Book Review - "The Number"

[rs0460a]

Greetings!

The subject book has come up in some conversations on this board. Some were positive, some negative (imagine that ).

Anyway, my DW gave me the book (one of many) concerning my upcoming retirement in '07 (won't list the others - they will be for other discussions).

What struck me most of all was how this book actually "met" my own "number". It was much like reading the "Millionare Next Door" after achieving the subject target (I wanted to know how others did it; of course, readers of this forum already know the LBYM mantra).

Here's a blog of the author's site for your information:

http://www.thenumberbook.com/thebook/bloggers.php

Let the comments begin... (be nice )...

- Ron

 

[mickeyd]

I recall reading that book about a year ago and I think that it was a pretty interesting read. I do not recall that I gleaned a great deal of new information from it, but I thought that the information was presented well and, since I read it cover-to-cover, I must have liked it.

 

[Cut-Throat]

Greetings!

The subject book has come up in some conversations on this board. Some were positive, some negative (imagine that ).

Anyway, my DW gave me the book (one of many) concerning my upcoming retirement in '07 (won't list the others - they will be for other discussions).

What struck me most of all was how this book actually "met" my own "number". It was much like reading the "Millionare Next Door" after achieving the subject target (I wanted to know how others did it; of course, readers of this forum already know the LBYM mantra).

Here's a blog of the author's site for your information:

http://www.thenumberbook.com/thebook/bloggers.php

Let the comments begin... (be nice )...

- Ron

JUst curious Ron, since you have computed your "number" and it matches the book, I am wondering how close your number is to the formual that I came up with.

My formula is: (( Bare Bones annual spending * 2) - Annual Pension Amt) * 25 = NEST EGG

Bare Bones is really Bare - (No cleaning lady, No travel, No hobby spending, No Eating out etc. etc.)

Annual Pension Amt includes Social Security, Company Pensions etc.

 

[rs0460a]

I am wondering how close your number is to the formual that I came up with.

If you go to one of the "bottom line" indicators (there are several in the chapter, on how to "compute the number", as you have proposed), on page 234 there is one option. Of the four "lifestyles", I/DW meet the criteria of "being OK" (in a financial sense for what I/DW have planned).

Using your method of calculation, I would have to change your "Bare Bones annual spending" factor to 3 (rather than two) to actually meet what is outlined in the book (and meet our "target"). Also, have you considered all options (such as an increase in the value of your holdings after year one) for your calculation? Also, how each of us view "bare bones" will be different. I pulled mine directly from my retirement budget, which DW/me have broken down into essential and discretionary (how anal is that ).

BTW, page 251 comes up with an eight-step alternative way of computing how much you can "safely" spend in retirement. I won't list them here (due to copyright infringement) but if you have the book, you can give that a "spin".

An additional comment (based upon some of the "youngsters" on this forum). The numbers (in the book) may seem "high", but they are based upon "common" lifestyles. I constantly read from folks (here) that they are in their 30's/40's and will have their mortgage and car paid off in x years (shortly!) and expect to retire at that point. Since I/DW have been in our early 30's, we are in our third house and "many" cars later (yes, we do have a car payment in our retirement budget, but since our current home is paid for, we do not plan on "moving up" - 4 bedrooms / 2.5 baths for just the two of us). Probably would be a good topic for another thread...

- Ron

 

[2B]

JUst curious Ron, since you have computed your "number" and it matches the book, I am wondering how close your number is to the formual that I came up with.

My formula is: (( Bare Bones annual spending * 2) - Annual Pension Amt) * 25 = NEST EGG

Bare Bones is really Bare - (No cleaning lady, No travel, No hobby spending, No Eating out etc. etc.)

Annual Pension Amt includes Social Security, Company Pensions etc.

I'm getting concerned about my plan. My current assets put me at 3 times "bare bones." My problem is the "bare bones" is far lower than my desired lifestyle.

 

[Cut-Throat]

I'm getting concerned about my plan. My current assets put me at 3 times "bare bones." My problem is the "bare bones" is far lower than my desired lifestyle.

Well Yeah! - That is why you multiply it by 2!

 

[2B]

Well Yeah! - That is why you multiply it by 2!

Even mutiplying by 3 doesn't get me where I'd prefer to be. My "bare bones" is effectively the trailer by the trout stream but I substitute the grass flats. Grilled redfish on the half shell taste better than any freshwater trout.

"Bare bones" for me is safely less than my SS and damn near the total amount of my pathetic pensions.

 

[Cut-Throat]

Even mutiplying by 3 doesn't get me where I'd prefer to be. My "bare bones" is effectively the trailer by the trout stream but I substitute the grass flats. Grilled redfish on the half shell taste better than any freshwater trout.

"Bare bones" for me is safely less than my SS and damn near the total amount of my pathetic pensions.

Well, Bare bones by my formula definition, is where you are currently living, your current property taxes, Heat bill, groceries etc. It is not meant to be a drastic lifestyle reduction. ONly those things in your life that are non-deiscretionary.

 

[2B]

Well, Bare bones by my formula definition, is where you are currently living, your current property taxes, Heat bill, groceries etc. It is not meant to be a drastic lifestyle reduction. ONly those things in your life that are non-deiscretionary.

Then, it's safe to say I'm not there yet but I'm getting close. Doubling my current "necessaries" is pretty luxurious by my standards. I'll have to keep working longer with your formula. Are we perhaps married to the same woman? Nope, not possible. Your wife has a paying job.

 

[rs0460a]

I'm not there yet

Big question - how old are you? Second question - when is your target ER year?

- Ron

 

[Martha]

BTW, page 251 comes up with an eight-step alternative way of computing how much you can "safely" spend in retirement. I won't list them here (due to copyright infringement) but if you have the book, you can give that a "spin".

- Ron

Without using the author's words (which could be copyright infringement), can you give us a rough idea of how he suggests calculating your number? (Ideas are not protected by copyright, only expressions of ideas.)

 

[Nords]

Without using the author's words (which could be copyright infringement), can you give us a rough idea of how he suggests calculating your number? (Ideas are not protected by copyright, only expressions of ideas.)

We did an eight-page thread on this a while back. If I remember correctly from reading the book, he writes over 200 pages without ever actually coming up with a damn number. It's all about the journey and the angst, not about the actual calculation.

We have to take into account that the author's still working... it doesn't matter whether his calculations are right or not!

But FWIW:
http://early-retirement.org/forums/index.php?topic=5422.0
http://early-retirement.org/forums/index.php?topic=5452.0
http://early-retirement.org/forums/index.php?topic=5454.0
http://early-retirement.org/forums/index.php?topic=7267.0

 

[2B]

If I remember correctly from reading the book, he writes over 200 pages without ever actually coming up with a damn number. It's all about the journey and the angst, not about the actual calculation.

I agree with Nords. I found the book interminable. I did read the whole thing but never felt like I really learned anything other than reinforcing my belief that people are always afraid they need more -- just like me.