Customer Reviews

Die Broke : A Radical 4-Part Personal Finance Plan

5 star:		(26)
4 star:		(20)
3 star:		(6)
2 star:		(6)
1 star:		(8)

 

 

Before reading this book, I had always harbored a great deal of suspicion for the generally accepted wisdom of "retirement." According to popular financial magazines, I will need somewhere around $2 - $3 million by the time I turn 65 to live a "comfortable" retirement. What a sick joke.

Retirement, as the author points out, is a myth. There is no such thing as retirement. Retirement at age 65 was arbitrarily made up years ago to get rid of the elderly so younger people could fill up those jobs. There is something else the author touches upon and that is America's obsession with accumulating large sums of money over years and years to one day get to that glorious point where we no longer have to work. Great, so what about now? What do we do during our working years? Do we sacrifice all the good years of our lives saving up ungodly sums of money just to get to the point where we can quit and do nothing but goof off all day? There's something wrong with this picture. As the author points out, and I have noticed this myself, we focus on retirement for the same reason we look forward to the weekend: we hate our jobs. Americans by and large just don't like to work. If we loved to work, we would have to change our national slogan to "Thank God it's Monday." I don't think so.

This book is basically divided into two parts. The first part is his radical and somewhat controversial plan to avoid retirement altogether. In other words, plan on not retiring at all. The author points out that this is done in several ways, most of which are not really new: (1) pay cash for everything except maybe a house (2) get rid of all your credit cards and ATM cards except maybe an American Express which you pay off every month (3) mentally quit your job. This is done by accepting the fact that there is no job security, so you might as well keep your eyes and ears open for other opportunities. Part of his plan reminded me of "The E Myth" by Michael Gerber. Gerber asserted that small business owners have turned their lives over to their business. We business owners revolve our lives around our businesses, or in other words, our business becomes our life. Been there done that. Many career oriented workers do the same. We proclaim that we are satisfied with our work, but in reality, it's because the work becomes an end in itself. A business or a job both have the same objective: to supply you with the money you need to live and enjoy life. That's it.

My favorite quote from the book was this little gem: "Forget about the pursuit of a holistic work life. You cannot successfully integrate your work and the rest of your life. Your work is not your life. Your work is what you do so you can have a life."

The second part of this book was okay. It's basically an alphabetical listing of various financial topics. There's not a whole lot of new information in here, but as an avid reader of financial books, newspapers and magazines, I like to get as much information as possible. Every book has something worthwhile in it. This section helped explain some topics that I had not understood before, particulary about annuities.

My overall impression of this book was very good. Although there is not a lot of new information in here, his plan for dying broke is wonderful. In particular, the death of "retirement" as we know it was particularly eye opening. There really is no such thing as "retirement," and people shouldn't even bother planning on it. What's even worse is that children nowadays look forward to inheriting their parents' estates. Now, you're supposed to save huge amounts of money to retire on, but additionally, you have to keep a large chunk of that to pass onto your heirs. My advice: go out and buy that bumper sticker which says "We're spending our children's inheritance."

I'm giving this book 4 stars because I appreciate the originality of his thinking. So much of our society is focused on retirement and the future, we forget to live our lives from day to day. There's nothing wrong with saving for retirement, but when we save large sums of money, we end up sacrificing our working years for something later on that may never happen. It's an industry based entirely on fear. The more you accumulate for "later," the less you can enjoy yourself now. What really touched me was when the author wondered why it is that the biggest legacy we leave to our children is an inheritance. That only happens after you're gone. What about while you're still here? Now that's something to ponder.

The main point of the book is that it is silly to aim to leave a large estate to your heirs. Instead of that, spend your money, or give it to the people and causes that you care about while you are alive and able to enjoy seeing the gifts put to use. Since this type of plan raises the spectre of running out of money (i.e. "outliving your assets"), Pollan and Levine's work is full of practical advice on how to insure a sufficient life-long income, using annuities, insurance, etc.

Those reviewers who criticize the book as a case against retirement planning miss the point. Whether or not you plan to "die broke", you'll need substantial assets to provide a comfortable income in your seventies, eighties, and beyond, God willing. Die Broke is about how to accumulate those assets, and how to make the best use of them, not at all an excuse for not saving.

Regarding their views on retirement, Pollan and Levine are preaching the not-so-heretical idea that many of us will find both fulfillment and income working past the standard retirement age, and should take that into account as we plan for that time. Indeed, social scientists are starting to find that people who keep working (often part-time, or as volunteers) are happier and live longer than those who "retire".

I highly recommend this book to people thinking about their careers and finances. Even if you disagree with its conclusions, it will stimulate your own thinking and planning. Be sure however to check with a qualified advisor before undertaking any of the detailed strategies mentioned, as tax and other rules are constantly changing.

This is my personal favorite in a long list of books on financial planning, although I think it caused the hairs on the back of my financial planners neck to stand up. Actually, that might be a good sign. The advice in this book goes against everything a sensible planner says to do. The traditional advise is to protect, nurture and grow your 'estate.'

You know the bumper stickers you see that say "We're Spending Our Children's Inheritance"? This book is based on that theory, although with a kinder philosophy behind it. The authors recommend you

1) Quit Your Job. (virtually,not actually)Rather than leaving your job, start thinking of yourself as an independent contractor - and make sure you do what you like, get what you want) The work world has changed, employers complain about lack of employee loyalty, but will 'right size' you tomorrow

2) Pay Cash - Get rid of credit card thinking and credit card debt. This is not your father's credit card system anymore!

3) Don't Retire - The idea of putting yourself out to pasture at a given age is as dated as the concept of thinking you have to grow your inheritance to leave to your kids.

4) Die Broke. Spend your money wisely now, use legal ways you can take care of your parents and your kids while you are still alive.

The idea is not to live poor or foolishly, but to rethink entirely why you are struggling so hard now for a tomorrow that may or may not come. Use your money today, to take care of yourself and your loved ones. This book is easy to read without talking down to the reader, is full of good advice with possible to practice wisdom. A good investment!

Much of what you'll find here has been written before, but Pollan puts it together in an easy to understand, easy to read style. A word of caution.....although this book is thought provoking, but must be taken in context with other readings and life experiences. That said, Pollan reduces his financial plan to four steps. They are:

1) Quit Your Job. Pollan recognizes that the vast majority of businesses don't care about their employees. When push comes to shove, anyone that isn't vital is gone with no regrets. Many readers already know that. Pollan argues that since your employer is no longer your protector, you should treat the relationship as a relationship of equals. That means doing what your employer is doing......by putting your needs first. Give him or her an honest day's work, but think always in terms of where you're going and what skills you need to get there. You are a free agent. You are responsible for your professional growth, not the person in the corner office. For some, this may mean stepping out on their own. For others, it may mean staying on the job but approaching it differently. Whatever it means to you, recognize that when things go bad for the company, nobody's going to care about your mortgage, credit card bills and braces for the kids. You need to make sure that you've got that covered by developing a set of skills and attitude that can't be replaced. That's what free agents do.

2) Pay Cash - Bingo. I stopped buying on credit years ago. I won't even buy a car unless I can pay cash for it and have accelerated mortgage payments and will soon have paid off the house. This is extreme behavior modification for many of us, but it is the true path to freedom in life. The bottom line is that you should never buy anything on credit (cars included) that will be worth less next year than it was last year. I can't say this in strong enough language. If you don't owe anyone money, they can't control you. If they can't control you, you can think in terms of what is truly best for you. If you're in debt for any consumer purchases (credit cards, cars, etc) develop a plan to get out as quickly as you can. You will be amazed at the impact it has on the rest of your life.

3) Don't Retire - Retirement is a concept from the days when everyone did physical work they hated because they had to put food on the table. If you truly love your work, you won't want to quit. The secret is to get out of debt so that you can quit that job that you hate and start doing what you love, even if it pays less.

4) Die Broke. This is an eye-catching statement, but what Pollan really means is, don't worry. If you don't need to retire because you love what you do and are capable of doing it, you don't have to save for retirement. You can only do this by having the right skill set and living below your means. Since most of us aren't saving for retirement, we're going to be working anyway. We might as well do what we love.

I decided years ago to take control of my life and even though I hadn't read this book, it's the system I chose to implement. I'm not wealthy, but I look at how I live and I look at how my friends live and I wouldn't trade. Think like a free agent, don't buy what you can't pay cash for (except a house, and pay that off as fast as possible), find work that you love and that makes a difference and you will have a better life.

Like most worthwhile things in life, it's so easy.

Die Broke is an excellent book. Author Stephen M. Pollan takes a philosophical look at our concept of retirement--a concept created for another generation based on a different value system. The idea that we must retire at the age of 65, build wealth until we die, and leave a big inheritance for our children is one founded upon the needs of society during the industrial age. Pollan's idea is that now that we are in the information age, there is no need to retire until we want to. We also needn't wait until we die to help our children (long past their most needful times). By setting up proper cash-flow investments, we can live a good life, help our children, and keep ourselves financially secure until we die.

Many people, including myself, worry continually about how to raise the money needed to survive for thirty years after retirement. Pollan's ideas help us to break out of the outdated concepts that give us these feelings so that we can feel better about ourselves and our current financial state.

Steve Pollan and Michael Levine examine our cultural and financial perspectives and the realities of today's retirement in the United States. Retirement is a very recent phonomenom that began in the post-depression era. How many Baby Boomers will live the lifestyle they want to have when they retire? In the book you'll find the surprising results from several research studies and surveys. Many Boomers will be in for a shock. This book also provides a perspective that will contradict what most Americans have been consistently told their entire lives by their family, co-workers, friends, financial advisors, and mainstream American culture. Whether working, middle, or upper-middle class, the traditional concept of the Golden Years will be an illusion for most. Not all, but most. For those that do achieve their financial status during retirement, there is one thing working against them: time.

This is a very informative book that most Americans can gain from reading. This book is not for everyone but it can offer insight and be a financial guideline for many. So often, I see and hear people talk about all the things they plan on doing in life--when they retire. Many Americans put their goals and desires on the back-burner until the so-called Golden Years. I know people who did this. And, many of them died before ever actually experiencing their plans they've long wanted due to heart attacks, Cancer, and car accidents. Others were too old physically to go on that trek through Nepal or go sailing abroad. Their investments provide income but not enough to do "what they really want." After a period of time, unless one has fulffiling hobbies, one doesn't know whether it's Tuesday, Friday, or Sunday.

One thing I learned from this book is that one can do what they want to do in their younger, middle, and yes, latter years. Why not break up these experiences and achieve them over the course of one's lifetime, instead of when one is "old." Perhaps we should focus on the journey itself and not just the end of it.

Why do I see Americans, who come from the wealthiest nation on Earth, taking the obligatory and shallow 2 week, sound-bite vacation, when I am abroad? One of the most common questions I am asked from people abroad is why Americans take such short holidays. Two week vacation culture, enormous amounts of debt, and not knowing any different, seems to be the answer.

I highly recommend this book. as I've said, It can be very useful for many. For the credit-card, two week vacation, "wait-until-I-retire" people, most will will reject and resent these authors' ideas. Because for them it is too late to change the course they've taken. Just simply read the reviews of this book on Amazon.com to find out who they are.

When this book was first published about six years ago, many reviewers on Amazon.com really ripped it up. I'd be curious to see their opinions now that their impressive "retirement" portfolios are worth next to nothing and they're looking for work--that they can't find.

It's a fine philosophy, but it depends on who the reader is. Pollan isn't right about everything. For example, he claims that non-cash gifts aren't subject to gift tax. Not exactly. And his ideas about getting to know the manager of your bank branch personally are quaint at best. In my experience, bank branch managers last a few months at most. I also don't understand his recommendation to lease instead of buy cars; leases are generally designed to rip people off.

But, that said, the idea of not retiring, of working so you can have a life, is right on. I suspect after the upheavals of the last few years, more people are likely to agree with him and see validity in his ideas.

HOWEVER, like so many of these books, it's essentially an interesting ten-page essay expanded into a book. If you think you're going to work at a job for 40 years, then spend a few years shuffling around the golf course waiting for death, buy it and read it. If that scenario strikes you as a dead-end fantasy, you're probably already with the program.

Pollan and Levine put foward a radical approach to life. Such a different viewpoint is valuable if only to make one think "out of the box". However, my faith in the authors was severely shaken when I read a serious error in their advice. They state that non-cash gifts are not subject to Federal Gift Taxes. This is definitely incorrect. (Check IRS form 709 and the accompanying instructions, which states very clearly that transfer of any type of property, real or personal, including cash, is subject to gift taxes.) Makes me think---what other errors might be there that I didn't catch. My advice--read with a grain of salt.

Before taking my flight to Honolulu from San Francisco, I decided to visit the terminal bookstore and find a book to entertain me during my 5 hour flight. In the sale section was this book "Die Broke: A Radical 4-part Personal Finance Plan." Being open to radical ideas, I decided to purchase it for entertainment purposes.

The book is broken into 2 sections: Section 1 describes the plan in detail. Lots of good information to consider. Again, the key word is consider! I particularly liked the author's view of today's work world (Quit Today!), Pay Cash, & Don't Retire. It all makes sense to me, yet I'm a 28 year old gen'xer that has read quite a few finance planning books out there. Most of the finance books out there in reality do preach "outdated" concepts. Pollan's 4 point plan is indeed refreshing, especially as we enter the new millenium.

The second half addresses various topics such as stocks, mutual funds, insurance, ATM's, debit cards, you name it. Although it was a breeze to read through this section, I was a little disappointed in that it should have been written more in depth as how it relates to the "Die Broke" philosophy, rather than a quick and dirty write-up.

All in all, I'm going to embrace most of his finance plan. All in all, Pollan and Levine are geniuses. Read the book with an open mind. After all, you CHOOSE what you accept to believe in. :)

Despite other positive reviews, I tend to think this book contains some flaws which have been over looked. First of all, it appears as if the audience of this book is aging baby boomers who are fretting about surviving their retirement years in financial comfort. Perhaps this book offers some useful advice for these people, but for me, this advice falls short.

First of all, many of the recommendations in this book assume that a) You do not have enough money for retirement. and b) You don't have enough time and/or discipline to save for retirement. However, as young GenX'er, I personally have plenty of time and earning potential to accumulate enough wealth to retire and die rich. If a young person, not even making the median income saves a mere 10% of their income from age 25 until age 65, they can retire a multi millionaire. I have no intention of abandoning this goal, since I have over 35 years in which to build a nest egg.

The author presents several contradictory statements on how to manage your money. First, he recommends dumping credit cards and using only charge cards. The charge card he recommends costs over $50 a year to use. I can use a credit card, with no annual fee, pay my bill in full each month and save over $2000 in annual fee charges over my lifetime. Apparently, the author assumes that his audience is too undisciplined to use credit cards without paying off the balances each month. In addition, the author rails against consumerism and planned obsolecence and says that it is better to repair your VCR, computer, etc. rather than by a new one. In a later chapter, however, he recommends leasing vechicles to avoid paying repair bills associated with older vechicles. I drive a 12 year old truck, and I know that my repair bills on that vehicle are much less than the thousands of dollars I would spend on lease payments and higher taxes.

Don't get me wrong, I agree with some of his advice. As a GenX'er, I 'quit today' before I even got my first job. ;-) I also think that many people in my generation have already decided to place family and happiness above the pursuit of wealth. The benefit of being young, however, is that these goals do not need to be mutually exlcusive. Much of the advice that I do agree with he seems to have taken be observing the GenX generation.

In short, the book may provide a good guide for older, undisiplined boomers who have missed the chance to save for retirement, but for younger people, conventional wisdom (properly executed, and with some modifications) may still be the key to sucess.