Jonathan Clements's Blog, page 13

The Luxury of Low Expectations: What We Gained by Having Less

The daughter of a close family friend got married a few months ago. My wife Suzie and I recently had dinner at the newlyweds' home. It was a lovely evening hearing the details of their honeymoon to New York and onward to Mexico.

Being a keen observer of the human condition, although Suzie suggests I'm just nosy, I couldn't help but notice the material abundance this couple starting out in life have already acquired. It's a stark contrast to our own humble beginning to married life.

Suzie and I purchased our first home in the fall of 1988 and spent the time until our marriage in the spring of '89 happily stripping, painting, and fixing up what we could to make our decidedly worn-out house comfortable on a shoestring budget. For the first four months, daybreak was our wake-up time because we had no curtains to dim the morning sun.

Our young friends were having a lively discussion debating what color and shape of built-in bedroom furniture would best suit a spare bedroom. Different times indeed, I thought. I can remember the excitement of getting an actual bedroom floor covering the week before our first Christmas—it was our early present from Suzie's parents. In fact, the reason we bought our house was that the seller was moving overseas and was happy to leave the furniture and cooker; otherwise, we would have had nothing.

My thoughts during the evening's dinner revolved around the generational divide and something important that I think has been lost over the nearly forty years since my marriage. This generation has it good in so many ways by most measures, but I think something fundamental has been discarded. The change from the simple low expectations that myself and many of my peer group saw as normal might be thought of as something to celebrate. I view it differently.

Of course, I can't argue the facts, today's young adults face challenges I never did. Housing costs have skyrocketed, making homeownership feel out of reach. Job security has largely evaporated, replaced by gig economy uncertainty. Student debt that barely existed for me now follows graduates for decades. Their material abundance might be less about excess and more about seizing what they can while they can, in an economic landscape that feels far less predictable than the one I navigated.

Yet despite these very real pressures—or perhaps because of them—I wonder if something valuable has been lost in translation. This lower baseline of expectations and the lack of the modern "immediacy of wants" phenomenon let Suzie and me live without certain pressures that seem endemic today. Debt to fund lifestyle wasn't front and center; saving for what we needed was much more the path taken—it was just how things were done.

Take my young friends again. Their whole spare bedroom refurb was financed by the supplier, essentially enabling the work. Our whole house was completed piecemeal as we had the funds. The rewards of delayed gratification—finally putting carpet in a bedroom or hanging curtains after months of patient saving—created a contentment that made not ordering that Friday takeout or going to that party worth the sacrifice. Vacations were a fantasy.

While I wish my young friends all the happiness in the world, I wonder if easy credit has created a perfect storm where immediate gratification feels both necessary and possible, even when it's financially risky. The real luxury for Suzie and me wasn't a beautifully decorated house on day one, but the simple satisfaction that came from building our lives slowly, deliberately, and always within our budget. No credit required.

I'm not romanticizing our tiny budget—today's economic realities are challenging enough. But watching my young friends navigate a world where traditional markers of security feel increasingly elusive, I wonder if we might all benefit from occasionally pressing pause on our purchasing power. Maybe it's choosing to save for something instead of financing it, or deliberately waiting before buying something we want. In a culture where both instant gratification and economic anxiety coexist, perhaps one of the best things we could do is rediscover our ability to wait and show prudence.

The generations have clearly changed, maybe for better, maybe not, but at least one thing hasn't: dessert at the end of the meal. While I waited for the recent groom to lay down my treat, my mind wandered, settling on the famous line from the writer L.P. Hartley: “The past is a foreign country; they do things differently there.”

These words, I think, perfectly sum up my doubt. Life is different now. As I finished my sweet, I was left not with criticism, but with a quiet conviction: that the slow, deliberate pace of our early married life—our forced luxury of low expectations—was simply a different path. Perhaps in another reality, Suzie and I would have taken the money lender's coin, but I'm glad we didn't have that temptation. We truly enjoyed the slow process of building our home.

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Information on Jonathan’s Memorial Service

The information below was gleaned from William Perry’s post of the obituary published on Legacy.com by Logan Funeral Home, Inc earlier today.

A Memorial Service will be held on November 8, 2025 at 11:00 am at:

St. Peter’s Episcopal Church
313 Pine Street
Philadelphia, PA 19106

A light luncheon reception for family and friends will follow at:

The Hill-Physick House
321 S. 4th Street
Philadelphia, PA 19106
(A three-minute walk from the church)

My question is: Are any readers planning on attending?

Also would any of you be interested in a get together the night before the memorial for dinner?

I know previously Jonathan held a luncheon at his favorite pizza restaurant but unfortunately I was not able to attend so I don't know the name.

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Jonathan’s obit on Legacy.com

Jonathan Clements ObituaryObituary published on Legacy.com by Logan Funeral Home, Inc. - Philadelphia on Sep. 26, 2025.I thought many of the readers of Humble Dollar would want to google and read the published obit.

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Dear Bogdan, Sorry to Bother

Dear Bogdan, would you please send your email address to the HD writers group? There are times when we need to reach you, such as when WordPress holds a new piece whenever it has embedded web links.

Best,

-David

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What words of wisdom would you have for your younger self?

Prompted by Mark's thread I'm having a bash, although I'm sure that this will be a subject that's been covered before.

Having lived experience  to wherever you're at now and with the superpower of hindsight (not to be spent on putting every cent you theoretically had in 1980s and subsequent into Apple) what are the key things you'd say to your younger self at say the following points:

i) Starting out in the serious working world at age 21ish

ii) Into middle age and pre-retirement working life at say 45-50

iii) On the cusp of retirement or making the decision of when to go

iv) 5 years into retirement

 

Be like a gator and keep it snappy ;)

My responses so far

 

i) You'll probably stick at this job/career longer than you think so don't worry about job security and having cash on hand - be a bit bolder in putting funds away for the long term.

ii) Don't dither - start shaping what you want out of the remains of your career now.  It's no good getting the better counter offer when you're handing in your retirement notice.

iii) There's never the perfect time but there's a point in which the present value of not being tied to work exceeds the marginal security/enjoyment from further work.  Decide what goes into that value and commit.

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Bogleheads 2013 post – I Bonds, CPI, and the Government Shutdown answer

I own Treasury Inflation Protected Securities (TIPS), a small amount of I Bonds and my wife and I are both receiving social security benefits  so I have a lot of interest in what the federal government will do as far publishing the appropriate indexes that determines the upcoming inflation adjustment for TIPS, I Bonds and our social security benefit given the 10/01/2025 shutdown.

Looking around on the internet I came across this 10/15/2013 Boglehead's article.

In the article there is a link to the federal register on the topic which Appendix C, 1  includes the following -

c) If, while an inflation-indexed savings bonds is outstanding, the applicable CPI-U is discontinued or, in the judgment of the Secretary, fundamentally altered in a manner materially adverse to the interests of an investor in the security, or, in the judgment of the Secretary, altered by legislation or Executive Order in a manner materially adverse to the interests of an investor in the security, Treasury, after consulting with the Bureau of Labor Statistics or any successor agency, will substitute an appropriate alternative index. Treasury will then notify the public of the substitute index and how it will be applied. The Secretary's determinations in this regard will be final.

The conclusion of the Boglehead's 2013 article was "In other words, they get to make one up. This sentence may mean that they extrapolate, but "based on" could mean many things."

From what I have read if our 2025 shutdown lasts for an extended period then the unavailable indexes will be determined by the using the provisions of this section of the Code of Federal Regulations to determine an appropriate alternative index. I hope that any such alternative index, if one is necessary, will reflect a good faith estimate of the actual inflation.

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Cloudy with Scattered Bubbles

Each year in Seattle, our exquisite summer weather exits stage left in September, pursued by a bear worthy of Shakespeare: pervasive gloomy clouds and steady rain persist until next July. More rain accumulates in other cities, but we have more gray, cloudy days (usually 226/year).

Those many days of non-stop summer sunshine lead even the most careful to grow forgetful, leaving home without a rain shell, driving with joyous abandon on newly slick and dark roads.

So it can be too, in our financial markets, after so much sunshine.

We’ve lately lived through mostly sunny market prices. Except for April’s brief tariff tantrum, prices have risen, some rising even faster of late. Much ink has been spilled on the topic of market bubbles. Jonathan wrote this piece in 2021, before a big decline in both stock and bond prices during 2022 from a post-pandemic inflation spike.

It’s impossible to predict the future, including highs and lows of stock prices over any period. But as Warren Buffett noted in one famous speech at Sun Valley in 1999, valuing is not the same as predicting. By several measures, U.S. stocks are expensive as of market close on Sep. 30:

Warren Buffett’s metric, which divides total market cap of all U.S. stocks by current U.S. GDP is +2.43 standard deviations (SD) over its average since 1950, a new high.
Schiller’s PE, aka CAPE or CAPE10, is now +2.2 SD over its average since 1950, but below its most recent high of +3.0 SD in Dec. 1999.
Price/Sales metric, which tracks the ratio of the total price of the U.S. stock market versus total sales revenue from U.S. companies, is at +2.6 SD over average since 2000.
S&P 500 mean reversion quantifies how far market prices are off the index’s long-term average growth rate; that metric is now +2.25 SD, its highest since 1950.

While these measures are high, some at new records, they can move higher still. Once market speculation takes over, and day traders are having their fun, the exuberance can last for months or years. Or it can drop like a rock tomorrow. Such volatility is the admission fee for long-term stock returns in a portfolio, and that is the best way to build long-term wealth.

At times like this, it’s important to know what game you’re playing. If you’re a long-term investor, as are most HD readers, beware of taking buy cues from prices pushed up by day traders who sell quickly. The expected future returns of any investment bought at an exorbitantly high price will be either very low or negative. And the math of losses is brutal. Dollar-cost averaging, through regular small buys over many years, usually helps dodge this bullet.

Jeremy Grantham, a long-time value investor and student of market history, uses objective price measures plus “touchy-feely signs of euphoria” to call a bubble. Grantham writes that while no two bubbles are alike, they often share certain characteristics. Price that’s risen more than two standard deviations (+2 SD) over long-term average is one objective measure. Acceleration in the final price “melt up” phase of a bubble is typical.

And we have some winners on that account:

Robinhood (HOOD): Up over 1600% since its recent low in Nov. 2023.
nVidia (NVDA): Chipmaker darling of the AI boom, its stock is up over 1500% since its most recent low in Oct. 2022.
Bitcoin USD: Up over 500% since its recent low in Dec. 2022. Whether you like it or hate it, it seems a lot harder to love at nosebleed prices.

Those three make growth of the next tier of bubblicious candidates seem slow:

Tesla (TSLA): Despite global sales headwinds from its CEO’s impolitic comments, and the end of U.S. government EV tax credits, the stock is up 300% since its Dec. 2022 low.
Cathie Wood’s ARK Innovation ETF (ARKK): A favorite tech growth ETF which dove off a cliff in 2022, ARKK is back in the clouds growing 150% since Oct. 2023.
Microsoft (MSFT): This popular “Magnificent 7” stock is also getting an AI tailwind, growing over 130% since Oct. 2022.

The markets will always have pockets of exuberant buying, unmoored from measures of value. But when a broad market index starts outrunning its long-term average, you can almost smell the alcohol on Mr. Market’s breath. Vanguard’s S&P 500 ETF (VOO) is up over 80% since Sep. 2022, more than twice its long-term average monthly growth rate.

Even gold has gotten in on the act, now up over 130% since Oct. 2022, growth that has run far ahead of inflation. Gold prices like this remind me of Howard Marks’ quote “there are no bad assets, only bad prices.” Price matters.

Here are a few thoughts for these tricky investing times:

Don’t stop believing. If you’re young and working, tune out all market news because this, too, will pass. Keep shoveling money into your 401(k). Dollar cost averaging (DCA) through regular paycheck contributions ensures high prices will be offset later when the market corrects.
Check your parachutes. If you’re approaching retirement or retired, ensure your plan includes enough in cash and bonds to avoid the need to sell stocks when prices are later depressed. Temper your expected return assumptions for the next few years. If the stock portion of your portfolio has grown over the past few years, consider rebalancing. Or not.
Percentages not prices. Keep the primal panic parts of your brain in check: focus on percentage changes in prices, or better still, focus on percent change in total portfolio value. A drop of $10,000 sounds bad, but in a $500,000 portfolio that’s just 2%.
Aim for the middle. As Adam Grossman has noted, we get in more trouble when we take steps that land us in extreme positions. Satisfying long-term returns are more likely to happen when we aim for the middle of the road. For instance: take more care when investing large sums of cash during high market prices, perhaps using DCA for half, then do three or four buys, guided by historical value measures, for the rest.
Prepare for the sale. Eventually, stocks which have become crazy expensive will drop, first to a price range most would consider fair market value. If we’re lucky, they’ll drop further, priced at a deep discount for those who have the cash and courage to buy when others are fearful.

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Enriching Our Collective Wisdom

I'm truly a bit of a techno refusenik when it comes to social media and much of the current online content. For example, I'm honestly not 100% sure how you'd find or listen to a podcast. Vlogs are a total mystery to me. I don't know what they are, and I simply don't have the curiosity to find out.

Obviously, I'm not a total dinosaur. After all, I'm writing this post for Humble Dollar, a most decidedly online retirement and personal finance forum. In my opinion, it provides its visitors with intelligent and thoughtful reading by a small group of amateur writers as they articulate their thoughts and feelings on various retirement topics.

I've been contributing since the site moved to the forum model, trying to share my journey through revelations and experiences about my recent retirement, along with anything else I think would be of interest. My unconscious style seems to be mostly conversational and light-hearted. I guess that comes from not taking myself or life too seriously.

I was a long-time lurker, reading and enjoying the content. Over time, I realised that most articles were penned by a small portion of the readership. Seeing an opportunity to add to the material's diversity and originality, I wanted to try my hand at contributing—to give back something in appreciation for the site's efforts to educate and entertain.

My motivation for writing this particular article is simple too. I've noticed in the comments section of the authors' articles a large wealth of articulate and intelligent individuals who obviously have the talent and life experience to compose interesting and unique writing to enhance the site—but fail to do so.

I think it would be wonderful and very much appreciated if some of our commentators and the family of silent readers would share their knowledge and perspectives on topics they find interesting enough to spend their time writing, for the benefit of the whole Humble Dollar family.

In essence, I stepped up from being a silent reader, and I know many of you are just as capable. If you've been reading and waiting, come join the gang. Enrich our site with your lived experience.

Don't be shy—we don't bite... much. 😉

 

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Right Day, On Time and at the Right Place: A Rare Trio

Well, what can I say? When I wasn't paying attention, I seemed to have turned into a responsible adult. That's the thought running through my mind as I signed the consent form for my grandkids' school, allowing them to contact me with any issues during the school day. I'm second on the list after my much more sensible wife, Suzie, so I'm moving up in the world!

Getting elevated to the contact form is a direct result of retirement. Before, I was considered a bit of a dodgy inclusion due to the unpredictable nature of my whereabouts on any given day. Not ideal for a dependable emergency response during a school crisis.

This being retired business seems to have introduced other out of character behaviours into my daily repertoire. Maybe at long last I'm being moulded into a man of maturity and thoughtful actions. My wife certainly has her fingers crossed…I think I get on Suzie's last nerve on occasion.

Take my past efforts to get to appointments and social engagements on time, I've been known to arrive a week early or if I got the day correct I'd normally be 30 minutes late or turn up at the wrong venue. Friends would always pass comments if I happened to successfully get the day, time and place spot on…it was considered a noteworthy cause for celebration.

Busyness was the bane of my life. After rushing to an important meeting with my bankers, my return journey to the car was delayed for an hour looking for my car keys, only to discover I had left them in the ignition with the engine still running. It took me a few days to admit this slight disaster to Suzie, but her only response was a slight sigh and a shake of the head.

Nowadays, thanks to the newfound freedom of time gifted to me by quitting the rat race, I've found myself turning up early for all manner of events. It's such a revelation. I even got kicked in the ankle by Suzie for rolling my eyes when friends were late for a restaurant meal. My memory can be conveniently hazy when required.

My redemption continues apace. Last July, pre-retirement, I organized a flight to Manchester plus a car hire for transport to the hotel I'd booked to meet up with some friends. Somehow, I managed to turn up at the wrong airport and, due to no availability on flights, I never got there. Suzie suggested it was possibly a lot of money to spend going nowhere. This year, I organized a trip to London and not only was I early, I even got the correct airport.

Where does this yarn leave us? I'm guessing my slightly chaotic work life would have frustrated and exasperated the average Humble Dollar reader, but it seems retirement can even teach an old dog new tricks. The gift of time has been the catalyst for this metamorphosis.

My only worry now is what stories the grandkids will tell about me. The old me provided legendary material—”Remember when Pops went to the wrong city?” Now what will they have? “'Remember when Pops arrived five minutes early?” That's not passing down family folklore, that's just depressing. I may need to stage something memorable. Accidentally attending someone else's wedding, perhaps. Just to keep the legacy interesting. But I've already done that once before, that really was legendary!

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RMDs Can Improve Your Portfolio

Christine Benz at Morningstar has published an update to the article. I think this is one of the better summaries on the internet.

It provides the steps and options available when determining an RMD. She lists the “key steps to take to improve your portfolio at the same time you’re meeting your obligations with the IRS.” She also discusses penalties for non-compliance and approaches to pruning and asset re-allocation.

Using Morningstar Style Box and sector exposure is suggested as a tool, but for those with a variety of index funds this might not be essential.

There is a section about what to do with the proceeds from that RMD, as well as the benefits of QCD charitable contributions.

https://www.morningstar.com/personal-...

 

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