Numbers, Numbers, and more Numbers!

I’m leaving this post running until Sunday to allow time for more comments … to read the really detailed comments that have been left already (they are like ‘mini-posts), just scroll down to the bottom (once you click on the title/link so that you can see them) … and, please feel free to throw your two-cents in as well!


If you have been following this blog for some time – and, if you have also been following the exploits of our 7 Millionaires … In Training! – you will see that I have an obsession with ‘helping’ you to understand your Number.

This is because simply understanding my Life’s Purpose, then quantifying that ‘purpose’ into a Number, had such a big impact on my life …

… I truly believe that I would not be sitting here, writing this very post today, had it not been for that simple act.

It’s a process that should only take a couple of hours – more, if you get the urge to dive deep into what your first cut throws at you.

What’s wrong with having no Number?

Nothing, if you like to fly blind; it’s like embarking on a journey with no destination: any road will get you there … which is OK for some, but not me.

My ‘no destination’ journey took me to a lot of work, two so-so businesses (together, they just managed to break even … and this is after YEARS of operation), and $30k in debt.

Yet, as soon as I realized my destination and found out how much it could ‘cost’ me to get there, it was like suddently letting off the parking brake: things almost magically started to fly.

Don’t get me wrong, there was even more hard work and major risks and decisions to undertake (not many people move country to pursue their dreams AND keep their businesses in the ‘old country’ going).

So, if having no Number is ‘bad’ what’s wrong with picking a number out of thin air?

Again, nothing, but have a look at what our 7MITs came up with after a couple of revisions … and, compare that to their starting Number – their first ‘guess’:


Let’s ask them: what changed and why? Why did your Number go up/down or (in only a couple of cases) stay the same? And, why is this exercise better than just picking a Number and going with it?

And, let me ask you … if you have a Number in mind, how did you come up with it? And, why?

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12 thoughts on “Numbers, Numbers, and more Numbers!

  1. I agree that having a number is a useful tool – when you set off on a journey it helps to know where you are going. However, having a wrong number can also be bad.

    I tend to redo my numbers once or twice a year. Since my number tends to focus on the amount of capital needed to generate a given level of income, the number (amount of capital) tends to fluctuate as yields, cost of debt etc fluctuate.

    I also have more than one number as a target – an acceptable level of income and a preferred level of income. Both of these need to get revised from time to time as the costs of living and lifestyle aspirations change over time. Around each of these income targets I give a range of net worth numbers based on differning asset allocations.

  2. Like traineeinvestor, I think there’s some value in looking at what you need and what you want. If you can pay for your living expenses from investments or businesses that run themeselves that gives you more time to focus on bigger things – but setting that smaller goal might slow you down in reaching the bigger one. If you absolutely need to get $500K/year with no ongoing time investment then set your number and get to work finding a way there 🙂

  3. @ TraineeInvestor – I think what you are proposing is a Number – a ‘life goal’ (in business, this might be like setting a strategic goal – and, and annual target – a budget (in business, this might be like setting the annual operating budgets for income, expenses, and capital expenditure)? Makes sense to me, although I’m not much of a budgeter …

    @ Richard – You also need a Date, $500K next year, and $500k in 20 or 40 years are two VERY different things. So, ‘set your Number [and DATE] and get to work finding a way there’ … who knows where it will lead you? To another country perhaps? 😉

  4. As one of the trainees, I can tell you about the first number – it was the amount a friend had “in the bank” and which a financial planner (another friend) had said would suffice (based on our estimates of what would be withdrawn without touching the principle).

    My later numbers were based on my grass roots estimate of what I personally wanted in my life as I lived out my own “Life’s Purpose” and used some of Tim Ferriss’s “4-hour work week” idea on how to look at some of those items – not as something far-fetched but to be realistic, maybe even call a travel agent or car dealer and get some quotes.

    Using the Life’s Purpose approach helps you to pinpoint what is really important to include in your life, what to exclude (both of which help regardless of whether or not you decide you need money to do them, eliminating the unnecessary is a huge release for most folks), and makes you think in practial terms about what it would take for you to get there.

    A favorite quote for this is the one from Alice in Wonderland when she asks which road she should take when coming upon a fork. When asked where she wanted to go, she said it didn’t much matter, in which case, the reply back was that it didn’t much matter which road she took then.

    A good philosophy. If it doesn’t much matter (and living life that way can be quite fun and adventuresome), then one should accept that strange and unusual things may occur, not necessarily good or bad, but perhaps quite interesting.

    On the other hand, if we would like to get somewhere specifically by the “end” of that particular part of our journey, then we may want to put a bit of structure and planning into the adventures we find along the way.

    Either way can be adventuresome. Just where do we want to be when we come thru that particular section of the journey? If it doesn’t matter, then you won’t want to bother with this blog too much. This is for those who realize that we want to have a fun and adventuresome life, but that we also have to put some structure on that so that when we reach the other side of the “woods” in xxx number of years (time), we have xxx number of dollars (money) that will allow us to do/be the things we want to do/be at that point in our lives.

    Or, we could leave it all up to chance and social programming.

  5. I actually have to admit that i’ve had 4 numbers along the way. My 1st number before meeting Adrian online was 5 million. How did I get that number? Most of the books I was reading at the time such as Masterson, showed what a 250k per year lifestyle was like and most suggested that you really weren’t “Rich” until you could at least afford to live a 250k lifestyle(assuming a 5% withdrawal rate per year on that 5 mil). Also at that time, my wife and I had not purchased our new home and land outside of town which is basically a 100 year old estate or ‘horse farm’ if you will on 8 acres.

    Before that purchase, every home we looked at with the amenities that this home had (8-20 acres, barn, horse run-ins, accessory storage or work shop buildings, complete fencing in mostly 4 board wooden style, above 3,000 sq ft of living space etc…) cost in the range of 600k to basically whatever you wanted to pay. We thought we would need to buy a house for a million or more at least to be honest. We lucked up and found one that needed a few final touch renovations for only 325k, probably because of a change in market conditions and the average consumer’s illusion that a “newly built” house is better, even though all studies show newer homes are built with softer woods instead of hard woods and seem to degrade at a faster rate than the old tanks that use to be built (plus my wife and I like the true artisan qualities, architectural styling, interior woodwork, etc… of older Victorian homes,etc.. that you just can’t quite find newer built homes today)

    Shortly after purchasing this home, things really got going with the 7 millionaires in training program here and I realized that a 5% withdrawal rate of your ‘number’ may not always cut it, especially in bad markets like the present and I started thinking that in order to have to 250k/year withdrawal while still preserving my number to keep up with inflation, I would need to withdraw more like 2.5% per year, hence this took me to 10million.

    Howerver, later on, after figuring out what I really NEED in life (personal, physical, emotional, spiritual and financial freedom from ‘working’ for money, so that I can help people out of abundance, without chasing down payments from insurance companies, dealing with paperwork and any of the other negatives to my practice that feel like will shorten my lifespan, as well as being able to travel abroad a few times per year to help those in need and less fortunate in other countries), I realized I didn’t NEED as much money as I thought I would in order to do that.

    Sure I would WANT more money. I could find it EASY to spend millions of dollar per year or more, but that would simply be what I WANTED for FUN, and not truly what I NEED in order to live my life’s purpose.

    I realized that it wouldn’t cost that much to finish the renovations on my home to make it an incredibly beautiful horse estate, do the traveling that I needed to do to help others, have my freedom, reduce stress, live longer, help people out of abundance in my practice and not because I have to make a payment to something or someone, etc.. And incredibly, I found that it cost less than HALF of what I previously thought it would to live that life.

    So my number ended up at just a shade over 4 million to accomplish in 10 years. Still quite a high mountain, but not quite as STEEP as previously estimated.

  6. I started out with $5 million as my number. There wasn’t much rhyme or reason to that, it just seemed like a ton of money and I figured it’d be more than enough for anything I’d ever want to do. I’m only a little embarrassed to say I just sort of picked it out of thin air for the most part.

    As I progressed through AJC’s experiment… he had us think more about the big picture – our “life’s purpose”. So my revised number was reflecting how much I thought necessary to live that purpose and I discovered $5 million wouldn’t quite be enough to sustain some of those things.

    Finally, after an excruciating process (for me, anyway) I worked out the fine details of living my life’s purpose by the date I selected and exactly what kind of cash would be required to be able to stop working (if I want).

    I’m glad we went through this process. If I had just gone with my first guess of $5 million, I’d fall short and not be able to fulfill my life’s purpose as I intend to. I wouldn’t have known that if I didn’t go through a detailed, thought-provoking exercise to come up with my number and date. I also wouldn’t feel particularly passionate about what I’m doing in this experiment if I didn’t have such an attachment to my number and date. It’s not good enough to say “I need a lot of money to do stuff” or “I need money to do stuff and give to charity” – it’s the specifics that allow you to create actual plans that can deliver. Without a plan and end goal – how would you know if you “made it” there?

  7. I had two numbers of substantially different values. The fist number is the amount needed to support the life I want and will eventually achieve, the second is the number I need to fulfill my life’s purpose at a bare minimum. The time hasn’t changed and remained static at 7 years, starting from this month, so we’re talking Nov, 2015. 4.865 million is the new number. Sounds like a walk in the park compared to 20 mil.

  8. My First number (10 million)was sort of a guestimate as to what I might need to achieve the life of my dreams and live out my purpose. Once I really sat down and worked through the exercises to determine actual costs of the things I will need/want in retirement, I came up with 12.5 million. After working through my expected taxes a little more, and then shaving off some of my annual expenses to a more reasonable level (Thanks to Advice from Adrian), I came up with my new number of 16 million by my 40th birthday on 05/05/2016.
    I feel good about my new number being accurate to achieve my goals, but how could I not be a little nervous about having to realize such an astronomical interest rate to get there?!?!

  9. Actually in the beginning of this grand experiment I had “no number” just a dream. Me being the “old guy” among the applicants I really didn’t figure I would make it much beyond the nice remarks about someone like me even trying something like this anyway.

    Now fast forward to being selected as one of the 7 participants. Putting dollar values to my dreams? This thing became very interesting to say the least. I think I scratched some outrageous figure that had like 8 numbers between the dollar sign and that little dot to the right. (This shows how much I knew about what I was getting myself into)

    Finally I came up with $5,425,000.00 in 5 years. After I read my own ideas again and again, I revised both my number and date $4,190,000 in 11 years. That means less money and more years. Now hold on I’m 60 years old as a matter of fact I’ll be 61 a week from today. So I’ve aged a year since we started this adventure. I would like to think I’ve gotten smarter as well as older.

    Since I’m an ordained minister and retired police chaplain I haven’t entered into this without a lot of prayer, as I sure everyone else has also. I’ve searched my heart, scratched my hear, looked at my bank book, what’s left of it, made sure I’ve taken all the medication I supposed to and took another look at the calendar and come to a conclusion. My conclusion is that $4,190,000.00 in 11 years IS NOT MY FINAL ANSWER.

    I’m changing my number one more time but the date remains the same.

    What is it? Slip back over to (7 Millionaires in Training) and watch for my post entitled, “It’s My List, I Can Change It If I Want To”…

  10. Things have come a long way within a short few months. Back in April, my application reads, “I would like to replace my current income in 3 years time through business activities and then to accumulate networth of about $5million (or more) within 7 years.”.

    I don’t think I did any in-depth analysis to come up with that number in April. I would not say that I guessed correctly since my second number is off by 3 years. My current goal is to accumulate $5million within 10 years. Why 10 years instead of 7 years? I think it is simply the layout of the spreadsheet here: (No 7 years :))

    The various exercises did put more meaning and substance to the number that we all have. In April, it is just a number with no proper reason. Now in November, it has a lot of meaning behind it.

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