Death, Life, and Cash

A saver upper's thought journey into spending down

Hello Global Jigsaw Friends,

I hope everyone had a wonderful week. Today’s newsletter features a guest post by a fellow member of the breast-cancer sorority, Ani Payumo, a corporate consultant-turned-writer, who moved to Madrid from New York a few years ago. Ani is originally from the Philippines and was introduced to me by a common friend, a neighbour from when I lived in Beijing back in the early 2000s. Getting to know her has felt like a piece of the Global Jigsaw sliding into place.

Ani wrote a draft of this piece at the writer’s retreat I organised in Spain’s Extremadura province in last month. I hope it gets you thinking:

xxx

Life and Cash

I am almost certain that anyone with a cancer diagnosis has a moment, however fleeting, when she thinks she is on the brink of death.  In my case, it was a year ago. I read my biopsy results, saw the word ‘malignant’, and thought, “I am going to die.”

I am less certain that anyone contemplating her own death then impulsively thinks of money.  In my case, “I am going to die . . . I saved too much.  I should have lived more.”  

I will admit, that was not my proudest moment. I startled myself with this pecuniary instinct. When one contemplates death, shouldn’t one’s thoughts naturally gravitate towards matters of the soul rather than . . . the wallet?

Curiosity piqued, I engaged with my thought process.

Self-portrait. Ani Payumo

“Sure,” I reasoned.  “I have always been a sensible spender.” I am a steadfast minimalist, I don’t splurge, I balance my accounts.   

“But” I countered myself, “I HAVE lived!” I’ve done most things I wanted to do. I buy that ridiculously expensive cup of coffee that every finance guru tells you to renounce. I travel freely, I eat well.  I’ve lived in the world’s most expensive cities and inhaled everything they had to offer. I retired early from corporate life to adventure (and spend) full throttle (within reason).

How much more can I Live??

In “Die with Zero,” hedge fund manager Bill Perkins, posits that to get maximum fulfillment out of life, we should spend down our money before death, i.e, die with nothing left in the bank. This, he says, is the hallmark of the perfectly balanced life: no over-saving and under-living. Dying with $100k left in the bank, he says, is $100k of gratifying opportunities lost.

Perkins gets technical on how to die with zero, but his important message is in the why. He pushes us to rethink our default ways of living. We’ve been programmed from childhood to maximize wealth —rat-race, accumulate, save, rinse and repeat until retirement. We preoccupy ourselves so much with being comfortable in our old age that we forget about living in the today.  

The problem is two-fold.  (1) We assume that our annual spending patterns in old age will be unchanged when, in reality, lifestyles change — we have less need for material things, we prefer simpler meals, we travel less. So, the utility of money declines as we age. (A side note: for readers wondering about how to cover the potentially catastrophic costs of medical care, Perkins advocates purchasing annuities and long term care insurance), and (2) We assume we’re going to live forever, thus requiring a mountain of money to sustain us into eternity, when in reality, well, we don’t. The result is we save much more than necessary — wasting opportunities for fulfilling our lives today. 

Perkins tells the story of a legal secretary who lived modestly in a rough neighborhood, never took a vacation, took the subway every day, worked into her 70s, and died with $3M in the bank and no heirs. She left her money to charities.  Perkins claims she did her life wrong.  She should have used her money to improve her life OR donated to charities while she was still alive, they might have benefited earlier.

For those wondering about leaving money for children and charities, Perkins suggests giving them money while still alive, or setting aside the amount you want to give in a Trust. Children will benefit from this since they will be receiving the money at a phase of their lives when they need it the most — starting out in their careers and growing their own families — and not when they have already established themselves.  After apportioning the amounts for children or charities, the rest of the money is yours to enjoy.

In short, money is a tool to help us live fulfilling lives — to enjoy ourselves, or to give away. Like airline miles, when not used, money is useless.  If you have it, use it.  Leaving money in the bank, Perkins says, does no one favors.    

I discussed this book at length with anyone who would listen. “Too risky if you have kids”, “What if you live until you’re 90?” “Selfish!” were some counter arguments fired back at me. Call me what you want, but I was convinced enough to give it a go.  Perhaps somewhere in the pages of this book was my answer to “how to live more.”

Armed with the disputable arguments of a hedge fund manager, the urgency of a cancer patient, and the brazenness of childlessness, I conducted a life-experiment: I turned on the spigot on my expenditures and did a conscious-spend-down.

I indulged — bought STUFF; ate very well. 

I bought convenience — got a place in the city for when I needed a break from suburban life; ditched my metro card and Ubered everywhere. I spent for friends and family — traveled to be with my dearest when chemo allowed; gifted stuff. 

Did material indulgences make me feel like I was living more?  Not really. Did paying for conveniences and giving away, do it?  These certainly made me happy, but no more than expected.

What was eye-opening, was that a conscious-spend-down also made me constantly conscious of an “end date.” And when you know in your bones that your time is limited, everything shifts. When it comes to money, you’re no longer squeezing the poor market vendor for the last dime, no longer trying to swipe every dollar off the table in a negotiation, no longer agitating over being overcharged.  More importantly, you have clarity on your values, untainted by cultural biases. And you do what makes YOU happy regardless of cost. You release. Your palms keep open. You are liberated.

For a brief enlightened minute.  

As I near the end of my cancer treatments, and the threat of death retreats from my thoughts, things start shifting back to the way they were. I feel myself again getting anxious over my retirement savings. My open hands start to clench. This experiment gives me more panic than peace.   

But I am determined to forge on. It’s a moment-to-moment battle to witness myself tense up about money, to combat the urge to grasp and keep open-handed. But I try. And try again. It’s all I can do.

I have come to realize that the value in this conscious-spend-down experiment is less about living lavishly as it is about finding my edges and pushing the boundaries of my sense of self. “I should have lived more,” is a call to engage with life, to dare to dance with it. To “live more,” is to awaken to my inner terrain — yearnings, muted daydreams, bizarre but instinctive thoughts about the state of my bank account — and explore what it is that they are revealing. To use them as a compass as I step out of my safety zone into what might be crazy, or risky, or maybe even downright scary. By exploring the territory that lies beyond default mode, I stretch the concepts of who I think I am and bear witness to who I am becoming. And through this collaborative process, I am no longer sleepwalking through life but leaping, canon ball-style, into it.

xxx

I hope you enjoyed Ani’s lyrical, but thought provoking essay as much as I did. You can check out more of her work here.

In the meantime please do share. And if you, please become a paid subscriber to support The Global Jigsaw.

Hasta pronto,

Pallavi