Updated on 02.20.07

# The Number: Figuring It

This week, The Simple Dollar takes a look at Lee Eisenberg’s The Number, a frank, well-written, and entertaining book that addresses the one number that so many of us obsess over: the amount of money we each need to live the rest of our lives the way we want to.

The middle third of The Number focuses on some of the social nuances of the process of calculating the number. Although this could have easily been the “dry” portion of the book, Eisenberg finds a number of ways to liven up the discussion.

First, he spends most of the section describing a “crash dummy” family and how they’re calculating (or miscalculating) their numbers. By doing this, Eisenberg effectively creates cariciratures of people: a “playboy,” an old family matriarch, young professionals, and a middle class planner each have vastly different true Numbers and also vastly different perspectives of what their Number should be (the playboy’s imagined Number is much lower than it should be, for example).

From there, Eisenberg goes on to analyze some of the additional numbers you need to know to calculate your Number. The most compelling portion here is the discussion of how the 4% paydown number came about (in other words, the idea that your nest egg should be 25 times your living expenses on the day you retire) and evolved over time.

Mostly, however, this section mostly just illustrates that no matter how old you are, you should think about your Number at least a little. Create some assumptions, do some figures, and see what happens. If you’re not doing this, you’re choosing to create a difficult end-life situation for you and for your family.

Tomorrow, we’ll talk about the final section of the book – including my favorite part of the whole book.

You can jump to the other parts of this review of The Number by using the following links:
Overview
Chasing It
Figuring It
Finding It