Only A Fool Would Die Solvent

"Do you think you could save enough in a year to take two weeks off?", the man asks. "Please raise your hands."

Nearly everyone in the room raises a hand.

"OK. Now, how many of you think you could save enough in a year to take six months off?"

The room is still. Not a hand is raised.

That startling difference is how Dallas benefits attorney Brooks Hamilton gets peoples attention to the problem of retirement saving. Where once we expected to work for 45 years and be retired for two or three years, now people are talking about working for 40 years and being retired for 20 years.

The difference in required savings is enormous.

To solve the problem we have mustered an army of financial planners, brokers, and financial product salesmen. We have also enlisted thousands of financial service firms to help people Plan Their Future. Not a week goes by without a survey showing that most of us are spending too much and investing too little. Worse, when we do invest, we do it in all the wrong places.

As a consequence, we all are doomed to a diet of cat food.

The most common theme in reader mail is a single question: "will we have enough to retire at age (fill in the blank)?"

The answer to that question can come from software, calculation, and planning and youll find it frequently in this column.

But maybe we should look for a different kind of answer.

It could also come from a radical change in how we look at our lives and how we live them. Thats what financial advisor Stephen M. Pollans believes and Ill bet you, right now, that he is about to get a very enthusiastic hearing from thousands of people who are frustrated with their lives as they are and as they expect they will be in the future.

Mr. Pollans ideas about our future can be reduced to eight words and four steps. First discussed in articles for Worth magazine, the idea is now a book. ( Die Broke, Harper Business, $25 hardbound) Here are those eight words and four steps:

Quit Today. In the prevailing view, we work hard, build our careers, and save to retire, going over an employment cliff at age 65 when we magically become a card carrying Retired Person. Mr. Pollan takes another tack. Noting that companies have abandoned all loyalty to employees and that we are all free agents, he suggests that we "quit today" and view our work differently. Instead of seeing our employment as a career, he suggests seeing it as simply a job, an activity whose primary purpose is to produce income.

"The work reward that matters is what youre paid. Remember: Everything other than money can come from the rest of your life. ( my italics) Your job is the only part of your life than can give you money, so you need to maximize that", he writes. Basically, he is suggesting that we expect too much from work.

Pay Cash. The second step is to avoid debt by paying cash for everything but cars and houses. Limiting credit means you opt out of maximum consumption. With an estimated 1.5 million households heading for personal bankruptcy in a year of great prosperity and anti-consumption groups and newsletters sprouting all around the country, this book is another bit of evidence we are heading for a public reaction against debt, borrowing, and saturation bombing with credit card offers.

Dont Retire. Instead of working toward that gold watch, Pollan suggests that retirement is nearly impossible and highly overrated. His alternative: get flexible about work and prepare to do something useful as long as you can. This will eliminate worry about Social Security and reduce how much we depend on 401k accounts or corporate pensions.

Die Broke. Rather than bestow blessings on your children in death, enjoy giving and sharing while you are alive. That can mean help with down payment for a home, cash for a computer or more education, travel, or help with educating grandchildren. Pollan points out that the entire notion of both retirement and inheritance is relatively new. There is no evidence to support the idea that either is a great advance for civilization. The prospect of an inheritance, he says, often freezes initiative and large inheritances tend to remove people from the work force altogether. Worse, expectations of an inheritance can twist or sour a parent/child relationship.

If youre unhappy with conventional thinking about how we live and plan our lives, this book will speak to you.

Questions about personal finance and investments may be sent to: Scott Burns, The Dallas Morning News, P.O. Box 655237, Dallas 75265; or faxed to (214) 977-8776; e-mail to scott@scottburns.com. Check the website: www.scottburns.com. Questions of general interest will be answered in future columns.