Asking the Editor
NINE MONTHS AGO, Jonathan Clements shared with readers that he’d been diagnosed with an incurable form of cancer. It was devastating news, especially for longtime readers, many of whom regard Jonathan not only as a journalist but also a friend. I count myself among them, so I was grateful that Jonathan agreed to sit for an interview to share more about his background, his early years and his current thinking.
You’ve joked that, when you’re in England, people think you’re American, but when you’re in America, people think you’re English.
I was born in London. But when I was three, my father moved our family to the U.S. to work for the World Bank in Washington. Just before I turned 10, he got posted to Bangladesh for four years, at which point my brothers and I got packed off to boarding school in England. I ended up spending nine years at an English boarding school, which probably explains a lot.
Can you say more about that?
It was a great education and a really rough way to spend your adolescent years. If you take young males and put them in close captivity for days on end, things do not work out well. It was a brutal environment, and you couldn’t escape.
It was during this period that I got interested in economics. I was also writing for the school magazine. I wrote a piece when I was at boarding school that ended up getting published in the school magazine under the headline, “Organ Transplant Fails.” It was about how the school spent £30,000 on a new organ for the church when other facilities were being neglected. Somehow, I managed to get it published, which earned me the enmity of a host of people. But in many ways, that was my entrée to becoming a journalist.
That’s when you knew you wanted to go into journalism?
Just before my 19th birthday, I took the Cambridge entrance exam, but I had nine months until I was meant to be up at Cambridge and needed to do something in the months ahead. By then, my parents were back in the U.S., so I phoned up a local newspaper in suburban Washington called the Potomac Almanac. That’s where I cut my teeth. I spent the next eight months working there. It was a small paper. I ended up as the education reporter, the sports reporter, the police reporter and the business reporter. It was so much fun.
The editor of the paper was this wonderful woman called Leslie Leven. She was probably the most important mentor I had.
Tell me about Cambridge.
I immediately got involved with the student newspaper and ended up as editor. To give you an indication of how I spent my time at Cambridge, in my second-to-last term, I went to exactly four lectures. I spent the rest of my time working on the paper.
The student paper came out every Friday, and it was put to bed on Thursday night. So, every Thursday night, I didn’t go to bed. We’d paste up the paper through the night, generally finishing around 7 a.m. Then we would go out to breakfast, head back to our rooms, fall asleep, and then get up around midday. Now, I can’t stay up past 9 p.m.
After college?
I worked for a specialty finance magazine in London called Euromoney. I did that for 13 months, and then decided that I wanted to be back in the U.S. I moved to the New York area without a job. I got a position as a reporter at Forbes magazine. Now, when you hear "reporter," it sounds like it’s a decent position, but reporter really means I was a fact checker.
After 23 months at Forbes, I managed to get promoted to staff writer. I was given the mutual funds beat and did that for a year and a half. I then got hired away by the Journal. I covered mutual funds for the Journal for a few years.
Do you remember your first article for the Journal?
It was about Dreyfus Corporation. I remember, when that article came out, sitting on the New York City subway and watching somebody read my article, which was a strange experience.
Along those lines, probably 25 years ago, I was at a conference in Napa Valley, and I was sitting next to [Nobel Prize winner] Bill Sharpe, and I watched him read one of my articles. Not for the faint of heart. I kept waiting for him to turn to me and pass judgment. But he didn’t.
You also talked about meeting Vanguard Group founder Jack Bogle.
Jack was definitely the most memorable guy I’ve ever met. My favorite Jack Bogle story was from 2005 or 2006. Jack was in downtown Manhattan. He calls me and says, “I’ve got a couple hours until my next appointment. Can I stop by and use a desk?” And I was like, sure. So, he walks into this newsroom full of reporters who are not easily impressed and, within minutes, he has everybody’s attention. He sits down in one of the cubicles and starts making calls. It was almost like he was a journalist himself.
Jack had this relentless drive, and this plays in my head a little bit at this point in my life. He just kept going and going. He didn’t stop right up until the end, and I wondered whether his family felt neglected. But after his death, I had the opportunity to speak with one of his daughters. To my surprise, she said they used to wonder whether their dad had a job, because he seemed to be at home all the time.
Many people remember your “Getting Going” column at the Journal. How did that come about?
The Journal was a wonderful place to work, but it definitely had a distinctive culture. Giving anything that smacked of financial advice was verboten. I remember I caused an uproar by running a story on mutual funds that included the 800 numbers for the funds involved. The notion that we could help readers by telling them how to find these funds was beyond the pale. The deputy managing editor had to weigh in. He said it’s alright to include 800 numbers, but they can’t appear above the newspaper fold.
In 1994, the Journal decided they were willing to consider some columnists for the news pages, and I put up my hand. To my surprise, at age 31, I was one of three people picked. One of the others was Walt Mossberg, who wrote the technology column.
What were some of your most popular articles at the Journal?
Anything with a list, anything that mentioned my kids, and anything on the topic of money and happiness.
What’s changed since those days?
Go back to the late 1980s and through the 1990s, all the focus was on investing, how to build a portfolio, what’s the expected return, yada yada yada. Since then, people have realized that there’s a limit to how much we can optimize a portfolio. Instead, there’s a lot of focus on other issues, like helping people buy the right-size home, making sure they have all their estate-planning documents, making sure they have the right insurance policies, making sure they claim Social Security at the right age, and so on. There has been more focus on the psychological aspects of managing money. And finally, there’s now a focus on helping people figure out what money means to them.
At the Journal, you became well known for advocating index funds. At what point did you arrive at that philosophy?
At Forbes and also in my early years at the Journal, a common story format was the fund manager interview and, as part of that, the fund manager would typically offer three stock picks. Those recommendations were no better than coin flips and maybe worse. There was one guy I profiled who had a really good record. The company that was the fund’s top holding turned out to be pretty much a fraud.
Do you remember your final article at the Journal?
When I left in 2008, I wrote a piece about three ways that money can help happiness. One, money can give you a sense of financial security. Two, it can allow you to spend your days doing what you love. And three, it can allow you to have special times with friends and family. I believe that those are the three ingredients for not only a happy financial life, but also a happy life—period. It’s certainly the three things that I’m focused on.
What do you see as the next frontier in personal finance?
I still don’t think we have a good way of assessing people’s risk tolerance. There are also all kinds of interesting psychological insights that could be brought to bear on personal finance. For instance, there are the five personality types. I think that’s interesting stuff, but we need to make the connection between that and financial behavior.
Because of your upbringing, you have more of a global outlook than most investors. How do you think that’s influenced your thinking?
I own a globally diversified stock portfolio. My default investment is Vanguard Total World Stock fund. My performance has suffered because of it, but I’m not going to change. I still think that, for investors, the starting point should be the global market portfolio, and then you have to decide how you’re going to deviate from that.
Can you describe how the idea for HumbleDollar came to you?
I’d like to say I had a vision for HumbleDollar, but I didn’t. After I left Citigroup in 2014, I worked on a book called the Jonathan Clements Money Guide, which was going to be annually updated. But I realized that the day it appeared it was out of date, so I decided to put it on the web, where I could update it continuously. To make the site more interesting, I figured I’d start blogging, and I would see if other people were interested in blogging as well.
I racked my brain for months trying to come up with a name for the site. It had to be something to do with money, and I wanted a word that would express my financial philosophy. Somewhere in the middle of the night, the words “humble” and “dollar” met in my brain. I got out of bed, it was 2 a.m., and I went to GoDaddy and banged in humbledollar.com, and it was available. That’s how HumbleDollar was born.
Since your diagnosis, you’ve written about the steps you’ve taken to streamline your finances. Are there things you’ve learned that you’d recommend to others?
I’ve moved four times in the past 14 years, and each time I’ve thrown stuff out. We hang on to this stuff thinking that it’s so important, and it simply isn’t. I cannot think of anything I’ve thrown away that I want back.
What approach did you take toward financial education with your children?
Talking about money is important. But the behavior that you model is much more critical. My kids learned from my frugality. They both have very good financial habits. In fact, their financial habits are probably too good. Maybe I emphasized frugality too much.
Was frugality something that your parents modeled?
I credit the frugality to what I call our big family story. When my great-great grandfather died in 1888, the newspapers said that he was one of the richest men in England. All that money was inherited by my great-grandmother Lillian, and she lived the Downton Abbey lifestyle. She had an estate in the Cotswolds with five houses on it.
Lillian had eight kids. Three of them died relatively early on. Five of them inherited the fortune and, with one exception, the fortune was blown, often in short order. That was the story I grew up with, and the message was clear: You’ve got to be careful about money. My two brothers, my sister and I are all very different people, but all of us are frugal, and I credit this great family story.
There’s a message here for readers: Think carefully about the family stories that you tell to your kids because they’ll guide their behavior. You can lecture all you want, and they might listen to you. But if you tell a really compelling story, it can change their behavior.
Has your thinking changed about anything since your diagnosis?
In the last couple of years, I’ve become better about giving money to my kids and funding my grandchildren’s 529 plans. In retrospect, I think I should have started earlier and could have been more generous, because it’s clear to me that I’d never have been able to spend all this money I’ve accumulated, even if I did live to a ripe old age.
If you’re pretty sure that your kids have good financial habits, and you’re not going to undermine their ambitions or send them on some wayward path, by all means give them money now. Why have them live with unnecessary financial anxiety? Why not make them feel a little more financially secure? I really believe that’s one of the greatest gifts that we can give to family members, this sense of financial security.
Would you have done anything differently? You’ve joked that you would’ve had more French fries.
I love French fries. They’re probably my favorite food. But even at this late stage, I find it hard to order French fries because I know they’re unhealthy.
Over the years, you’ve mentioned that your asset allocation has always been aggressive. Can you say more about how you were able to tolerate that risk?
I’ve always had a strong faith in capitalism and in the stock market. I’ve never had any doubt during a market decline that share prices would recover. I’ve almost always had at least 80% in stocks. Right now, I’m at 92%. My diagnosis has not changed my allocation because I’m not investing for myself anymore. I’m investing for Elaine and for my kids.
In your writing, you’ve shared that you aren’t feeling negative emotions about your diagnosis. In fact, you wrote that your first reaction was, “I’m okay with this.” Can you say more about that?
I feel like I’ve been very fortunate. It’s not that bad things haven’t happened in my life. They have. But I’ve been able to spend my life doing what I love. I have a close-knit family, and I’ve largely been free of financial worry. All in all, I feel like I’ve managed to get a whole lot out of my life.
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.
You’ve joked that, when you’re in England, people think you’re American, but when you’re in America, people think you’re English.
I was born in London. But when I was three, my father moved our family to the U.S. to work for the World Bank in Washington. Just before I turned 10, he got posted to Bangladesh for four years, at which point my brothers and I got packed off to boarding school in England. I ended up spending nine years at an English boarding school, which probably explains a lot.
Can you say more about that?
It was a great education and a really rough way to spend your adolescent years. If you take young males and put them in close captivity for days on end, things do not work out well. It was a brutal environment, and you couldn’t escape.
It was during this period that I got interested in economics. I was also writing for the school magazine. I wrote a piece when I was at boarding school that ended up getting published in the school magazine under the headline, “Organ Transplant Fails.” It was about how the school spent £30,000 on a new organ for the church when other facilities were being neglected. Somehow, I managed to get it published, which earned me the enmity of a host of people. But in many ways, that was my entrée to becoming a journalist.
That’s when you knew you wanted to go into journalism?
Just before my 19th birthday, I took the Cambridge entrance exam, but I had nine months until I was meant to be up at Cambridge and needed to do something in the months ahead. By then, my parents were back in the U.S., so I phoned up a local newspaper in suburban Washington called the Potomac Almanac. That’s where I cut my teeth. I spent the next eight months working there. It was a small paper. I ended up as the education reporter, the sports reporter, the police reporter and the business reporter. It was so much fun.
The editor of the paper was this wonderful woman called Leslie Leven. She was probably the most important mentor I had.
Tell me about Cambridge.
I immediately got involved with the student newspaper and ended up as editor. To give you an indication of how I spent my time at Cambridge, in my second-to-last term, I went to exactly four lectures. I spent the rest of my time working on the paper.
The student paper came out every Friday, and it was put to bed on Thursday night. So, every Thursday night, I didn’t go to bed. We’d paste up the paper through the night, generally finishing around 7 a.m. Then we would go out to breakfast, head back to our rooms, fall asleep, and then get up around midday. Now, I can’t stay up past 9 p.m.
After college?
I worked for a specialty finance magazine in London called Euromoney. I did that for 13 months, and then decided that I wanted to be back in the U.S. I moved to the New York area without a job. I got a position as a reporter at Forbes magazine. Now, when you hear "reporter," it sounds like it’s a decent position, but reporter really means I was a fact checker.
After 23 months at Forbes, I managed to get promoted to staff writer. I was given the mutual funds beat and did that for a year and a half. I then got hired away by the Journal. I covered mutual funds for the Journal for a few years.
Do you remember your first article for the Journal?
It was about Dreyfus Corporation. I remember, when that article came out, sitting on the New York City subway and watching somebody read my article, which was a strange experience.
Along those lines, probably 25 years ago, I was at a conference in Napa Valley, and I was sitting next to [Nobel Prize winner] Bill Sharpe, and I watched him read one of my articles. Not for the faint of heart. I kept waiting for him to turn to me and pass judgment. But he didn’t.
You also talked about meeting Vanguard Group founder Jack Bogle.
Jack was definitely the most memorable guy I’ve ever met. My favorite Jack Bogle story was from 2005 or 2006. Jack was in downtown Manhattan. He calls me and says, “I’ve got a couple hours until my next appointment. Can I stop by and use a desk?” And I was like, sure. So, he walks into this newsroom full of reporters who are not easily impressed and, within minutes, he has everybody’s attention. He sits down in one of the cubicles and starts making calls. It was almost like he was a journalist himself.
Jack had this relentless drive, and this plays in my head a little bit at this point in my life. He just kept going and going. He didn’t stop right up until the end, and I wondered whether his family felt neglected. But after his death, I had the opportunity to speak with one of his daughters. To my surprise, she said they used to wonder whether their dad had a job, because he seemed to be at home all the time.
Many people remember your “Getting Going” column at the Journal. How did that come about?
The Journal was a wonderful place to work, but it definitely had a distinctive culture. Giving anything that smacked of financial advice was verboten. I remember I caused an uproar by running a story on mutual funds that included the 800 numbers for the funds involved. The notion that we could help readers by telling them how to find these funds was beyond the pale. The deputy managing editor had to weigh in. He said it’s alright to include 800 numbers, but they can’t appear above the newspaper fold.
In 1994, the Journal decided they were willing to consider some columnists for the news pages, and I put up my hand. To my surprise, at age 31, I was one of three people picked. One of the others was Walt Mossberg, who wrote the technology column.
What were some of your most popular articles at the Journal?
Anything with a list, anything that mentioned my kids, and anything on the topic of money and happiness.
What’s changed since those days?
Go back to the late 1980s and through the 1990s, all the focus was on investing, how to build a portfolio, what’s the expected return, yada yada yada. Since then, people have realized that there’s a limit to how much we can optimize a portfolio. Instead, there’s a lot of focus on other issues, like helping people buy the right-size home, making sure they have all their estate-planning documents, making sure they have the right insurance policies, making sure they claim Social Security at the right age, and so on. There has been more focus on the psychological aspects of managing money. And finally, there’s now a focus on helping people figure out what money means to them.
At the Journal, you became well known for advocating index funds. At what point did you arrive at that philosophy?
At Forbes and also in my early years at the Journal, a common story format was the fund manager interview and, as part of that, the fund manager would typically offer three stock picks. Those recommendations were no better than coin flips and maybe worse. There was one guy I profiled who had a really good record. The company that was the fund’s top holding turned out to be pretty much a fraud.
Do you remember your final article at the Journal?
When I left in 2008, I wrote a piece about three ways that money can help happiness. One, money can give you a sense of financial security. Two, it can allow you to spend your days doing what you love. And three, it can allow you to have special times with friends and family. I believe that those are the three ingredients for not only a happy financial life, but also a happy life—period. It’s certainly the three things that I’m focused on.
What do you see as the next frontier in personal finance?
I still don’t think we have a good way of assessing people’s risk tolerance. There are also all kinds of interesting psychological insights that could be brought to bear on personal finance. For instance, there are the five personality types. I think that’s interesting stuff, but we need to make the connection between that and financial behavior.
Because of your upbringing, you have more of a global outlook than most investors. How do you think that’s influenced your thinking?
I own a globally diversified stock portfolio. My default investment is Vanguard Total World Stock fund. My performance has suffered because of it, but I’m not going to change. I still think that, for investors, the starting point should be the global market portfolio, and then you have to decide how you’re going to deviate from that.
Can you describe how the idea for HumbleDollar came to you?
I’d like to say I had a vision for HumbleDollar, but I didn’t. After I left Citigroup in 2014, I worked on a book called the Jonathan Clements Money Guide, which was going to be annually updated. But I realized that the day it appeared it was out of date, so I decided to put it on the web, where I could update it continuously. To make the site more interesting, I figured I’d start blogging, and I would see if other people were interested in blogging as well.
I racked my brain for months trying to come up with a name for the site. It had to be something to do with money, and I wanted a word that would express my financial philosophy. Somewhere in the middle of the night, the words “humble” and “dollar” met in my brain. I got out of bed, it was 2 a.m., and I went to GoDaddy and banged in humbledollar.com, and it was available. That’s how HumbleDollar was born.
Since your diagnosis, you’ve written about the steps you’ve taken to streamline your finances. Are there things you’ve learned that you’d recommend to others?
I’ve moved four times in the past 14 years, and each time I’ve thrown stuff out. We hang on to this stuff thinking that it’s so important, and it simply isn’t. I cannot think of anything I’ve thrown away that I want back.
What approach did you take toward financial education with your children?
Talking about money is important. But the behavior that you model is much more critical. My kids learned from my frugality. They both have very good financial habits. In fact, their financial habits are probably too good. Maybe I emphasized frugality too much.
Was frugality something that your parents modeled?
I credit the frugality to what I call our big family story. When my great-great grandfather died in 1888, the newspapers said that he was one of the richest men in England. All that money was inherited by my great-grandmother Lillian, and she lived the Downton Abbey lifestyle. She had an estate in the Cotswolds with five houses on it.
Lillian had eight kids. Three of them died relatively early on. Five of them inherited the fortune and, with one exception, the fortune was blown, often in short order. That was the story I grew up with, and the message was clear: You’ve got to be careful about money. My two brothers, my sister and I are all very different people, but all of us are frugal, and I credit this great family story.
There’s a message here for readers: Think carefully about the family stories that you tell to your kids because they’ll guide their behavior. You can lecture all you want, and they might listen to you. But if you tell a really compelling story, it can change their behavior.
Has your thinking changed about anything since your diagnosis?
In the last couple of years, I’ve become better about giving money to my kids and funding my grandchildren’s 529 plans. In retrospect, I think I should have started earlier and could have been more generous, because it’s clear to me that I’d never have been able to spend all this money I’ve accumulated, even if I did live to a ripe old age.
If you’re pretty sure that your kids have good financial habits, and you’re not going to undermine their ambitions or send them on some wayward path, by all means give them money now. Why have them live with unnecessary financial anxiety? Why not make them feel a little more financially secure? I really believe that’s one of the greatest gifts that we can give to family members, this sense of financial security.
Would you have done anything differently? You’ve joked that you would’ve had more French fries.
I love French fries. They’re probably my favorite food. But even at this late stage, I find it hard to order French fries because I know they’re unhealthy.
Over the years, you’ve mentioned that your asset allocation has always been aggressive. Can you say more about how you were able to tolerate that risk?
I’ve always had a strong faith in capitalism and in the stock market. I’ve never had any doubt during a market decline that share prices would recover. I’ve almost always had at least 80% in stocks. Right now, I’m at 92%. My diagnosis has not changed my allocation because I’m not investing for myself anymore. I’m investing for Elaine and for my kids.
In your writing, you’ve shared that you aren’t feeling negative emotions about your diagnosis. In fact, you wrote that your first reaction was, “I’m okay with this.” Can you say more about that?
I feel like I’ve been very fortunate. It’s not that bad things haven’t happened in my life. They have. But I’ve been able to spend my life doing what I love. I have a close-knit family, and I’ve largely been free of financial worry. All in all, I feel like I’ve managed to get a whole lot out of my life.
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 Asking the Editor appeared first on HumbleDollar.
No comments have been added yet.
