What's your Number?

"IF you don't know where you're going, you're never going to get there". No doubt I have butchered this well-known phrase but you get my drift.

In a complicated, time-scarce-always-full-on 24-7 Twitter-Facebook-LinkedIn-world, it's very difficult to see beyond the here and now.

Struggling with mortgage repayments; putting Timmy & Trinny through private education; running your own businesses or concerned about your employment security: we all have enough to worry us on a day-to-day basis without the added pressure of finding the time to stand back and look at the bigger picture.

And then.... BANG. It happens.

You are 60.

Or 77.

Or 92.

And you have no money left.

You were so immersed in running your life in the here and now you had no time, opportunity (or inclination, frankly) to plan your future, because, well, that was the eternal tomorrow that would never come.

Except it does. Always. Without fail.

In his book "The Number" Lee Eisenberg captures the zeitgeist of the American baby boomer generation and the dillema they face as they approach that life stage where they have neither the energy or motivation to run their own businesses or - more likely - employers don't want them because of their age. Legal disclaimer: this is not to say that I advocate or support age-discrimination. But, living in the real world. it happens, right, so we can allude to it and not blush.

These long-in-the-tooth baby boomers (in their hundreds of thousands) are having to rely on what they have accrued over the preceding decades. This is the theme of Eisenberg's book: have these people got their "Number", a sufficiently large enough stash to see them through to the Pearly Gates with comfort and dignity?

I introduce new clients to the book to help get them thinking about this kind of stuff. I have three copies of "The Number" to give away if you email me quickly enough.

Working out your Number means working out YOU: what are YOUR values? What age would you like to be financially independent? What does financial independence look like, feel like, sound like to you? What things did your parents never get round to doing? What would you like to see your children do in your lifetime? How can you help them do this? etc.

All of your goals, values and dreams come at a cost. A good financial adviser will get you to talk about you and help work out the cost of your desired lifestyle. The adviser will go away, do some fab numbercrunching and then say to you one of two things:

"Fab. You can [sell your business today] / [stop working for that horrible boss] and you will have enough to live your vision of the perfect life for the rest of your days. Even net of my fees, you will be fine!
In fact, you can start giving money away right now to Timmy & Trinny, each and every year, and it will not have any impact on your quality of life. Why wait till the reading of the will?"

Or

"Sorry to put a crimp in your day but you are living in Cloud Cuckoo Land. Retire in five years? What are you, nuts? You'll be working for another 20. Mind you, if you do THIS, THIS and THIS right NOW, I can help you get there in 10 years, maybe less, with a prevailing wind."

The point is, people who go through this financial life planning exercise gain clarity about where they are going. They know if their dream, their vision of the future, is realistic.

These are the people who know why they have that pension fund, that collection of ISAs, that life assurance etc. It's because these assets (along with their bank accounts, their businesses and all the other material wealth we accrue) form part of their Number.

Clients who know their Number enjoy a close relationshop with their adviser. They understand that all their financial strategies and investments are geared to one overarching objective: to get them to their Number as efficiently as possible, with the least hassle and minimal taxation along the way.

So next time your financial adviser tells you to use your ISA allowance or to top up your pension, ask him "Why? Is this helping me get toward my Number? Do you even know what my Number is?"

Chances are, he doesn't even know what you want to do with the rest of your life. Which, really, is the kind-of-damn-important-stuff......

{The above is solely the opinion of Nick Lincoln. It is not individual financial advice and should never be taken as such. If you wish to discuss the issues raised in more detail, please make contact with Nick. If you ignore this small print and act on his opinion(s) without first seeking financial advice or reading at least 100 pages of Key Features Documents containing numerous risk warnings, you may well be struck down by lightning}