“Die Broke” by Stephen M. Pollan and Mark Levine has been on my “to read” list for a while, and I finally got around to checking it out from the library. It was published in 1997, so it should be easy to find a copy at the library or a used copy. I was impressed in a few places in the book where he suggested caution about stocks (which would have been useful a few years later during the dot-com bomb) and caution with real estate (which seems particularly wise these days).
Although there’s a large number of ideas in the book, the most innovative (and people’s main take away point) is his idea that you should structure your finances such that there’s nothing left when you die. He spends a fair bit of time talking about inheritances, and how he feels they are poisonous to the recipient and the giver. The core of his argument is that in the past inheritances came with obligations. The first son would get the family farm, but be responsible to take care of his parents in their old age. A daughter would inherit the silver, but would be obligated to maintain it and pass it along to her daughter (or a niece). He feels that in modern times the obligation has disappeared and turned inheritances into something like winning the lottery.
He’s not opposed to gifts or transfers of wealth, but suggests they be made during a persons lifetime so they can enjoy giving the gift and seeing it impact the person’s life. He talks about buying a farm with a swimming pool where his children and grand-children would visit and spend time with him each summer. He suggests paying for children’s or grand-children’s education or helping out with a child starting a business if finances allow and that’s the sort of thing you want to do.
It’s definitely worth reading the book to get all the details, but the core of his approach to making sure you don’t run out of money is:
- Keep working: He feels retirement is also poisonous, and that it’s harmful to suddenly become a useless lay-about at 65. He recommends decreasing your workload, but maintaining some sort of paid labour for life.
- As you cut back on work, replace the work income with things like annuities and reverse mortgages that will pay out over time in exchange for a lump payment.
One of his other big ideas is that job security is dead (remember, he wrote this in 1997 so it wasn’t as obvious then as it is now). He recommends doing a good job, but to always be looking for your next position (and to look for job experiences that strengthen your career rather than just helping the organization you’re currently in).
He touches on a number of other financial issues, such as how much he hates ATM cards and credit cards (he feels people don’t consider purchases as carefully), investments, insurance, estate planing, health care and career planning.
I didn’t agree with everything in the book (I’m keeping my ATM card and credit cards) and I might even want to leave a nice inheritance if I ever have kids. He has a very interesting perspective however, and presents an well thought-out opinion on a number of issues that are worth considering.
The book is broken down in 72 chapters, some of which are only 2 or 3 pages long, so it’s a fast, easy read. I enjoyed it, found it well worth reading, and I would definitely recommend tracking down a copy if any of the issues mentioned above are of interest to you.