Meaning Matters; The Numbers Don’t

Planning is, at least on the surface, a rational exercise. One thing that makes it difficult is the question of scale independence.

Scale independence

The idea of scale independence is that we believe changes have absolute meaning. For example, we know four is twice as much as two, and the size of the change from four to six is the same as the change from two to four.

When planning and assessing finances, scale is not independent. We make a mistake in assuming it is. Sometimes changes of identical size matter, and other times they do not.

Some changes are not proportional.

If unemployment changes from 2% to 4%, it would have far less effect on the economy than a change from 4% to 6%.Why? Because there is always some unemployment. People are changing jobs, moving from one place to another, or just taking an extended vacation or leave of absence. Both 2% and 4% are in the range of normal and expected unemployment.

The change from 4% to 6% has a different meaning. Something is happening that is not normal. Jobs that once existed exist no more. For no reason, do Microsoft, Amazon, and others reduce their payroll by 10,000 jobs? Probably not.

We could try to know their reason, but that is less important than the fact that they see something that requires frugality.

Think about meaning

Other changes have a meaning greater than their apparent size.

It matters if your mortgage rate doubles from 3% to 6%. It is catastrophic if it doubles from 6% to 12%. Even the change of 3 percentage points from 3% to 6% has less importance than a change from 6% to 9%. You must consider the interest you pay in terms of the resources you have to pay it with. That’s where the meaning can be found.

Inflation is similar. A change from 1% to 2% doesn’t mean much, but a change from 2% to 4% has meaning because a) some inflation is expected and even helpful, and b) the helpful part is less than 2%. Once you get into 8% or more, serious mismanagement has occurred, and there will be a price to pay to fix it. How much is your share?

Notice that not all scale factors matter. It is in the -25 degree range here just now. That’s about -13 degrees Fahrenheit. Cold enough that you must zip up your coat.

Years ago, I was at James Bay in Wemindji, Quebec. It was early February, and at lunch, my friend Elmer told us it was -55 and that we should be careful outside. A first-time visitor at the table asked, is that Celsius or Fahrenheit? Elmer’s reply, “It doesn’t matter.” proves scale doesn’t always tell the story,


We anticipate events to help us fit into our future. Noticing the numbers and assuming the scale is fixed misleads. Seek meaning rather than the numbers or the change. Meaning matters when it implies a consequence that affects you.

Pay attention, discover meaning, and act on what you discover. That will help your budget decisions and your investment decisions, too.

I build strategic, fact-based estate and income plans. The plans identify alternate and effective ways to achieve spending and estate distribution goals.

Be in touch at 705-927-4770 or by email at

2 Comments on “Meaning Matters; The Numbers Don’t

  1. Hey Don,

    A good post today, thanks. A mantra I live by is “Money is not math and math is not money”. Let’s say math is used to verify the past & project a future hypothetical. I agree with you, meaning (and hence philosophy of why) are more relevant. Interesting that chasing a rate of return has been a predominant motivation for the consumer and marketing of the financial industry. Apologies for not getting back to you sooner for our phone call. I’ve been awaiting responses from Leap Systems States side and am not quite through that process. For now, I’m always up for a casual chat when convenient. Best to you and Margaret.

    Kind regards, Frank

    Frank R. Tooton, CFP, CH.F.C. Chartered Financial Consultant 69 Smith Cove Rd. Brule, NS B0K 1N0 Mobile:902-880-5327+19028805327 http://www.franktooton.com

    To book an appointment with Frank, click on this link:

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