By Lee Eisenberg
Reviewed by Gary W. Silverman, CFP®
With millions of baby-boomers nearing retirement, folks are starting to wonder what the last third of their life holds in store for them. Consider the time leading up to your first day at school, first date, entering college, getting married, or starting a new career. All were a combination of fear and fascination. Retirement is no different.
At 52 years old, with a lifestyle-changing (good and bad) job offer on the table, Lee Eisenberg wondered, "Did we have enough? How much is enough? And if we didn't have enough, what compromises, and sacrifices, were we prepared to make?" In other words, what is The Number? In his words, "This book is about money, but ultimately it's about the life you want, the life you don't, and the costs of each."
Eisenberg is not a CFP, CPA, or any sort of money guy. He's a writer, the former editor-in-chief of Esquire, served as the creative director at Lands' End, and was the person who coined the term "power lunch."
Though not a planner, Eisenberg knows "it." The "it" that we try to explain to our clients. The "it" that keeps us awake at night wondering if we've got it right. The "it" that we help our clients plan for, even if they themselves don't know what it is. "…you'll live longer than you ever figured, which is the good news….you'll live longer than you ever figured, which is the bad news." The book is the story of Eisenberg trying to find answers to the same questions we struggle with every day.
So, do advisors come to the rescue in this book? While he does include some words of wisdom from a planner or two, overall he doesn't paint a rosy picture of the financial industry. Eisenberg's view is that the industry is more of a problem than a solution. He seems to think that the main aim of the industry is to get hold of people's money—preferably rich people's money—so they can charge fees for managing it. Hmm—maybe "not a rosy picture" is somewhat true. While he is okay with fee-only and fee-based compensation, Eisenberg is not enthralled with commission-compensated advisors. According to him, unless a client has $5 million or more, forget about getting any help from advisors. He relays to his readers that folks with a mere million or two will only attract sales-oriented brokers and agents. He adds that the only true advice the majority of Americans might get would come from the Garrett Planning Network, or a no-load mutual fund Web site.
Why aren't people planning for the future? Eisenberg concludes, "It isn't so much future shock as future denial." To make it through the new Rest of Your Life, you need to know how to get from point A, perhaps up a creek, to point B, out of the woods.
To try to get folks out of their malaise, he sounds like most of us do in our meetings with clients who are apathetic about their retirement needs. He gives warnings on the effects of living "too long," the rising cost of health care, and investing too aggressively or not aggressively enough. He quotes Malkiel, Bengen, and Markowitz. The three sections of The Number are easy and surprisingly quick reads: "Chasing It," "Figuring It," and "Finding It."
Readers will certainly come away knowing that they need to plan for a future…a future they must figure out. And that is the value of the book. It does not really get down to helping a person determine the retirement they are seeking. It does not help them determine an investment strategy. It does not cover all the important aspects of risk management. But it does get readers thinking…perhaps with enough energy that they will get started and do something instead of staying in a state of daze and denial.
As such, this book is as much about trying to figure out what life you want your number to support as it is about finding the number to support it. This should be no shock to those reading this review. It's just the retirement part of "life planning." In other words, it's what most true planners have been doing for years before it had a name.
Since many of Eisenberg's examples are from the upper-middle and upper-income ranks of the East Coast community, some readers will have a hard time identifying with several of the examples. One can also get lost in some of the rambling and incomplete thoughts that Eisenberg introduces. For those who can keep a more open mind, this book can be valuable.
I think The Number would be a good recommendation to clients who are just starting to come to grips with the expanse of preparing for that last third of their lives. While not complimentary to most of the financial industry, the highlighted "good" advisors are a reflection of the habits of most of you reading this review. One thing you should be warned about is that some of Eisenberg's language is definitely PG-13. I think he does it to shock readers into listening rather than to offend, though both effects may take place with some readers.
Gary W. Silverman, CFP®, owns Personal Money Planning, a fee-only financial planning firm in Wichita Falls, Texas. He is the host of the television show Falls Informer, editor of the financial newsletter Personal Money Planning, and a frequent contributor to the print and broadcast media. Gary also teaches university courses in finance and management.
Simon & Schuster
$26.00 U.S., $36.00 Can.