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Die With Zero - Track 008

Die With Zero

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  • Give Kids Their Money While You Can
    • Dying with zero means spend all your money, but separate and give your kids whatever you’ve intentionally allocated for them before you die.
    • Treat inheritances as planned in-vivo gifts, not accidental leftovers from precautionary savings; make them untouchable when given. Transcript: Other Speaker Every single time I talk about dying with zero, I get some version of the same question. What about the kids? This question always comes up, without fail, no matter who I talk to. A couple variations of this question even have a moralizing, self-sacrificial tone. Some people have actually said to me, well, that’s what somebody would say who doesn’t have kids. And even when they know I have children, two daughters, some people will still imply that dying with zero is the ultimate act of selfishness. No matter how they put it, what most people who ask about the kids mean is this. Planning to die with zero might be good for someone thinking only about themselves, but shouldn’t you care about the well-being of your children too? Because if you cared about someone other than yourself, you wouldn’t die with zero. You would make sure to leave money for the kids. Their implication, if dying with zero is a philosophy only for selfish bastards, then it can’t be the right philosophy for decent, caring people like themselves. That’s the holier-than attitude I hear from so many people, and I have no patience for it because it’s so hypocritical. Too often, people who make comments about the kids arguing against the die-with way aren’t actually putting their children first, but instead are treating their kids as an afterthought. Why do I say that? Well, let me give you an example from a typical conversation with my closest friends. When one of these good friends poses the inevitable question, what about the kids? I first explain that the money you’re leaving to your kids is not your money. So when I say you should die with zero, I’m not saying die with zero and spend all your kids’ money along the way. I’m saying spend all your money. That is, give your children whatever you have allocated for them before you die. Why wait until you’re gone? Remember, these are conversations I’m having with my closest friends, and we always call each other out on our BS. So I tell them straight out, you’re full of BS. Where’s your trust fund for your kids? How much is it set to? When is it going to distribute? Have you even thought about these things? Or are you just parroting what you’ve heard? Do you see what I’m saying? If you’re really putting your kids first as you claim you are, don’t wait until you’re dead to your generosity. I like to say that dead people can’t give money away. They can’t do anything. Putting your kids first means you give to them much earlier and you make a deliberate plan to make sure that what you have for your children reaches them when it will make the most impact. A real plan for dying with zero includes the kids, if you have kids. That way, you’ve already separated out their money, which becomes untouchable by you, from your money, which is what you must spend down to zero. (Time 0:00:13)
  • Give Children Their Inheritance While It Still Matters
    • Most people who ask “what about the kids?” assume leaving money at death is the same as caring for them, but Ferriss argues that money left at death often isn’t their money to spend effectively.
    • Die With Zero means spend all your money while you can — and give children whatever you’ve allocated for them before you die, not as a late inheritance.
    • He calls out the hypocrisy of people who scold others while failing to plan concrete transfers like trusts or scheduled distributions.
    • Instead of vague promises, ask specific questions: Where’s the trust fund? How much is it set to? When does it distribute?
    • The point is to prioritize impact and timing over symbolic posthumous gifts that kids may never use as intended. Transcript: Other Speaker And even when they know I have children, two daughters, some people will still imply that dying with zero is the ultimate act of selfishness. No matter how they put it, what most people who ask about the kids mean is this. Planning to die with zero might be good for someone thinking only about themselves, but shouldn’t you care about the well-being of your children too? Because if you cared about someone other than yourself, you wouldn’t die with zero. You would make sure to leave money for the kids. Their implication, if dying with zero is a philosophy only for selfish bastards, then it can’t be the right philosophy for decent, caring people like themselves. That’s the holier-than attitude I hear from so many people, and I have no patience for it because it’s so hypocritical. Too often, people who make comments about the kids arguing against the die-with way aren’t actually putting their children first, but instead are treating their kids as an afterthought. Why do I say that? Well, let me give you an example from a typical conversation with my closest friends. When one of these good friends poses the inevitable question, what about the kids? I first explain that the money you’re leaving to your kids is not your money. So when I say you should die with zero, I’m not saying die with zero and spend all your kids’ money along the way. I’m saying spend all your money. That is, give your children whatever you have allocated for them before you die. Why wait until you’re gone? Remember, these are conversations I’m having with my closest friends, and we always call each other out on our BS. (Time 0:00:35)
  • Give Kids Their Money When It Helps Most
    • Die With Zero doesn’t mean spending your children’s future; it means spending your own money while separating and securing what you’ve allocated for them.
    • Ferriss (speaker) challenges parents who wait to give inheritances, calling out vague promises and unexamined trust funds.
    • He argues dead people can’t give — so prioritize giving to kids earlier when money has real impact.
    • A proper die-with-zero plan explicitly includes children: segregate their funds so they’re untouchable and spend the rest down to zero.
    • The goal is timing gifts to maximize impact, not preserving wealth until after death. Transcript: Other Speaker Too often, people who make comments about the kids arguing against the die-with way aren’t actually putting their children first, but instead are treating their kids as an afterthought. Why do I say that? Well, let me give you an example from a typical conversation with my closest friends. When one of these good friends poses the inevitable question, what about the kids? I first explain that the money you’re leaving to your kids is not your money. So when I say you should die with zero, I’m not saying die with zero and spend all your kids’ money along the way. I’m saying spend all your money. That is, give your children whatever you have allocated for them before you die. Why wait until you’re gone? Remember, these are conversations I’m having with my closest friends, and we always call each other out on our BS. So I tell them straight out, you’re full of BS. Where’s your trust fund for your kids? How much is it set to? When is it going to distribute? Have you even thought about these things? Or are you just parroting what you’ve heard? Do you see what I’m saying? If you’re really putting your kids first as you claim you are, don’t wait until you’re dead to your generosity. I like to say that dead people can’t give money away. They can’t do anything. Putting your kids first means you give to them much earlier and you make a deliberate plan to make sure that what you have for your children reaches them when it will make the most impact. A real plan for dying with zero includes the kids, if you have kids. (Time 0:01:17)
  • Give Kids Their Money When It Helps Not After You Die
    • Money you plan to leave your kids isn’t really serving them if you wait until you die; give it when it will have the most impact.
    • Separate a designated trust or fund for children so it becomes untouchable, then spend the rest down to zero while you’re alive.
    • Waiting for an inheritance hands outcomes to chance — recipients might not be alive or may get money when it’s too late to matter.
    • Think deliberately about timing (early adulthood rather than at death) so gifts align with real needs and increase their benefit.
    • Use concrete planning (trusts, distribution ages, a trust schedule) rather than vague promises to ensure money reaches children when it helps most. Transcript: Other Speaker Do you see what I’m saying? If you’re really putting your kids first as you claim you are, don’t wait until you’re dead to your generosity. I like to say that dead people can’t give money away. They can’t do anything. Putting your kids first means you give to them much earlier and you make a deliberate plan to make sure that what you have for your children reaches them when it will make the most impact. A real plan for dying with zero includes the kids, if you have kids. That way, you’ve already separated out their money, which becomes untouchable by you, from your money, which is what you must spend down to zero. That’s my short answer to the question about the kids. The rest of this chapter provides the full version. Dying to give the money away. The problem with inheritances. When people bring up the kids, they’re saying that anyone planning to die with zero won’t leave a bequest. The kids won’t get an inheritance. And what a terrible outcome for the children that is. The crazy thing is that these are often the same people who say you should save as much as you can for your retirement because you don’t know when you’ll die. Well, if you don’t know when you’ll die and you care so much about your kids, why do you want to wait until that random date for your offspring to get what you want them to have? In fact, what makes you so sure that all your kids will even be alive by the time you die? That is the problem with inheritances. You’re leaving too much to chance. Remember, life can be extremely fickle. (Time 0:02:19)
  • Inheritances Usually Arrive Too Late
    • Inheritances commonly arrive around age 60, so leaving money until death often means it reaches heirs after their peak years of impact.
    • Waiting to give creates a timing risk: beneficiaries may not be alive or may receive funds when they no longer need them most.
    • Die-with-zero advocates recommend separating children’s allocated money early so you can spend the rest while alive to maximize impact.
    • The author contrasts saving until death with deliberately gifting earlier when the money will improve recipients’ quality of life.
    • Data from the Federal Reserve shows the inheritance receipt age peaks at ~60 due to average lifespans and typical 20-year parent-child gaps. Transcript: Other Speaker Dying to give the money away. The problem with inheritances. When people bring up the kids, they’re saying that anyone planning to die with zero won’t leave a bequest. The kids won’t get an inheritance. And what a terrible outcome for the children that is. The crazy thing is that these are often the same people who say you should save as much as you can for your retirement because you don’t know when you’ll die. Well, if you don’t know when you’ll die and you care so much about your kids, why do you want to wait until that random date for your offspring to get what you want them to have? In fact, what makes you so sure that all your kids will even be alive by the time you die? That is the problem with inheritances. You’re leaving too much to chance. Remember, life can be extremely fickle. Regardless of the amount you’re passing on, it takes a great deal of luck for it to arrive exactly when each of your recipients needs the money the most. Much more likely, the money will arrive too late for it to have maximum impact on the recipient’s quality of life. What would you guess is the most common age for people to get an inheritance? Well, people at the Federal Reserve Board track such things, and here’s what they find. For any income group you look at, the age of inheritance receipt peaks at around 60. In other words, if you are betting on how old someone will be when they inherit money, assuming you know nothing else except that they stand to inherit, 60 is your best bet. That’s a natural result of the fact that the most (Time 0:03:03)
  • Inheritances Arrive Too Late On Average
    • Most inheritances arrive around age 60 because parents often die ~20 years after their children’s birth, making timing random and often late.
    • Leaving gifts to chance yields random amounts at random times to random people, which is the opposite of caring. Transcript: Other Speaker What would you guess is the most common age for people to get an inheritance? Well, people at the Federal Reserve Board track such things, and here’s what they find. For any income group you look at, the age of inheritance receipt peaks at around 60. In other words, if you are betting on how old someone will be when they inherit money, assuming you know nothing else except that they stand to inherit, 60 is your best bet. That’s a natural result of the fact that the most common lifespan is 80 and the most common age gap between parents and children is 20, the report points out. Of course, there’s a spread around that peak of age 60. Many people who get an inheritance get it earlier than that, and many get it later. Overall, the data falls into a more or less normal, bell-shaped distribution. So for every 100 people who inherit around age 40, which is 20 years before the age of peak inheritances, there are 100 people who inherit around age 80. It’s true that some people may be getting inheritances from people other than their parents. The older the recipients are, the more likely that is to be the case. But it doesn’t matter. Whether people are getting inheritances from their parents or from someone else, the data clearly shows many people getting inheritances late in life, and that is suboptimal. The upshot of all this is that if you wait until you die to have your children inherit your money, you’re leaving the outcome to chance. I call it the three R’s, giving random amounts of money at a random time to random people. (Time 0:04:01)
  • Why Waiting To Inherit Is Leaving It To Chance
    • Inheritances peak around age 60 because typical lifespans (~80) and parent–child age gaps (~20) align to create that mode.
    • The distribution is bell-shaped: many heirs get money much earlier or much later than the peak, so timing is highly uncertain.
    • Waiting until death often means money arrives when it has little impact on recipients’ quality of life.
    • Passing wealth at death is effectively giving random amounts at random times to random people — the “three R’s” — which is the opposite of caring.
    • If you truly care about helping your children, plan timing deliberately rather than relying on chance. Transcript: Other Speaker That’s a natural result of the fact that the most common lifespan is 80 and the most common age gap between parents and children is 20, the report points out. Of course, there’s a spread around that peak of age 60. Many people who get an inheritance get it earlier than that, and many get it later. Overall, the data falls into a more or less normal, bell-shaped distribution. So for every 100 people who inherit around age 40, which is 20 years before the age of peak inheritances, there are 100 people who inherit around age 80. It’s true that some people may be getting inheritances from people other than their parents. The older the recipients are, the more likely that is to be the case. But it doesn’t matter. Whether people are getting inheritances from their parents or from someone else, the data clearly shows many people getting inheritances late in life, and that is suboptimal. The upshot of all this is that if you wait until you die to have your children inherit your money, you’re leaving the outcome to chance. I call it the three R’s, giving random amounts of money at a random time to random people. Because who knows which of your heirs will still be alive by the time you die? How can randomness be caring? It’s the opposite of caring. Being okay with leaving all these outcomes to chance means you evidently don’t care if you spend years of your life working for future random people. And it means you may not (Time 0:04:28)
  • Virginia Got An Inheritance Too Late
    • Virginia Collins struggled financially for years while her mother, who had wealth, waited to give an inheritance until her death.
    • She received $130,000 at 49, which helped but came far too late to prevent earlier hardship for her children. Transcript: Other Speaker My colleague Marina Krakowski, who helped me in the research and writing of this book, read an article about a woman who was in dire financial straits. Even though her mother had plenty of financial resources, Marina tracked the woman down and, well, here’s what Marina found out. For many years after her divorce, Virginia Collins struggled financially, receiving almost no child support from her ex. She raised her four children on her own, mostly at the edge of poverty, as she puts it. She eventually remarried, was able to hold down a decent part-time job, and attained financial stability. Then when she was 49, her mother died at age 76, leaving Virginia with a large inheritance. Virginia is one of five children, and each of them received $130,000. I think the $650,000 was the maximum that you could get from one person’s estate without incurring some kind of estate tax, Virginia points out, suggesting that her parents had most Likely accumulated even more wealth than the total bequeath to Virginia and her siblings. The 130,000 windfall was definitely welcome, no question about that. But it would have been a lot more valuable a lot earlier, says Virginia, who is now 68. I wasn’t at the edge of poverty anymore. We weren’t rich, but by this time we were living a comfortable lower middle class life. The money was now more like a nice bonus rather than the lifeline it would have been a decade or two earlier. (Time 0:06:08)
  • Give Money While It Still Matters
    • A real-life example: Virginia’s parents left her $130,000 at age 49 after decades of hardship — money that would have been far more valuable earlier when she raised four children near poverty.
    • Many parents postpone transfers until death, intending to help but often missing moments when funds could have the biggest impact.
    • Die With Zero argues for deliberate, earlier transfers that align with intentions: think through how much to give and do it while both giver and recipient can benefit.
    • These in vivo transfers (gifts while living) are uncommon despite their greater practical value compared with late inheritances.
    • Prioritize timing and shared experiences over simply preserving wealth for a posthumous bequest. Transcript: Other Speaker What a sad situation. Here was somebody who, for many years, barely had enough to feed herself and her children, while her parents had lots of money, but, like so many others in our culture, just wanted to Wait until they died to give it to her. Virginia’s parents are no longer around, so we can only guess what they would say if they heard me talking about dying with zero. If they’re like most people I’ve spoken with, chances are they would say, but what about the kids? Put your money where your mouth is. I know I might sound harsh when I talk about this stuff. My goal isn’t to go around calling everyone a hypocrite. Most people have good intentions for themselves and for their kids. And if they’re hypocrites, it’s only by accident, because they fail to act on those good intentions. That’s true every time you say one thing but do something else, whether or not the disconnect is deliberate. For example, in your heart of hearts, you want to enjoy your free time, but in reality, you spend a good chunk of it checking your work email. Or you say you want to provide financial security for your kids, but in the end, you leave it to random chance, whether and how much your kids will actually get from you. The Die with Zero way, on the other hand, makes sure that you deliver on your good intentions. It’s a more thoughtful approach in both senses of the word. It simultaneously shows seriousness and caring. When it comes to the kids, Die With Zero shows thoughtfulness by having you put your kids first, which you do by thinking deliberately about how much to give them and then doing so before You die. This is radically different from how many, if not most, people in the United States approach the question of giving money to their children. (Time 0:07:31)
  • Give Money So Children Can Use It When It Matters
    • Virginia learned not to wait until death to transfer wealth and now gives her children money earlier based on need.
    • Giving money in the 30s can let recipients buy a house and raise kids without scrambling later.
    • Teenagers (e.g., 12–16) are usually too young to manage large gifts—timing matters.
    • Delaying gifts reduces recipients’ ability to convert money into meaningful experiences as they age.
    • Aim to transfer funds when recipients are young adults (roughly late 20s–30s) so they can extract more utility from them. Transcript: Other Speaker In any case, Virginia learned from her parents’ experience. Don’t wait until you’re dead to give your money away. With our five children and stepchildren, ranging in age from 29 to 43, she and our husband make a point of giving them money sooner rather than later, depending on their needs. If you get the money when you’re 30, she rightly points out, you can buy a nice house and raise your kids in the environment you want to raise them in, and not have to scramble the way I did. Timing is everything. As Virginia’s story illustrates, timing is key. We’ve already established that waiting until you die is not optimal. So what is the optimal time to give money to your children? Certainly, it is easier to say what is suboptimal. Most people who have assets to give to children wouldn’t give them to a 12-year or even a 16-year It’s pretty obvious that children in most teens are too young to manage wealth. But of course, that doesn’t equate to the later the better. I don’t want to say there’s an age when it’s just too late to give your children money. Late, after all, is better than never. But age 60 is worse than 50, and 50 is worse than 40. Why? Because a person’s ability to extract real enjoyment out of the gift declines with their age. This happens for exactly the same reasons your own ability to convert money into enjoyable experiences diminishes after you get past a certain age. (Time 0:12:58)
  • Give Major Gifts When Kids Are 26 To 35
    • Aim to give major financial gifts to adult children around ages 26–35 to maximize their ability to use and enjoy the money.
    • Earlier avoids immaturity and later avoids declining health and reduced utility from money. Transcript: Other Speaker As Virginia’s story illustrates, timing is key. We’ve already established that waiting until you die is not optimal. So what is the optimal time to give money to your children? Certainly, it is easier to say what is suboptimal. Most people who have assets to give to children wouldn’t give them to a 12-year or even a 16-year It’s pretty obvious that children in most teens are too young to manage wealth. But of course, that doesn’t equate to the later the better. I don’t want to say there’s an age when it’s just too late to give your children money. Late, after all, is better than never. But age 60 is worse than 50, and 50 is worse than 40. Why? Because a person’s ability to extract real enjoyment out of the gift declines with their age. This happens for exactly the same reasons your own ability to convert money into enjoyable experiences diminishes after you get past a certain age. And for a whole host of activities, you need a certain minimum mental and physical state to enjoy them all. So, for example, if the peak utility of money, the time when it can bring optimal usefulness or enjoyment, occurs at age 30, then at age 30, every dollar buys you $1 worth of enjoyment. By age 50, the utility of money has declined considerably. Either you would get a lot less enjoyment out of that same dollar, or you would need more money, say $1.50, to obtain the same amount of enjoyment as you got out of $1 back when you were a Healthy, vibrant 30-year For the same reason, as your adult children age, every dollar you give them goes less far, and at some point, that money becomes almost useless to them. Let’s look at a more specific example. Suppose you ignore my advice about giving money to your kids before you die, and you want to take a more traditional route of leaving some money to your children after you die. Now assume that your life expectancy is 86, and that your oldest child is 28 years younger than you. So they’ll be 58 when you die, and they inherit. At this point, they’re well past their peak of extracting enjoyment out of that money. Now, I don’t know the exact age of this peak, but based on what I know about human physiology and mental growth, between the ages of 26 and 35 seems about right, and 58 is clearly past that Optimal point. I actually did an informal Twitter poll recently in which I asked people what their ideal age was to receive an inheritance windfall, and most of them agreed. Of the more than 3,500 people who voted on this question, very few, only 6%, said the ideal age to inherit money is 46 or older. Another 29% voted for the ages 36 to 45, while only 12% said 18 to 25. The clear winner, with more than half the votes, was the age range 26 to 35. Why? Well, some people mentioned the time value of money and the power of compound interest, suggesting that the earlier you get the money, the better. On the other hand, a bunch of people pointed out the immaturity problem of getting the money too young. And to those two concerns, I would add the element of health. You always get more value out of money before your health begins to inevitably decline. Bottom line, the 26 to 35 age range combines the best of all these considerations. Old enough to be trusted with money, yet young enough to fully enjoy its benefits. (Time 0:13:29)
  • Give Inheritances When Kids Can Actually Enjoy Them
    • The utility of money for enjoyment declines with age, so a dollar given at 30 buys more happiness than the same dollar given at 50 or 60.
    • If children inherit at older ages (e.g., 58 in the example), they are past the peak period for converting money into life-enhancing experiences.
    • Die With Zero recommends giving money earlier so recipients can use it during their high-utility years rather than waiting until after you die.
    • An informal poll of 3,500 people found the preferred inheritance age is 26–35, with only 6% favoring 46 or older.
    • Balance the time-value-of-money and compound interest benefits of earlier gifts against the immaturity risk of giving money too young. Transcript: Other Speaker Either you would get a lot less enjoyment out of that same dollar, or you would need more money, say $1.50, to obtain the same amount of enjoyment as you got out of $1 back when you were a Healthy, vibrant 30-year For the same reason, as your adult children age, every dollar you give them goes less far, and at some point, that money becomes almost useless to them. Let’s look at a more specific example. Suppose you ignore my advice about giving money to your kids before you die, and you want to take a more traditional route of leaving some money to your children after you die. Now assume that your life expectancy is 86, and that your oldest child is 28 years younger than you. So they’ll be 58 when you die, and they inherit. At this point, they’re well past their peak of extracting enjoyment out of that money. Now, I don’t know the exact age of this peak, but based on what I know about human physiology and mental growth, between the ages of 26 and 35 seems about right, and 58 is clearly past that Optimal point. I actually did an informal Twitter poll recently in which I asked people what their ideal age was to receive an inheritance windfall, and most of them agreed. Of the more than 3,500 people who voted on this question, very few, only 6%, said the ideal age to inherit money is 46 or older. Another 29% voted for the ages 36 to 45, while only 12% said 18 to 25. The clear winner, with more than half the votes, was the age range 26 to 35. (Time 0:14:42)
  • Why 26–35 Is The Sweet Spot To Transfer Wealth
    • Delaying inheritances until after someone’s peak enjoyment years reduces the utility of each dollar because health and vitality decline with age.
    • Peak money-utility likely falls between about 26 and 35, when adults are mature enough to manage funds but still healthy enough to enjoy them fully.
    • Example: if you die at 86 and your oldest child is 28 years younger, they inherit at 58 — well past the optimal enjoyment window.
    • A Twitter poll (~3,500 votes) found most people pick 26–35 as the ideal age to receive an inheritance; very few chose 46 or older.
    • Time value, maturity, and health together make 26–35 the best compromise for giving windfalls while maximizing meaningful benefit. Transcript: Other Speaker About giving money to your kids before you die, and you want to take a more traditional route of leaving some money to your children after you die. Now assume that your life expectancy is 86, and that your oldest child is 28 years younger than you. So they’ll be 58 when you die, and they inherit. At this point, they’re well past their peak of extracting enjoyment out of that money. Now, I don’t know the exact age of this peak, but based on what I know about human physiology and mental growth, between the ages of 26 and 35 seems about right, and 58 is clearly past that Optimal point. I actually did an informal Twitter poll recently in which I asked people what their ideal age was to receive an inheritance windfall, and most of them agreed. Of the more than 3,500 people who voted on this question, very few, only 6%, said the ideal age to inherit money is 46 or older. Another 29% voted for the ages 36 to 45, while only 12% said 18 to 25. The clear winner, with more than half the votes, was the age range 26 to 35. Why? Well, some people mentioned the time value of money and the power of compound interest, suggesting that the earlier you get the money, the better. On the other hand, a bunch of people pointed out the immaturity problem of getting the money too young. And to those two concerns, I would add the element of health. You always get more value out of money before your health begins to inevitably decline. Bottom line, the 26 to 35 age range combines the best of all these considerations. (Time 0:15:07)
  • Give Money When Kids Can Actually Use It
    • Most people prefer inheriting between ages 26–35 because it’s old enough to be responsible but young enough to enjoy the money.
    • Waiting until very late (e.g., 58 or 76) greatly reduces the value heirs get due to declining health and life-stage mismatches.
    • As a giver you can control timing; prioritize maximizing impact over simply maximizing dollars transferred.
    • Even if you disagree about the exact ideal age, acknowledge the consistent decline in value to heirs the longer you wait.
    • Use timing (not just amount) as a lever to increase the real benefit your gifts provide to recipients. Transcript: Other Speaker Old enough to be trusted with money, yet young enough to fully enjoy its benefits. What I’m pointing out is the stark contrast between what people say they want and what the U.S. Inheritance data shows most people actually get. You can’t always get what you want, but I’m talking to you as a prospective giver. If you have the means to give money to your children, then you have the power to control when they receive it. So don’t waste that opportunity. Whatever you give your heirs past their optimal age of receiving has less value to them. If you’re trying to maximize the impact of the money you give, instead of just maximizing absolute dollar amount you give, then you should aim to give the money as close to their peak As you can. Now, you might disagree with me about the right age to begin to turn assets over to your kids, but even so, you must acknowledge the decreasing value to your offspring with respect to Time. Just take it to the extreme, the case of leaving your money after living a very long life. Does it make sense to wait and leave money to a 76-year No, most people would say that’s too old. My friend Baird has a mother who’s 76 and knows she can’t spend her money before she dies. The last trip she took lasted five days, and that was two days too long, he says. Since her money is of limited use to her, she has been trying to give it away to Baird, who’s 50. But by this point, Baird really doesn’t need the money anymore. Optimization doesn’t care whether we’re talking about parents or children. The same principles, such as the declining value of money, apply to everyone. (Time 0:16:40)
  • Give Money When It Helps Them Most
    • Optimize gifts for the recipient’s age so money creates the most life enjoyment, not just the largest inheritance.
    • Example: the host funded 529s and a trust for his daughters under 25 so the funds are theirs to use when most useful.
    • He gave his 29-year-old stepson most of his inheritance early to buy a house rather than waiting until retirement.
    • He reviewed his will, realized some beneficiaries were older than him, and chose to give money now because they can enjoy it more.
    • Framing gifts as “their money, not mine” lets you free up resources to spend on your own experiences without hoarding for a distant inheritance. Transcript: Other Speaker This is exactly what I’m trying to do with my own kids. For my daughters, who are not yet 25, I’ve funded an educational savings plan, a 529 plan, and set up a trust. Mind you, the money in trust is their money, not mine. And I contribute to it as I see fit, up to the maximum that I’m willing to give. My stepson is older, 29. So he’s already received 90% of his inheritance in the form of money he used to buy a house. By the way, spreading out your giving in this way is totally fine. But I am sure not going to wait until he’s 65 to give him the rest. I do have a will, which is only for disposing of what I have in case I die unexpectedly. A while ago, I realized I had money in my will for people who were older than me, my mom, my sister, and my brother. That made me think, what about now? Do I want to give anything now when they can enjoy those gifts more than later? My answer was yes. So I gave them that amount. (Time 0:18:42)
  • Your Real Legacy Is Shared Experiences
    • Legacy is primarily experiences and memories you leave your children, not material wealth alone.
    • Time with parents yields lasting health and relationship benefits and produces a memory dividend for both parent and child. Transcript: Other Speaker I spent much of this chapter talking about giving your money to your offspring, but that’s only because money is what most people are talking about when they ask, what about the kids? But remember, money is just a means to an end, a way to buy the meaningful experiences that make up your life. As I explained in chapter two, I’m assuming that your goal in life is not to maximize your income and wealth, but to maximize your lifetime fulfillment, which comes from experiences And your lasting memories of those experiences. And just as you’re trying to maximize your own fulfillment, you’re trying to maximize your children’s fulfillment too. The same holds for memories. Just as you’re trying to form memories of times with your kids, it makes sense to want your kids to form memories of you. Both sets of memories will yield a memory dividend. One stream of dividends for you and one for your kids. So how do you want your kids to remember you? That’s just another way of asking, what kind of experiences do you want them to have with you? That’s important to think about before it’s too late. Look at it from the perspective of the child deprived of experiences with the parent. A friend of mine received a massive fortune from his father, with whom he had almost no relationship while growing up, because the dad was always chasing deals to build his fortune. So despite his family’s impressive wealth, my friend had a pretty miserable childhood. He was the classic poor little rich boy. The years of emotional neglect put a lasting strain on the father-son relationship. When the two finally did have time together, they found that they had trouble enjoying each other’s company. There was just no way to make up for all that lost time and attention. Now when my friend thinks of his father’s legacy, material wealth is one of the few things he recalls with any sense of gratitude. (Time 0:20:10)
  • Legacy Is Memories Not Just Money
    • Bill emphasizes that money is a means to buy meaningful experiences, not the ultimate legacy.
    • He argues you should give when recipients can actually enjoy it so gifts convert non-productive money into maximal life value.
    • Memories yield a “memory dividend” for both you and your children — shared experiences create lasting returns.
    • Planning gifts and experiences now lets you spend freely while ensuring your kids still have resources to use.
    • The key question shifts from how much to leave to how you want your kids to remember you. Transcript: Other Speaker I spent much of this chapter talking about giving your money to your offspring, but that’s only because money is what most people are talking about when they ask, what about the kids? But remember, money is just a means to an end, a way to buy the meaningful experiences that make up your life. As I explained in chapter two, I’m assuming that your goal in life is not to maximize your income and wealth, but to maximize your lifetime fulfillment, which comes from experiences And your lasting memories of those experiences. And just as you’re trying to maximize your own fulfillment, you’re trying to maximize your children’s fulfillment too. The same holds for memories. Just as you’re trying to form memories of times with your kids, it makes sense to want your kids to form memories of you. Both sets of memories will yield a memory dividend. (Time 0:20:10)
  • Time With Kids Is A Measurable Legacy
    • Derek emphasizes that memories of time with parents form a child’s lasting legacy and have measurable long-term effects on mental health and relationships.
    • Cats in the Cradle captures the harm of postponing parent-child time, but Derek warns that the song’s lesson is incomplete: simply “more time” isn’t always the right answer.
    • Time with family has opportunity costs (less time earning money), so treat experiences quantitatively to make better trade-offs.
    • Prioritize time during formative years because parental affection in childhood predicts fewer substance problems, less depression, and stronger adult relationships.
    • Think deliberately about which experiences to delay and which to prioritize now to maximize your child’s lifetime fulfillment. Transcript: Other Speaker But its message is incomplete. Yes, many of us are too busy chasing X, Y, and Z for the sake of future benefits, not realizing that the time to have meaningful experiences with our children is now. But it’s too simplistic to leave it at that, because there’s a limit to the benefits of spending additional time with your kids. You can’t delay everything, but you can delay some things. I do believe firmly that your real legacy for your kids consists of the experiences you shared with your children, especially when they’re growing up, the lessons and other memories You’ve imparted to them. But I don’t mean it in a smallsy, best things in life are free kind of way. In fact, the best things in life aren’t actually free, because everything you do takes away from something else you could be doing. Spending time with your family usually means not spending time earning money, any other way around. Instead, there are ways to think about experiences in a more quantitative way that will help you make better decisions about how to spend your time. But before I get to that, let me make my main point clear. Of all the experiences you are trying to bequeath to your child, one of those experiences is time with you. Time with you is crucial because the memories your kids have of you have lasting effects, for better or worse. (Time 0:22:15)
  • Prioritize Time Over Extra Money Once Needs Are Met
    • Quantify tradeoffs between working more and spending time with kids; sometimes extra work reduces your children’s long-term well-being.
    • Once basic needs are met, consider whether an extra hour of work is worth the lost parent-child time. Transcript: Other Speaker But before I get to that, let me make my main point clear. Of all the experiences you are trying to bequeath to your child, one of those experiences is time with you. Time with you is crucial because the memories your kids have of you have lasting effects, for better or worse. Scientists have known for some time that young adults who as young children receive more affection from their parents, come to enjoy better personal relationships in general, and To also have lower rates of substance abuse and depression. We also know that the positive effects of loving, attentive parents last well past young adulthood, thanks to a study of more than 7,000 middle-aged adults. Researchers ask these adults a bunch of questions about their memories of their mother and father. Questions like, how much time and attention did she, he give you when you needed it? And how much did she, he teach you about life? And how would you rate your relationship with your mother, father, during the years you were growing up? Obviously, the higher person’s ratings on questions like these, the more positive their childhood memories of their parents. So what did the researchers find? By correlating these ratings with answers to questions about particular outcomes, the researchers were able to conclude that those adults who had memories of higher parental affection Ended up with better health and lower levels of depression. The word experience may not evoke images of a child being taught about life or of simply being given time and attention, but all those are indeed experiences too. And they’re indispensable, paying off in sometimes surprising ways. I don’t know anybody who wouldn’t want that kind of experience and that kind of memory dividend for their children. So how do you quantify such things? What is the value of a positive memory? Your first instinct might be to say that’s impossible to say or that memories are priceless. But let me put it another way. What is the value to you of a week at a cabin on a lake, or of a day with a beloved relative? The price might be extremely high or fairly low, but the fact that you can even propose a ballpark price says that the value of an experience can be quantified. In fact, you might recall doing that with experience points in an earlier chapter. I am making a big deal about quantifying the value of experiences with your children because doing so forces you to pause and think about what’s really best for your kids. Sometimes it is earning more money, and sometimes it’s spending more time with them. So many people tell themselves that they are working for their kids. They just blindly assume that earning more money will benefit their kids. But until you stop to think about the numbers, you can’t know whether sacrificing your time to earn more money will result in a net benefit for your children. What can thinking about the numbers tell you? Well, take an extreme example. Let’s say you live in the wilderness and you must go to work to cut down trees just to build a basic shelter for your family. When you have to work just to enable your family to survive, of course it makes sense to work instead of hanging out with them. But once you get past the point of just working for basic needs and avoiding negative experiences, you can start to exchange your labor for positive life experiences. As far as your children are concerned, you can either work for more money to buy them experiences or spend your extra free time to give them the experience of time with you. At the other extreme is the billionaire who works such long hours and travels so much for work that he spends no time at all with his children. If you’re already a billionaire, it’s safe to assume that your children would be better off if you spend at least a little more time with them, even if it’s to the detriment of your career. The financial cost to your career is small, but the benefit to your children is immense, so it’s a net gain to the family, including you. The value of time with your kids is like the value of water. If you got 50 gallons of water, you wouldn’t pay a dime for an additional gallon of water. But if you’re dying of thirst in the desert, you might be willing to cut off your arm to get even one gallon. Most of us, of course, are somewhere between these two extremes. We are neither working all the time just to survive, nor completely neglecting our children. As such, we are facing a much more difficult trade-off between time and money. But the thought process should be the same as at the extremes, even if the answer isn’t obvious. Is each additional hour of work you do really worth it to you and your children? Does your work add to your legacy? Or does it actually serve to deplete it? Parents’ employment is a mixed blessing for kids of all income levels. When parents go to work, the income they earn can improve their kids’ lives in many ways. But as the economist Carolyn Heinrich points out, work, especially long hours and night shifts, can take time away from parent-child bonding and can bring real stress into children’s Lives. And low-income parents are especially likely to be working stressful jobs with long hours. But of course, most people have to work to provide for their families, and the optimal balance between time at work and time with your kids isn’t always obvious. Where you and your children are in your lives matters too. Just as you can’t keep delaying ski trips because there is a minimum level of basic health you need in order to go skiing, you can’t keep delaying time with your six-year because eventually Your child won’t be six or seven or a child. The fact that these opportunities gradually disappear should cause you to re-evaluate how much money you’d be willing to give up to have those experiences. Now look at it from your kid’s point of view because it’s our kid’s fulfillment that we’re trying to maximize here. What do you suppose is the value to your child of an extra day with you? Or to have you home when she comes home from school? Or to have you attend her soccer game or music recital? I’m well aware that your kids, especially when they’re very young, probably don’t value these experiences when they’re having them. If I were to ask my older daughter how much she values my going to one of her games, she might not even know what I was talking about. But these shared experiences clearly have a value, especially in retrospect. Remember, the purpose of money is to have experiences, and one of those experiences for your kids is time with you. Therefore, if you are earning money but not having experiences with your kids, you are actually depriving your kids and yourself. If you really think through the implications of saying that your legacy consists of experiences with your children, the conclusion you reach might be somewhat radical. That is, once you have enough money to take care of your family’s basic needs, then by going to work to earn more money, you might actually be depleting your kids’ inheritance because You are spending less time with them. And the richer you are, the more likely this is to be true. (Time 0:23:14)
  • Quantify Time Versus Money For Your Kids
    • Billions and subsistence aren’t the only cases; most families face a trade-off between extra earnings and time with children.
    • You can quantify experiences (a week at a cabin, a day with a relative) to compare against income rather than assuming money always helps.
    • Once basic needs are met, extra labor buys positive experiences but also costs parental time that may be more valuable to kids.
    • At extremes the decision is obvious, but for most people you must ask whether each additional hour of work increases or depletes your legacy.
    • Long hours and night shifts can reduce bonding and introduce stress, so counting the true value of time prevents misallocating effort for your children. Transcript: Other Speaker As far as your children are concerned, you can either work for more money to buy them experiences or spend your extra free time to give them the experience of time with you. At the other extreme is the billionaire who works such long hours and travels so much for work that he spends no time at all with his children. If you’re already a billionaire, it’s safe to assume that your children would be better off if you spend at least a little more time with them, even if it’s to the detriment of your career. The financial cost to your career is small, but the benefit to your children is immense, so it’s a net gain to the family, including you. The value of time with your kids is like the value of water. If you got 50 gallons of water, you wouldn’t pay a dime for an additional gallon of water. But if you’re dying of thirst in the desert, you might be willing to cut off your arm to get even one gallon. Most of us, of course, are somewhere between these two extremes. We are neither working all the time just to survive, nor completely neglecting our children. As such, we are facing a much more difficult trade-off between time and money. But the thought process should be the same as at the extremes, even if the answer isn’t obvious. Is each additional hour of work you do really worth it to you and your children? Does your work add to your legacy? Or does it actually serve to deplete it? (Time 0:26:20)
  • Charitable Impact Grows With Earlier Giving
    • The same timing logic for kids applies to charity: giving earlier amplifies impact because charities can deploy funds now for compounding social returns.
    • Donors who delay to bequests create inefficiency and miss opportunities to help people currently suffering. Transcript: Other Speaker Guess what? Almost everything I’ve said about giving money to your kids at the right time applies to donations to charity. Whether the money or the time you’re giving is to children, to charity, or to yourself, the concept is the same. There is an optimal time, and it is never when you’re dead. Consider this headline, above one of the most emailed New York Times stories in the week it came out. 96-year secretary quietly amasses fortune, then donates $8.2 million. Wow! The story explained how a Brooklyn woman named Sylvia Bloom managed to amass so much wealth on her salary as a legal secretary. Though she’d been married, she had no children, and she had worked for the same Wall Street law firm for 67 years, lived in a rent-controlled apartment, took the subway to work even into Her 90s, and made her savings grow by replicating on a smaller scale the investments made by the lawyers she worked for. Nobody close to Ms. Bloom had any idea of her wealth until after her death. She made a bequest of $6.24 million to a social service organization called the Henry Street Settlement. Another $2 million went to Hunter College and a scholarship fund. Everyone at the settlement was blown away. Bloom’s niece, who was the organization’s treasurer, was especially stunned. It was the largest single gift from an individual in an organization’s 125-year history. Their group’s executive director called the gift the epitome of selflessness. Now, I understand where he’s coming from. It does seem selfless to leave so much money after living on so little. And a good deed is a good deed. But in all candor, I don’t see Bloom’s actions as the height of selflessness. You can’t be generous when you’re dead. Before I explain why Bloom’s actions don’t seem all that selfless, let me explain that I can’t say whether someone’s decision is good or bad, rational or irrational, without knowing What the person wants. For example, I personally might prefer to give my time and money to people rather than to animals, but if someone would rather volunteer at an animal rescue than a homeless shelter, Who am I to say that’s irrational? As long as what they do is consistent with what they actually want, I have to respect their decisions, even if it’s not the decision I would have made. There’s just no accounting for taste. Therefore, I can’t say Sylvia Bloom made a mistake in working a whole life and scrimping to eventually have all that money go to someone else. We can only guess whether she was denying herself deliberately to give a larger gift to others, which indeed would be generous, or whether she was just living on autopilot with her beneficiaries Getting whatever was left, which would not be generous. Why? Well, once you’re dead, the transfer of your assets is legally enforced. And the only say you have in the matter, through your will, obviously created before you die, is where those assets get transferred. But your money is taken no matter what. So how can that be generous? The dead don’t pay taxes, only the recipients of their bequests do. So you can be generous only when you’re alive, when you have actual choices and their actual consequences. That’s when you can choose whether to give your money or your time to one thing or another. If you give generously when you’re alive, then I can consider you selfless. If you’re dead, you just don’t have that choice. So by definition, you cannot be generous when you’re dead. A terrible inefficiency. Maybe you think I’m splitting hairs about the meaning of selflessness, generosity, and choice. Bloom did, after all, scrimp and save and put those charities in her will, so she must have had generous intentions, right? Okay. And it’s possible that she also received a lot of joy from saving that money with the knowledge that someday it would go to a cause she cared about. Charitable giving, after all, is another way to have an experience. So what’s the problem? The problem is terrible inefficiency. People who were needy during her lifetime did not benefit from her largesse. Here was a person who, by her own choice to consume very little of her growing wealth, routinely lived far below her means. She chose to keep taking the subway to work and to keep living in a rent-controlled apartment, which, incidentally, could have gone to a needier person. Let’s assume that she was saving specifically so her money could go to these charities. So why didn’t she give it to her beloved charities earlier when she clearly could have? Well, maybe part of her motive for saving was precautionary. She might have thought there was a good chance she would need to spend $2 million at 72 to take care of herself. Or maybe she thought that the money growing in her counts as some sort of score, a measure of how well she was doing, instead of a way to have an impact on the world. Or maybe she didn’t really think it through. After all, large grants at death are a deeply ingrained part of our culture. I don’t know. We can only guess. But I do know that her delay was inefficient because our charities certainly could have put the money to use earlier, benefiting many more people sooner. Think, for example, of the amazing gift Robert F. Smith gave to the class of 2019 of Morehouse College, paying off all their student loans. Whatever his motives were, whatever amount his gift added up to, the point is that Smith didn’t put it in his will. He gave it while he was still very much alive, enabling today’s graduates to leave college debt-free. Sylvia Bloom also gave to educational causes, which is particularly interesting for our purposes, because the benefits of investing in education are so well-documented. The benefits accrue not just to individual students, who as a result of education can get better jobs and enjoy better health, but also to society as a whole. Lower rates of poverty and lower rates of crime and violence are just the most obvious social benefits of education. Economists have also tried quantifying the return on investment in education, finding that worldwide, the social returns to schooling at the secondary and higher education levels Are above 10% per year. What other investments can yield such a reliably high rate of return? To justify holding on to the money and investing it in your own rather than giving it to your favorite educational charity now, you’d have to know that you can earn more than that rate Of return year after year. Charitable organizations certainly prefer to get your money now, but some charities, particularly foundations and endowed nonprofits, don’t use the money they receive right away Either. Instead, they aim to grow their endowments by taking in more than they give away each year. For example, in 1999, foundations took in more than $90 billion, but distributed less than $25 billion. That is why one analysis concludes that donors should ask not just how, but how soon their gifts will be used. I couldn’t agree more. But no matter how your favorite charity spends your money, the charity always gets more out of having the money sooner. Your legacy is now. You already know my take on timing your spending in general, that it’s important. (Time 0:29:49)
  • Giving Later Is Not Pure Selflessness
    • The episode contrasts giving money late in life with giving earlier: there is an optimal time to give, and it’s never when you’re dead.
    • Sylvia Bloom amassed and bequeathed millions at age 96 after a lifetime of frugality; the charity called it the epitome of selflessness.
    • The host argues Bloom’s choice isn’t the height of generosity because dead donors can’t make use of timing to maximize recipients’ benefit.
    • You can’t judge whether a late bequest is rational without knowing the donor’s goals; preferences (who or what to support) matter.
    • The broader point: timing gifts matters as much as amount — giving earlier can create greater impact and shared experience. Transcript: Other Speaker Consider this headline, above one of the most emailed New York Times stories in the week it came out. 96-year secretary quietly amasses fortune, then donates $8.2 million. Wow! The story explained how a Brooklyn woman named Sylvia Bloom managed to amass so much wealth on her salary as a legal secretary. Though she’d been married, she had no children, and she had worked for the same Wall Street law firm for 67 years, lived in a rent-controlled apartment, took the subway to work even into Her 90s, and made her savings grow by replicating on a smaller scale the investments made by the lawyers she worked for. Nobody close to Ms. Bloom had any idea of her wealth until after her death. She made a bequest of $6.24 million to a social service organization called the Henry Street Settlement. Another $2 million went to Hunter College and a scholarship fund. Everyone at the settlement was blown away. Bloom’s niece, who was the organization’s treasurer, was especially stunned. It was the largest single gift from an individual in an organization’s 125-year history. Their group’s executive director called the gift the epitome of selflessness. Now, I understand where he’s coming from. It does seem selfless to leave so much money after living on so little. And a good deed is a good deed. But in all candor, I don’t see Bloom’s actions as the height of selflessness. You can’t be generous when you’re dead. (Time 0:30:05)
  • Sylvia Bloom’s Surprise Posthumous Gift
    • Sylvia Bloom lived frugally and left $8.2M to charity at death, surprising recipients who had no idea of her wealth.
    • Other Speaker argues this was inefficient because needy people could’ve benefited earlier and charities could’ve used funds sooner. Transcript: Other Speaker Nobody close to Ms. Bloom had any idea of her wealth until after her death. She made a bequest of $6.24 million to a social service organization called the Henry Street Settlement. Another $2 million went to Hunter College and a scholarship fund. Everyone at the settlement was blown away. Bloom’s niece, who was the organization’s treasurer, was especially stunned. It was the largest single gift from an individual in an organization’s 125-year history. Their group’s executive director called the gift the epitome of selflessness. Now, I understand where he’s coming from. It does seem selfless to leave so much money after living on so little. And a good deed is a good deed. But in all candor, I don’t see Bloom’s actions as the height of selflessness. You can’t be generous when you’re dead. Before I explain why Bloom’s actions don’t seem all that selfless, let me explain that I can’t say whether someone’s decision is good or bad, rational or irrational, without knowing What the person wants. For example, I personally might prefer to give my time and money to people rather than to animals, but if someone would rather volunteer at an animal rescue than a homeless shelter, Who am I to say that’s irrational? As long as what they do is consistent with what they actually want, I have to respect their decisions, even if it’s not the decision I would have made. There’s just no accounting for taste. Therefore, I can’t say Sylvia Bloom made a mistake in working a whole life and scrimping to eventually have all that money go to someone else. We can only guess whether she was denying herself deliberately to give a larger gift to others, which indeed would be generous, or whether she was just living on autopilot with her beneficiaries Getting whatever was left, which would not be generous. Why? Well, once you’re dead, the transfer of your assets is legally enforced. And the only say you have in the matter, through your will, obviously created before you die, is where those assets get transferred. But your money is taken no matter what. So how can that be generous? The dead don’t pay taxes, only the recipients of their bequests do. So you can be generous only when you’re alive, when you have actual choices and their actual consequences. That’s when you can choose whether to give your money or your time to one thing or another. If you give generously when you’re alive, then I can consider you selfless. If you’re dead, you just don’t have that choice. So by definition, you cannot be generous when you’re dead. A terrible inefficiency. Maybe you think I’m splitting hairs about the meaning of selflessness, generosity, and choice. Bloom did, after all, scrimp and save and put those charities in her will, so she must have had generous intentions, right? Okay. And it’s possible that she also received a lot of joy from saving that money with the knowledge that someday it would go to a cause she cared about. Charitable giving, after all, is another way to have an experience. So what’s the problem? The problem is terrible inefficiency. People who were needy during her lifetime did not benefit from her largesse. Here was a person who, by her own choice to consume very little of her growing wealth, routinely lived far below her means. She chose to keep taking the subway to work and to keep living in a rent-controlled apartment, which, incidentally, could have gone to a needier person. Let’s assume that she was saving specifically so her money could go to these charities. So why didn’t she give it to her beloved charities earlier when she clearly could have? Well, maybe part of her motive for saving was precautionary. She might have thought there was a good chance she would need to spend $2 million at 72 to take care of herself. Or maybe she thought that the money growing in her counts as some sort of score, a measure of how well she was doing, instead of a way to have an impact on the world. Or maybe she didn’t really think it through. After all, large grants at death are a deeply ingrained part of our culture. I don’t know. We can only guess. But I do know that her delay was inefficient because our charities certainly could have put the money to use earlier, benefiting many more people sooner. (Time 0:30:42)
  • You Can’t Be Generous When You’re Dead
    • The host argues true generosity requires choice and consequences, which only exist while you’re alive.
    • Bequests after death are enforced transfers, not acts of generosity, because the dead have no agency over recipients’ outcomes.
    • Taxes on inheritances fall on recipients, not the deceased, further distancing posthumous gifts from being ‘generous’ acts.
    • Genuine selflessness requires deciding in life to give money or time where it will have intended impact.
    • Without knowing a person’s intentions (deliberate sacrifice vs. autopilot frugality), you can’t judge whether leaving wealth at death was generous or not. Transcript: Other Speaker You can’t be generous when you’re dead. Before I explain why Bloom’s actions don’t seem all that selfless, let me explain that I can’t say whether someone’s decision is good or bad, rational or irrational, without knowing What the person wants. For example, I personally might prefer to give my time and money to people rather than to animals, but if someone would rather volunteer at an animal rescue than a homeless shelter, Who am I to say that’s irrational? As long as what they do is consistent with what they actually want, I have to respect their decisions, even if it’s not the decision I would have made. There’s just no accounting for taste. Therefore, I can’t say Sylvia Bloom made a mistake in working a whole life and scrimping to eventually have all that money go to someone else. We can only guess whether she was denying herself deliberately to give a larger gift to others, which indeed would be generous, or whether she was just living on autopilot with her beneficiaries Getting whatever was left, which would not be generous. Why? Well, once you’re dead, the transfer of your assets is legally enforced. And the only say you have in the matter, through your will, obviously created before you die, is where those assets get transferred. But your money is taken no matter what. So how can that be generous? The dead don’t pay taxes, only the recipients of their bequests do. So you can be generous only when you’re alive, when you have actual choices and their actual consequences. (Time 0:31:31)
  • You Can’t Be Generous After You’re Dead
    • The author argues generosity requires active choice while alive; transfers at death can’t be considered generous because the donor no longer makes trade-offs or experiences consequences.
    • Sylvia Bloom’s lifetime frugality and posthumous gifts may have had good intentions, but delaying donations is inefficient because needy people during her life received nothing.
    • Possible reasons for delay include precaution (saving for future personal needs), treating wealth as a status score, or simply not thinking it through.
    • Delaying large gifts until death reduces overall impact since charities could have used the funds earlier to help more people sooner.
    • Cultural norms (large posthumous grants) can mask this inefficiency and lead people to postpone giving when they could benefit living recipients. Transcript: Other Speaker If you’re dead, you just don’t have that choice. So by definition, you cannot be generous when you’re dead. A terrible inefficiency. Maybe you think I’m splitting hairs about the meaning of selflessness, generosity, and choice. Bloom did, after all, scrimp and save and put those charities in her will, so she must have had generous intentions, right? Okay. And it’s possible that she also received a lot of joy from saving that money with the knowledge that someday it would go to a cause she cared about. Charitable giving, after all, is another way to have an experience. So what’s the problem? The problem is terrible inefficiency. People who were needy during her lifetime did not benefit from her largesse. Here was a person who, by her own choice to consume very little of her growing wealth, routinely lived far below her means. She chose to keep taking the subway to work and to keep living in a rent-controlled apartment, which, incidentally, could have gone to a needier person. Let’s assume that she was saving specifically so her money could go to these charities. So why didn’t she give it to her beloved charities earlier when she clearly could have? Well, maybe part of her motive for saving was precautionary. She might have thought there was a good chance she would need to spend $2 million at 72 to take care of herself. Or maybe she thought that the money growing in her counts as some sort of score, a measure of how well she was doing, instead of a way to have an impact on the world. Or maybe she didn’t really think it through. After all, large grants at death are a deeply ingrained part of our culture. I don’t know. We can only guess. (Time 0:33:05)
  • Giving While Alive Multiplies Impact Compared to Posthumous Gifts
    • Sylvia Bloom delayed large charitable gifts until her death, which meant needy people missed out on help she could have given earlier.
    • Giving while alive lets recipients (like Robert F. Smith did for Morehouse) benefit immediately, producing clear, measurable social returns.
    • Education is highlighted as a high-return charitable investment (social returns >10% per year), so delaying those funds is especially inefficient.
    • To justify postponing donations you must reliably earn more than those social returns year after year — an unlikely assumption for most individuals.
    • Some foundations also delay spending by growing endowments, but that choice is organizational and different from an individual hoarding money until death. Transcript: Other Speaker I don’t know. We can only guess. But I do know that her delay was inefficient because our charities certainly could have put the money to use earlier, benefiting many more people sooner. Think, for example, of the amazing gift Robert F. Smith gave to the class of 2019 of Morehouse College, paying off all their student loans. Whatever his motives were, whatever amount his gift added up to, the point is that Smith didn’t put it in his will. He gave it while he was still very much alive, enabling today’s graduates to leave college debt-free. Sylvia Bloom also gave to educational causes, which is particularly interesting for our purposes, because the benefits of investing in education are so well-documented. The benefits accrue not just to individual students, who as a result of education can get better jobs and enjoy better health, but also to society as a whole. Lower rates of poverty and lower rates of crime and violence are just the most obvious social benefits of education. Economists have also tried quantifying the return on investment in education, finding that worldwide, the social returns to schooling at the secondary and higher education levels Are above 10% per year. What other investments can yield such a reliably high rate of return? To justify holding on to the money and investing it in your own rather than giving it to your favorite educational charity now, you’d have to know that you can earn more than that rate Of return year after year. Charitable organizations certainly prefer to get your money now, but (Time 0:34:37)
  • Make A Concrete Giving Plan Today
    • Decide now what ages and amounts you will give to your children and charities, discuss with your partner, and consult an estate planner or lawyer.
    • Convert intentions into concrete in-vivo transfers and legal structures so gifts reach recipients at the optimal time. Transcript: Other Speaker Recommendations. Consider at what ages you want to give money to your children and how much you want to give. The same goes with giving money to charity. Discuss these issues with your spouse or partner and do it today. (Time 0:40:03)