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Getting Short

Jonathan Clements

Jonathan is the founder and editor of HumbleDollar. He also sits on the advisory board and investment committee of Creative Planning, one of the country’s largest independent financial advisors, and is the author of eight personal finance books. Earlier in his career, Jonathan spent almost 20 years at The Wall Street Journal, where he was the newspaper's personal finance columnist, and six years at Citigroup, where he was director of financial education for the bank's U.S. wealth management arm. Born in England and educated at Cambridge University, Jonathan now lives in Philadelphia, just a few blocks from his daughter, son-in-law and grandson.

Getting Short

Jonathan Clements  |  July 23, 2021

WE JUST LAUNCHED our newest feature: A blog that’ll be updated two or three times a day with new posts that typically run some 300 words. These posts will, I hope, complement the site’s longer articles, which we’ll continue to publish, though perhaps less frequently.
Why introduce a blog? It’ll allow HumbleDollar to be more timely. It’ll be a way to tackle topics that don’t require full-length articles. And it’ll be another opportunity to highlight the financial philosophy that drives much of what we write—and what makes HumbleDollar different from most other financial sites:

We think harping on the stock market’s daily action is foolish and that the forecasts of Wall Street’s chattering class aren’t just worthless,

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Prices Just Doubled

Jonathan Clements  |  July 22, 2021

IF YOU THINK BITCOIN or any other cryptocurrency will one day be used as readily as dollars and cents, give some thought to this year’s volatility. Suppose you were using your bitcoin stash to pay your $2,000 monthly mortgage payment. Between April and today, the effective cost of your mortgage would have doubled—because bitcoin’s value has been pretty much cut in half.
Now, if you were paid in bitcoin and your mortgage payment was fixed at some value specified in bitcoin,

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Playground Taunts

Jonathan Clements  |  July 21, 2021

IF YOU WANT TO SEE your fellow citizens at their least appealing, look no further than online discussion forums. All too often, they’re a repugnant cesspool of anger, bullying and boastfulness. The comments posted on HumbleDollar are typically fairly civil, though even they occasionally veer toward the unnecessary nastiness that’s rampant everywhere else.
But here’s what these virulent commenters miss: Their postings reveal far more about themselves than about the subject they’re opining upon.

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Ask the Question

Jonathan Clements  |  July 17, 2021

THERE’S NOTHING that deters financial planning like a scarily large price tag.
We should ask ourselves all kinds of tough financial questions. But many of the toughest never get asked—because we know answering them will involve agonizing choices, difficult conversations and unthinkable amounts of dollars. Consider these four:
1. How would you cope if you were out of work for six months? As I’ve noted in earlier articles, the big financial emergency isn’t replacing the roof or the air-conditioning system,

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Keeping Our Heads

Jonathan Clements  |  July 10, 2021

WHAT WORRIES ME? It isn’t the stock market, but rather stock market investors.
Despite all the hand-wringing, this doesn’t strike me as an especially dangerous time to own stocks. Corporate earnings are rapidly recovering from last year’s economic shutdown—not exactly a scenario where you’d expect a big stock market decline. Meanwhile, bonds and cash investments are offering scant competition for investors’ dollars, which is another reason to be bullish on stocks.
But even if the overall market appears no riskier than usual,

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June’s Hits

Jonathan Clements  |  July 1, 2021

WHAT GRABBED readers’ attention last month? Here are the seven most popular articles published by HumbleDollar in June:

“Among the unhappy retirees I’ve talked to, most are bored,” writes Joe Kesler. “That can usually be fixed. Think about old interests you weren’t able to pursue in the past.”
Dick Quinn considers himself thrifty. But even he balks at the frugality embraced by some followers of the financial independence/retire early (FIRE) movement.
Suppose you pay 1% in annual fund expenses and 1% for financial advice.

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Skimping on Cash

Jonathan Clements  |  June 26, 2021

EMERGENCY MONEY is dead money—and it’s rarely looked more dead.
Just as we shouldn’t carry more insurance coverage than we really need, we shouldn’t hold more emergency cash than necessary. Why not? Excessive money spent on insurance and kept in our emergency reserve will likely come with a hefty opportunity cost. Indeed, thanks to the double whammy of inflation and taxes, our cash reserve will slowly depreciate, and that’s especially true given today’s rock-bottom interest rates.

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What Goes Down

Jonathan Clements  |  June 19, 2021

IT MIGHT SEEM LIKE an obscure academic question: Do stocks truly follow a random walk or can we count on them reverting to the mean? Depending on which side we favor in this debate, it can make a huge difference to how we invest—and to our confidence as investors.
Like me, many HumbleDollar readers have most or all their investment dollars in index funds. A key reason we invest this way: It’s impossible to predict which stocks will shine because they follow a random walk.

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Get an Attitude

Jonathan Clements  |  June 12, 2021

WHAT DOES IT TAKE to manage money prudently? Yes, we should save diligently, favor stocks, diversify broadly, hold down investment costs, buy the right insurance and so on. But all these smart financial moves stem from key assumptions we make about our lives and the world around us.
What assumptions? I believe prudent money management starts with five core notions—which, as you’ll discover below, sometimes contradict one another:
1. We’ll live a long life.

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Life Cycle

Jonathan Clements  |  June 5, 2021

I JUST HAD MY SIXTH bicycling accident—which made me think about my investment portfolio.
I started cycling seriously in 2005, when foot problems forced me to cut back on running. That was the year I bought my “starter” bike—part aluminum, part carbon—purchased for $1,000 from a bike shop that was going out of business. Within a few months, I added the special pedals with the shoes that clip in.
Early on, I had my fair share of embarrassing falls,

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Illusions of Safety

Jonathan Clements  |  May 29, 2021

IF WE WANTED to design a portfolio that appeals to our worst investment instincts, we might couple a savings account with lottery tickets. Some governments have even issued bonds with just these characteristics.
What’s the attraction? The savings account ensures that part of our portfolio never loses value, while the lottery tickets let us dream of riches in return for a relatively small investment.
This year, we’ve seen the lottery-ticket mentality writ large, as investors take fliers on meme stocks,

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Getting Framed

Jonathan Clements  |  May 22, 2021

WE ALL HAVE LIMITED time and limited money. How can we make the most of these two scarce resources?
More than anything, the answer lies in getting the big picture right. That means thinking through the tradeoffs involved, so we don’t allocate too much time and money to some parts of our financial life, while neglecting others.
On that score, it’s hard to offer hard-and-fast rules because personal preferences play a key role. Still,

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Work in Progress

Jonathan Clements  |  May 15, 2021

RETIREMENT MAY MARK the end of fulltime work—but that doesn’t mean we should stop working on our finances. Even after we quit the workforce, there’s much we can do to strengthen our retirement plan and, indeed, that may be necessary if we find we’re drawing down our nest egg too quickly.
Are you concerned that you might outlive your savings? Consider these six financial tweaks:
1. Work part-time. I’ve heard folks claim that if you’re still doing some work for pay,

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Not So Different

Jonathan Clements  |  May 8, 2021

THE ECONOMY IS recovering and the stock market has recovered. The pandemic isn’t over, but it seems we’re past the worst, at least in the U.S. Feeling better? Take a deep breath, take a step back—and think about the past two decades.
Since early 2000, we’ve had three major stock market declines, or roughly one every decade:

In 2000-02, the S&P 500 tumbled 49%, excluding dividends. The first leg down was triggered by the bursting of the dot-com bubble.

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Built for Ease

Jonathan Clements  |  May 1, 2021

MY FATHER LOATHED the idea that he would spend his final years in a nursing home. In the end, he never had to confront that possibility: At age 75, while riding his bicycle, he was struck and killed by a speeding car.
Still, I think often about his reluctance—because I share it. Despite exercising every day, I know I’m not as flexible or as fast as I once was, and it takes longer for the stiffness in my muscles to ease each morning.

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