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How do the rich and famous stop their kids from getting lazy? The threat of no inheritance might do it.
Billionaires from Warren Buffett to Steve Jobs have made it clear their enormous wealth won’t be passed onto their children. Instead many, including Bill Gates, have chosen to spend their money on philanthropy during their lifetimes.
But workers across the wealth spectrum are increasingly adopting the same idea—with many trying to spend or give away all their cash before they die as opposed to leaving it to children, family, or friends to inherit. Their plan is to “die with zero”—to have absolutely nothing left in their bank accounts by the time they’re on their deathbed.
It’s an idea that has gathered momentum in the past couple of years, buoyed by the release of ‘Die with Zero’, a Wall Street Journal bestseller penned by Bill Perkins. For some, dying with zero is not only changing their lives but the people they’re gifting their assets to. For others, it’s an interesting idea in principal that becomes impossible in later life.
‘Do good now—don’t wait until you’re dead’
Elena Nuñez Cooper plans to donate millions of dollars in her lifetime to charitable causes—and teach any children she has in the future to do the same.
The 32-year-old founder of Chicago-based Ascend PR, a firm that also acts as an advisor to family offices, said she’s seen many family conflicts arise out of money negotiations through her work. It’s a dynamic she’s keen to keep out of her own life.
“It’s disturbing for me,” she said. “It’s sad when you have entire segments of the family that aren’t talking to each other over money. I want to eliminate any animosity as [my husband and I] spend down.
“My grandparents have told us how much we’ll be inheriting, but in the back of your mind you’re like: ‘I don’t need that, I don’t care about that.’ I’m a relational person and care very much about my relationships.”
A die with zero or spend down approach means Nuñez Cooper and her husband—who share $4 million in personal assets—can establish a more “fluid” set of financial goals, from treating newly-married friends to a beautiful honeymoon to planning to take a year off when they have children.
Although Nuñez Cooper currently donates thousands of dollars through her donor-advised fund, she plans to increase that to seven figures by her 40s, 50s, and 60s.
“I believe to whom much is given, much is expected,” Nuñez Cooper—who has chosen not to draw an income from her own family office—added. “I would rather raise my children, and maybe grandchildren, with the idea that we have a duty to do good in the world, and that that good should be done now. Planning for the future is great, but if you have money now do good now—don’t wait until you’re dead.”
The couple also plans to teach their potential children the value of work from a young age, and will encourage them to donate a portion of each paycheck to their own donor-advised funds.
“You can die with zero—you just have to be smart about it,” Nuñez Cooper added. “You should’ve trained your grandchildren, children, nieces, and nephews,to use money wisely so they’re not relying on a payout.”
‘Why give your life to the 9 to 5?’
There’s no exact science to dying with zero, admitted UK-based personal finance coach James Beckett, but he’s more worried about “wasting his life” than he is about running out of cash.
Beckett estimates he’ll die around the age of 88, and plans to have just enough money to keep a roof over his head and food on the table until then.
Although the 32-year-old owns a home, Beckett and his partner are open to selling the property and renting if it means getting more out of their money in older age.
Beckett—who earns close to six figures in the U.K.—said he couldn’t think of any downsides to his plan, which have allowed the couple to travel to America annually for the past three years, as well as holidaying in Mexico, Spain, and Ireland on top of trips to music festivals like Glastonbury.
This belief is key to the freedom of dying with zero, Beckett said, as people need to be “invested in the upsides” of the idea as opposed to fearing the drawbacks.
“It’s such a shame to see people dying with so much money in a job they’ve worked in that they don’t enjoy, or with people they don’t like. They go on auto-pilot accumulating wealth and not thinking about what it’s for,” he said.
“It’s not a belief that you spend every penny on materialistic things every month. It’s being very conscious about what you want to achieve and when.”
The couple plan not to have children but adore their nieces and nephews, who they are already financially planning for with savings accounts that they opened when the kids were young.
“I’m still in the accumulating wealth phase,” Beckett said. “I don’t know how many nieces and nephews I might have. It’s just about giving that money away while I’m alive—it brings me a lot of joy. I had help in buying a house and with my university fees, so I know how much it means.”
How do you plan when to die?
Of course, a major flaw in the dying with zero plan is that people rarely know when they’ll no longer need their money.
“You could die tomorrow, you could die at 105,” said Eliana Sydes, Head of Financial Life Strategy at financial advisors Y Tree. “We don’t know where it is in that continuum a person might fall, so which do we plan for?”
Running out of cash also gets more dangerous the older you get, she pointed out, with the latter years of a person’s life often proving the most expensive due to inflation and the care invariably needed in extreme old age.
This fear of “going without” is what drives many older people to continue to accumulate wealth when they should be decelerating their savings, Sydes explained: “People in their 90s now have very strong memories from the war. They’re bringing with them a lot of legacy baggage around fear of being without. We’re asking people to take a message of: ‘Die with nothing in the bank, you don’t know when that’s going to be, and by the way you’ve grown up with rationing which makes you feel really unsafe.’”
This fear may form part of the reason why baby boomers have an average net worth sitting roughly between $970,000 and $1.2 million, according to the Federal Reserve’s 2019 Survey of Consumer Finances. Meanwhile Gen Zers’ average net worth sits at $76,000, the average millennial over the age of 35 stands at more than $400,000, and those in Gen X have average net worths between $400,000 and $833,000 (although it makes sense these net worths would be lower than boomers’ since younger generations haven’t had as much time to accumulate wealth).
Sydes added that the decision about dying with zero needs to be made when a person is younger in order to get their plan in place—but few like to be confronted with the reality of their demise. “There’s only actually a small window in life where you can safely and actively do this with a reasonable chance that this work out,” she said.
“[Dying with zero] is a great hook to open these conversations about ‘What is it I want to do while I’m alive to make these decisions about my money?’ But it can also be a barrier because it can be frightening to a lot of people. So I think the conversation is actually: ‘How do I die with zero above my personal needs?’”
Whether you’re looking to die with zero or gift sums in inheritance to loved ones, Sydes said there was one lesson to remember: purpose.
“It’s really hard to switch from accumulation to decumulation, it’s really emotionally difficult,” Sydes said. “It’s a conscious decision that you want to help others. It’s not good enough to give away stuff you’ve got, there has to be a purpose for what you’re doing otherwise you’ll give it up.
“If you’ve got a definite reason why: you’re getting some good feelings from it, you’re more likely to stick with it. You’re going to feel connected with your decision and that’s a really massive thing.”
