The theory of building a pile of cash (also often known as “the number”) that will last for life has not worked for most people. Unless you are extremely disciplined or that mountain of money is huge, it never has and it never will work. Just ask all those people who lost their money with Enron or in a huge market crash when they were ready to hit retirement. They can tell you.
The mountain of money or number theory claims that to be able to retire in style you need to reach a certain number, a certain dollar figure, or a certain size pile of cash in the bank that will last long enough. (And you don’t want to outlive that!) While that is certainly one way to look at it, it has some serious flaws. One of these flaws is that the pile can disappear quickly if it is put in the wrong place and/or at the wrong time or with the wrong person.
Unless you are a star who makes millions a year, you probably have tried the conventional way of putting 10 percent of your paycheck away into a mutual fund or 401k, and you probably don’t have a whole lot to show for it.
If something’s not working anymore, then it’s time to try a new method.