Jonathan Clements's Blog, page 17
September 16, 2025
Ten Frugal Habits
This article popped up in my email this morning, and a lot of the advice reminded me of various HumbleDollar discussions: https://www.thewealthminded.com/lifestyle-and-money/10-frugal-habits-that-secretly-make-you-wealthier?lctg=64810442f2b7387f8e68c961
I didn’t actually resonate with most of them. I do #5 (automate savings) and #7 (cook at home), and I’m working on the “cancel subscriptions” (#8) thing. The rest of it, not so much.
OK, a couple of caveats. If we were in a financial spot where money was extremely tight and we had to watch every penny, I’d probably do some combination of #1 (track spending) and #2 (make a budget). After all, I do track calories to keep myself accountable, and I have calorie goals (a “budget,” if you will)—slightly different between weekdays and weekends, but I calculate success by my weekly averages. But once our financial situation loosened up a bit—I’d say in our 40s; we were pretty strapped in our 20s and 30s—I figured that if bills were paid, debt was limited, and savings goals were met, I didn’t have to fuss over extra toppings on our Friday night pizza, and so forth.
#4 on the list is “buy used,” and we did that for decades with our cars—bought late-model used Toyotas, drove them until the wheels were about to fall off, and then bought another—but our current version of that is to buy new to get the latest technology, reliability, and safety features and then drive them for a really long time. I guess we “bought used” for our first two houses; our current home, a condo, was new construction, but that wasn’t especially a “new vs used” decision but rather a home that was a good fit for our stage of life.
#3, DIY? Well, other than the aforementioned cooking, nope, not me, not gonna happen. My husband is less inept than I am, but honestly not by much.
What do you think about this list?
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The Catch-22 of Success: How Our Achievements Shape Our Children’s Choices
I've just got a hug from my daughter as she heads out our door to make her way home. I always have a sense of regret when a visit from one of our children ends. It's always lovely to see them, but with my youngest child I admit to normally heaving a sigh of relief. Not very fatherly, but she truly vexes me.
Let me explain my difficulty. My daughter is 27 and, to my mind, going on 13 when it comes to her ability to hold firm financial opinions. Around finance, it seems whatever is the flavour of the day on TikTok becomes the firmly held conviction of the moment. Trending narrative is, to my daughter's mind, the last word on the subject.
This situation presents a tough challenge. Do I keep trying to offer advice that she's likely to reject? Or do I step back and let her learn her own lessons, no matter how painful they might be? It's a difficult balance to strike, and there's no easy answer.
At present I'm in a non-committal phase of our relationship. Whatever financial wisdom is imparted by my dear child is acknowledged with a generic response like "very good" or "I see" before moving our chat onto a more promising avenue.
The difficult part is that the anxiety doesn't just disappear. While I'm no longer debating with her, I'm still worried about her future. This, I guess, is one of the challenges of being a parent: we can't always save our children from themselves, but we can always be there for them. By choosing to step back from the debates, I'm ensuring I'll still be a safe and supportive presence in her life if and when she needs me.
While my approach is working in the sense of "keeping the peace," I truly find it an unsatisfactory impasse, and I can't see a natural pathway for a better resolution. I guess sometimes in life, knowledge and understanding has to be experienced to be learned, even if the financial consequences could be messy. It's hard to step back. I find this doubly frustrating because I feel her generation has a more difficult path than mine.
I console myself with the thought that my parents maybe had doubts about my financial choices, although by 27 I very much doubt that. I was two years away from starting my own business and already owned my own home. I guess being successful in all areas of life is too much to expect, but it would be lovely to eventually succeed with this thorny problem.
The only possible positive outlook is that future security for both my daughters is reasonably good due to the successful financial lives my wife Suzie and I have achieved. Although that won't be until both our passing—hopefully, for us, a long time in the future! But at least we all have a crutch to lean on, even if it's for different reasons between our two generations.
But the question has to be asked: does our success influence the very problem I worry about? Is it a catch-22 situation? Have I created a dilemma due to our very different experiences, causing a different relationship with money? I have no answer. Sometimes family life doesn't present a neat solution.
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September 15, 2025
Final Secure 2.0 regulations regarding catch up contributions
My initial reading of a summary has two key takeaways for me.
A requirement that catch-up contributions that will require such catch-up contributions to be ROTH for certain taxpayers based their on earned income ($145K indexed) of the prior tax year.
The effective date of the new catch-up provision will now be for tax years after 12/31/2026, so starting in 2027 for plans using calendar years.
I am certain there will be matters in final regulations that will be of concern to others. An advanced copy of the 94 pages of final regulations are here.
A more readable early read summary from the National Association of Plan Advisors (NAPA) is what I am currently reading. The NAPA comment "Under SECURE 2.0, the deadline for compliance was initially for tax years beginning after Dec. 31, 2023, but it was postponed to 2026 by the IRS due to its administrative complexity." is a understatement of the tax complexity these regulations require. Ultimately the cost of such tax complexity will be absorbed by the plan participants regardless if they make catch-up contributions or not.
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A bit selfish, but still seeking peace of mind
HD writers and commentators have discussed a wide range of topics related to an enjoyable retirement. Finances is a primary topic, including investments and drawdowns, budgets and such. Closely following is use of time and dealing with the break from a working life.
I think I am fighting a mid-retirement life crisis. All I want now is peace of mind, and to limit stress as much as possible. I don’t want to worry, but that is not happening lately. Perhaps my quest is a bit selfish because I know for sure there are many, many people coping with far worse vicissitudes than I am.
Connie is in the process of being diagnosed with something requiring a CT scan and other tests. I am concerned, perhaps over little or nothing.
Two good friends were just diagnosed with cancer, one that requires life changing surgery. Last week a long time friend died.
Switching to more mundane matters our fridge just gave up, leaving it and the freezer full of spoiling food. We had just stocked the freezer. Now comes the aggravation of shopping for a new one and the hassle of delivery interwoven with previous plans we had.
The fridge shouldn’t have been a surprise. All our appliances are at least twelve years old, all coming when the condo was built. There is talk of replacing the stove and dishwasher too. That is Connie talking, but I know she is right.
As we were having breakfast at a local diner - no edible food in the house- and discussing our collective woes, I mentioned the one silver lining.
“Tell me” Connie asked. “At least we can pay for it,” I said. There we are, back to money and in this case emergency funds. The fridge is around $4,000, but we haven’t priced the other items yet. 🤑
At least that’s one worry forgone. One luxury that I know many people don’t have. Money doesn’t buy happiness, money isn’t the answer to most problems, but on occasion having a little squirreled away can ease stress.
Last evening we got word the garage door at our building is stuck - closed. Our cars are inside - we are trapped. I’m hoping the repair crew will have a better day when they get here. I’m told there must be a manual way to open the door. 🥵
All I want is a good nights sleep, relaxing with little on my mind. Retirement doesn’t allow you to escape life though, as all retirees know.
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Retirement Begins Long Before You Retire
Including my time delivering newspapers, I’ve had a total of ten different employers in my life. Some jobs were more memorable than others. One of my early roles was at a company that created merchandise catalogs for department stores.
I was twenty—shy, insecure, and working part-time while attending college. I mostly did the tasks no one else wanted: vacuuming, taking out the trash, cleaning the bathrooms. Yet, two women at that company saw potential in me that I couldn’t yet see in myself.
One was Leni, the owner. She encouraged me to switch my major from history to business and promised that if I earned a business degree, she would make me her right-hand person. The other was Jodi, my age, who worked on staging photo shoots—and sometimes modeled herself. Fred from shipping insisted she liked me, but I never had the courage to find out.
I never took Leni up on her offer. Perhaps it was because her son, who also worked there, didn’t like me. Or maybe I simply didn’t believe in myself. As for Jodi, I never asked her out. I couldn’t imagine someone like her being interested in a guy who cleaned toilets and had no plan for his life. My shyness held me back, too.
These days, I’m no longer that shy, self-doubting kid. I tend to speak my mind—which brings me to retirement. Looking back, I realize that the habits I struggled with in my early jobs—self-doubt, hesitation, and risk avoidance—can have real consequences later in life, especially as we approach retirement. Some of what I’m about to say might be uncomfortable, but it’s important.
Here are three ways people sabotage their own retirement:
1. Neglecting our health
On a seven-hour flight to Amsterdam, the man next to me drank two regular Cokes, a glass of orange juice, and capped it off with a slice of chocolate cheesecake. It made me think about friends who never reached retirement—or whose retirements were cut short—because they didn’t take care of themselves.
I recently had lunch with my high school friend, Mark, who has diabetes. His doctor told him, “I can see from your bloodwork that you’re not following my advice. Why do you even come in if you won’t listen?” Even so, Mark still ate rice with his meal, a reminder that good intentions alone aren’t enough.
2. Divorce
I’ve seen how relationship stress can impact retirement. A couple I knew spent years arguing over blame and unmet expectations. Their inability to communicate and compromise eventually led to separation, which not only caused emotional pain but also financial strain—an example of how personal choices can shape the quality of retirement.
3. Not avoiding unnecessary risk
I was amazed at the number of people riding bikes in Amsterdam, especially the elderly, none of whom wore helmets. While biking may not seem dangerous, even small risks can have major consequences.
Take Dave, my former coworker. He planned to retire after paying off his four-year truck loan. But during a charity ride, he went headfirst over the handlebars, ignoring warning signs from earlier falls during training. The accident left him unable to work, and cost him not only his job but also his marriage.
Each of these examples—poor health choices, failed relationships, and avoidable risks—serve as reminders that retirement isn’t just about money. It’s about arriving at that stage of life with your body, relationships, and peace of mind intact.
Looking back, I often wonder how things might have turned out if I had taken more chances when I was younger—if I had believed in myself the way Leni and Jodi did. But perhaps those missed opportunities helped shape my awareness now. They taught me that the decisions we make—or avoid—don’t just affect our careers. They ripple into our later years, into our health, our relationships, and the freedom we hope to enjoy when we finally stop working.
If you still have time ahead of you, don’t wait. Take care of your body. Nurture the relationships that matter. And think twice before taking unnecessary risks that could derail your future. Retirement is not just a destination—it’s the result of a thousand choices we make along the way.
If you’re like me—no longer twenty—remember: it’s never too late to make better choices. We can’t rewrite the past, but we can shape what comes next.
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The Long Dander Home: Being Close to Your Crew
I think I'm getting in the way. Nothing specific drives this feeling—it's just a tingling sense from a longtime marriage. Although a suggestion from my wife Suzie about "perhaps taking yourself out for a dander would be helpful" could possibly be concrete evidence of my suspicion.
My getting underfoot arises from the fact we're organizing to return to our permanent home after spending the summer at our vacation house. There's a lot of things to do, and Suzie has decided I'm only useful when something heavy needs doing—although even then I'm under constant supervision.
After taking Suzie's suggestion under advisement, I find myself walking along the shoreline thinking about our decision to head home. I'm going to miss being here, a lot. But I guess we have to return to reality sometime, and I've things to do and people to see.
My half-acre garden hasn't been tended for a long time, and I suspect it's going to be like a jungle. Hopefully I don't get lost finding the lawnmower! An area of garden decking has developed a slump from a broken subframe, and I want to play with some power tools and start repairing before fall shortens the daylight hours.
Many things are calling us back. My WhatsApp messenger notifications have been giving my phone severe palpitations with the number of alerts from sporting groups organizing for the coming sporting season. I even have my first excuse for rubbish tennis in the barrel—not playing for twelve weeks.
We've had lots of friends and family visiting and staying over throughout the summer, but rather annoyingly they don't stay long enough for me to get under their skin and have fun annoying them until they retaliate. Then we fall into our regular playful and friendly bickering relationships. I've had to rely on Suzie for that, but she's much better than me!
Our little patch of coastal charm has everything we could dream of, but it simply can't compete with the feeling of friendships and community living in the same place our social circle and family call home. It would seem, although I'm retired and having a ball, somehow it still matters to be close to your crew.
Reaching the end of the empty beach, I linger for a while. Childishly skipping stones into the swell. I guess I had better head back, I'm sure Suzie needs my "help"—it's time to go pack. Walking back, my mind thinks of home. Oh man, I slowly remember—I have to clear the guttering and the shed roof needs to be fixed …
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September 14, 2025
The Financial Metric I Refuse to Calculate
I guess I'm going to be hounded out of the forum with pitchforks and flaming torches for confiding this dirty little secret. Apparently, confession is a catalyst for redemption, so here's the truth: I never have and probably never will produce a statement of net worth.
I really don't see the point. My two homes and cars aren't for sale, and their personal contents are just that—personal and not for sale. Since I don't view any of these possessions as liquid, they hold no practical monetary value for me. I only care about knowing the position and value of my actual liquidity: cash, stocks, and bonds.
My financial foundation is built on zero debt. Given this principle, I can't chip a brick from my home's wall or remove a wing mirror from my car to use either as payment at the grocery store. These items are irrelevant to my financial planning, as are the assets they belong to.
To me, the only reason to include illiquid assets in financial calculations is if you plan on leveraging those assets to take on debt—which I don't. My illiquid assets, along with remaining liquid assets, will simply be passed on to my children and grandchildren to do with as they choose.
It won't be a difficult task for my heirs to sell any illiquid assets and valuable personal possessions to distribute the money as per the will. They'll just have to accept any impediment as a fee to access my illiquid assets. However, it won't be difficult because a detailed account of my liquid assets will be available, and all deeds, titles, and policies will be deposited with the will.
My wife Suzie is fully on board with this philosophy and is fully aware of all our financial positions should I shuffle off this mortal coil first. I think this position is logical within our own narrow frame of reference. That is, zero debt and a strong focus on liquidity for day-to-day living and planning. The net worth of our illiquid assets is "irrelevant" because we have no intention of using it for personal consumption.
There's also the matter that I can't be bothered going through all the faffing about to produce the document, but I'm not going to mention that 😉
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September 13, 2025
Philosophy Around Phone Upgrades
I’ve been using an iPhone XR for almost 8 years now. It’s crazy to think about as I bought it back when it first came out, and somehow it’s still chugging along. The battery isn’t great anymore and the camera definitely shows its age, but it still does the job.
With Apple dropping their newest iPhone, I’m finally thinking about upgrading. Part of me feels like I’ve squeezed every drop of life out of this XR, but I’m also not someone who likes upgrading just to have the latest thing.
So I’m curious, how do you handle your phone upgrades? How long do you usually keep your phones?
I’ve always bought unlocked phones, but my wife’s family has been doing Costco’s AT&T deals since they get a lot of money for trade ins.
Feels like I’ve pushed mine longer than most people, but maybe I’m not the only one out here still hanging onto an old device.
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What is retirement?
I think that's a great definition of retirement - the ability to do what you want whether or not you get paid. He thinks he's retired, I think he's retired, do you? If not, why not? Or take my case. I spent 30 years working full-time as a techie at a large corporation. October 1st 2000 I retired and started my pension. The next day I went back to work at the same job as a part-time contractor. August 2001 I left the corporation for good and embarked on a four month trip. Back home, in February 2002 I got a part-time job, between trips, as a tech writer at a local start up. April 2004, when I left on a ten month trip was the last time I worked there. When I got back in early 2005 I decided to stop work altogether.
So, when did I retire? I think it was 2000, when I started my pension. But was it instead 2001, when I left the corporation, or 2004, the last time I worked for pay, or 2005, when I decided not to look for another job?
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September 12, 2025
Navigating the Unknowns of Financial Decisions
Why?
Ian Wilson, a former executive at General Electric, explained it this way: “No amount of sophistication is going to allay the fact that all knowledge is about the past, and all decisions are about the future.” In the absence of a crystal ball, in other words, even the most seemingly rigorous answer to any question will contain a kernel, if not more, of uncertainty.
Consider the question of how to establish an asset allocation. Most people’s first step would be to consult historical data, reviewing past returns for each asset class. That makes sense, and this is certainly how I approach it myself.
The challenge, though, is that historical numbers will never be able to perfectly predict the future. At best, they’re a guide, suggesting where things might go.
I mentioned recently, for example, investors’ experience in Japan’s stock market. During the 1980s, Japan’s economy boomed. But after peaking in 1989, the Nikkei Index went into a multi-decade slump, recovering only last year, after a long, 34-year slump. It’s doubtful, though, that even the most pessimistic observer could have predicted that result.
Such is the difficulty of using historical data. We can’t fully rely on it. And yet, despite its inherent weakness, we also can’t ignore it. Fortunately, there are ways to square this circle. To see how, we can examine four common financial questions.
Budgeting
Suppose you’re building a retirement plan and trying to estimate your annual expenses. You could do the math, and that’s certainly a good starting point. But just as with estimating market returns, that number will be necessarily imperfect. Especially when projecting many years into the future, expenses could turn out to be higher for any number of reasons.
Very often, for example, retirees use their newfound freedom to travel more. Or they might have higher healthcare expenses or might decide to help their adult children more. It’s very hard to predict, and that uncertainty can make it difficult to build a reliable plan.
The solution?
In this case, you could try inverting the question. Instead of asking whether your estimated expenses would be sustainable, ask what the maximum sustainable spending level might be. If you think your expenses will be $100,000, for example, test to see whether your assets would support spending of $150,000 or $200,000, or more. Try identifying that outer bound.
Insurance
You may be familiar with umbrella insurance, which provides additional liability coverage on top of standard home and auto insurance. It can be enormously valuable, but many people are unsure how much to purchase. One common approach is to match the coverage level to one’s net worth. Someone with $5 million, for example, might secure $5 million of coverage.
That’s one approach, but if you ask attorneys, they’ll tell you that the right coverage level is actually unknowable. That’s because judgments in accident cases are driven by the damages involved, so someone’s net worth generally isn’t relevant.
At the same time, however, attorneys will also acknowledge that, all things being equal, personal injury lawyers will always prefer to pursue someone with a higher net worth.
In other words, net worth shouldn’t matter, but it does. As a result, there ends up being no single, mathematically “correct” way to choose a coverage level. Each approach has some merit but is also imperfect.
How can you arrive at an answer?
In this case, a good approach might be to triangulate. Use the numbers derived from each perspective to arrive at a final answer that seems to make sense.
Gifting
If you have adult children and are thinking about helping them financially, that’s another area where the calculator can’t provide a perfect answer. That’s because it involves the intersection of money and family relationships.
Consider a discussion that the late Charlie Munger once had with a friend. Charlie’s friend asked him if he planned to leave his fortune to his children. Charlie said yes. His friend then asked if he worried it might have an adverse effect on his children’s work ethic. Charlie’s response: “Of course it will, but you still have to do it. Because if you don’t give them the money, they’ll hate you.” In other words, this isn’t just a math problem.
Another complicating factor is equity. If you have more than one child, chances are that their financial circumstances are not all the same. And yet, on principle, many parents feel that children should be treated equally.
And finally, there’s the question of when to make gifts. Should gifts be made early, to help children as they’re getting started, or only after they’ve settled down? Or should they receive gifts much later, only by way of inheritance?
None of these questions is easy, and none has a mathematically right answer. The solution? My suggestion would be to just get started.
Choose a modest number for some initial gifts, then assess how things go. See how your children react to that first gift and how they use it. That information can then inform the size, pace and structure of future gifts.
Trusts . Suppose you want to use a trust to convey assets to your children. It sounds simple, until you consider the question of how and when to distribute those assets. You could specify distributions at specific ages or stages, like when a child reaches 25 or 35 years old, for example, or when they get married. Or you could limit distributions to specific needs, such as education or a home purchase. Another approach would be to limit distributions to a fixed percentage each year.
Each framework is logical in its own way but also carries flaws. That’s why some parents decide to leave distributions entirely to the trustee’s discretion. Adding this element of human judgment might seem to sidestep other complications, but that too is imperfect, as many families find out. Trustees are human, and thus imperfect as well.
What’s a solution? In this case, keep in mind that financial decisions need not be viewed through an either-or lens. Instead, you could go with a hybrid approach. You might include a distribution timetable according to your children’s ages but also allow the trustee to override that timetable in specific circumstances—perhaps for the purchase of a home.
Stephen Schwarzman, the billionaire founder of the Blackstone Group, jokes that his math skills are “primitive.” In his view, though, he’s been successful because financial decision-making isn’t just about the math and doesn’t require perfect precision. More than anything, he says, it requires the ability to make judgments in the face of incomplete information.
Adam M. Grossman is the founder of Mayport, a fixed-fee wealth management firm. Sign up for Adam's Daily Ideas email, follow him on X @AdamMGrossman and check out his earlier articles.The post Navigating the Unknowns of Financial Decisions appeared first on HumbleDollar.
