Wealth Is Not A Number

"If you can count your money," J. Paul Getty observed, "you don't have a billion dollars."

Even so, Bloomberg's new Billionaires Index is a guilty pleasure. Look at Bill Gates make $319 million in a day! See an unfortunate Brazilian lose $213 million! Watch Warren Buffett grow $86 million richer before sundown!

It's fun. And, of course, pointless. Warren Buffett almost certainly doesn't fall asleep trying to compute his daily net worth. More likely he dozes off by inventorying Berkshire-Hathaway's holdings: Geico…reinsurance…furniture…Lubrizol…thirteen percent of American Express…almost nine percent of Coca Cola…more than five percent of IBM….

Mr. Buffett must sleep very well.

Just as the market value of billionaire wealth can be expected to fluctuate by tens or hundreds of millions of dollars daily, modest wealth fluctuates by thousands or tens of thousands of dollars a day. For non-billionaires, that's scary. For two reasons.

First, merely affluent investors don't have an extra billion tucked away for emergencies. Second, financial planners have taught them that financial independence is measured by a specific number. Very specific, in the case of ING ads. Make your number and you're OK. Fall short and you'll never retire.

Say Jake's number is $1,247,543. He hits his number and retires. Then his wealth dips to $947,865. Must Jake go back to work? Can he stop working again when he rebounds to $1,147,543?

IF he rebounds.

During the Great Recession many investors were terrified by market volatility. Terrified enough to act against their own best interests. Brett Arends has tried to estimate how much investors lost by ill-timed selling over the last five years. His ballpark figure: over $100 billion.

Over $100 billion! That's enough to get even Warren Buffett's attention. And enough to make you wonder. Does trying to motivate investors by giving them a precise wealth number to strive for do more harm than good.? Even if they reach their number, it's likely to be here today, gone tomorrow…and may or may not be back next year.

In the ING commercial, the bad example is a dolt who "has no plan." The poor soul just keeps investing and hopes he hits a gadzillion. If that approach allows him to weather market downturns, maybe he's not so dumb.

Is there a better way to encourage people to save and invest, a better way to help them understand what they'll need for financial independence? Come up with a good answer and you're practically guaranteed a place in the Financial Marketing Hall of Fame.