|
|
|
 |
|
|
|
Die Broke: A Radical Four-Part Financial Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales rank 28,322
Customers rating (based on 58 reviews)
|
|
|
|
|
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.
|
|
|
| Publisher | Harper Paperbacks | | Release date | 10/1998 | | Availability | Usually ships in 24 hours | | Edition | Paperback |
| | List price | $15 | | Our price | $11.7 (you save 22.00%) | | Used price | from $0.01 |
|
|
|
|
 Everyone Should Read this Book!
Watch Video Here: http://www.amazon.com/review/R1QRQN6JMX170H
Generic Financial Advice With a Twist
Die Broke infuses typical financial advice with a few new insights. The gist of the book is covered with the four statements on the front cover. Quit your job mentally, pay only with cash, never retire, and aim to spend every last penny by the time you die.
Despite its claims as being revolutionary, almost all of the financial advice is pretty bland and unspecific. Besides the four items on the front cover, the book doesn't really stray from the norm.
Overall, I have mixed feelings on the book. I highly agree with some of the central ideas in the book, but found much of their specific advice either uninspiring, vague, or flat out wrong.
To start out with the good stuff, I think Pollan hits it right on the head about retirement: it's a myth. It's a concept that didn't even exist 120 years ago, and it was created during the industrial revolution as a response to a variety of unique economic and political conditions. America found itself in the midst of the Great Depression, had 25% unemployment, and an industrial economy that was littered with older, unproductive workers that were crowding out younger generations from entering the work force. So, congress and big business decided to pay them to go away. It worked, and due to the baby boom and the strong economy in the 50's and 60's, America and much of the industrialized world had the right demographic and economic characteristics to allow the concept to work for another generation or two.
Now that people are living to be 85, spend their lives working in an office instead of a factory, and birth rates are slowing down, the numbers don't add up. And that's okay, because humans weren't designed to sit on their duff for twenty years and play shuffle ball. Instead, don't view turning 65 as this walk off a cliff, but view your life as a continuing series of ups and downs up until the day you die. Studies show that retirement is unhealthy anyway, and it's not an entitlement; it's a luxury that costs about as much as a fleet of Rolls-Royces.
Likewise, the idea of inheritance is equally as dead. The idea of inheritance was created centuries ago when sons needed to learn their fathers work in order to survive and inherited the physical equipment to do so. That has no bearing to today, where parents pass on stock portfolios to their children, and large endowments are proven to make people less enterprising and create tension in families. Instead, spend it all while you're alive.
Basically, that sums up the most eye important parts of the book. Everything else is just a potpourri of financial tidbits, none of which go into any detail.
The only unique piece of financial advice he provides is instead of transferring from stocks to bonds, steadily transition from stocks to annuities, in order to provide yourself a lifetime of income to spend.
I also think his description of how the job market is changing is very accurate. Americans on average, spend less than 6 years at a particular job. Increased mobility is the way of the future, and the idea of wedding yourself to a company and having it take care of you for the rest of the life is a fantasy that hasn't been true since the 60's (like retirement). Preparing yourself to be continually reinvented is crucial to professional success. With a global economy, no job is safe from being liquidated, so always be on the lookout for something different and new.
A few quips I had:
He highly recommends annuities, but spends little time explaining them. This area is where I felt his lack of detail was most troubling. I can't say I know a lot about annuities, but I'm of the impression that they're fairly complicated and not too many people understand them. If you didn't, you still won't after reading this book. His advice for shopping for one isn't very useful. Basically, find one that's simple and safe, but he doesn't give much effort to describe how they work, the different dimensions of risk you assume when buy one, or much detail about the little things to look for when buying one.
In a similar vein, I think he should have discussed other types of income producing investments, such as real estate or other types of debt instruments, both of which have unique advantages that annuities lack.
When the author says 'Quit Today', he means quit in your head. With this thought, give up the idea that you're going to find meaning in your work, and just treat it as a way to make money and nothing more. Always think of yourself as a free agent. According to him, identifying yourself through your work is a thing of the past when you worked at the same company for 30 years and spent your life climbing up the corporate ladder. I agree with him to a point, but I think he fails to make an important distinction. It is unhealthy and unfulfilling to attach feelings of self worth and personal identity to what you do as a profession. Your inner self is not the same as your work. That said, you're still going to spend 1/3 of your life at work, and life is too short to spend that much time doing something you don't like. I think his point of view may be biased since he's a financial advisor in a rich part of NYC, so he probably deals with a lot of distressed career people who have the problem I earlier mentioned. He takes the point too far. I can't imagine spending my life at a job that I didn't like.
Likewise, he spends the entire book talking about ways to switch from salaried job to salaried job, but never mentions being self-employed, an important omission. He also extolls the virtues of 401(k) plans and the like, but never mentions self-directed IRA's, which offer unique financial advantages for the type of financial philosophy he is promoting.
I am speaking with the benefit of hindsight, but I thought his characterization of the housing environment didn't really correlate very well with what I see around me. His claims that real estate is dead never really connected with me, and if anything, I would think that the additional tax exemption from selling your home that Bill Clinton passed has led to an over investment in housing since that time, which helped cause the subprime mess.
Likewise, I'm not sure his advice of waiting to purchase your dream home first instead of buying a starter home and then moving out of it is wise. He simultaneously espouses buying your dream home first, and then living there the rest of your life, while encouraging the reader to constantly be on the lookout for new jobs and career fields. To a degree, this seems like a competing agenda, and it's probably difficult to plant yourself somewhere for 30-50 years now a days. Things change too much.
His advice seems to conflict with itself in a few other areas as well. He says Die Brokers should live at their means, but mentions several times the importance of continually saving and investing and trying to grow your assets through most of your life. Well, if you're saving and investing, by definition that means you are living below your means, not at them....which is a good thing.
He also advises people to focus on their income, and not their net worth. I think a more appropriate course of action would be to focus on your net worth the first half of your life, and then on income the second half. Besides, the higher your net worth, the bigger income streams you'll be able to secure for yourself. Likewise, I think it makes sense to live below your means the first half of your life, and at your means the second.
Lastly, my final quip is his advice on cars. He says people should lease, unless they're rich enough that they can just pay cash, or they're trying to be very frugal and just want to buy a junker to get them around town, in which case they can also pay cash. I think the truth is, unless you're quite wealthy, it almost always makes sense to buy used cars with cash. In The Millionaire Next Door, the authors note how most millionaires drive used cars that they bought without credit. For most people, taking out a loan on a car is something they probably shouldn't do, as it's a very inefficient use of resources.
The author also speaks from a unique point of view which I believe is important for understanding how he formulates his financial views. He apparently works as a financial advisor in NYC, where he deals with pretty wealthy clients, who care about their career a lot. I imagine it's this world view that was directly responsible for shaping two of his four principles: quit today, and don't retire. I got the impression that he worked with a lot of people who worried about their career a lot, and made professional accomplishment a large priority in their life. If you're dealing with a lot of those types of people day in and day out, I can understand how you would form his opinion on the subject that he did. However, most people that I know of are more like gerrymandering career drifters, who are often disgruntled with their work and caught somewhere between trying to make sure they pay their bills, trying to find a bigger pay day, and trying to find something that's 'right' for them. A more balanced attitudes towards professional life would strike me as more appropriate.
Likewise, while I agree with his views on retirement, the fact is that most people don't spend nearly enough time thinking about their future as they should, and many don't have anything more than the material objects that they own, which is a terrible place to be in. I think he deals with a lot of people who are constantly trying to reach some sort of magic 5 million dollar number for their retirement, and worry a lot about their money, which is why they would come and see him. I imagine that's a small subset of the population, and most people would probably be better off thinking more about their retirement, even though the concept is flawed.
If I could, I would give this book three and a half stars. I really like some of his ideas and his perceptions of 21st century life, and the book is easy to read. However, most of the good ideas in his book can probabl y be summed up in 20 pages and a lot of the meat of the book is lacking and I find the minutaie of his advice to be troubling. I also think his frame of reference leads him to make broad generalizations about the population at large that probably isn't true.
Overall I would recommend it for its unique good points, but be modest in my praise.
Some Basics and a New Approach
My husband has been suggesting that I read this book for many years and I finally gave in. Though it was originally published about 10 years ago and has not, to my knowledge, been updated since, there are many interesting concepts. Most of these are common sense such as use cash, get rid of credit cards, invest wisely and similar. The audience appears to be targeted to middle aged individuals, but much of the advice deals with action to be taken in the 60s and 70s. I don't think that I'm ready to get rid of my debit card quite yet. Wrapping my head around engineering my finances in such a way that I die "even" and don't leave an estate certainly bucks the culture in which I was raised. Several short chapters briefly discuss taxes, health insurance, etc.
revolutionary
Every once in a while, a book comes along to revolutionize the way a generation considers a topic. This is such a book. It covers new ground and offers compelling reasons to reconsider the entire notion of retirement. This book is also very readable and really is a must read for anyone who wants to retire or is in retirement. Here you will find the antithesis to all the retirement advice you will get from most every other source on retirement investing. At the very least, grab this book off the shelf of your favorite library or store and read the first 18 pages. This synopsis covers the heart of what the authors have to offer and will help you decide if you need to read the whole volume.
 Financial Planning for Stunt Pilots
Die Broke is an extremely seductive book. Stephen Pollan's idea is that you'd be a fool to save your money for a rainy day. He says spend it now, which is contrary to what evey other personal finance expert advises. Take a round-the-world cruise, buy that new Mercedes, or better yet, lease it. This advice goes against the grain, and I found myself fascinated by such an original approach. It's tempting to adopt his methods and live for the present, but my advice is read the book, but don't take it too seriously.
|
|
| | |
|
