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IMAGINE YOU TOOK a group of folks—mostly male, mostly older, mostly upper-middle class, mostly well-educated—and had them describe their financial journey. They’d all be pretty similar, right? You might be surprised. I was.
Next Tuesday marks the official publication of My Money Journey, which you can now order from Amazon and Barnes & Noble, as well as directly from Harriman House, the publisher. When I asked 29 writers for HumbleDollar to join me in contributing essays to the book, I wasn’t quite sure what I’d get. But as the last few essays trickled in and I looked over the submissions, what struck me most was the diversity of the stories.
There are many paths to the top of the mountain. Most journeys start haphazardly, trying one route and then another. But eventually, successful investors settle down and do mostly the right thing for many years, and they end up with surprising wealth—and nobody’s more surprised than the investors themselves, who discover that a huge pile of dollars has resulted from decades of prosaic prudence.
While each journey described in the book is unique, you’ll likely notice that certain themes crop up again and again. Here are the eight themes that struck me:
1. Our parents mold our financial beliefs. This comes shining through in almost every essay. Trust me: If you’re a parent, it’s scary to realize how much influence you have on your children. Really scary. What beliefs from our parents should we hang on to, and which should we discard? For some contributors to My Money Journey, it’s been a lifelong struggle.
2. The key to financial freedom is good savings habits. It’s banal to say it, and yet it can’t be said enough. The virtue of thrift is a theme that runs through almost all 30 essays.
3. Complexity is unnecessary. Again and again in My Money Journey, you’ll hear mention of the same simple strategies. Dollar-cost averaging. Extra-principal payments on a mortgage. Maxing out retirement plan contributions. Indexing. To the uninitiated, the world of personal finance can seem baffling. But once you dig into the details, you’ll discover that complexity is usually the route to high costs and mediocre returns, while simplicity offers not just better financial results, but also a comforting sense of control.
4. We don’t need to be great investors. That’s just as well, because most of us aren’t. In fact, most folks end up with investment results that trail the market averages, which is why indexing—humbly accepting the results of the market averages—is a strategy embraced by virtually all contributors to the book.
5. Success is apparent only in retrospect. It usually takes decades to achieve financial independence, and, along the way, progress often seems grudgingly slow. And then one day, we look back and realize how far we’ve come—and how all those small, sensible decisions have compounded one upon another to ensure a comfortable future. Are you early in your financial journey and saving regularly, but it feels like a game of inches? For inspiration, look no farther than the stories in My Money Journey.
6. Don’t discount the role of luck. Our financial success often hinges on things beyond our control. Does our boss take a shine to us—or instead favor others for no apparent good reason? Does our employer prosper, or do we find ourselves struggling to survive in an organization beset by red ink and constant layoffs? Once we have a healthy sum invested, does a booming stock market fatten our nest egg even further—or are we hit by a vicious downdraft?
It seems almost all of us get dealt a bad financial hand at some point in our life. The wound might be self-inflicted, or it may come out of the blue—a major medical bill, a bad investment, a family member needs our help, unemployment, divorce. Such financial hits may set us back, but—as you’ll learn from some of the book’s essays—the damage doesn’t have to be permanent.
7. We infuse money with meaning. Money is just money in the same way that a Maserati is just a car and the silver cutlery we inherited from our parents is just flatware. My point: These inanimate objects hold meaning far beyond their objective attributes—and how I feel about such things will likely differ from the sentiments you harbor.
It’s worth spending serious time pondering the meaning we attach to money and its many uses. Are we buying the Maserati because we love finely engineered automobiles—or because we want to impress the neighbors? Are we saving diligently because we want the financial freedom to pursue activities we find fulfilling—or are we over-saving because we’re terrified that we’ll end up destitute? In the essays, many of the writers discuss their relationship with money and their efforts to make their peace with the almighty dollar.
At its best, money is a tool that delivers a sense of security, lets us devote our days to activities we’re passionate about, allows us to have special times with loved ones, and lets us help those around us, not just family and friends, but also those we’ll never know personally. How should we divvy up our money among these possible uses? It comes down to our values—to what each of us believes is meaningful and finds fulfilling.
8. At some point, we need to declare “enough.” Then comes the next hard task: learning to be satisfied with what we have—and enjoying the money we’ve accumulated. This may be the destination we’ve long had in mind, yet most of us find that the journey never quite ends and contentment remains elusive. That isn’t so terrible. We humans are built not to rest and relax, but to dream and strive. There’s great satisfaction to be had from that striving.
The above article was adapted from My Money Journey’s introduction.
Jonathan Clements is the founder and editor of HumbleDollar. Follow him on Twitter @ClementsMoney and on Facebook, and check out his earlier articles.
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Insightful as always. Look forward to reading the book.
My parents didn’t mold my financial beliefs. My mother raised 3 kids on her own, so we had no money. When I reached adulthood, I decided I didn’t want to be poor anymore.
After working at a salaried position for a while, at a good job with great benefits, ESOP and good salary, I decided I did not want a job where someone in HR would determine what % raise I might get each year. I also didn’t want to rely on a boss’s review to determine the following year’s income.
I decided to go into commission sales, and got licensed and took a job in the financial services field as an advisor. My efforts dictated how much I made as a commissioned sales person.
After starting to earn enough I began saving. I always made sure to research every major purchase and was frugal but not cheap. I invested for the long term, no timing involved, in funds (now ETFs) and some individual stocks. I was 100% equities all my working years. Now retired, I am more 60/40 equities/fixed income.
Eventually I paid cash for autos and kept them for a long time. I always buy Lexus now for 2 reasons. They are ‘luxury’ cars, but are much cheaper than other luxury brands, such as Mercedes and BMW, and the quality is better. My 2004 is still working great, as are my 2013 and 2020 hybrid SUV. One of my sons always wanted me to buy a Maserati because he thought they were cool and awesome. I never did.
At some point I became financially independent and years later, when at retirement age, I retired.
I am still frugal but not cheap. Helped my kids with down payments for homes, but will not overpay for a gallon of milk or a quart of cream at overpriced super markets when they can be bought somewhere else for 30-40% less. Why pay more for a commodity? I cannot shake the poverty lessons and habits I learned while growing up.
To me the benefit of the money we have is the freedom and peace of mind that comes from it. We don’t spend anywhere near what we can afford, but we buy and do whatever we want, and will spend for quality and top notch service or travel.
We have enough, and enjoy it to the fullest. We are satisfied and have no need or desire for more. Contentment is definitely not elusive for my wife and me.
I’m looking forward to reading the stories in the book.
I will buy and look forward to reading the book. Thank you to all who contributed.
I am interested in knowing:
Are the eight themes listed in any specific order/prioritization?
Many of us had parents whose priority was providing. When it came to saving, that was what was left over after all the bills were paid (in months when that happened). For investing, we each had a passbook savings account. So, I’m wondering who else may have had an outsized role in molding financial beliefs, or better yet, financial behaviors? Coworkers? Other authors? Friends?
Good savings habits, among those “mostly older”. For one, I believe we will all see a dramatic change in financial habits, especially savings, among a substantial minority (potentially a majority) of American households due to the deployment of behavioral economics tools, processes and concepts that have become increasingly prevalent in corporate employee benefit (savings) plans. What do you think?
And, finally, for the investment experts,
Thanks for the comment. No, the eight points weren’t listed in order of priority. Why would dollar-cost averaging fail to work with a mutual fund, whether it’s an index fund or actively managed? I could see it might not work out with an undiversified investment, like a single stock or a sector fund. But it should lead to decent returns with any fund diversified enough to roughly track the broad market.
I’d have put luck right up at the top of the list.
You’re born in a country where public health and a good education are readily available… luck.
You’re born with a brain that works, and works fairly rationally… luck.
You buy a stock for the wrong reason and it goes up 16X… luck.
You want to buy a house so you sell that stock at a 40-year high… luck.
You buy a house for the wrong reason and it doubles in value… luck.
You live in a community property state when you get divorced… usually luck.
You stumble accidentally into a lucrative career… luck.
You avoid a half-dozen potential physical catastrophes when you didn’t have health insurance… luck.
When catastrophe does strike, you’ve got great insurance and don’t get wiped out… luck.
All the smart strategies in the world may not matter if enough breaks go against you, so never, ever forget the role of sheer, joyous happenstance.
Nothing better then easy to understand advice 🙂 I’ll be buying your book… Nothing new yet reinforcement is really good stuff! Thank you as always…
If you learn why INDEXING is the winning game, the rest is history
Totally agree 2-3 fund portfolio is all one needs
I agree 100% that two to three index funds are all you need. But investing is just one piece of the financial life puzzle. We also need to make smart decisions when it comes to saving, spending, borrowing, real estate, insurance, estate planning, Social Security and so much more.
Jonathan, you made so many great points. Now, I’m intrigued and as soon as I finish this comment, I’m ordering your book (I have a collection of your earlier books, too!) I’m a long time follower of HD. Thank you for all that you do. I’m a better informed person today because of you sharing your wisdom, knowledge and advice. Forever grateful…
Jonathon what a 💎 of information you have provided over the decades for us all. I will put an order in at our local library for your new book and will tell the librarian there to spread the word on your new book. Every day reading the mail on your HD group provides un censored down to earth information that does not exist any where else. Thanks again for all the effort you put into keeping everyone connected in the HD.
Jonathan, your list summing up the book’s recurring themes in large part describes well-known and straightforward guidance for people at every age to “get going” or “keep going” with their own financial (savings) journey. Still, there’s a cottage industry of books repeating this sage advice. (An even larger stack of books promotes a myriad of ever more implausible and sketchy schemes.) What does your new book add to the mix?
The genius of this book is its honest tone and personal tales including the small and large errors and waystations your contributors describe. How do we people pick ourselves off the ground and keep going after setbacks? What matters most? Where do we find inspiration and help? I have to say that when early versions of these essays were appearing periodically on Humble Dollar, I counted the days till the next one’s expected arrival.
That honesty comes from your contributors finding Humble Dollar a safe place to openly acknowledge challenges and explore strategies to psychologically stick to what’s more likely to work, or to repair damage inflicted by our younger selves or other forces not in our control. There’s much more inside these stories than people bragging of their credentials and successes.
Many people nowadays arrive at age 40 or 50 or 60 with a shock of recognition that they should have started socking cash away sooner. Hopefully your book’s readers will skew slightly younger. But if not, it’s never too late to revise one’s practices and habits.
Lastly, as you say, “mostly male, mostly older, mostly upper-middle class, mostly well-educated” folks contributed their stories. I would be interested to hear your thoughts about why. (I have ideas about this, beginning with observations from my early working years where I was often the only woman in the room.) I do believe at this point in time, nearly a quarter of the way through the 21st century, our domestic employment practices and global economic model have made it simultaneously easier and harder for our workforce to prosper. And I greatly appreciate the many days your site features columns from our younger colleagues whose stories are still unfolding, early yet to say how they will turn next.
Thanks for the comment. Why is it that “mostly male, mostly older, mostly upper-middle class, mostly well-educated” folks contributed essays to the book? No doubt macroeconomic trends and traditional gender roles played a part, as you suggest. But there’s also the perhaps less interesting answer: The book draws on those who who have written for the site, many of those writers were readers who summoned up the courage to put pen to paper — and those readers have, in many cases, been following my work since the early 1990s when I was at The Wall Street Journal. The WSJ’s readership tended to tilt older, affluent and male.
I am so proud to be a part of this book. As one of only five female contributors, I hope the stories will inspire more women to share their own financial journeys. I know from experience that achieving financial freedom doesn’t require a six-figure salary or a complicated investment plan. It does require discipline and a willingness to learn about personal finance.
Super excited to have my story included in this book! It’s a really fantastic compendium of financial journeys and perspectives, all of the revealing and valuable. I’ve learned so much from the different writers featured in this collection, and I have no doubt others will as well.
Huge thanks to Jonathan for including my story and the magic of his editing. I’m in awe of what he’s done with HumbleDollar and in pulling together this collection.
Congrats to Jonathan and all the contributors to the book. It will open many more eyes to the fundamentals of sound personal finance and investing. Well done!
I just binge-read the book on my trip to Europe. Two other common threads were: we hate credit card debt but benefited greatly from home mortgages. Another was our generation had very little student debt but feel obliged to help our offspring with 529 plans. Of course student debt greatly hinders home buying. Like many of the fellow writers the retirement journey now leads overseas!
Love it when you riff your checklists Jonathan ~ my left brain appreciates the tidiness and my right brain appreciates the content … and the rest of me nods up and down. I just ordered the book and as always, thanks for your work.
Thanks for ordering the book — and for the kind words!
If you are young or under 50, just read up about the Bogle 3 or 4 fund strategy. That’s all you need to know. We are not Wall Street slick traders, you don’t have high frequency trading (HFT) computers, and you don’t have the wherewithal to analyze the S&P 500, much less the great worldwide companies that you must be invested in.
“Boglehead 3 Fund Portfolio is a simple, low-cost investment strategy that consists of three index funds: a U.S. Total Stock Market Index Fund, an International Stock Market Index Fund, and a U.S. Total Bond Market Index Fund. Boglehead 4 Fund Portfolio adds Total International Bond Market Index Fund to the mix. Both portfolios aim to provide diversification and long-term growth, with a focus on minimizing costs.”
That’s why, even at my age (73), I added the Pacer funds HERD ETF to many of my portfolios including to my wife’s portfolio for worldwide equity coverage wrapped in one ETF. It’s not a Target Date Fund, and I do not like their investment methodology.
HERD has a small AUM and a pretty steep expense ratio. If one is interested in this type of ‘fund of funds’, FFNOX, which is Fidelity’s fund of funds has a much lower cost and $billions under management and follows recognizable indexes. (I don’t work for Fidelity.)
Here’s more on the fund:
https://fundresearch.fidelity.com/mutual-funds/summary/31634R109
There is a lot more to the financial journey than what funds to invest in -a lot more.
Thanks Dick for your sage advice.
What a great and unique idea! Two thoughts come to mind. First, the old saying “the best plan is the one that you will actually stick to”. Second, there are many, sometimes very different, paths to success. You’ve provided a useful service in dissecting out the common threads which connect the diverse experiences described by the various authors. Congratulations Jonathan! And to the authors too! I look forward to reading the comments on the book.
As always ….Great article.
But help me fellow Humble Dollar readers……what do I say to my children (of home buying age) when they say….” but Dad ….I tried to do all the right things”?
https://mail.google.com/mail/u/0?ui=2&ik=b51fce2155&attid=0.1&permmsgid=msg-f:1763883819040106968&th=187a92fceaf1e9d8&view=att&disp=safe
Don’t know if this will come up but it is in regard to the new policy going into effect May 1st for new homebuyers with high credit scores over 680 paying 15-205 more on their home loan and will get the largest fees?
Doesn’t this apply only to FHA loans? If you have a good credit score can’t you get a loan elsewhere?
I would think that this will make FHA loans less attractive to those with good credit.
The Newsweek article you’re citing can be found here.
Aren’t credit scores capped at 650?
FICO scores range from 300 to 850:
https://humbledollar.com/money-guide/credit-scores/
OK, thanks – maybe I should try to find out my own score, since I did not know about much the ranges…could be enlightening.
The link you included isn’t working for me. What new policy are you referring to?
https://www.washingtontimes.com/news/2023/apr/18/joe-biden-hike-payments-good-credit-homebuyers-sub/
Sorry …. Didn’t know if it would Jonathan. I just sent you an email with a bunch of articles.
It was a pleasure and great honor to contribute to this book. I was also surprised by the many different paths people have taken in life. This book is unlike any financial book you will read. It is an amalgamation of financial principles and wonderfully human stories. One message that resonated with me was just how far financial theory and practice deviate in the lives of these 30 humans. Financial theory is elegant but people’s lives are messy. Another is the importance of chance in financial and personal affairs. Finally, behavioral finance rings loud and clear throughout the pages of this book.
So, read this book with your favorite drink in hand. Prepare to laugh and also shed some tears. The stories in this book illustrate the power of narratives to teach us about personal finance, investing, and life itself.
I’m going to buy one for each of my 20 something year old daughters. They seem to be making good money decisions, but whenever I try to explain investing principles to them, like “index funds” their eyes glaze over. My father only invested in stocks, guess that’s where I picked up my habit of investing in individual stocks. When I was young I remember him showing me his stock notebook with all the winners and losers, he was very proud of it. But, by his 70s he had almost all his money in bank stocks which crashed in the ’07 crash, and had to live mostly off his SS the rest of his life. Guess there is another parent lesson in there.
I bought my hard copy from Harriman House when it first became available. A pleasant surprise was that I also got a free digital copy and the Bookshelf App which includes the option to listen to my computer read the stories to me. Much appreciated after recent cataract surgery.
Congratulations on the publication of this labor of love, and excellent summary of the themes!
The elite eight of our financial lives.
Now if we could get every college student to read this, but if we did, would they be willing to wait until age 70 to get their dream car?
“1. Our parents mold our financial beliefs. This comes shining through in almost every essay. Trust me: If you’re a parent, it’s scary to realize how much influence you have on your children.”
Actually, fewer young people today are driving today. Many have the attitude that it is easier to Uber or Lyft than to own a car. It appears that the muscle car days when many in our generation lusted after Mustangs, Camaros, GTOs, Challengers & Barracudas are long gone.
https://www.washingtonpost.com/climate-solutions/2023/02/13/gen-z-driving-less-uber/
Just alluding to delayed gratification
And I was just building on your example to point out that failing to delay gratification was also an issue for our generation.
A big surprise to me was one of my grandsons living in DC sold his car – all things considered, that was a worthwhile decision. He’s a lot of money ahead each month now and invests his car expense. That is more difficult to do in most of America, though.
Plus DC has great public transport. Good for him! My son purposely chose an apt close to work so he can bike ride, rather than drive, his commute. He’s attempting to convince his office mates to do the same.
Ebikes would help some, as long as they don’t get stolen!
Thank you Jonathan for creating this platform and inspiring me, and so many others, to share our experiences in the hopes they may help someone else.