I was talking to some financial planning students recently and they asked me how they should analyze a client’s circumstances to ensure good retirement outcomes. They essentially wanted to know how they could guarantee that all would be well.

It was tough to break it to them that they were seeking the impossible. “Sorry, guys. That animal just doesn’t exist. By the time we get done with all the uncertainties, variables and possibilities of a single human’s life, the numbers on your spreadsheet are essentially just an illusion. They may look real and may be more useful than nothing, but they are still illusory.”

Financial planners work with an invariable truth: The law of large numbers does not apply to small numbers. Each client’s future is essentially unpredictable given the abundance of variables. You hope the money lasts, but the certainties yield inexorably to uncertain life spans and states of health, acts of nature, volatile business cycles, unstable dependents, unforeseeable client responsibilities, irregular business … just to name a few of the realities we all face. The world is a fickle place—and the money doesn’t care.

It would be nice if we could actually rely on our wondrous spreadsheets and graphs. Often, all the client wants is the sense of certainty and predictability implied by settled numbers. But, alas, the map is not the territory. Such certainties are not part of life or money, particularly not individual lives or modern money.

I know what you’re thinking. “Bummer! All that time spent with that ridiculous HP-12C calculator preparing for the CFP exams, and for what?”

Fair enough, but we have to admit to ourselves that financial planning is a tough, but inexact, profession, more art than science. Ultimately, it doesn’t lend itself to certainties of any sort—except the certainty that failures to plan and prepare will undoubtedly yield the worst results of all.

We get the big bucks when we put all of this in perspective for others, namely regular people who find money a bit mysterious.

Predictions amid uncertainty are for weathermen and actuaries. Truly predictable results simply can’t be delivered. Economists and insurance companies may deal accurately in the laws of large numbers, but we must recognize that those people are in the denominator business. Not us. We are in the numerator business, simply stuck doing the best we can, one client at a time.

I find it amusing to parse the numbers that pass for meaningful, i.e. “scientific,” analysis of investments and their use in planning for life events, especially retirement. Though clearly well-intentioned, these efforts basically yield answers that are some version of “Who knows? It’s the best we can do.” That’s how the would-be clairvoyants address such issues as Social Security elections, withdrawal rates, miscellaneous portfolio enhancement theories and the whole range of what I would affectionately call the “crystal ball business.” These prophets act as though they are operating particularly effective divining rods, their pronouncements fairly drenched with certainty. But let’s face it, when it comes to individuals and meaningful inquiry, a Monte Carlo analysis is just a fancy way of saying that life is unpredictable. And we only have 100% certainty after something happens. Otherwise, we are basically giving answers to the question, “How high is up?” It’s so easy to fall for the “lie of the decimal point,” believing that the numbers impart reliable truths simply because they foot.

Clearly, the number crunchers help us understand relevant issues with greater clarity than no analysis at all. But we must see things in perspective: Individuals are always different from one other and from spreadsheets. The best we can do is guess intelligently and then put those guesses to work within living, breathing, real-life frameworks, as best we can understand them.

Consider that idea, along with the fact that money itself really is different in these times. While money has been around for thousands of years (see David Graeber’s extraordinary book Debt: The First 5000 Years), its most recent role is unprecedented.

A funny thing happened after World War II—the newly sane world entered the Age of Money. Once kings and fascism had been eliminated in those post-war times, the new issue was how to organize people and institutions effectively to provide for social structures and economic frameworks. The Communist Bloc tried smoke, mirrors and blatant coercion, with decidedly mixed results. The Western democracies went mainly to money. In both instances, the lives of people changed dramatically.

Because this happened in the lifetimes of many of us, it is easy to assume it’s normal. In truth, our postwar world bears faint resemblance to the prewar era. Machines changed the nature of both agricultural production and manufacturing processes. No longer was a great amount of labor required for food production; agrarian and other prewar skills were often obsolete or redundant. Rosie’s rivets were no longer needed for war machines. Nonetheless, in America, the troops were returning home and they needed places to go.

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