The Number Review: Chasing It

February 22nd, 2008

This is the second installment of a 5 part review of Lee Eisenberg’s The Number. The first installment can be found here. The reviews will appear every Friday afternoon.

In last week’s review, I explained that I chose to review this book based on a sentence that gripped me from the back cover: “The Number will help you think about the kind of life you want, and the kind of help you need to achieve it.”

And that sentence still has me sold. Retirement is a scary, confusing idea for me, and I need all the help I can get in figuring out how to realistically plan for it. So this week I’ll be examining the first section of the book, aptly titled “Chasing It”. Are we all chasing some mythical number? Do any of us know what number we’re chasing and have an actual reason why? I think I’ve heard “$1 million” tossed around so many times I just think that’s the number to shoot for, and have no idea what $1 million means in regards to actual income in retirement. Let’s see if most people are as clueless as I am.

Chasing It begins with a series of scary, yet to me not surprising, statistics. In a nutshell, most people aren’t saving enough for retirement, most have inadequate savings up to this point, and no one seems to outwardly care if they are saving enough or not. The few people who do think about concrete numbers in regards to retirement (those of Wall Street and the like) are constantly adjusting their number upwards. And no one is really talking about it.

Retirement savings remains one of the last taboos of discussion - but why is that? Eisenberg presents the idea that the “Number” is tied up in self-worth and validation. Validation that all the years spent in your career were worth the effort, validation that you are not a failure. There is a fear that we aren’t doing enough, but surprisingly, that fear, in most cases, doesn’t actually motivate action. I can see that, because I’ve carried a number of money-related fears that I really did nothing to address for a very long time.

Eisenberg breaks down Number Chasers (and we all are one, even if we don’t know it) into four groups:

Procrastinators - haven’t gotten to it
Pluckers - pluck a number to shoot for out of thin air
Plotters - number crunchers with graphs and tables
Probers - number is a means to achieve dreams and goals

Obviously, we don’t want to be a procrastinator or a plucker. I’d think there should be a balance of plotter and prober in all of us, at least, a little bit. They are presented rather equally here, with Plotters being more left-brained and Probers being more right-brained.

There are many reasons why we as a culture are not saving enough for retirement, or even understanding what “enough” is, and Eisenberg talks about the reasons in what he terms “Eisenberg Uncertainty Principles”. They embody the uncertainty around things that if we knew how, we would change:

Little social pressure to get our financial house in order
Not understanding how money works
The old retirement supports are withering away
Immense doubts over what future benefits are
Failure to see larger picture
Not understanding what matters

Because of these factors, we are lulled into inaction over the uncertainty of what we should be doing and what we really can do to make a significant difference.

The rest of the Chasing It section is devoted to exploring a number of factors that keep us from being able to adequately plan for our “Number”, even if we knew what it was. Those include the Debt Warp - that debt feels like a normal state of being and so we accept it as part of existence, the Lost Years - the years spent not bothering to learn anything about finances and saving, and the confusion between the “Old” rest of life and the “New” rest of life - that in the past, social security and pensions took care of you, but now, we must be more proactive ourselves and make our own plans. Why do these things hold us back? To embody that, this quote has stuck with me the entire week since reading this section:

Even intelligent human beings would just as soon avoid information that causes distress.

So true. Avoidance is not a good strategy but it is such an ingrained part of human nature.

All in all, so far, I still have somewhat mixed feelings about the book. I think there is a lot of great “thinking” information - ways to look at and think about things that I hadn’t quite thought of before. For example, the types of Number Chasers. I know I used to be a procrastinator, and now I am more of a plucker but I am trying to work towards being a plotter. And there are a number of great one-liner quotes in the book that stay with me. But a lot of the book is aimed at people in a different world from me - a lot of the information is written about the top 1% or 10% and how they feel broke too even if they aren’t on paper - and I accept that, but it isn’t really relevant to me or my life right now. A lot of the book seems to be trying to convince the “rich” that they need to care about their Number, too. So I might not be the target audience here. We’ll see as the book continues.

Next week, we’ll look at Figuring It - and maybe I’ll learn how to understand what my Number is. It’ll probably scare me if I do. But reality is better than ignorance.