How do you spend $12k on a trip to Italy? Are you bringing ten people, or staying for months? I love to travel, I'm not broke anymore, but I can't figure out how I'd ever spend that much.

$3.9m to $4.5m at 95? That’s a terrible return.

Had an uncle like this: he became the man of the house at 9 & struggled a lot. He later owned a great many properties & was wealthy by any measure. But he couldn't bring himself to spend any of it - always bought the cheapest thing on the menu at low end diners.

Whenever I think about this hard switch I think of board games that teach you when to amass resources and when to switch to go for the victory points. But timing is everything. Also some people connect their lifetime identity to the amassing of wealth. Spending it was not really a plan. And switching that identity is scary.

Should you be talking about your clients' finances?

My parents are in their 80’s. Both retired around mid 50’s and travelled. Yet their friends who are more well off than my parents cannot part with a dime. It may be immigrant mentality. They worked, scrimped and saved to become wealthy, yet in their old age, they don’t know how to spend. Bc they never did. They live in a big house but have no furniture. They drive an S class but only eat at $10 restaurants. Will only fly business class with miles. Money will just go to their kids. They never learned to enjoy fruits of their labor. Their focus was just saving and pinching pennies. Now most are too old to see the world, let alone visit an another state.

Not knowing what kind of economy (and world) my four kids will inherit is the most important "save, don't spend" incentive there is.

Youth is wasted on the young, but money is wasted on the old. For every client I tell to spend less, there are 5 I tell to spend more. I say things like "for now on I want you to fly business class".

💯 It's definitely the hardest mental shift to make going from saving to spending. Even if your portfolio is gaining in value as you spend like ours. Maybe reminding them of the old adage of go-go, slo-go and no-go years will help.

It seems like for some high-net-worth folks, that fear of the balance dipping is just ingrained deeper than an old oak root, no matter how comfortable the projections look. if you've done the work, you might as well enjoy a nice glass of wine while you're here.

The big lie is that you need to have 5 million to retire "comfortably". No you don't! Not even close. You just need to know the difference between wants and needs. Make sure your needs are all met well and allow some of your wants to flow freely. Not all of them - some of them! And don't forget to give back to those who need it! You will be content lik never before.

At 15% inflation, that $3.5 M loses 56% of it's purchasing power in 5 years. After 10 years, that's 80% reduction. The 4.5M reduces to 965k equivalent. Need to increase the nest egg 15% pa just to stay even.

Only $12K on trip to Italy? My flight to Italy cost $12k

If it doesnt feel good to spend why should people change?

4.5M at 95 isn't comforting. Maybe your client is wiser than you are.

Yeah, until one of them needs 25 years of specialized care after a broken hip from a fall. 4 million might not look like enough. Just sayin’. 😕

Do the most adventurous trips while you're young and still have energy!

I have doubts about the "end up with 4.5m at age 95' part. So I agree with the man's caution.

I know my mom has a hard time turning it off. 60 years of being poor and saving has a hard time spending on herself.

Are they in their 90s already? Literally boomers

This is brilliant. A blessing and a curse. I see it often. The fear that blocks the blessing.

Yes. The most tragic, but very true.

Yes! Recommend you give them the book - Die with Zero. Great read

What a great post ….Can relate 100%

Couldn’t agree more 👍

Hahahahhahahahahahaaaaaaaaa 😂😂😂😂😂😂😂😂 Ew

Great post.

If there’s any one benefit to a state’s estate tax, if it’s punishing enough, is it kind of gives big incentive to “spend it, give it away, instead of having your heirs write a big check to the state.”

Comfort levels with spending bring peace of mind. Peace of mind is a great blessing. Things can go wrong in retirement and his reasons are real. Projections are not necessarily real outcome ...and people can live a full life without traveling to Italy. I say.... his peace of mind outweighs the trip.

Send them @DieWithZero

My parents had their house and cars paid off 20 years ago and still collect aluminum cans to trade in for money. They’re just retired sitting around getting paid from pensions but still pinching pennies . Both came from severe poverty so I definitely think the extreme frugality stems from that.

How does the spreadsheet account for possible market crashes, medical disasters, and the inability to find employment if those things happen? Unfortunately, I can relate to this couple.

This is why, which Kurt can confirm, that these 401ks are the last things to get spent. Why? Again, it’s that security of knowing that total is underneath you and not wanting to spend it.

Not wanting to spend $12k wasn't necessarily because he thought they couldn't afford it. It could have been because he just didn't want it because he didn't value it that highly.

Congratulations to your clients for their fortunate circumstances. However, there are MUCH harder parts to retirement planning. Every circumstance is different.

The closer you get to that point, the more you worry about tipping the equation to where your nest slowly decreases. Many in that boat have saved enough to show them that the spending can come out of the growth without going backwards at all.