WHEN READERS THINK of my younger brother Jonathan Clements, they often picture the longtime Wall Street Journal columnist or the founder of HumbleDollar. They remember the clear financial advice, the thoughtful essays and the quiet wisdom that helped millions make better decisions with their money. But every writer has a beginning. As I've been researching Jonathan's life over the past several weeks, I've found myself drawn less to the career everyone knows and more to the people who helped shape it. Before the books, the columns and the countless readers, there was a curious teenager discovering that he loved to write. Jonathan's journey began long before Wall Street, long before Forbes and long before HumbleDollar. It began with a school magazine at Bryanston School in Dorset, England. As a teenager, Jonathan joined the staff of Saga, the school magazine. There he wrote an article criticizing Bryanston's decision to spend money on a new pipe organ while other parts of the school needed attention. Years later, Jonathan looked back on that article with characteristic humor, saying it earned him "the enmity of a host of people." But he also said something far more revealing. That article, he believed, "was my entrée to becoming a journalist." More importantly, Jonathan had discovered not just that he enjoyed writing, but that he enjoyed asking difficult questions. Reading those early Saga articles today, what strikes me isn't simply Jonathan's talent. It's how familiar his voice already sounds. Even as a teenager, he questioned accepted wisdom with humor rather than hostility, weighed competing arguments fairly and cared deeply about priorities. Years later, readers would come to know him for helping them decide what mattered most in their financial lives. Looking back, those instincts were already there. Journalism also ran in the family. Our father began his career as a journalist before becoming an economist, and Jonathan often said his example inspired him to pursue financial journalism. After leaving Bryanston, Jonathan had almost a year before beginning his studies at Cambridge, our father's alma mater. During that time, a family friend, Mrs. Dolezal, helped him secure a reporting job at the Potomac Almanac, a small community newspaper in suburban Washington. For the next eight months, Jonathan did what young reporters often do. One day he covered education. The next, sports. Then police, then business. It wasn't glamorous work, but it taught him the fundamentals of reporting. Years later, Jonathan would describe those eight months as "the most fun and the most educational experience I had in journalism." It wasn't a large newspaper, but it gave a young reporter the opportunity to learn every aspect of the profession. Even more importantly, it introduced him to the paper's editor, Leslie Leven. Decades later, after writing for Forbes, The Wall Street Journal and founding HumbleDollar, Jonathan was asked about the people who had influenced his career. His answer surprised me. Of everyone he had worked with, he singled out Leslie, describing her as "probably the most important mentor I had." Those words say as much about Jonathan as they do about Leslie. No matter how successful he became, Jonathan never forgot the people who had believed in him before anyone else did. Cambridge came next, but by then journalism was no longer simply an interest. Jonathan later admitted that during one term he attended only four lectures because he was so immersed in editing the student newspaper, Varsity. Somewhere along the way, writing had stopped being a hobby and had become the work he wanted to spend his life doing. After Cambridge, Jonathan joined Euromoney in London, his first full-time journalism position. It was another stepping stone that eventually led him to New York and Forbes, where he discovered the world of personal finance writing. The years that followed are well known. After Forbes came nearly two decades at The Wall Street Journal, where Jonathan became one of the country's most respected personal finance columnists. He later spent six years at Citigroup as Director of Financial Education, helping investors better understand their financial lives. But the entrepreneurial spirit never left him. In 2016, he founded HumbleDollar, creating not simply another financial website, but a community built on thoughtful conversation, generosity and the belief that money is ultimately a means to a richer life, not an end in itself. Millions of readers came to trust his judgment and his remarkable ability to explain complicated ideas with clarity, humanity and compassion. Growing up, I don't think any of us could have imagined where Jonathan's curiosity and love of writing would eventually lead. He was simply my younger brother; curious, thoughtful and always eager to learn. Looking back now, the path seems almost inevitable. At the time, it was anything but. But as I've pieced together Jonathan's early years, I've come away with a different appreciation of his career. I always knew where Jonathan finished. Only recently have I begun to appreciate where, and with whom, it all began. Long before Jonathan became a mentor to countless writers and readers, someone had mentored him. A family friend opened a door. An editor patiently taught him his craft. A small community newspaper gave him a chance. We often celebrate the finished product. The successful journalist, the respected author, the trusted voice. Yet behind almost every accomplished life are people whose names are seldom remembered, people who quietly open doors, encourage talent and believe in someone long before the rest of the world notices. Jonathan never forgot them. Perhaps that's why, years later, so many aspiring writers would tell similar stories about him. He answered emails, encouraged new voices, edited with kindness and opened doors for others just as doors had once been opened for him. In the end, Jonathan's story isn't simply about becoming one of the world's most respected financial journalists. It's also about the people who quietly shaped that journey. Mrs. Dolezal opened the first door and Leslie Leven helped Jonathan find his footing as a young reporter. Those early opportunities gave him the confidence to pursue the career that followed. Every accomplished life begins somewhere. Jonathan's began with people who saw potential in a young man long before the rest of the world did.   After spending more than two decades building a successful landscaping business with his twin brother Nicholas, Andrew Clements retired in 2015 with a new appreciation for what matters most. Born in England, his essays draw on a life that has included growing up in England and Bangladesh, entrepreneurship, caregiving, family loss and travel. A regular HumbleDollar contributor, he enjoys tellingstories that remind readers life’s richest lessons often have little to do with money. Andrew is the older brother of HumbleDollar founder Jonathan Clements, whose life and legacy have inspired some of his most personal writing. He lives in Florida with his husband, Joey.

INNOVATION IN THE world of retirement plans is decidedly slow moving. But as of July 4th, investors now have a new savings option known as a Trump account. In short, these are retirement accounts designed specifically for children. Trump accounts share some similarities with traditional individual retirement accounts (IRAs), but there are also key differences. If you have children, grandchildren, nieces or nephews, this new option may be worth exploring. Who is eligible for a Trump account? An account can be opened for any child who will be under 18 as of December 31 in the year that the account is opened. How are Trump accounts different from traditional IRAs? The primary goal of these accounts is to allow children to begin to accumulate retirement funds much earlier than has been possible in the past. For that reason, and in contrast to traditional IRAs, Trump accounts don’t require a child to have any earned income. Contributions could begin as soon as a baby is born.  What is the process for opening an account? To get started, head to the new government website at trumpaccounts.gov. From there, you can download a mobile app to start the account opening process. I tried it myself, opening an account for one of my sons, and found the process quite easy. One nice feature is that the funds are invested automatically in low-cost index funds. What are the contribution limits? Trump accounts have their own unique contribution caps, which are a little complicated. Individuals and employers can contribute up to a total of $5,000 per child per year, though the employer portion is limited to $2,500 of that $5,000. This limit will grow in future years. In addition, the government and a group of philanthropists have established a pilot program and are making contributions to certain new Trump accounts. Children born between January 1, 2025 and December 31, 2028 are eligible to receive a $1,000 contribution from the government upon opening a new account. In addition to this $1,000 contribution from the government, a group of philanthropists, including Michael Dell, Ray Dalio and others, are contributing $250 to Trump accounts for children up to 10 years old who live in particular Zip codes. These additional contributions don’t count toward the $5,000 annual contribution limit. Do Trump account contributions affect IRA contribution limits? If your child has earned income, he or she can contribute the maximum to a Trump account and still also contribute to a regular IRA or Roth IRA up to the annual IRA contribution limit. There’s no tradeoff. How are withdrawals treated? Withdrawals from Trump accounts aren’t permitted during the initial “growth period,” which begins at birth and ends on December 31 of the year before the child turns 18.  After the growth period, withdrawals from Trump accounts will be treated in much the same way as traditional IRAs. Specifically, withdrawals prior to age 59½ are subject to a 10% tax penalty. Trump accounts do, however, allow for penalty-free withdrawals before 59½ under certain circumstances, including a first-time home purchase, higher education and a few other, less common situations. The tax treatment of withdrawals differs by donor: Contributions by individuals are made on an after-tax basis, so those dollars come out tax-free. Investment gains on those contributions, however, are subject to ordinary income tax. Any dollars received from the government or other donors under the pilot program will also be subject to ordinary income tax. Should you contribute to a Trump account? The answer, as with most financial questions, is that it depends. Here’s a framework you might consider: Step 1: If your child was born between 2025 and 2028 and is thus eligible for the government contribution of $1,000, that is the easiest decision. I would head over to the new website today to get started. Step 2: Should you make contributions beyond the government’s initial $1,000? I would pause at this point to assess where your college savings stand. Since education is such a significant expense and since 529 accounts have the benefit of growing tax-free, I would prioritize college savings over a Trump account contribution. Step 3: The next account to consider is a custodial Roth IRA. If your children have any income, they can contribute to a Roth IRA. And since Roth balances grow tax-free too, I would also prioritize Roth contributions over Trump account contributions, where the growth will be taxable. Step 4: After addressing potential 529 and Roth IRA contributions, ordinarily the next savings option to consider would be a custodial taxable account—often referred to as an UTMA. But it’s at this point that you might consider a Trump account.  How should you think about this decision? While there are tax differences between UTMA accounts and Trump accounts, and there are differences in contribution limits, neither of those, in my view, should be the primary consideration. Instead, the question I’d ask is how you’d like the funds to be used, and on that point, there’s a big difference between an UTMA and a Trump account. Depending on the state, children can generally access funds in an UTMA at either age 18 or 21. If you feel your child would benefit from having some funds to help get established in the early years after college, then an UTMA might be the better choice. In contrast, Trump accounts are really designed to be retirement accounts, with only the handful of early withdrawal provisions referenced earlier. If you’d prefer to see your child’s savings grow for decades, then the Trump account might be the better choice. If you aren’t sure how to decide between a contribution to an UTMA and a Trump account, you could always split the difference. One reason to do that is because Trump accounts present an interesting tax planning opportunity. After the growth period, if a child has a Trump account balance, that balance would be eligible for a Roth conversion, whereby it would transfer over to a Roth IRA to grow tax-free. Of course, Roth conversions are taxable, but if a child is in a low tax bracket in the early years after college, the tax might be modest. I see that as a compelling reason to consider making at least some contributions to a Trump account.   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.  

AS WE CELEBRATE 250 years since the Declaration of Independence, I’m reminded of an expression that’s popular in the investment world: “This time is different.” The phrase dates to a 1993 publication titled “16 Rules for Investment Success,” authored by the veteran investment manager Sir John Templeton. Rule number 11 included the following admonition: “The investor who says, ‘This time is different,’ when in fact it’s virtually a repeat of an earlier situation, has uttered among the four most costly words in the annals of investing.” Templeton’s message, in other words: Human nature doesn’t change. Though the facts change with each new market cycle, the outcome will ultimately be driven by the same human tendencies and emotions as we’ve seen many times before. The phrase “this time is different” was further popularized by a book by that name published during the worst of the financial crisis in 2009. Economists Carmen Reinhart and Kenneth Rogoff studied dozens of market cycles going back centuries and concluded that Templeton’s somewhat informal hypothesis turned out to be more accurate than even he might have guessed. Things always seem different but rarely are. As a result, “this time is different” is an expression that’s usually invoked with irony, as if to suggest that whatever investors are excited about today is likely—with the benefit of hindsight down the road—to look no different from similar events in the past. What makes this notion tricky, though, is that sometimes things do change in ways that are fundamentally new and discontinuous. In other words, we can’t dismiss every new development we see in investment markets with the glib assertion that the future will be no different from the past. Even if human nature is a constant, in other words, a more critical analysis of current events is always warranted. Here are four such areas where change is underway but the ultimate result is still an open question. Question 1 - The impact of the internet on investing. Years ago, the assumption was that the internet would democratize investing because it would make more information accessible to more people at lower costs. This hypothesis was logical, and to some degree, it was accurate. Information that was previously only available through a pricey Bloomberg terminal is now available through any number of free or low-cost online services.  But there have been unintended consequences. As much as the internet enables the spread of information, it also accelerates the spread of less-than-useful information that can drive events like the meme stock craze in 2021. The internet has also given rise to various forms of gambling. It’s enabled inventions like non-fungible tokens, which seem to be of dubious value. And the internet has enabled cryptocurrencies, of which there are apparently millions. Many have lost all or virtually all of their value. Which way will this go? On the positive side, the internet has lowered costs dramatically. Where brokerage commissions were more than $100 not too long ago, most brokers now charge little or nothing to trade stocks and exchange-traded funds. At the same time, recent trends suggest that the internet has been of mixed value, especially with the recent rise in so-called prediction markets. But reversion to the mean is a powerful force, and ultimately the internet may be a net positive for investors. Question 2 - The impact of artificial intelligence on the workforce. Not long ago, there was the belief that AI would displace large numbers of workers. This view was supported most notably by OpenAI co-founder Sam Altman, who commented more than once that AI was likely to “replace most of the jobs people do today.” But he’s since changed his mind. “I'm delighted to ⁠be wrong about this,” Altman said this spring. “I thought there would have been more impact on entry-level white-collar jobs being eliminated by now than ​has actually happened.” What did Altman overlook in his earlier prediction? Investor Bob Haber offers an analog. When railroad networks became widespread in the 1800s, there was the assumption that demand for horses would fall significantly. But the opposite happened.  As Haber explains, “rail displaced horses in one narrow function, long-haul transport, but it increased demand for them almost everywhere else. Rail depots needed drayage. Growing railroad towns needed more cartage. Farms connected to wider markets needed more local hauling. Rail automated one visible task while enlarging the surrounding economic system in ways that created more complementary work for horses and for the humans who depended on them.” We may see something similar with AI. The jury is still out, but it’s clear that the most pessimistic predictions overlooked potential second-order effects. Question 3 - Whether the stock market is overvalued. For a decade, and maybe more, there’s been hand-wringing over stock market valuations. Using the popular cyclically-adjusted price-to-earnings (CAPE) ratio as a yardstick, the market’s valuation has been rising almost continuously since 2009 and is now just a few percent below the peak reached in 2000. Through that lens, there’s a lot to worry about, and those who argue that this time is different seem like they’re straining to justify numbers that shouldn’t be dismissed. There’s another side to this argument, though, driven by the fact that the composition of the market has changed over time. Today’s largest companies are almost all in technology and are faster growing than the largest firms were in past generations. As a result, the argument goes, today’s technology companies deserve higher valuations. And that, in their view, makes the CAPE ratio an outdated metric. Who’s right? Of course, time will tell. That’s why investors’ best defense, in my view, is a defensive asset allocation. Question 4 - The value of international diversification. Twenty years ago, the accepted wisdom was to diversify a stock portfolio internationally. One reason was because many economies outside the U.S. were growing quickly. Another argument was that exchange rate fluctuations were a potential source of added returns. Those who limited their investments to the U.S. were accused of “home bias.” But this view came under pressure when, for most of the past 20 years, domestic markets outpaced their global peers, and that’s reversed only recently. How should we think about this question? One point of view is that we shouldn’t abandon diversification simply because it delivered a string of losing years, and indeed, the recent resurgence of international stocks might represent the beginning of a new trend.  The opposing view cites the relative anemia of many international markets, especially in Europe. Over the 15-year period between 2008 and 2023, GDP per capita in the European Union fell from 76.5% of the level in the U.S. to just 50%. Which side is correct? It is, of course, anyone’s guess, which is why I continue to believe in international diversification.   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.

RETIREMENT IS LIFE’S most expensive purchase. During our working years, we deprive our present selves of immediate pleasure by refusing to spend money for nicer cars, a bigger house or a vacation to boast about. Instead, we squirrel away those saved dollars with an eye toward keeping the future us fed, clothed and living indoors.  At age 64, after decades of choosing to save and invest a large chunk of each paycheck, rather than spend it, I’ve bought a choice: Fully retire to fully embrace life after work, or carry on in a career that still adds purpose to my life. I’ve chosen to stay, but I’ve whittled down my work hours too far to handle all of my family’s spending needs. Thus, I’m faced with reaching into savings for the first time. More about that later. But first, where is our money, and why? Taking advantage. The bulk of our retirement savings is invested in tax-advantaged accounts. Until we reached our mid-30s, neither my wife nor I had invested a dime in the stock market. Since that time, however, we’ve stuffed dollars from every paycheck into our workplace savings accounts. Initially, these contributions went into traditional accounts, but we switched to the Roth option when it became available. We also topped-off Roth IRAs every year, and stashed a smaller amount in a taxable brokerage account. A little less than half of our total investments reside in future-tax-free Roth accounts. Most of the balance is tax-deferred, traditional money, which is subject to ordinary income tax rates the year it’s withdrawn. The distinction between how these two types of accounts are taxed influences where we position assets between those accounts. Accordingly, we’ve looked at two scenarios that may raise our future tax rates: One begins in a little more than a decade, when required minimum distributions (RMDs) from my traditional retirement accounts begin at age 75, followed by my wife’s RMDs a few years later, plus my Social Security, begun at age 70. The other is triggered when the first of us dies and the surviving spouse moves into the single filer tax bracket.  Because we still owe ordinary income tax on the savings in our traditional accounts, we’re making Roth conversions and taking the tax hit now, at a known rate. We’re also seeking to curb the growth of our traditional accounts by keeping all our bonds there. By contrast, our Roth accounts, on which we should never owe future tax, are invested 100% in the stocks we expect to grow over time. Picking winners. In the beginning, my wife and I entertained thoughts of alternatives to stocks, such as real estate. Soon, however, we decided that maximizing market participation was our wisest wealth-building tactic. As our knowledge of finance grew, we further refined our focus by choosing broad-based, low-cost index funds over other options, for good reason: They out-perform actively-managed funds. I don’t doubt the intelligence of active fund managers. On the contrary, I suspect they carry bigger brains than me, and know they command more resources to sniff-out future winning stocks. But they swim in a tank with fish just as big, and it's tough to get a fin up on the competition. The result: Each year, index funds finish strokes ahead of their active cousins. For the same reason, we’ve shied away from individual stocks. Have we lost out? I’d argue we profited. Simple diversity. Moving into retirement, my ideal portfolio is heavily influenced by decades of working closely with older patients in my physical therapy practice. I’ve followed a number of folks as they age from their vibrant, active 60s through the years of physical deterioration. Along the way, I’ve observed the cognitive decline that affects most of us as we age. I don’t count on escaping a similar fate.  Hence, rather than covering every corner of the stock market with a complicated collection of index funds, my wife and I have been shifting toward a two- or three-fund portfolio, to achieve the same result. We aim to hold shares in virtually every public company across the globe, housed in two funds, plus one bond fund. Our choice for U.S. stocks is Vanguard Total Stock Market Index Fund (symbol: VTSAX). For foreign stocks, we like Vanguard Total International Stock Index Fund (VTIAX).  Tending to just two stock funds cuts complexity, especially decisions like when to rebalance and how to go about it. Aside from the biases that affect most of us, there’s that issue of our aging brains, again. Why fret about realigning our investments when just keeping track of medical appointments has become a challenge? To further simplify our lives, at a bit more expense, we could let Vanguard Group, Inc. do all the work with their Vanguard Total World Stock Index Fund (VTWAX).. Picking our peril. Our nest egg is weighted a little heavily toward stocks, which means its sum will rise and fall with the market. That can be unnerving, but it’s the price we'll pay for the extra risk that gives us a shot at outpacing inflation.  Without the long-term growth provided by stocks, our buying power might not keep pace with our expected long lives. That strategy is fine when the market is riding high, but where do we go for spending money when stocks are in a slump? Selling depressed stocks in a pinch to raise cash is hazardous to our wealth. For that reason, the balance of our savings is in mostly short-term government bonds and cash, enough of a cushion to cover several years of expenses until the market regains its footing. To be sure, that money is mostly idle, but it's ready when needed. When I finally clock my last-day-forever in the clinic, we might buy an income annuity to replace earned income with insured money to add to my wife’s modest Social Security check, which she expects to start collecting in a little over a year.  This combination of regular monthly paychecks would provide a floor of income to keep the household going, and bolster our courage to boot, when the market hits the skids. Drawing it down. Meanwhile, we’ve yet to settle on a plan to siphon off savings to pay the bills not covered by my part-time income. At the moment, there’s little pressure to find the perfect formula. For starters, we’re not calculating the highest withdrawal rate our investments will bear to bankroll a spending spree. Also, part of our retirement preparation included holding steady to a frugal lifestyle and eliminating debt. Our low expenses give us breathing space to decide how to replenish our cash account. Why the dithering? It turns out nailing down a withdrawal plan is my toughest financial decision to date. But it’s not the math that has me stymied. Rather, it’s the emotion. Yes, I believe the research, and I’ve run analyses that assure me our money will probably outlive us.  Still, thinking of pushing start makes me queasy, so we’re sliding into the task. Instead of a rate, we’ve chosen the dollar amount that sustains our current lifestyle over the coming year. It falls short of the figure we expect to reach once we’ve limbered up our spending legs, but one allows us to work up to a rate that doesn’t outpace my level of comfort. Ed is a semi-retired physical therapist who lives and works in a small community near Atlanta. When he's not spending time with his church, family or friends, you may find him tending his garden and wondering if he will ever fully retire. Check out Ed’s earlier articles.