The Number
Author: Lee Eisenberg
Amazon info
Any book that tells you to start planning for your financial future is a good book and in that sense, The Number is no exception. However, The Number does not measure up to my favorite in this genre, "Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence" by Joe Dominguez and Vicki Robin.
The highlight of The Number was the 4% Rule. This rule states that you can spend 4% of your liquid net worth every year without worrying about running out of money. So, when you reach 25x your annual spending, you can "retire". If you are so inclined, you can be slightly more aggressive with the 5% rule and 25x turns into 20x.
The book touches upon the psychological and irrational aspects we hold about money - and that is essential in financial planning - as the rational/numerical information is only about 1/2 the story. But I think "Your Money or Your Life" covers this area in more depth.
While the book has useful tidbits, e.g. earmark $200K off the top for medical expenses - it has more than its share of annoying idiosyncracies. Most importantly, the author seems to have spent much of his time interviewing investment bankers and other super-wealthy folks. This results in a somewhat warped perspective and it even suffuses the writing style - testosterone-laced in the adjective that comes to mind.
But perhaps I just didn't fit the profile of the intended reader - e.g. someone who is spending far beyond their means and hasn't done any planning for the future and can't even talk about "their number" - it being just too private and, well, taboo. I simply couldn't relate to most of the characters portrayed in the book.
The biggest complaint that I had was that I wasn't completely sure of what he meant by "The Number". It was either one's current liquid net worth (e.g. assets other than your home) or the amount that an individual needed to reach in order to "retire". One is a current value that fluctuates, the other a target. It seemed these concepts were used interchangeably.
By the way, in case you are wondering, my number is 1.25M (e.g. my retirement target). Molly's is probably a little higher - but she hasn't read the book yet :).
Recommended to fans of financial planning and/or financially ill-prepared men who enjoy watching more than 4 hours of sports per week.