Learning to Die with Zero. The Last Check Must Bounce (guestpost)
My friend Christopher Ng recommended to his reader to read this book by Bill Perkins called Die with Zero.
I do not know whether it is a good book or not but I think it might be thought provoking enough for me to read it.
Die with Zero sought to answer a core question we all seek:
This post was originally posted here. The writer, Kyith Ng is a veteran community member and blogger on InvestingNote, with a username known as @kyith and has 1,000+ followers.
When Bill released this book, I also heard many interviews that he did to promote his book. This book… might be the book to help re-calibrate my thinking. After doing so much research on how much a person need to accumulate so that they won’t run out of money in retirement, we need a book to teach us not to spend all our time accumulating.
Is this a good book? Personally, I find it hard to connect with.
In this article, I list out some of the notable takeaways from Bill Perkins.
The first concept that Bill explained was consumption smoothing. Bill took a page out of a time when he started working not too long ago. Back then, he was very thrifty and extremely proud about it.
However his boss, who is a partner at the company he worked for was astonished he was saving so much.
It was a slap across Bill’s face.
In his boss’s mind, Bill would eventually made much more than that.
He could certainly spend today and not save this sum of money.
It was a life-changing moment for Bill as it cracked his head open to new ideas about how to balance his earnings and spending.
If we look at our income chart over the years, it should be upward sloping. Due to our experience over time, we should earn more.
If we know that, we should be able to spend a greater percentage of our income today because eventually, we will make more and our savings rate will go down, but the savings in the future will make up for the higher consumption today.
We will basically transfer money from years of abundance into the leaner years.
What is difficult to connect for a lot of people is how much higher would your salary be in the future?
To use myself as an example, some of my peers are currently director of security while others are still a team lead in a small company.
If we smoothed out our income, the director of security and the team lead would be totally different.
I get the idea but I think whether it is sensible for us to do that or not is subjective.