I picked up The Number by Lee Eisenberg and was pleasantly surprised by the book. It’s a interesting read with a liberal amount of humor so it makes for a quick read.
Lee starts off wondering about his own number and how much he needs for the rest of his life. He then points out the difficulties of actually getting to the number since there are so many factors to consider like:
- Living in a culture where debt is so common getting your finances in order feel like climbing a mountain.
- People being generally utter confused on how money works and have no motivation to learn.
- The old retirement supports like a defined pension or generous government benefits are slipping away for most people.
- Living with the uncertainty of doubt around future benefits like your corporate pension plan going bankrupt or an angry stock market god smashing your savings to bits (the book was written in 2006, so I don’t think he was predicting 2008).
Then through conversations with various experts Lee slowly brings us to face the fact the Number is a sneaky beast that changes colours and escapes the second you think you are close to getting it.
Yet perhaps the most useful things Lee brings people around to understanding is your financial planner now a days needs more than a good model to get the Number, he needs to also be a therapist to extract out of your brain your real desires and needs and use that information to build up your number.
Since let’s face it. If you don’t know what you want to do in your retirement calculating how much you need for it is a useless exercise. You will get a Number, but it won’t be useful to plan anything on. Having a winter home in the US and living in BC is a completely different number than living in a small town in Ontario for retirement. Also are you planning on some work, what are your hobbies, did you want to be near your grandkids, what are you going to do all day?
So overall I enjoyed this book alot. It’s honest enough to say the Number depends on various factors and understanding it all is confusing. Yet in the end, find what works for you and plan for that.