There’s a pretty well known book called Die With Zero by Bill Perkins. I just finished reading it myself. It’s a very interesting concept and it achieved its (I think) main goal of getting me to think differently about wealth. But, overall, I have mixed feelings about it. His advice is obviously for people from all walks of life. But we are doctors. So, let’s examine whether doctors should actually die with zero.
A quick background
At least at the time of his writing the book, Bill was 50 years old. He is not a financial advisor or anything like that. He made his money as an energy trader, and it sounds like he made a lot of it. Which is great.
His thoughts on the topic of dying with zero seem to have stemmed from a conversation that he had with mentor when he was a young stock broker. He was living in NYC on a meager salary but managed to save up over $1,000 (largely through frugal FIRE principles). So, he told his boss thinking he would be impressed.
Instead, his boss called Bill an idiot. Why would Bill save this money now and deprive himself as a 20-something on such a low salary? His income would rise in the future. He could save then. Now was a time to enjoy and optimize the little money he had.
From there, it seems that Bill’s conception of the Die With Zero concept began and has since evolved…
The basic tenets of Die With Zero
I’m going to summarize the main points of the whole die with zero philosophy here. This is obviously superficial and you can read the book (it is a nice, easy read) for more details.
But basically, here are Bill’s main points:
- The goal of life is to maximize your experiences, accumulating as many subjective and individualized “life experience points” as possible
- In doing this, your goal should be to die with $0. Any money that you leave over is money wasted that was not used to maximize life experience points
- Dying with zero is not mutually exclusive from helping others with your money, like your kids or charities. Instead of waiting until you die, give your money to those you want to help now, when they can use it the most
- All of this requires finding a balance between using your life energy to make money versus using your life energy to gain life experience points
- Most people are saving too much for the future due to an irrational fear of living beyond their savings, especially when they are young
- When you are young, you should take bolder risks because the downsides are lower (since you have more time to rebound)
Of course there is more nuance. But these are the basic principles. So, what do we think about them?
Should doctors die with zero?
Reading the book, and even summarizing it now, I don’t flat out disagree with any of the points above.
But still something just felt not quite right when I finished the book. So this post is also me trying to dissect down my exact feelings about the philosophy.
And when I look at the list of basic tenets above, I really don’t have too much of a problem with the first four. But the last two bother me a bit. Especially when we apply them to physicians.
So let’s start there.
Are we saving too much for the future?
Doctors, as a whole, are not saving enough for the future. This is evidenced by many data points. You can see here that almost 40% of doctors between the ages of 50-55 have a net worth less than $1 million.
And only 11% of doctors in that age range have a net worth of $5 million or greater. And yes, $5 million sound like a lot. But remember the 4% withdrawal rule. That amounts to a retirement “income” of $200,000 before taxes annually. The majority of doctors I speak to in this age range want more retirement income than that. The majority of doctors I talk to in that age range also want to retire soon.
Are we starting to see the problem?
And why is the average doctor in this position of lower than expected net worth? (Remember, you can calculate your expected net worth for your age here.) It’s because of two things:
- We spend too much and
- We save too little
Remember, the average physician salary is greater than $200,000. If you can’t save enough for your nest egg with that salary, then you have a saving problem, not an income problem.
(And yes, I know that it seems like that’s easy for me to say as a plastic surgeon making the higher end of physician income. And it is easier with more income. But the average is more than enough. Just ask any non-physician.)
Add this inept average saving by physicians with the delayed gratification of training and I fear the call for doctors to “die with zero” becomes dangerous rallying cry.
And now onto the next point…
Should young doctors be taking more risk?
Bill’s point here is that there is disproportionate risk when making big decisions for young people. But instead they often magnify the worst case scenario and avoid taking the risk, to their detriment.
He uses the example of someone who wants to become an actor but is working a boring but stable office job
If that person is 20, it makes sense to go for it! There are plenty of boring office jobs to choose from acting doesn’t work out. Plus you have no one depending on you. But if you are 50 years old with a family, the risks are greater and it would not add up to take that chance.
Point well taken.
But now let’s look at doctors…
When most future doctors are starting medical school, they are around age 21 (assuming a straight course through college and no time off…which I know is not always the case).
At that time and young age, medical students take out hundreds of thousands of dollars of unsecured debt with no income and no prospect of substantial income for a minimum of 7 years, often more…closer to a decade.
Over those 7-10 years, we go through rigorous eduction, competitive selection processes, and burnout inducing hours. If we falter at any point along the course or decide medicine is not for us, our future income goes caput. But our debt remains.
This all adds up to demonstrate that future doctors take a HUGE risk when we are younger. And I would argue that the risk is even bigger than the ones that Bill talks about in his book.
So again, I worry about this message when applied to physicians…
So, should doctors die with zero?
I think it comes down to this: the concept or idea of dying with zero is not a bad one. It actually kind of makes sense.
However, becoming a doctor is a risk that we take. And the majority of doctors are at much greater risk of reaching zero way before they die (or working beyond when they want to in order to keep their nest egg from reaching zero).
So the messaging needs to administered carefully. And I think timing is the most important factor.
When should a doctor read this book?
If I read Die With Zero when I was just starting my financial journey, it would not have been the message that I needed to receive.
I was on pace to end up as a burned out, over-spending, under-saving doctor. And this book may have given me the message that my delayed gratification was justified to almost any extreme – even if it was unintentional.
Because when I look back to why younger medical school and residency years, there was spending on experiences and things that brought me great joy. But there were just as many that did not and were very unintentional. Without understanding this key difference, it could be easy to misconstrue that all spending while younger is justified. But in reality, some mindfulness towards minimizing debt and saving is important for young doctors as well.
So I think this book is best for someone who is on the right track for financial freedom
It takes a lot of hard work and of course some luck. But I am proud that Selenid and I are on pace to reach financial freedom before our original goal.
And I have to admit that if I skew on one side or the other of the Die With Zero spectrum, it is probably on the conservative side. I grew up seeing money evaporate and our lives change very quickly, so it’s hard for me not to want to save as much as possible just in case…even when excessive.
So for me, this book was a welcome reminder that money is only as good as the happiness it can bring you, your loved ones, and others in the world.
That means it’s okay to spend it!
Wisely and intentionally. But once you have enough saved and invested to reach your financial goals and to protect you from a financial disaster, it makes sense to spend the rest aggressively to accumulate as many life experience points you can!
For someone like this, the book is a welcome refresher. So, reader beware!
And if you are looking for a high yield way to get caught up on all the habits to get right on the path to financial freedom, watch my Masterclass Webinar on The 12 Steps to Financial Freedom for Physicians here!
What do you think? Should doctors die with zero? Where are you on the spectrum? How do you plan to spend your money? Let me know in the comments below!