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How old will your kids be if you die at 85?
Here are 4 bizarre insights that will make you want to work waaaay less:
Here are 4 bizarre insights that will make you want to work waaaay less:
If I die at 85, my oldest daughter will be 50.
We’ll probably be able to leave a decent inheritance.
But is that really the best outcome?
We’ll probably be able to leave a decent inheritance.
But is that really the best outcome?
1. Not all dollars are created equal
If I gave my 90 year old grandma $10,000 there’s nothing she could do with it.
As you get older, your ability to “buy experiences” goes to zero.
If I gave my 90 year old grandma $10,000 there’s nothing she could do with it.
As you get older, your ability to “buy experiences” goes to zero.
The opposite is true for someone in their 20s.
$500 for a guys’ trip can create a lifelong memory.
Paying for a gap year can shift a child’s perspective of the world.
$500 for a guys’ trip can create a lifelong memory.
Paying for a gap year can shift a child’s perspective of the world.
So back to my 50 year old daughter who inherits our assets when we die at 85.
The utility of that money has declined substantially for her.
If anything, it may be more useful to her kids.
The utility of that money has declined substantially for her.
If anything, it may be more useful to her kids.
2. No one wants to run out of money — so we oversave
It’s impossible to forecast your living expenses as you get older.
Medical care, nursing homes, extended life expectancies can wreck even the best forecast.
It’s impossible to forecast your living expenses as you get older.
Medical care, nursing homes, extended life expectancies can wreck even the best forecast.
So many of us will oversave.
We’ll try to plan for every possible “edge case” by socking away as much as possible.
But this too, is sub-optimal?
We’ll try to plan for every possible “edge case” by socking away as much as possible.
But this too, is sub-optimal?
3. Why bother self-insuring away all these risks?
By trying to prepare for every worst-case scenario, we play the role of an insurance company.
But guess what? There’s actually a pretty efficient market if you want to insure those risks with a 3rd party.
By trying to prepare for every worst-case scenario, we play the role of an insurance company.
But guess what? There’s actually a pretty efficient market if you want to insure those risks with a 3rd party.
Scared you’ll outlive your savings?
A permanent policy will pay out a fixed amount until you’re 121.
Scared of nursing home costs?
Purchase long-term care insurance. (Although, I’ve heard this one is dicier.)
A permanent policy will pay out a fixed amount until you’re 121.
Scared of nursing home costs?
Purchase long-term care insurance. (Although, I’ve heard this one is dicier.)
4. Why work so hard then?
Whether it’s the Goldman banker, McKinsey Consultant or FAANG engineer, most professionals just want to do right by their families.
But if you can insure away extreme cases and give smaller amounts to your kids EARLIER in life…
What’s the rest for?
Whether it’s the Goldman banker, McKinsey Consultant or FAANG engineer, most professionals just want to do right by their families.
But if you can insure away extreme cases and give smaller amounts to your kids EARLIER in life…
What’s the rest for?
Charity is the obvious answer.
But even there, wouldn’t you want to play an active role in how your donations are disbursed?
You could maximize your joy AND impact by giving while you live.
But even there, wouldn’t you want to play an active role in how your donations are disbursed?
You could maximize your joy AND impact by giving while you live.
So to recap this memento mori:
1. It becomes harder to buy experiences with age
2. Over-saving is a sub-optimal life strategy
3. Many risks can be insured away
4. If you lower what you’ll leave behind, you can work less
1. It becomes harder to buy experiences with age
2. Over-saving is a sub-optimal life strategy
3. Many risks can be insured away
4. If you lower what you’ll leave behind, you can work less
If you enjoy contemplating death on a Saturday, pls smash the RT button on the first tweet
Stay rad, fam 🤙
Stay rad, fam 🤙
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Alex Wieckowski @AlexAndBooks_
·
Nov 23, 2022
Great thread Khe!