TBR: The Number
Today I’m catching up on the last of the books that I’ve been sent by publicists and have been feeling guilty for not getting around to. It’s The Number: A Completely Different Way to Think about the Rest of Your Life, by Lee Eisenberg.
When I got the email asking if I’d be interested in the book, I said sure, because we’d been strugging with the question of how to think about our long-term finances. As I’m sure I’ve said before, we’re doing fine on one income in the short-term, but I worry about the long-term impact. And when I consider switching to a job that pays significantly less than I currently make, I don’t have any sense of how to evaluate the implicit tradeoffs that I’d be making, down the road as well as today. Having read the book, I can’t say that I have any better of an answer than I started with. And I’m not sure that I’d do any better going to a financial planner, because Eisenberg makes it clear that the types of places that are interested in serving people at my income scale generally don’t do a whole lot of individualized hand-holding.
The most interesting parts of the book are at the beginning, when Eisenberg talks to real people about what they think their "number" — the amount they need to live happily ever after — is. Eisenberg had an article in New York magazine last fall that focuses on this aspect of the book. Among other things, this section gave me a new operational definition of rich — if you have a concrete idea of the difference it would make to your quality of life to have $7 million instead of $3 million, you’re rich.
Overall, I was underwhelmed by the book. I’m surprised that it’s been on some of the best seller lists. Eisenberg’s "completely different way to think about the rest of your life" turns out to be not all that different after all, unless it’s a new concept to you that the quality of your retirement will depend as much on whether you’re doing things that are meaningful to you than on the number of zeros at the end of your IRA balance. To be fair, I’m at least 15 years too young to really be in Eisenberg’s target audience.
April 6th, 2006 at 12:10 am
One of Eisenberg’s claims to fame is the phrase “power lunch”, so I’m happy to give everything else he does a great big raspberry. Two if it turns out he’s the guy behind those stupid yellow ties and suspenders.
The book excerpts on Amazon make it look like a lot of baloney, frankly. If you want to spend time on pop categorizations of ways people fail to prep adequately for retirement, psychically or financially, he’s your man. Otherwise….
I went to a retirement-planning seminar recently, and was told by the tired advisor that he used to tell people in their 30s & 40s what to do, but the God’s honest truth was that there’s no way you can predict the next 30-40 years. All you can do is make & save as much as you can without making yourself crazy, and hope the world stays in one piece. That sounded like reasonable advice to me.
And btw, Elizabeth, yes, I can certainly tell you what $3M v. $7M would mean for me, so hooray, I’m rich.
April 6th, 2006 at 12:13 am
bah, the excerpts are on Eisenberg’s book site, not Amazon. Sorry.
April 6th, 2006 at 11:56 am
I don’t have any comments on the book. But with respect to your thoughts on a financial planner, I have to differ. We have had great success with our financial planner and it has really made us feel more secure about our future planning. I would recommend it. Ours does do any hand-holding we require, or ask for. If we are stuggling over any decision regarding money, she has been very responsive to our requests for advice. Now that we are expecting our third (wow!) child, she helped us figure out how we are going to pay for all that day-care (ouch!) and not have to live on bologna sandwiches. I highly recommend getting a financial planner that you connect with, and can serve your needs — they are out there!!!
April 6th, 2006 at 4:04 pm
Megan, point well taken. Important though to distinguish between budgeting for current/near-future expenses and retirement planning. I’d argue that college saving is also pretty predictable stuff; you have a fair idea what the kid will need and how tuition trends. The guy I was talking with was a retirement planner, and retirement’s another story, I think. It’s hard enough for a 65-year-old to have a good sense of what the next 25 years might cost her (healthcare, long-term care, other support needs), let alone for a clairvoyant to see what the post-retirement aging picture might look like ca. 2050. It’s all fog from here, and that’s assuming peace and prosperity for the next 50 years, which you can’t. That’s why the guy’s “throw max money and hope” advice was reasonable.