TPTB that be have put out the call for content. Here is a half-baked article. Discuss amongst yourselves
This is one of many books that had an influence on young kinnath. And it’s one of the reasons why kinnath is still working at 69 and counting.
Die Broke: A Radical Four-Part Financial Plan (ISBN-13 : 978-0887309427)
From the Back Cover
From America’s most trusted financial advisor comes a comprehensive guide to a new and utterly sane financial choice. In Die Broke, you’ll learn that life is a game where the loser gives his money to Uncle Sam at the end. There are four steps to the process:
Quit Today
No, don’t tell your boss to shove it…at least not out loud. But in your head accept that from this day on you’re a free agent whose number one workplace priority is your personal bottom line.
Pay Cash
You should be as conscious of spending as you are of saving. Credit should be a rarely used tool for those few times (buying homes and cars) when paying cash is impossible.
Don’t Retire
Your work life should be a journey up and down hills, rather than a climb up a sheer cliff that ends with a jump into the abyss.
Die Broke
It sounds terrifying, the one intolerable outcome to your financial life. And yet, in truth, dying broke might be your best option for a life without fear: fear of failure and privation now, fear of impoverishment in the long run.
kinnath’s Summary of the Book
Quit Today
Working for yourself doesn’t mean you have to own and run a business. You can punch a clock and draw a paycheck. Or you can draw a salary. Working for yourself means that the purpose of working a job is to satisfy your own needs, period. Getting work done and keeping the boss happy is just a means to an end – getting enough money to pay for your life.
I ran into a former boss at a beer festival late in the afternoon. The boss turned to one of his companions that day and said: “You know what I like about kinnath. kinnath works for money. If you got money, kinnath will work for you”.
Pay Cash
My single greatest weakness. This took decades to get under control. But the bottom line is that paying interest is like taking part of every paycheck and setting it on fire. Not much else to say at this point.
Don’t Retire
And the Gods of the Copybook Headings said: “If you don’t work, you die.”
We had a group outing recently. One of the younger engineers asked what my target was. I asked what he meant. He asked what was my target to retire. I replied that I had no intention of retiring anytime soon. He said that he was 55, and his target was 58. I said the sainted Anthony Fauci was 82 when he retired as the highest paid employee of the federal government. I said my target was to beat his record. So, I have 13 years to go. He was nonplussed by my response.
Put in the papers when you can. Collect your pension. Collect your social security checks. Get all the money you have coming to you. But don’t stop making money.
That doesn’t mean working 40 hours a week at a job you can’t stand. But if are physically and mentally capable of making money, then make money.
Die Broke
You can’t take it with you. Dying with a big bank account does you no good. If you want to give something to your next of kin, then do it when you are alive and can see the benefits that it brings. There is no value in letting the government take part of what you spent a life time accumulating.
Conclusions and Consequences:
Quit Today and Pay Cash are straightforward concepts that can easily be applied to anyone’s life. Buying into the Don’t Retire and Die Broke concepts has benefits and consequences. Together they say you don’t need to burn yourself trying out to acquire enough wealth by time you’re 65 to cover your life for another two decades or more. You plan for and expect to continue covering your life expenses by continuing to generate some income after the major life purchases are over (e.g., having the house paid off). But, the consequence of buying into these concepts at age 45 is to get to age 65 and to realize you can’t actually retire. You don’t have the wealth to retire because you choose not to acquire it along the way. And there is no going back in time to change that.
I always assumed that I would be working forever. The government fuckery with Social Security and Medicare was obvious 50 years ago. This book just provided a framework for living with that expectation.
My wife asks when I am going to retire. I say five years at the earliest. Ten to fifteen years is not unrealistic if my brain keeps working, and I can continue to function as a very well paid engineer for a long time. This does not frighten or dismay me in anyway. I enjoy having plenty of money to spend on my life, and I am not walking away from it any time soon.
Is there a book “How to Take It With You?”
There is but the Forward says “Burn before reading”
I said the sainted Anthony Fauci was 82 when he retired as the highest paid employee of the federal government.
To be fair, Fauci should have been thrown off a cliff in his 40s.
No argument here.
My mother and her idiot husband must have read Die Broke, as they have been bound and determined to blow every bit of family money they can get there hands on to ship a damn RV around the world.
It’s not your money.
Or have they borrowed money from you for that RV?
Dunno. The one where George’s parents were determined to blow all their money traveling around the world.
wut
That was a reply to Evan
I saw that Seinfeld episode.
(The Bottle Deposit ep?)
Die Broke does not teach one to be completely ignorant in managing your money.
There is a reason I used the word idiot.
Thanks Kinnath, great info, great philosophy
Of course it’s completely different from what I have done. I got out as soon as I could, 55. My boss gave me a going away gift, payable over 5 years, with interest. plus 1/2 pay for 10 years. I enjoyed my job with no supervision but I wanted to get away.
I had things to do. My house was finished enough to move into but I had to do that. Then a garage, then another one.
And fishing, summer and winter.
I’ve been giving stuff away, my three grand daughters got their college loans paid off as a graduation gift. They could start their lives with out that worry.
Mrs F traveled extensively, more than 20 trips abroad while I took flyin fishing trips plus we traveled the 4 corners of the continental US and environs.
Now for the past few years we’ve not did much, the age thing can’t be avoided. We’re trying to tie up the loose ends financially but they seem to be growing.
My kids and grand kids will get a boost when the time comes.
I like this idea. “Die broke,” especially. Give it to children, etc while you’re alive and -particularly- don’t let the gov get their share after you go through inheritance taxes and whatnot. (Fucking blatantly evil, that, eh? Yes.)
I’m doing well on this part of the plan! I don’t have any debt, which is a good start. Still pissed and flummoxed that I paid off my student loans ~2015 and my SiL (I believe) still hasn’t paid hers off, despite being five years older w the same in-state school $$. Odd, that.
Other than monthly car payments (to my ‘rents), I have no current financial obligations and after first weekly payday on Fri from this contract, I’ll have $4k to my name. My savings were highest in ’15 while I was in Singapore, with close to $20k and no debt. Biggest truth, then and now, I have very few expenditures. (No kids! Well. No rent at the moment, either, but that’s an expenditure I’m eager to have again.)
“Die Broke, Die!”
*GASP!*
‘Oh, it’s German. “The ‘broke,’ the.”‘
“Well, no one who speaks German could be evil!”
/Simpsons, when it was gold.
Don’t Retire
No thanks. Time is the ultimate finite resource, and there’s no way to check to see how long before that balance hits zero (RIP, Hayek).
“Lives of great men all remind us
We can make our lives sublime,
And, departing, leave behind us
Footprints on the sands of time”
/Longfellow
Thanks for succinctly writing what I was having trouble formulating.
I have no plan to not do something, but not necessarily will it generate cash.
I’m gonna have to diagram out that sentence.
Ideally I’d like to have my money or property making money (dividends, investment properties, etc.) Then I can do whatever I want. Selling my time to some third party until i keel over is hopefully not my future.
making money is making money
The real advice is don’t stop making money.
Yeah my calculus is a bit different because reasons.
Working until I drop is not how I want it to play out, at all.
making money is making money
The real advice is don’t stop making money.
Now that I can get behind.
I’m more in the Fat Fire camp of let your money make money for you.
This is good advice, and timely.
Posted before the news on Saturday.
By contrast: https://taxproject.org/buy-borrow-die/
Acquire a couple million dollars in appreciating assets before you decide to retire (stocks, real estate, etc.)
Borrow against a small portion of those assets, paying only the interest on the loan with some of the money your borrowed.
Use some of the money left over to buy more assets. Live on the rest for a year or two.
Refinance the principal into a new loan using the appreciation of your assets.
Repeat until death.
Acquire a couple million dollars in appreciating assets
Reminds me of Steve Martin’s advice on how to make a million dollars and not pay taxes.
step 1) make a million dollars
step 2) don’t pay any taxes
Great post, kinnath and bonus points for Steve Martin “you could be a millionaire and never pay taxes” reference 🙂
That house of cards can come tumbling down pretty darn quick if you slip up.
No thanks.
Very true. The ways to protect against it is having diverse assets so nothing you own tanks in a hurry, and to keep a low loan-to-value ratio so that even if everything goes to shit it really has to go to shit to a Great Depression degree.
I’m sure there are others like me, that hate owing money and hate paying interest. It’s pretty much a given for a house but doubling/tripling on the principal every month can save a lot of time and get that loan paid off sooner.
I paid off 2 houses way early and life got a lot easier. Finance a car for 4 years, pay it off in 2. Inflation is a borrower’s friend, if wages keep up. It’s tough to make the monthly payments if you are trying to retire.
“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”
― Albert Einstein
I did the math, compound interest pretty much never keeps up with inflation.
You really need closer to 10s of millions, but yeah.
The easy way to think of this is that for the wealthy your wealth works for you. You don’t work for wealth.
However, if you are fortunate and plan properly you can get your wealth to work for you in retirement.
And on the “die” part in that article the heirs will still pay taxes on that stepped up basis regardless if it is sold. So in NJ on that $10m hypothetical inheritance if not a child that will be $1.6m of taxes due that will require liquidation.
I’ve worked for the same company for more than 25 years. It’s quite possible that I will for another 25+.
33 years and counting at my current job. It’s not unrealistic to think I will hit 40.
Same, when accounting for mergers & acquisitions.
I, too, would like to work for your asshole. Rhy’s may have more experience, but I’m spry.
I suspect that my asshole doesn’t have any more experience than yours.
I’ve been working for the same asshole for 30 years, hopefully always will. Heck, he’s already given me two raises this year.
Nice. Hopefully real raises. I miss those.
Mr Bole, don’t you run your own business?
https://media1.tenor.com/images/c5f9ca217be9a4450d1d730609946f77/tenor.gif
The hotel Im in has really thin walls. The guy next to me yelled “Turn down your TV volume! And the brightness!”
I may well die broke in the not-fun way, but I’m planning to retire “early” – well before my full retirement age per SS. I’ve told my boss I’ll be knocking off in early February next year. I’m doing so for personal/familial reasons: TT is almost ten years older than I am, has been retired for several years, and has had multiple health issues. I figure I should give lots of notice to retire as soon as I can practically manage rather than risk having to leave abruptly due to an emergency that I can’t claim not to have seen coming. The house and car are paid for, and I have no other debt and have modest savings. I’m content to live simply, and if I eventually have to go back to work part or full time, so be it.
My wife is older than I am and part of the same calculus for me. Fortunately no serious health issues.
I took SS at 62, I figured if I died early I’d at least have gotten something back. Now the plan is to live a long life and buy turkey/deer food.
At a certain age/stage of life our wants are limited. We don’t go anywhere, funerals here are blue jeans affairs and even those are more infrequent. A reliable car is more important than a shiny one.
Sounds great
My parents retired quite well. Dad was at the Evansville Courier for ~40yrs and she was a public edu teacher (after the Bluefield Telegraph). She was earning more than him, by the end of it, ~$60k in ~2010.
Mom ‘retired’ from teaching and works at Conner Prairie, in 1836 costume for the history center there. She also works at another ‘history center’ downtown. She also plays in a couple Irish folk bands and took up Spanish a few years back. And grandma stuff. (And Mom stuff.) And gives hammer dulcimer lessons. She sometimes complains she’s too busy.
Dad always has his little projects. Wrote and ‘produced’ a few plays (with diminishing quality of work…), and grandpa stuff. She runs every show because his brain fundamentally doesn’t work in that way. At all. His Asperger’s, plus his 980 SAT (he’s obsessed w) and lifelong stubbornness, she needs to be in charge. *highfive* She’s a fantastically patient woman.
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Ah! I’ll stop typing. Playoff hockey distracts. So does Thunderstorm Pt 2, now, with some funky fun lightning.
I’ve been thinking a lot about this recently. The 4% rule is far too conservative. Also, the best mitigation of sequence of returns risk is to remain flexible: be willing to pick up part time work or reduce spending, or both, if you retire into a down market.
Nowadays, you are likely still a long-term investor when you retire. The biggest risks to your financial security are being too conservative and being inflexible.
Or another Biden presidency.
Watching your expenses double because of inflation while investments nose dive for the same reason is not cool.
You end up having to sell into a bear market to raise the extra cash. It can result in a spiral of death as your reduced assets earn less, which means you have to sell more, which means you earn less.
Yes… I speak from experience.
My burn rate in terms of total net worth almost tripled under Biden.
Yes, precisely. You need a variety of asset classes and with Biden it was tough to find. In severe markets a balanced portfolio will have negative return.
The 4% rule increases withdrawals by the inflation rate. The theory is this keeps you ahead as that rate is included in asset return.
I chose to model it differently. I looked at my spending and inflated it year over year and saw what level of assets supported it until 10 years after current life expectancy.
There are also web sites that will do Monte Carlo simulations of this. My plan is 99th percentile.
This question entirely depends on who you are.
My grandfather built several successful businesses and never truly retired. Even at 80 and becoming infirm, he went to work most days at an accounting firm he helped build for a relative (one of the few he didnt own)
He rescued the local savings and loan (that he started) during the savings and loan debacle. He sold his businesses and gave almost all of it to the church and local civic organizations many years before he died.
He lived the way he wanted, as a pillar of the community who took pride in his town and his country. Left about $110k behind when he passed in the form of his house. Another $90k in cash, much of which went to settle things and repair the house.
As a would be heir to what would have been quite a few millions way back in the 90’s had he chosen to go the “set up a trust for the kids” route, I cant say I dont have mixed feelings on his choices. (Not much though. Ain’t my money and you cant miss something you never had).
Coming from an economically challenged family, not from lack of hard work but lack of education taught me a lot growing up. My brothers and I gravitated to the army, for lack of other opportunities, I went to tech things while they were more suited for combat roles.
After retirement I used the GI Bill to get a liberal arts degree and that helped open the doors for me.
Prime example of idea vs execution.
The Bee has a fine idea for a joke here. They just completely fail to execute on writing the jokes.
https://babylonbee.com/news/9-warning-signs-your-teacher-might-be-plotting-to-assassinate-the-president
I suspect this crew would bring it home much better.
Oof. One good one in the bunch.
The estate tax exemption is $15 million for an individual, so most likely the government won’t be getting much from most of us. I don’t have a problem helping my kids out with a down payment for a home, but I’m not going to just hand them a bunch of money before I die. It would just feed my son’s sense of entitlement.
Such is Harlan Ellison’s reputation that hearing him do a commentary on a Twilight Zone (1980s) episode based on his work had a strangely more unnerving impact than the show did. Mind you his voice is very ordinary, and there was nothing odd about what he was saying, but it was as if it was going to invoke his spirit more locally.
😱🤨
Or I’m just being weird.
I was annoyed because it looks like the show had more than one story per episode but the DVD is broken down by story, so I don’t know how to catalog the contents. Do I try to reconstruct the episodes? Do I just throw the stories in a heap?
Yeah, the 80s version had an annoying habit of doing that. Maybe they picked it up from Night Gallery.
Whoever encoded the DVDs also used a different naming convention for each disk. The first three have been:
NEW_TWILIGHT_ZONE_S1_D1
Twilight Disc 2
New Twilight Zone D3
These are in the same box set, and it makes no sense for them to have different naming schema.
We opened a business 2 years ago so not retiring and dying broke are definitely on the table. I never did expect to retire though, I always thought I’d teach or keep creating art.
I’ve been thinking about the quitting part a lot too. I never was that into my career, I put in my 9-5 and that was it. Now that I’m facing a future where my career may go extinct, I think that was wise.