that idea of really dying with zero. I do not take it literally. I would never advocate for somebody to truly aim for having, you know, the last check bounce, as they say.
But, um, that’s one of the big, biggest critics is like it, maybe it encourages people to be more frivolous. Um, I don’t see it that way. I think it’s really important to have balance. That is the key for me, is it’s about knowing when you have enough, and then when you know you have enough, how can you make sure you are enjoying things along the way, but also still making sure you’re gonna be okay if you, you know, live to a hundred, or if you have a major medical event.
And, I think what’s unique about my perspective is I work with affluent retirees. You know, most of my clients have well over a million dollars saved, um, but that’s not money that fell into their lap. They’ve been good savers, you know, they worked hard and they are self made most of them and they got where they are because they were good savers.
And so for them, a lot of times it’s hard for them to start spending their money. And I think one of the other criticisms is people say, well, how do you know when you have enough? Like that’s kind of a vague idea of, Oh yeah, great. Amy, it’s great to spend our money if we know we have enough, but how do we know?
And that’s, I think the thing that I can help with the most is, you know, part of the planning process that we use that sensible money with our clients is it’s a very thorough, comprehensive planning process. You know, could get into the weeds of course, but you know, at a high level. Our planning process, we have three distinct metrics that we look at with clients.
Um, you know, I think we’ve done different videos on these before, but we look at something called a critical path and something called fundedness, something called Monte Carlo. There are three tests that all evaluate something different. We use those tests to be able to see how solid somebody’s financial situation is.
And what I see time and time again is when all three of those metrics are really strong, that gives me the confidence to help my clients spend their money. And, you know, I, I often say to them, one of my biggest fears is not that they’re going to run out of money. You know, a bigger fear is that they’re going to sit down with me when they are 90 and they’re going to say, Amy, why do I have all this money left?
You know, I wanted to know 30 years ago. And so that’s what Die With Zero really is. It’s that. Doing the math, putting in the work, having a solid financial plan. And then once you see the numbers are solid, taking kind of that sigh of relief and, and going out and doing the things that make you happy.
Robert Powell: Right. And we’ve covered a lot of ground. Anything we missed or just bears reemphasizing?
Amy Shepard: I don’t think so. I think we covered it all. And I think it’s a great book for anybody to read, whether they’re in the retirement phase of life or, you know, on the far other end of the spectrum, it’s just a really good reminder that.
You know, life is worth living, so go out and enjoy it.
