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JONATHAN CLEMENTS’S final book was released this week. Titled Money and Me, it traces the arc of Jonathan’s nearly four-decade career as a personal finance columnist.
Money and Me starts with the story of a man named George Cope, who was a nineteenth century tobacco baron. At the time of his death in 1888, Cope was one of Britain’s richest men. But within just two generations, his fortune was gone. Why? Cope’s daughter was the sole heir to her father’s fortune, but she lived what Jonathan described as a Downton Abbey lifestyle, on an estate in the Cotswolds with five homes and eight children. Before long, the fortune was gone.
This story was of interest to Jonathan because George Cope was his great-great-grandfather. He called it the “big family story” and explains that this hard financial lesson was imprinted on everyone in his family from a young age.
In part because of this family story, Jonathan got interested in personal finance, and, among his peers, was early in focusing on the psychology of money. “I like to think I’m rational in the way I spend my dollars, and I suspect most readers do, too. We are, of course, deluding ourselves,” he wrote.
Early in his career, Jonathan covered mutual funds for Forbes, then The Wall Street Journal. Each week, he’d review a different fund and interview the fund’s manager. From that vantage point, he was early in recognizing a reality about Wall Street: that they’re great marketers but not such great investment managers. After reviewing scores of actively-managed funds, Jonathan came to the conclusion that index funds were a better way to go for most investors.
Since the investing question was “solved,” as he put it, by index funds, Jonathan turned his attention to other domains in personal finance. The relationship between money and happiness was of particular interest. Though he acknowledged that each of us has a happiness “set point” that is largely fixed, he pointed out that our happiness level isn’t entirely fixed. There’s plenty we can do to move the needle.
A chapter titled “15 Ways to Happy” includes a number of practical suggestions. Among them: Jonathan always recommended making plans—especially vacation plans—far in advance. Why? “Often, the best part of a purchase or experience is the anticipation,” he explained.And since it doesn’t cost more to book early—indeed, it often costs less—that was his recommendation.
Jonathan leaned heavily on academic research and helped translate its findings for everyday investors. In Money and Me, he explains concepts from psychology including the hedonic treadmill, eudaimonic happiness and many others. Jonathan acknowledged that there’s no magic wand for achieving happiness. On the other hand, he explains why a million-dollar salary isn’t a necessary ingredient for financial contentment.
Jonathan also wrote a lot about spending. On the one hand, owing to his family’s experience, he developed frugal habits early in life, and he was grateful that those habits led to financial independence by age 50. On the other hand, he knew that frugality could be taken too far. In a chapter titled “Don’t Overdo It,” Jonathan offers a menu of ideas to help others who might similarly struggleto loosen the purse strings.
Jonathan had two children and thought a lot about how best to convey money values to them. He knew the risk in helping too much. “Money doesn’t necessarily kill all ambition. But it seems to put a big dent in financial ambition,” he wrote. For that reason, Jonathan mostly emphasized education rather than direct financial assistance.
He describes, however, one important way in which his own parents helped him: They always made it clear that they were there for him as a backstop. Though he might have never needed it, simply knowing this support was in the background gave Jonathan the confidence to always invest heavily in the stock market. He describes maintaining an allocation to stocks that was regularly above 80% or even 90%. That kind of aggressive investing ran contrary to the textbook. But recognizing the benefit it had provided during strong markets over the years, Jonathan offered a similar backstop to his own children, thus allowing them to take risks that they might not have otherwise.
In choosing a heavy allocation to stocks, Jonathan explains some of the other factors that went into his thinking. For starters, he points to the role of financial forecasters. They’re often wrong, but that doesn’t stop them from waking up the next day with something new to say. As a result, during both stock market rallies and routs, prognosticators can be found on TV telling stories that often cause investors to overreact. In the chapter “Not Scared of Bears,” Jonathan walks through the math that should give investors the courage to ignore forecasters, to keep their feet on the ground and to stay fully invested regardless of what bad news happens to be in the headlines.
Jonathan was willing to pile on even more risk in his portfolio when markets declined. He acknowledged that this opened him up to the accusation of being a market timer—“pretty much the nastiest insult you can hurl”—but he explains a subtle difference between his approach and true market timing, then offers a helpful strategy for profiting from downturns.
Jonathan Clements was one of a kind. Like all of his readers, I miss his kindness, wit and good cheer. For decades, he helped readers navigate the potholed road known as Wall Street. With his final work, Jonathan leaves us with a timeless guide to thinking about money in uniquely sensible ways.
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.
Thanks for sharing. He lives in our memories.
Thanks Adam. Great book review and great job on The Long View podcast.
I pre-ordered copies for both my sons and their families. I just finished reading it. Classic Clements; makes you think about life circumstances and to make positive changes. A writer and thinker like no other.
Excellent summary Adam of our friend Jonathan’s new book. A guide every one of our Children should read. Many thanks to Jonathan for his guidance that all of us can learn from. I really miss his wit. I only knew Jonathan by email and Humble Dollar, and he always answered, he was an AMAZING person. He was one of a kind.
Haven’t begun reading it yet but received my copy this week.
Thank you, Adam. Really helpful review. I’m embarrassed to say I thought I had read everything by Jonathan. Now I know I haven’t. I’m anxious to get a copy of the book.
One thing I learned from Jonathan was to “pace” myself. It is more fun to have a better life year after year than splurging for it all at once and then paying for it later.
I’m looking forward to reading this book. Thanks for the heads up, Adam.
Thanks, Adam. Good review. My local library is ordering 11 copies of Jonathan’s book and I just put it on hold. Chris
Thanks for this fine piece, Adam. Like all of us who were/are able only to read Jonathan’s work, I wish I had actually known him, and I wish also I had known to read him earlier!
As for human self-delusion, the monsters have always been sex, food, money, and religion/politics, haven’t they? We sure are interesting critters!
Regarding a “magic wand” for happiness, I think there is a bit of knowledge that serves that purpose, and that is knowing that mutually shared love with other beings, especially on the “giving” side, is the absolute foundation of lasting happiness, satisfaction, and meaning. Without a good helping of deep affection in one’s life, everything else is bound to be ring hollow, at least for the vast majority of us. Sadly, a great percentage of us (and often, our parents and teachers) never really learn the primacy of love, spending our lives distracted by the “monsters” listed above, or by things like fame, or worse, hatred and desire for vengeance. Not that we can think of any prominent examplars…
Great review. My copy arrived this week. I’m reading it at a measured pace, to savor this last book from Jonathan.
Adam, what a great review and recommendation for Jonathan’s book. I’m sure it will become one of the authoritative books on personal finance for all who are interested in the topic. I will be getting my copy today!
Now if I could just get my grown daughters and their husbands to read it, I’d buy 4 more copies immediately!
Thanks for the advance review and commentary!
I had the same thought about my children. I know they can benefit from being more educated on personal finance matters. I am still searching for ways to get them more interested as I am a big believer of “teaching a man to fish”. Has anyone successfully navigated this challenge?