Don't die with riches

We may all die broke. That's a radical concept but that's what financial advisor Stephen M. Pollan says we should do.

In his book Die Broke he lists four maxims we should aim for in the new world. They are quit today, pay cash, don't retire, and die broke. The book is co-authored by Mark Levine.

The more I read the book, the more I'm inclined to agree.

We don't live in the same world our grandparents did. Grandpa worked for the same company for 25 years, day in and day out, and at the end of that time he received a gold watch. Nowadays workers move from job to job and may work at several different jobs in their lifetime. Company loyalty and security, as grandpa knew it, no longer exists.

Pollan recommends that you mentally quit your job That means to use your job to generate money so that you can persue your personal goals elsewhere.

He recommends that we practice frugality. Instead of pulling out the plastic to pay for any and everything we think we must have, pay cash.

That puts a whole new perspective on spending. If you don't have the money, you don't buy.

We need to go back to the old ways and save and wait and then buy. That's what my father-in-did. If he didn't have the cash, he didn't buy. He didn't have a credit card and didn't believe in them. He once saved $10,000 and paid cash for the only home he ever owned. He lived there for years and years. He, his wife, and their son, all lived in that same house until their deaths.

Today we can't always pay cash, of course. Especially when buying a car or real estate, but for other purchases, we could.

Paying cash helps us realize how much we are doling out.

Plastic gives us a "why wait" mentality. Once that plastic monkey is on your back, it hangs on for dear life.

Pollan doesn't approve of hoarding money in an estate either. It is damaging for families and their relationships.

Rather, he says, why not help your children when they're young and need it most.

My Aunt Mary and Uncle Bill practiced that philosophy by helping their daughter and her family when they needed financial help. When the daughter needed a washing machine, they bought it for her. They also bought books and clothing for their grandson who was in college. No, they didn't shower the family with needless things. They just wanted to help out when financial help was needed.

Pollan's book is a financial guide to a new and perfectly sane financial choice.

You can break the old pattern and enjoy life more, he says.

Actually, I haven't read the whole book yet, but it is fascinating.

I've gleaned a lot of wisdom from the first 50 pages of a 299 page book.

There's no telling what else I'll learn

While looking at the contents, I see chapters that deal with loans, insurance, estate planning, banks, bonds, stocks, jobs, pensions and a whole lot more.

The author says, if you have children, start teaching them to Die Broke as soon as they learn the alphabet.

Now that is a new concept.