The $1,000 Gift From Jonathan Clements To 18-Year-Olds | Bill Bernstein & Christine Benz | 160 - Catching Up to FI: Financial Independence for Late Starters

Episode Transcript
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(06:39):
Hello and welcome backto Catching Up to FI.
I'm Bill Yount with Jackie CummingsKoski and we're very excited
today to introduce you to a showthat was recorded on Bogleheads
on investing a few weeks or ago.
And in order to introduce this show,we brought on two of our dear friends,
Christine Bens and Bill Bernstein.
I'm so excited to have them on theshow because we need to have Bill

(07:01):
back, and this is the hook to get himback on our show, to talk about the
history of investing and financialhistory of which he's an expert.
But let me tell you, bill Bernsteinis an American financial theorist,
author, and former neurologist.
He is known for his work on modernportfolio theory and economic
history, as well as his booksaimed at individual investors.

(07:21):
He co-founded Efficient FrontierAdvisors and investment management firm.
He holds a PhD in chemistry andan MD and practice neurology.
Before shifting his focus to financeand history, he's authored several
books, and I have to say, the veryfirst book I read when I woke up as
a late starter to investing was theIntelligent Asset allocator, which

(07:44):
was an interesting place to startand he can maybe tell us about that.
'cause that may be the most difficultbook for the new investor to, to start
with because I had to get out a financialcalculator to figure out how to read them.
Book, but some of the books he iswritten are the four Pillars of investing
as well as the Investors Manifesto.

(08:04):
Historically, he's written the Birthof Plenty, a Splendid Exchange, which
I love, and masters of the word.
So I'm gonna welcome Bill Bernsteinfor the first and hopefully not
the last time to catching up to FI.
Glad to be here.
Yeah.
And Bill, you know, we havesome smart people on this show
and, Christine is no exception.

(08:26):
She has been on the show twice before.
We're so honored to have herback along with Bill and they're.
Are both board members of the BogleCenter for Financial Literacy and
Christine serves as president.
She is director of Personal Finance andRetirement Planning for Morningstar and
co-host of the podcast, the Longview.
She is also author of the book, how toRetire 20 Lessons of a Happy, successful

(08:49):
and Wealthy Retirement, and we're soglad to have them today to talk about a
new initiative that we believe is veryimportant to us and most of our listeners.
So Christine and Bill, a lot of ouraudience may not know unfortunately.
Who Jonathan Clements is.
You are both dear friends of his,as am I I was very fortunate to meet

(09:11):
him back in 2019 at the inaugural,Jim Dalley conference, WinCo.
ever since then we've been friends.
He is been on the show, but ouraudience may not be as much as vintage.
They may be a little younger.
Christine, who is JonathanClemens and what does he mean
to the financial literacy space?
Jonathan Clements has been a seminalfigure in the personal finance space.

(09:35):
A seminal figure for mepersonally in my trajectory.
But, many of us first became aware ofJonathan's work when he was the personal.
Finance columnist for the Wall StreetJournal for many years, and just
consistently penned these excellentarticles that cut to the quick of
what investors needed to know andwhat they should just disregard

(09:58):
with respect to their money.
Um, And so.
Every day I would read the journal, andI quickly realized that Jonathan was
the person who was just consistentlygiving people what they needed to know.
Not any, fluff.
And so he has written a numberof, uh,, super valuable books.
And more recently, he's been engagedin a blog called Humble Dollar, which

(10:22):
is a website that is geared towardindividuals managing their finances.
Jonathan contributes.
Articles there.
And he also curates a stableof, of contributors, many
of whom are like-minded.
So he has just been a tremendouslyinfluential figure in the
Bogleheads community as wellas for investors at large.

(10:45):
Um, I think he has helped shape investors'wellbeing, as much as, or more than
almost any figure that I can think of.
And Bill, how did you meet Jonathanand what is your experience with him?
Give us a little personal flavor.
Well, Jonathan and Igo back, over 30 years.

(11:05):
I mean, Christine, you musthave been in elementary school
when I, first did, and, he was.
One of these people who would answer allof his emails no matter who you were.
And back 30 years ago, hedidn't know me from, from Adam.
He was always gracious,and helpful and it.

(11:26):
take me very long to realize allof the things that Christine said
about him, which was that hisadvice was always to the point.
And over the next 20, 20 yearsor so, he acquired the kind of
readership that I don't think anyother, financial journalist has.

(11:47):
He acquired.
I would say almost maybe an elitereadership of people who understood
finance better than the readersof most financial columnists do.
He understood market efficiencyand he talked that his readers.
he also talked to his readers about thenon-financial aspects of money management.

(12:09):
It's not just how do I make a lotof money, and how do I invest well.
What's this money really for?
And that was really where he excelledand what he taught people was that if
you think that if the purpose of moneyis to buy stuff, you've lost the game.
Alright?
What money buys is not stuff.
If that's what you think itbuys, that you're going to be.

(12:31):
miserable.
What he taught people was that moneybuys time and it buys autonomy.
And it buys experiences and theopportunity to enjoy your life with
the people that matter to you most.
you know, I think he left people, ina much better place than almost any
other financial writer that I know of.

(12:52):
Yeah, he wrote the book How to ThinkAbout Money, which is one of his semial.
Works and he in his later years,and we talk about later years
because unfortunately as we'll hearabout his life is being cut short.
And that's sort of been an evolutionfor him into a very transparent look
at how do you plan for your own.
Death.

(13:12):
He was unfortunately diagnosedwith terminal lung cancer that had
metastasized approximately a year anda bit ago, and he was given a year to
live, and he's taken that year to tellhis audience about what it's like.
What's interesting is he approachesit with humility and equanimity.
He is at peace with thisand is, he is so strong.

(13:33):
I find his courage so impressive.
He's telling us not only how to livenow, but he's telling us how to die.
Well, isn't that not true?
Very much so.
Yeah.
I think so.
Y you know, it's been an inspirationto all of us who've dealt with
him, over the past 14 months sincehe is gotten his, his diagnosis.
I have in my years of practicingmedicine, I don't think I've

(13:56):
ever seen anybody, uh, approach.
their demise with suchgrace and good cheer.
it's been quite aremarkable experience from.
Yeah, it's actually beenvery inspiring to me.
I'm like, this is how I wanna go out.
And the initiative that we brought youguys on to talk about and we're gonna,
play, a lot more detail about it.

(14:18):
But I love the fact that thisis how he lived and now this
is going to be his legacy for.
For however long he still has here.
So he got with Bogle heads and you guyscan tell us a little bit more about it.
But the new initiative is calledGetting Going On Savings Initiative,
A legacy of financial empowerment.

(14:40):
We wanna hear more about that.
Christine, can you give us alittle bit of background on that?
Sure Jackie.
Thank you.
A number of us who knew Jonathan well,when we heard of his diagnosis, went to
him and said, what can we do to honor you?
We would love to have you see thefruits of your legacy while you're here.

(15:00):
And so, we had initially thoughtmaybe it would be some sort of
a financial journalism award.
And in Jonathan's name and Jonathan's.
counterpoint was that there areway too many such things and he
wasn't really interested in that.
What he was interested in was somesort of project that would help
individuals, ideally young workingadults get going on savings and

(15:27):
investing, and start to recognize thebenefits of long-term compounding.
And so we set to work.
We had many, many meetings.
In fact, one of the best parts of theproject has been being able to work
with, bill and Jason Zweig and AlanRoth and Mike Piper and Karen damato.
That's kind of our, core crew todiscuss how we might do this, how

(15:51):
we might stand up this project.
And so we hit on this idea of.
Making contributions to young workingadults and trying to get them into
a Roth IRA with perhaps a little bitof a nudge to consider something very
minimalist like a target date fund andoperationalizing something like this.
I won't bore you with the details,but it's a little bit of a

(16:13):
lift, you can't make Roth IRAcontributions in other people's names.
They need to have earned incometo make a Roth IRA contribution.
There are lots of logistical.
Hassles with, gettingsomething like this set up.
But we have been working with a group,aligned with MIT, it's called J Pal.

(16:34):
Jason Zweig had written about JPAL in his work for the Wall Street
Journal, and J PAL is an organizationthat is dedicated to toward poverty
alleviation in various forms and wasinterested in working with us on this.
Project and J Pal will iterate onour initial, crew of, folks whose

(16:57):
contributions we will, make andthey'll sort of help try to help
improve upon the pilot group.
So if we find that.
People pull their money out shortlyafter making their contributions or
they don't add any additional funds.
We'll work on making sure that thenext group potentially have nudges

(17:19):
to help, improve their outcomes.
So it's a work in progress, but the BogleCenter has been involved as the conduit.
We're a 5 0 1 C3 charitableorganization, the Bogle Center.
And we have been takingin donations to fund.
These contributions toyoung working adults.
We've been very successful withfundraising so far, but we are still

(17:41):
welcoming additional donations.
But, the donations then canbe fully tax deductible for
people who wish to contribute.
And then on a separate track,funding this initiative.
I'll let Bill talk about thebook because Bill has done
truly the heavy lifting on, um.
Getting that book up and running, andit's been selling very nicely too.

(18:02):
So Bill, maybe you can talkabout that piece of it.
Yeah.
I mean, before I talk about that,the person, the other person I really
want to give credit to that, thatChristine mentioned was, was Jason
Sweig, who more or less was Jonathan'ssuccessor at the Wall Street.
Journal.
and Jason's focus, is very similarto, to Jonathan's, but Jason is

(18:23):
also very interested in the academicfinance literature and both,
Jonathan, and Jason didn't really wantanything to do, with a journalism.
Award or a directeducational effort as well.
because some of theirexperiences in that space.
And Jason was the one who suggested,you know, I know this academic

(18:46):
research group that's veryinterested in the, the formative
process, for disadvantaged youths.
And he was the one who got ushooked up with, with J Pal.
He was the one with that, connection.
And it's been a very rewarding.
Process.
This is a very inspirationalgroup of people that we're,
that we're working with.
one of the things that, and I don't even,can't even for the life of me, remember

(19:09):
where the idea came from, but the ideawas to put together a compendium of his.
Of Jonathan's best column.
So Jonathan did do a lot ofthe heavy lifting on that.
He was the one who picked outinitially about 75 columns.
We whittled it down to about60 of them, and we put it
together into a self, uh, book.
All of the royalties.

(19:30):
Go of course , to the initiativeand the feedback we've gotten on
the book is just, spectacular.
You know, it's, it's, very,very highly, rated on Amazon.
It gets a 4.7, if youknow what that means.
in Amazon's rating system.
I mean, you know, there areauthors who would sell their
mothers for that kind of rating.
And it's sold very well.

(19:51):
And the process of editing it, producingthe book has been very rewarding.
I mean, producing a book really not a lot.
Fun.
But in this case, it really, itreally was, uh, a very enjoyable
and rewarding experience.
I won't say it was fun, but it was really,it was, it was very, very rewarding.
I really enjoyed, greatlyappreciated putting this together.

(20:12):
Well, this two-pronged approach to helpingyoung people that are disadvantaged get
involved in saving is really avant-garde.
I, I think this is the futureof giving with that warm hand.
While you're alive hand, as opposed to thecold hand, you've shown Jonathan the power
of his work by giving to him and giving tothe world in the way he sees fit so that

(20:33):
he can experience it while still alive.
This is all what I think we shouldbe focused on with regards to giving.
Who wants to be the, you know,the richest man in the graveyard?
Let's give while we're alive, and thisis one of those gifts that I think
we'll keep on giving to the world.
I look forward to reading that bookbecause I never got a chance to
grow up with Jonathan's columns.
I didn't wake up till eight yearsago, and I think he is long since

(20:56):
gone from the Wall Street Journal, soI didn't learn with him as he grew.
But I can now learnfrom him in retrospect.
So I really look forwardto reading that book.
And I wanna say, Jackie,that catching up to FI
has made a $1,000 donation to thisfoundation to be seed money for this.
And we want to challenge ouraudience to do this as well.

(21:17):
The first four donors that are ableto give $250 and so four of you will
make up a thousand dollars for anotheryoung person to have a Roth IRA.
We will give you a free book.
That, Jonathan's book.
So take a picture of your donation,send it to us at info at catching up to
fi.com, and we welcome the opportunityto send you a book of Jonathan's columns

(21:39):
that you can read and you will make adifference in some individual's life.
So, Jackie, what do you think about this?
I think that is awesome and we'revery excited about it, and I could
tell you guys that I'm one of thosepeople that would have been ecstatic
about something like this when I wasin high school and starting college.
I. I saved nothing when I was so youngbecause I'm paying my way through school.

(22:01):
I'm trying to work full-time.
The only thing I saved withthese $2 bills behind me.
So this had such a profound impacton me, and I know the type of
people and the demographic you'reserving and how critical that is.
Now, for one second, I wannaput my financial planner hat on.
Okay.
So.
The bill that just passed, it includesthat you get a thousand dollars charitable

(22:24):
gift donation that you can, deduct evenif you're taking the standard deduction.
So that's a very new thing.
So if you do a thousand dollars,you're gonna be able to get a deduction
and you don't even have to itemize.
And me personally, I have this supersized,HSA and I lean towards, leaving a legacy.
C for nonprofit organizations.
So I have included the Bogle Centeras a part of that because, I've

(22:48):
just been so, I've benefited somuch from what you guys are doing.
So just a few financial planningtopics and I hope that Jonathan
will appreciate the fact that wethrew a little bit of that in there.
But, but so awesome and Billand I are so thrilled to support
this and we are behind you 100%.
Thank you both so much.
We very much appreciate you shiningthe spotlight on the initiative and

(23:11):
we appreciate your generosity as well.
Before we close our introduction,I want you to tell us a little bit
about the BOGLEHEADS Conferencebecause I started my conference life
with FinCon as I talked to you about.
That'll be in Portland this year.
I move towards econ.
Economy, which is a fantastic conferencethat occurs every year in Cincinnati.
And then I moved into Bogleheads andit seems to me that there's a synergy

(23:34):
between economy and Bogleheads Conference,and Bogleheads is really growing.
Tell us where the conference is, how wecan involved, and can we get our catching
up to file listeners there this fall?
Absolutely.
Thanks, bill.
The conference, the bogleheads conferencewill be October 17th through 19th.
2025 and it'll be in San Antoniothis year, right on the river

(23:58):
walk at the Hyatt Regency.
We have a phenomenal slateof experts who will be there.
Bill Bernstein, will be thereof course, because he is on our
board and as a Bogleheads regular.
Um, Alan Roth will be there.
Karen Dato will be there.
Rick Ferry.
And then we'll also be bringingin Celine Roji, the, new-ish CEO

(24:21):
of Vanguard Ed slot, the, tax.
And IRA expert will be makinghis bogleheads debut this year.
Jackie will be one ofour speakers as well.
Um, we are trying to address.
Fi, in the Bogleheads programmingbecause we recognize there's an alignment
there that many folks who are pursuingfinancial independence are very much

(24:45):
on board with the minimalist sorts ofportfolios that Bogleheads believe in.
And so we have tracks that aregeared toward, people who are
in the accumulation fi phase.
Saturday afternoon, we'll have,breakout sessions geared toward
people who are at that life stage.
So I really love the idea ofbringing younger investors

(25:09):
on board with bogleheads.
We're also, offering a familydiscount this year that if you
bring a non spouse, family member,whether a child, adult child is fine.
Sibling, whatever the casemight be, you're eligible for a
discount on your registration.
So the goal is to try to bringyounger folks and families
to the conference as well.

(25:31):
Me say two things about the conference.
First of all, you won't go toa better staffed conference.
I like to say that Christine has thebiggest, Rolodex of anyone I know.
she deploys that beautifullyin selecting the speakers.
And the second thing I wanna say is justabout the, ambiance of the conference.
I can remember the second one I went to.

(25:53):
Was in 2003.
and I remember getting on the plane andthinking to myself, why am I doing this?
and then the moment I got tothe conference, I realized these
were the nicest group of peoplethat I had ever met in my life.
And every time I go to the conferencenow, that's what I look forward to.
It's just the nicest bunch ofpeople you'll ever wanna meet,

(26:17):
and very interesting people.
Well, you're the historian actually.
Bill and the Bogleheads havebeen around since John Bogle's
days and he rest in peace.
He died before I was able to meet him.
I didn't make it to the Bogleheadsconferences that he was at, but
this started in somebody's livingroom back in Miami, was it?
15 years ago.

(26:38):
2001, I believe.
Yeah.
Is that, is that right, Christine?
That sounds right.
Taylor Lamore home in Floridawas the site of the original
kind of, Bogleheads gathering.
And, Jack Bogle made an appearancethere and thrilled, the folks who
were in attendance that night.
It was, uh, sounds like it was avery special evening, and, uh, this

(26:58):
incredible group has been goingstrong and arguably getting stronger
in the ensuing 20 plus years.
if I'm not mistaken, the conference had500 people at it last year, and you've
expanded the number to 600 this year.
So this is, a coffee tableconversation back in 2001.
That is now a. Significant force inthe financial independence movement.

(27:21):
And I just wanna see it keep growing.
So I encourage our listeners to buytheir ticket and go to San Antonio.
Unfortunately, I will not beable to be there this year.
I will be in South Africa on anexperience for my 60th birthday,
but Jackie will be there.
She'll be talking there.
There'll be other people, from.
The FI community thatyou are familiar with.

(27:41):
If you're not familiar with say JonathanClements or Bill Bernstein, there
are gonna be folks that , you willbe familiar with in the community,
and they're gonna be people your age.
I've seen fathers bring sons, I've seensons bring fathers who were late starters.
an incredible experience and asBill said, the ambiance is great.
I sat down with Bill Bernstein, AlanRoth and Jonathan Clements over lunch

(28:03):
and talked about small cap value.
I mean, what more fun can you have?
Oh, bill Bill was ona playground for sure.
So I will represent and I am soexcited now, bill Bernstein, did
you wanna get a last word in?
Go ahead.
no.
I mean, it was just a funny story aboutthe first conference, which was that,
Mr. Bogle had been, invited to speakin Miami at some conference, I think

(28:25):
it was set up by the Miami Herald.
and he wanted to, bring, uh, acouple of his local fans, including
Mel Lindower and Taylor Lamore.
and the Miami Herald said, no, can'tjust bring anybody to this conference.
And so Jack said, screw it.
and went, and instead of going to thatpart of the conference, wound up in

(28:45):
Taylor's, uh, living room, Miami Heraldlooked at that and said, we better
invite these people to our conference.
I.
Yeah.
Yeah.
I'm not, I hope I'm not s Miami Herald.
Well, as always, there's great historyand everything and we learn from it.

(29:07):
You're gonna teach us about financialhistory in a future episode.
Christine, I'm sure we'llhave you back for yet another.
a multitude of reasons andthings that you can talk on.
We wanna focus in the near futureon drawdown strategies, and you're
a proponent of one and Dana SBAsproponent of another, and Fritz
Gilbert's proponent of another.
There are many ways to skin a cat,and we wanna talk about not only the

(29:28):
accumulation phase, but Deaccumulationand Bill may have a word on that as well.
So, at any rate, there's so muchmore to learn from these folks.
So much more to talk about.
Let's get into this podcastthat they all recorded.
With Jonathan Clemens, you'll hear hisvoice in this show and you're gonna
learn a lot about his history and whatthis initiative, the Jonathan Clemens
getting going on Savings Initiativeis going to do for the future.

(29:51):
Thanks guys for being here tohelp us launch this on our show.
Thank you so much, bill and Jackie.
We appreciate it.

(30:13):
Welcome everyone to the 82nd editionof Bogleheads on Investing, and
today we have a very special podcast.
We have three guests, Jonathan Clements,Jason Zweig, and Christine Bens.
And we'll be discussing theJonathan Clements Getting Going
On Savings Initiative and his newbook, the Best of Jonathan Clements

(30:35):
Classic Columns on Money and Life.
Hi everyone, my name is Rick Ferry and Iam the host of Bogle Heads on Investing.
This episode, as with all episodes,is brought to you by the John c

(30:59):
Bogle Center for Financial Literacy,a nonprofit organization that is
building a world of well-informed,capable, and empowered investors.
Visit the Bogle center@boglecenter.netwhere you will find a treasure
drove of information, includingtranscripts of these podcasts.
Before we begin, I haveone special announcement.

(31:19):
Tickets for the 2025 BOGLEHEADS Conferenceare now on sale@boglecenter.net.
There's special early bird pricing,so you want to get your ticket.
Soon.
This year's conference will begin atnoontime on Friday, October 17th, and run
through noontime on Sunday, October 19th.

(31:40):
It will be at the Hyatt RegencySan Antonio Riverwalk Hotel.
A beautiful location directlyacross from the Alamo.
With lots to see and lots to do in thecity of San Antonio, you'll find a list
of speakers@theboglecenter.net website,and a full agenda will be up soon.
I hope to see many of you there.

(32:02):
In today's podcast, we have threespecial guests, Jonathan Clements, former
personal finance columnist for the WallStreet Journal, Jason Sweig, current
columnist for the Wall Street Journal.
And Christine Bens, director ofPersonal Finance and Retirement
Planning for Morningstar.
As most of you know, a year ago,Jonathan was diagnosed with a rare

(32:28):
terminal cancer and has been battlingto stay with us one day at a time.
But that has not stoppedhim from his life's goal of
continuing to educate people.
On good financial principles throughhis Humble Dollar website and a new
program called the Jonathan ClemensGetting Going On Savings Initiative.

(32:51):
And our new book, the Bestof Jonathan Clemens, classic
Columns on Money and Life.
We're gonna be talking about allof this with Jonathan, Jason, and
Christine, and discuss how you can help.
So, with no further ado, let'swelcome Jonathan Clements, Jason's
wg, and Christine Bens, welcomeback to Bogleheads on investing.

(33:14):
Rick, thanks for having us all on.
It's great to, great to be talkingto you about the initiative.
Well, that's a great start toget going with the podcast.
Uh, Jonathan, why don't you tell us,uh, how did this initiative get started?
Well, I really am not the rightperson to be talking about it.
I was approached about wood.
I like a journalism awardset up in my memory, and my

(33:37):
response was absolutely not.
The world has way toomany journalism awards.
Yeah, I'm not sure thatit needs another one.
And so I said, well.
If we're gonna do something, let'sdo something to help young people
get started as an in investors.
And my initial idea, which seemssimple to me, but it didn't prove to be

(33:58):
quite so simple, was that it would begreat to take kids from disadvantaged
families and get them started asinvestors by funding Roth IRAs with
a thousand dollars on their behalf.
And I threw this outthere and thought, well.
Seems like a good idea should work.
Sorry, you said you threw that out there,but who did you throw it out there to?

(34:21):
Um, I think my initial conversationswere probably with Bill Bernstein,
who's been involved with this ashis Mike Piper and Karen damato.
I mentioned this Bill had one or twofurther conversations with me about.
And said that there seemed to be someproblems, but essentially I was cut out
of the loop, which is a nice place to be.

(34:42):
Uh, one of my, my goals in life isnever to sit on a committee again,
and so all this work was goingon in the background and I had
absolutely nothing to do with it.
So perhaps Jason or Christinecould talk a little bit more
about what's been going on.
Okay.
So Christine or Jason,what happened after that?
What's going in alphabeticalorder, Christine?

(35:03):
Well, that's fine.
I remember, um, Jason and I kind ofat the, um, Morningstar conference
talking about next steps here.
Yep.
Yep.
So we, at the Bogle Center, the Johnc Bogle Center for Financial Literacy,
it includes some of the people thatJonathan just mentioned on its board.
So Mike Piper, ki damato, billBernstein, Alan, Alan Roth.

(35:27):
X of our board, we have this 50 1 C3 that's dedicated to help
improving financial literacyand wellness in the community.
And we thought that perhaps we werewell situated to help facilitate this
because standing up a separate 5 0 1C3 seemed like a pretty big project,

(35:48):
and we felt that our mission at theBogle Center is enough aligned with.
Jonathan's vision that we were in aposition to help that we could serve
as the repository for donations.
And then the next step from therewas really figuring out, well, who
is our, our partner organization tohelp to help operationalize this?

(36:09):
Because the Bogle centers of.
Fairly small operation as youknow, Rick, um, having been my
predecessor as as president.
And so we were kind of casting aboutlooking for different entities that do
some version of what we wanted to do here.
And really that's where Jason picksup because he came to us with an idea
of a group that he had been familiarwith, that he had written about.

(36:33):
So Jason, maybe you wanna talk abouthow Jay Powell entered the picture?
Yeah, thanks Christine.
I'll echo some of what Jonathansaid with a couple more details.
I mean, he and I have been friendssince early 1987, and one of
my goals was to spare him, uh,all the nitty gritty, all the.

(36:58):
Agonizing back and forth, the thiswon't work and the that won't work.
And oh crap, we forgot about this.
And a large part of the processof overcoming obstacles was
dealing with things like whatpaperwork is gonna be required?
How do we make sure wecomply with IRS rules?

(37:20):
How do we make sure there's.
An appropriate placefor the donations to go.
How do we eliminate conflicts of interest?
I mean, am I exaggerating, Christine?
It was hundreds.
No, hundreds.
Hundreds of eem, hundreds of emails, andnumerous phone calls, and quite early on

(37:40):
I realized that we needed reinforcements.
This was not a project that we couldtake on either individually or.
Exclusively through theBogle Center because it, it
was too big and complicated.
And so I thought of J Pal, whichis a organization that does

(38:02):
experiments in behavioral economicswith the goal of reducing.
Wealth and incomeinequality around the world?
Are they affiliated withany academic organization?
Yeah, uh, so J Pal operates out of MIT,the Massachusetts Institute of Technology

(38:22):
and it's co-head is Esther Duflo, who wonthe Nobel Prize in economics for research
that was largely driven through jal.
And I wrote about them.
For the Wall Street Journal, uh,about a decade ago, maybe it was 2016.

(38:44):
So I was familiar with them and Ithought, what could be better than
setting this program up as an experiment?
Because what JAL specializes in is.
RCTs, randomized control testing whereyou take two groups of people and you

(39:05):
expose one to the experimental conditionand the other is the control group,
and you see what happens to each group.
So that where it evolved and that broughtin a whole new group of people, actually
two groups, because this program willbe at the ground level operated by.

(39:28):
A youth employment organization thatis operated by the city of Boston.
So there's this group that is gonnabe the subject of this experiment,
and we'll describe what theexperiment is in a minute here.
But, um, who chose that group?
Was that MIT?
Yeah.
Well, first of all, because of theeligibility rules for a Roth IRA

(39:52):
and the importance of being able totrack the participants over time.
They wanted it to be run throughan organization that JAL has a
longstanding relationship with,because they've already put the data
gathering infrastructure in place.
Though, before we get into,uh, the administration of this

(40:14):
study and initiative, let'sdescribe exactly what it is.
I mean, what, what are we studying?
Uh, Christine?
Sure.
So the goal of this, uh, pilot programwill be to get these young people.
Investing.
So the study will give them the fundsand a little bit of direction about

(40:38):
how and where to invest the money witha little bit of a nudge nudge into a
target date vehicle, and then J Palwill study what happens after that.
Just so I understand, the studyis about if you give these young
people a thousand dollars andgive them educational material.

(40:59):
In this case that might nudge theminto a target date fund of some sort.
The idea is see what happens in inthe future if they build upon that.
Or if they just take the moneyoutta the account and spend it.
And how that compares people whoyou did not give any money to.
Is that how it's supposed to work?
Yeah, exactly.

(41:19):
And if I can jump in for a second, there'sresearch from around the world, much of
which has been done by people associatedwith J Pal, showing that cash grants
can be a motivation for future saving.
And we don't know whetherthis program will work.
These young people areunder a lot of pressure.

(41:41):
They come from poor families andundereducated, so we don't know
how they're going to behave whenthey get a a thousand dollars in
an account that is created for them
in a Roth account.
Exactly.
Will they immediately withdraw it?
Will they leave it thereand forget about it?

(42:03):
Will they leave it there and add to it?
As they start earning income of theirown, which of course is what we're
trying to see if we can incentivize.
So that's the purpose of the experiment,to figure out whether it will work,
what works best, and with luck.
The lessons that we acquirethrough this experiment will

(42:27):
apply more broadly throughoutsociety and we can help motivate.
Young people, uh, across the countryand across the world to become long-term
savers and investors, which is apretty good way to honor Jonathan.
And
lemme just jump in here.
Uh, one thing I want to clarifyis that, you know, while this, uh.

(42:50):
Initial experiment is gonnabe based out of Boston.
The, the notion is that thisis not gonna be Boston only.
The hope is that if it's successful,that it'll get rolled out into
other cities around the country.
It's just for this initial summerprogram that we'll launch this summer.
Right, Jason?
Yeah, that's correct.
And that's a very good point, Jonathan.
And as Christine said,this is a pilot program.

(43:11):
It's testing the initialfeasibility, like can this be done?
What do we need to tweakto make it more effective?
What are the problems with young peoplemaybe who don't read well or who don't
know the difference between a stock anda bond or who've never turned heard?
The term mutual fund or ETF?

(43:35):
So there's gonna be a lot of trial anderror initially, but I can tell you in
my Wall Street Journal inbox, I have.
At least a dozen emails from readersin other cities saying, how can we
find out more about this program?
'cause we wanna try it here.

(43:56):
And the real purpose of this experimentis to make that possible so that
we can take what we learn in Bostonand enable people in Minneapolis and
Chicago and Los Angeles and San Antonioand the other places I've heard from.
To do it there as well.

(44:17):
One thing we really liked aboutJ Pal and its approach was that
they're constantly iterating on.
What's working, what's not working,and so we'll be able to look at
this pilot program and see maybeincentives would help get people to add
additional funds to, to the account.
Like
a matching of some sort.

(44:39):
Yeah.
It's not one and donesaying, we have fixed this.
Issue and we're going to goforward with it forevermore.
It's saying, here's somethingwe we're trying, and then we may
try to improve it as we go along.
So I think that was a very agreeableapproach to all of us because it,
there are no clear cut solutions tohelping people emerge from poverty.

(45:02):
The other great advantage of doinga project like this through an
organization like J Pal is of course.
Being run by a team of academics.
One of their goals is to publishthe findings as a research
article in an academic journal,which will be, of course, widely

(45:24):
circulated around the world.
Similar organizations elsewherewill have that free intellectual
property to build on.
And to try to createsimilar programs elsewhere.
And if you think about techniques likeautomatically defaulting employees into

(45:46):
a target date fund, that has becomevery popular in the United States.
Or automatic rebalancing.
All of those ideas originally cameout of academic research and have been
applied successfully in the real world.
So we hope if this project takes hold,that it'll have a similar effect.
So there's three parts to this that we'llget young people enrolled in this program.

(46:12):
I, and I was not involvedin, in the creation of it.
Uh, you know, I'm learning as I go along.
Number one, someone will select the groupof people who will get these a thousand
dollars grants, and number two, they will,with some help, I assume they will open
up a Roth account and a thousand dollarswill be contributed from the Bogle Center.

(46:35):
Correct, Christine?
Well, yes, so the contributions arecoming in through the Bogle Center.
Contributors have theopportunity to earmark their
contributions to this initiative.
And the book also that was published,that that money will also come into this.
Does that go through the Bogle Center too?
The, the book revenue,which we'll get to later.

(46:57):
The idea is that the revenues will come inthrough the Bogle Center and we will then
contribute them out to the initiative.
So
the Bogle Center being anonprofit 5 0 1 C3 organization.
Has the ability to do this.
And so you are facilitatingthis through the Bogle Center.
So that's the second thing.
The account is open and, and it'sfunded with a thousand dollars.
But the third thing that's happeningis these people who are granted

(47:20):
the thousand dollars Roth aregoing to get educational material.
And Christine, I understand that'salso coming from the Bogle Center.
That has been a collaborative effort,Rick, where the goal is to give the
participants at point of purchase enoughinformation to make a good decision, but.

(47:43):
We don't wanna overwhelm them.
We didn't wanna put them through awhole curriculum, make them take a test.
We wanna give them enough information tomake what we hope will be a good choice.
So we've crafted some materialsabout what is a target date
fund with some basic detail on.
Investing in stocks entailswhat inve investing in other

(48:07):
safer assets might entail.
And so the trick was to providethem with enough information, but we
certainly didn't wanna overload anyone.
And I've been compelled bysome of the research at.
Various institutions that have looked atfinancial education kind of at point of
purchase, that if you can give people alittle bit of information to make a good

(48:29):
choice when taking out an auto loan orallocating a 401k for the first time,
those can be very powerful interventions.
Perhaps more so than putting someonethrough a long curriculum where they're
learning things, but they're not inany position to put them to work.
So that was the goal here wasjust to give a little bit of, of

(48:50):
information at point of purchase.
Yeah.
Let me jump in here.
I think what the research hasshown us is that, you know, if you
do put somebody through a generalpersonal finance curriculum, that
the information that they get and thelearners, they get degrade relatively
quickly and after maybe 18 months.
They're as as but ignorantas I was when I was 18.
But if you jump in when they're aboutto take out a mortgage or they're

(49:13):
about to get a credit card, orthey're about to fund A IRA and the
information is immediately, to use aword I hate immediately actionable,
then it can be super effective.
And so in this particular case, you know,these kids will be getting information
right when they're making a decision.
And with any lock, it willprove super useful to them.

(49:34):
So they're selected toparticipate in the program.
Then they are given help to open a Rothand then the money is going to come
into their Roth and at the same time,the Bogle Center is going to provide
them with this educational package.

(49:54):
Is that the way it works?
Basically, the Bogle Center through J Pal.
Ah, through J Pal.
J Powell will be doing this sortof hands-on work with the, the
participants to give them the materials.
Is this material availableonline for anybody to look at?
So if I have a 18-year-old grandchild, Iused to say child, but now a grandchild,

(50:16):
18-year-old grandchild, uh, theycould, I could also take, take the same
information that these young peopleare getting and give it to my grandson.
We haven't thought about that,Rick, but that's not a bad idea.
Materials were written explicitlyfor this sort of point of purchase
decision making, but I, I think theycould easily, we could readily put them

(50:39):
online on the Bogle Center website.
It's a very good idea.
This is very exciting and differentways you could participate.
If I wanted to give to, uh, thisinitiative, I could either make a
donation to the John c Bogle Center forFinancial Literacy for specifically.
This cause and I could use mydonor advise fund to do it.
John c Bogle Center is obviously aregistered 5 0 1 C3 organization,

(51:03):
or you could buy the book.
And the book is the best ofJonathan Clements classic columns.
On Money and Life.
Jonathan, this is your 12th book,as I counted, is that correct?
12 book.
You know, Rick, after a certainpoint, you know, it's like with my
marriages, you know, you just, youdon't, you don't count anymore.

(51:24):
More than one.
More than one.
Before we get into this, Rick, I wanteverybody who's listening to appreciate
just how incestuous this whole project is.
So as Jason mentioned, I'veknown Jason since 1987.
We were the lowest form oflife at Forbes Magazine.
I was a, I was a fact checker,and then the next fact
checker to be hired was Jason.

(51:45):
And you know, we worked together atForbes for three and a half years.
We had lunch together almost.
Every day.
Yep.
That was in the days when you couldgo out, wander out into Greenwich
Village and get a lunch for underfive bucks, which is our specialty.
Yep.
And then, you know, you think about theother people who involved in the project.
I've known Bill Bernstein since the 1990s.
Obviously I've known Christine, AlanRoth, Mike Piper, and Karen Dema.

(52:08):
I used to work side by side with Karento moderate the Wall Street Journal.
And then the fact that this isbeing done under the auspices of
the Bogle Center, I mean that I.
I love because I, I love Jack Bogle.
I thought he was just,you know, an iconic man.
I mean, so charismatic and tohave this project operating under
the Bogle Center is really great.

(52:29):
I mean, it's just from my point ofview, not that my medical condition is
a, is a dream come true, but in termsof this particular project really is a.
Well to work on.
It was a dream as well, Jonathan, tohave communications daily with Bill
and, uh, Jason and, and Karen and Alan.
It, and Mike was a, a ton of fun.

(52:50):
And I would also say from theBogle Center's perspective, Andrew
Bogle, Jack Sun is on our board.
And when Andrew heard about thisproject that we were working on and the
potential for the Bogle Center to beinvolved, his directive was go, go, go.
He felt that it was very aligned with.
His dad's vision and hewas utterly supportive.

(53:11):
And we feel that that's sort oflike the family support as well,
which is, which is a lovely thing.
Great ideas, uh, everybody.
Thanks for all the hard work andhopefully it, we learn a lot from this.
So, getting to the book, AlanRoth, uh, wrote in the book.
Jonathan has consistently remindedhis readers that money is not
an end in itself, but a meansto achieve what truly matters.

(53:34):
Security, freedom, and the abilityto nurture what we hold dear.
His columns are not aboutmaximizing wealth at any cost.
They're about finding balance andaligning our financial decisions
with our values and that really.
I thought encapsulates you, Jonathan,and in your book, the best of
Jonathan Clements, you selected whatyou believe are 62 of your best.

(53:59):
Columns and it was combined in this book.
So tell me about that process.
So initially I actually picked out I think75 columns and we ended up down at 62
because as both Jason and Christine canattest, you know, one of the secrets to
being a longtime columnist is repetition.
Repetition without people noticing.

(54:20):
So you just keep saying thesame stuff and hope that nobody
actually realizes that you said thesame thing three months earlier.
Well, as I went through the, youknow, thousand plus columns I wrote
for the Wall Street Journal, therewas a heck of a lot of repetition.
And so it was really just a question ofnarrowing it down to some distinct columns
that covered different topic areas.

(54:41):
So that was where the, uh.
You know, we ended up at the 62.
The other thing about being a columns,and I think, uh, both Jason and
Christine can also attest to this,is, you know, you don't wanna be.
The typical Wall Street writer where,you know what you're saying, hinges
on the, the stock of the day, or youknow, the market movement of the month

(55:02):
or whatever the hell it is, right?
Because if you're doing that, you'redoing a disservice to your readers.
So what you need to do is somehow.
Speak eternal truths whilemaking it seem timely.
And that is, that is thetrick to being a columnist.
And so, in a sense, what Alan istalking about in, uh, in what he

(55:22):
wrote for the book is about yeah.
Trying to figure out.
What it is that we can say oflasting value as columnists, but
packaged up in such a way thatit has some immediate appeal.
And so with many of thesecolumns, that's, that was my goal.
You know, I remember so many timesgoing in to talk to my, uh, editor
at the journal and I was justlike, well, what's the news hook?

(55:43):
What's the news hook?
And I was like, do we reallyneed to have a news hook?
Can we just run a decent article?
And so in some cases with these columns,what I did is actually remove the news
hook when we, we put them into the book.
Um, because the newshook was not important.
What was important wasthe meat of the pieces.
And I'm pleased with the waythe book came out though.

(56:04):
I would also say, and I, I think again,Jason and Christine will echo my thoughts.
You know, when you go back and you lookat the stuff that you wrote, you know,
20, 30 years ago, it's like, whoa.
That was really not very good.
Or, you know what I found when I did a lotof writing for Forbes is that the articles

(56:26):
that you don't think are very good areactually the ones that are the best.
It's the one that resonate with people.
I write an article and I'd say,well, that was just terrible,
but I'm gonna publish it anyway.
And people rave about it.
Mm-hmm.
How great it was.
And then I write something that's reallyinsightful, really important to me.
And nobody cares.
It doesn't
get any.
Nobody cares.
Well, this does remind me ofwhat I call Zweig's Law, which

(56:49):
is if I like it, you hate it.
And if you hate it, I like it.
Yeah.
Jason and I have had this conversationactually, that the amount of research
you put into an article is inverselyproportional to its popularity.
Exactly.
If you work really hard on a piece.
It's gonna be likecrickets when it comes out.

(57:10):
Yep.
And if you whip it off in fiveminutes, people are gonna love it.
Exactly.
So you started out with 75and whittled it down to 62.
So tell us about the process.
What happened in this case wasthat I came up with the initial
75 Bill Bernstein went through.
Put them into categories and hewrote little intros for each of

(57:31):
the chapters as folks will see.
And then, you know, I went,took it and I was like, eh, this
sounds a little bit like this one.
So that's how we went.
Went from 75 to 62, and thenthe greatest humorous impulses
to edit other people's work.
I went through and, and revised.
Bill's categorization, and that'show we ended up with the book.

(57:51):
And then along the way, you know,Jason, bill and Alan Roth all wrote
pieces that appear in the book,either at the front or the back.
Very good.
And you ended up with 11.
Sections.
And if you don't mind, we've got some timeto spend, um, on each section and so we
could, uh, all maybe throw in some input.
So the very first sectionis basically categorized as

(58:13):
talking with family about money.
And this you put up right up fronthow to talk with parents, children.
So forth.
Well, in the end, you know, youknow, why do we manage money?
Why do we accumulate money?
I mean, we, you know, for most ofus, you know, we have a core group
of people we care about deeply.
And you know, we know we want not only ourown financial security, but we also wanna
make sure that they're okay financially.

(58:34):
You know, I say to people, eitheryou're in the circle or you're or not.
And if you're in the circle, Iwill do everything in my power
to make sure that you are okay.
So if family is not necessarily a, ablood relative, but it's whoever is.
In the circle and the the peoplethat you'll go to the ends of the
earth to make sure they're okay.

(58:54):
Jonathan, I, I have to say that thisis one of my favorite sections of the
book because it's so differentiateddiscussions of, of talking to your kids
about money, trying to inculcate healthyfinancial decision making in them.
Um, when I looked at this sectionof the book, it was one of my
favorites because I just don't seethis discussion in a lot of other.

(59:19):
Personal finance, writing about how totalk to children, how to help develop
them as savvy financial human beings.
And I think the really happy partof this story is that your kids
have, have generally taken whatthey learned to heart, right?
I mean, things, things turnedout here, which is a really nice.
Sort of end cap to this, uh,to this piece of the book.

(59:41):
Well, I treated my kids sort of asfinancial Guinea pigs, and I experimented
with them in all kinds of different ways.
Um, fortunately all the manipulationdoesn't seem to have left too many scars,
and in fact, it's had a generally good.
Output.
You know, both my kids arequite financially responsible.
I think when I was on your podcast,Christine, I talked about how my son,
during his seven years getting his PhD, hewas getting $30,000 a year as a stipend,

(01:00:05):
and over the seven years he managedto save a hundred thousand dollars.
Bravo.
Yeah, that's frugality.
The only thing I worry about a little bitis that maybe they learn the frugality.
A little too well, you can't overdo it.
You don't wanna be so frugal that as,as Alan always likes, Alan Roth always
likes to talk about, you don't wannabe the richest person in the graveyard.

(01:00:26):
I would just add that the temptationfor people who think about money and
investing a lot is to think about the howshould I buy this index fund or that one.
Uh, should I hedge myforeign currency exposure?
And Jonathan wants usto refocus on the why.

(01:00:48):
It's like, why are you doing this?
And that's a really importantmessage that gets overlooked.
A great point.
The next topic in section number two,your money in your house and Jonathan's
view is your house eats your money.
Tell us about that.
So over the course of my life,I've owned four houses and yes,

(01:01:10):
all of them have eaten money.
A lot of people, you know, dothis creative accounting where
they somehow turn their housesinto fabulous investments.
But if you sit there and you runthe numbers on how much it costs
to own a house, you know, all thoseremodeling projects, all the money
you spend on homeowners insurance and.
Property taxes and how much you fork overin mortgage interest and so on and so on.

(01:01:34):
And of course the opportunity costof where else the money could be.
Houses are, are not a great investment.
They're, they're not terrible.
I owned one house after another.
I like owning the place that I live,but I would never jump up and down
and say A house is be all and end all.
It does really two things for you.
One, it fixes your housing costs.

(01:01:55):
If you buy a house, you know your,you know what your housing costs is
gonna be pretty much from year to year.
And two, it's a form of fixed forcedsavings as you pay down the mortgage.
Christine,
this section is, uh, so interestingbecause to me it tackles household
capital allocation, which is the thingthat we don't talk that much about.

(01:02:15):
We sort of move straight to investmentallocation and the decisions you're
making around your investment portfolio.
But all of us have us.
Set of choices that precedeinvesting in our portfolios.
And I love that this section disdiscusses that decision making squarely.
And I was struck by how prescientsome of the, the columns were about

(01:02:37):
over allocating to real estate thatthey preceded the big real estate.
Market meltdown where Jonathanis cautioning about not going
overboard on improving your homeon over-investing in properties.
So that was something that was,was quite striking, was just how

(01:02:58):
prescient those conversations were.
And I'm not sure there were thatmany people talking about over
allocating to real estate prior to the.
To the real estate crisis.
Certainly there were murmurings,but it's impressive how these
columns seem to predate the problem.
Yeah, and I guess the only note Iwould add is that if you look at data

(01:03:21):
from Robert Schiller, for example,the Yale University economist, you'll
see that the long term real returnafter inflation, the long term real
return on residential real estate is.
Zero.
You know, that's based on roughlya century of data and there've

(01:03:41):
been more recent studies thatgo back to the 17th century.
And the consistent finding is thatyour home is not a particularly good
investment in a financial sense.
But I love the way Jonathan brings acrossthe fact that this, like a lot of other

(01:04:01):
investments, is not necessarily about the.
Financial return.
I mean, you get a psychic returnfrom investing in your own home
even if you don't necessarilyget a high financial return.
All great points.
The next few sectionshave to do with investing.
We start out with your money and themarkets, and then the math of investing,

(01:04:27):
how the media tries to influence youon investing in the financial industry.
So I want to sort of group allthose together about investing.
And Jonathan, if you couldsummarize, you know, the main topics.
And by the way, within this isthere's a list chapter which has
lists, columns that are lists.

(01:04:49):
And I noticed you like lists.
Every columnist loves lists
and lists are fun to read too.
Readers
love lists.
Yeah.
There are a couple of sort ofdifferent themes within these.
I mean, one is like the basicsof investing and you know, I've
done this column countless times.
You know, 10 things youshould know about investing.
How you're not gonna beat the marketand the importance of paying attention

(01:05:11):
to costs and so on and so on.
But another aspect of these pieces,and I think Jason could talk to this,
uh, much more readily than I, becauseit's, it's really in his wheelhouse
rather than mine is, um, in the, the.
Late 1990s, behavioralfinance really exploded.
It hit the popular consciousness, andwhile Kahneman Dki had been looking at

(01:05:34):
this stuff since the 1970s, suddenly allkinds of other academics were weighing in.
Tons of research was comingout, and for me as a columnist.
That research gave me extra legs.
I mean, look, if you're trying tofigure out something to write every
week and there's a new interestingpiece of research, it's like, hooray.
That's another one down.

(01:05:54):
And this was a really a, a goldenera of behavioral finance research
late 1990s, early two thousands.
And so that also played into alot of those pieces that appeared.
And Jason, of course, during thistime, you came out with your, your
book, your Money in Your Brain.
Hmm.
Yeah.
Jonathan, as he often is,he's being overly modest.

(01:06:18):
He was really the pioneer inbringing attention to this field.
This research had been around for a while,and certain people in the investing world
were aware of it, but it had never reallygotten much attention, and Jonathan
really brought it to the fore and.

(01:06:39):
And introduced the idea that, as Ilike to put it, it's not investments
that make or lose money, it's investorsand he really brought to the public
consciousness the idea that you shouldlook in the mirror as an investor.

(01:07:01):
Don't just look out the window at allthose stupid people down on the street.
But look in the mirror and look atthe dummy who's looking back at you.
I love the sections on investing.
I have to say, uh, from a personalstandpoint, I learned so much about
investing, but also talking to investorsfrom Jonathan, from those columns.

(01:07:25):
I, I wrote about this on morningstar.com,just how influential he was.
To me in terms of kind of shaping thedirection I wanted to go in with my
career, did I want to be someone who wassort of adding to the confusion and the
ca cny about investing, or did I wanna besomeone who was helping to clarify and.

(01:07:47):
It seemed like with every column,Jonathan was there clarifying and helping.
And that is a, a through line in all ofthese columns is just helping with the
advice about having a decent savingsrate, having a SANE asset allocation,
having a plan that you can live withthrough a variety of market climates.

(01:08:09):
That those things would put youon a, a firm financial footing.
And I was also struck as Iread through the columns, just.
Frankly, the courage in them in thatso many of the entities that Jonathan
would criticize, the financial adviceindustry, certainly the asset management
industry, with its constant productionof various products, of varying

(01:08:32):
degrees of helpfulness to investors.
He was.
Very critical, and I found power inthat and it really helped, I think,
give me courage to say some of the samethings when I was eventually charged
with helping investors in the same way
when I was at the Wall Street Journalthrough this period, the Mansion
editor for, I think pretty much theentire period was Paul Steiger and.

(01:08:58):
Really wonderful individual, supersupportive, and even though I
was saying stuff that people onWall Street didn't necessarily
like, Paul was always supportive.
I remember one time a delegation fromMerrill Lynch came in to complain
about something I had written.
And so we ended up in the big editorialconference room on the ninth floor and,

(01:09:23):
you know, sitting around and they'rewhining about this and that, and they'd
cooked up a bunch of numbers thatcontradicted a set of numbers that I had.
And their, their numbers were just.
Flat out wrong.
And so we sat there andthey made their spiel.
I took it apart and as we walked outof the conference room, Stiger leaned

(01:09:43):
into me and whispered into my ear.
They didn't lay a hand on you.
And, and that was the way it was, youknow, so even though, you know, we
were obviously taking their advertisingdollars, it wasn't expected that we
should, you know, kiss their, their feet.
It was okay to be critical,which was wonderful.

(01:10:03):
So coming back to the stuff aboutbehavioral finance and as I went through.
My time at the journal, there were reallysort of four sets of interesting research
on what I would say is the human side ofmoney gave me sort of a few extra years as
economist, and one was behavioral finance.
Um, then there was, there again, Jasondid much more on this than I did.

(01:10:24):
But Neuroeconomics then there wasthe whole area of evolutionary
psychology, which is very closelyconnected to Neuroeconomics and how
it influences our, um, our thinking.
And then an area that becameparticularly close to my heart.
And there's a. A chapter within thebook devoted to some of the columns on,
uh, happiness research and those fourareas, happiness research, evolutionary

(01:10:45):
psychology, neuroeconomics andbehavioral finance to this day remain
great fruitful areas for anybody whowants to write about human behavior and
particularly human financial behavior.
Sounds complicated, but you breakit down to a user level in the book.
I can read this stuff and I canunderstand what you're talking about.

(01:11:07):
I guess the, the only real trick here.
And not much of a trick 'cause I couldfigure it out, was just to look at the
research and say, you know, what doesthis mean for the average individual?
How can I take the insight that somepoor PhD has spent, you know, years
looking into and turning it into,you know, one or two nuggets that
people can use in everyday life.
And that's the trick.
I, as a reporter, as economist,I hated picking up the telephone.

(01:11:31):
I didn't like interviewing people,but I enjoyed reading the research.
So instead of calling people up on thephone, I would just scroll through and
see what was the latest research outthere and read the papers and see if I
could somehow turn it into an article.
My dad had an expression thatI think really applies to
Jonathan's work in this area.
My dad used to say the hardestthing in life is to make

(01:11:54):
something look easy, and Jonathan.
Makes it look easy.
So don't underestimate howmuch work it takes and don't
believe him when he says it.
Well, Jason, you knew
from early on you sawthe the chewed up pens.
Yes, that's right.
That's right.
When I was at Forbes Magazine,Jason and others would go into.

(01:12:15):
The metal desk and pull out thedrawer, and there would be a series
of pens that had been the tops of,which had been chewed to, to nothing.
Smither, Smither.
And, uh, I, I would add that'sa practice that you continued at
the, at the Wall Street Journal.
Uh, I'll paraphrase, uh, AlanRoth on this, who said there's a
complexity to getting to simplicity.

(01:12:37):
Yep, that's right.
Okay.
I want to get into moneyover your lifetime.
I found this.
Section to be very interesting to me.
In other words, you know,what is it all about?
So money over your lifetime.
Uh, one of the things that I, righttowards the end of my time at the
journal, so 2007 2008, uh, the conceptI became super interested in was human

(01:13:01):
capital and how human capital is really,you know, thing around which you can
arrange your entire financial life.
Your human capital, you know,drives your ability to borrow money.
Drives your ability to save.
It drives your portfolio's allocation.
You know, you want more in stocksearly in your career when you still
have this big paycheck coming in.

(01:13:21):
You want less as youhead towards retirement.
It also drives your insurance need, youknow, to protect your human capital.
You need health insurance,you need life insurance.
You need disability insurance.
So human capital, of allthe concepts out there.
When it comes to defining yourfinancial life, it's probably
the most important, and so that'sreally where that section kicks off.

(01:13:44):
This section is a great reminderto people that you can think about
your human capital as resembling.
Maybe it resembles a stock,maybe it resembles a bond.
If, for example, you're atenured high school teacher.
And you're fairly young.

(01:14:05):
Your human capital isprobably a lot like a bond.
Um, you've got job security.
You've got decades ahead of you.
So because your human capital,which is a portion of your overall
portfolio is quite safe and secure,you can afford to take more risk with

(01:14:26):
the financial part of your capital.
You know, somebody.
Whose human capital is like abond can probably safely afford to
invest quite a bit more in stocksthan somebody who, uh, who's.
Human capital is probablymore like a stock.
People who work in the medicalfield are generally a human.

(01:14:48):
Capital is like a bond.
Mm-hmm.
I mean, because it's noteconomically cyclical.
People get sick all thetime, get hurt all the time.
So it has nothing to dowith, uh, the economy.
Whereas maybe if you're in manufacturingor something, it's more like a stock.
Yeah.
So that may have some effect.
And even in technology workersprogrammer or something, I mean,
you're, you may have cyclical.

(01:15:11):
Earnings, the ups and downs ofthe, uh, technology industry.
So you're more like a,a stock than a bond.
And so you may adjust your portfolioaccordingly, uh, based upon your
human capital and the potential tohave consistency of human capital.
It's all very interesting, Christine.
I love the components of the book thatdelve into retirement and finding enough,

(01:15:35):
determining whether you've actually savedenough to retire and quantifying enough.
As, as Jonathan discusses in the book,is a, a very subjective question, helping
people determine whether they have.
Saved enough and how much theycan reasonably spend, how much
they can give to their loved ones.

(01:15:56):
Some of the, the columns on thattopic I think are incredibly valuable
and, and do stand the test of time.
So I'd like at this point to justput in a plug for Christine's book
that came out last year, which Ithink is superb, absolute superb.
And I interviewed Christine forhow to retire, uh, the name of the
book, uh, and episode number 73.

(01:16:19):
What it speaks to, to me is thecomplexity and difficulty and emotional
trauma of giving up your humancapital and moving into retirement.
Retirement is, has hung out there asthis sort of prize at the end of this
four decade journey of saving, investing.
But in fact, you know, whenyou retire, you not only lose a

(01:16:41):
paycheck, you lose your right.
Identity.
You lose social connections.
You lose your emotional, intellectualand physical stimulation.
I mean, it's, it is a trauma and Idon't think it's appreciated enough.
And if you read some of the, uh, theinterviews that Christine does in that
book, you really come to appreciatehow difficult retirement is, and it's

(01:17:03):
not disappearing off into the sunsetfor 20 or 30 years of fun, fun, fun.
It's, it's quite different.
Well, thanks for that, Jonathan,and it's a badge of honor that you
wrote the forward for the book.
Bye.
So appreciate that.
And my soundbite on the book is just thatthis is not a math problem, and that's
a message to the Bogleheads who mightbe listening, who sometimes get a little

(01:17:26):
lost in the spreadsheets that thereare many more dimensions to retirement
planning than some sort of number.
Yeah, and Christine's book isso good that my, uh, four month
old puppy ate the entire thing,
and after my puppy ate the entirebook, I immediately went out and bought

(01:17:47):
another copy and put it on the topshelf where it's safe as a reference.
Thank
you for that.
Okay, the last part of Jonathan'sbook covers what is a rich life?
Jonathan, you talk about this thingcalled a rich life and, uh, money and
wellbeing, and I want to describe inyour own words here you are, right?

(01:18:10):
Your situation.
I mean, what is a rich life to you?
So in the book is the final column thatI wrote for the Wall Street Journal in
2008 before I, uh, departed for a, forCitigroup for six years, or as Jason
and my other friends from the journalismworld would call to the dark side.

(01:18:31):
And in that final column for the,uh, the journal in 2008, I said that.
The rich life, the happy life sortof consists of three key components.
I mean, one is yes, you do want asense of financial security, and
you know, that is why we do all thissaving investing over many decades.
But two, you want social connections.

(01:18:53):
You, you want to be surroundedby, you know, people you love.
And you know, all the research saysthat having a, you know, rich social
network is a huge source of happiness.
And then third.
You need a sense of purpose, uh, you needa reason to get out of bed in morning.
And it's not just duringyour working years, it's also

(01:19:15):
during your, your retirement.
You know, people head off intoretirement and say, I'm gonna relax.
No, you head off into retirementand after two months of relaxing,
you're bored outta your brain.
And then you need to reason toget outta bed in the morning.
So here I am.
I don't know how many more months I have.
My best guess based on how my treatmentis going and so on, is that I might
have seven or eight more months.

(01:19:36):
I don't know that it's gonnabe much more than that.
That's better than Iwas initially promised.
When I, when I was diagnosed12 months ago, I was given
12 months to live, so I've.
I've made it to that, and at thispoint I'm still in okay shape.
But, uh, for those who are curious,um, my treatment plan is failing.
And so I'm trying to getonto a new treatment plan.
I'm trying to get onto aclinical trial, um, but the

(01:19:59):
cancer is continuing to spread.
It's spreading up and down myspine, it's spreading in my brain.
You know, I've had frequent doses ofradiation and so on, and I need a new
treatment plan if I'm gonna make it anymore than sort of seven or eight months.
So that's where I stand today.
Nonetheless.
Despite all of that, despite the fact thatI know that time is short, I do not get
up every morning and binge watch Netflix.

(01:20:22):
You know, I get up every morning andthink about what it is that I can do
to have that sense of progress, thatsense of striving, that sense that I'm
doing something useful with my life.
I can't tell you.
I mean, that, you know,it's, it's better than crack.
Well, not that I've ever tried crack,but I think it's better than crack.
You know, to have that sense of purpose,you know, to come to the end of the day

(01:20:46):
and say, yeah, I accomplished something.
That's, that's really valuable.
And for anybody out there who's tryingto have a richer life, I would encourage
them to figure out what it is that they'repassionate about, what will make their
days fulfilling and focus on those things.
And the wonderful thing.
About being financially independent andhaving a healthy amount of savings is

(01:21:11):
that you can devote your life to thethings you care about most, and I would
encourage people to save and invest andmanage their money with the goal of being
able to lead the life that they want.
Jonathan, that's a very powerful message.
Thank you so much for everythingyou've done, and thank you for.
Being on the podcast.
Thank you, Christine.

(01:21:31):
Thank you Jason, for being with us today.
Well, thank you Rick.
And, and thank you for, forthe Bogle Center, for, uh,
for pursuing this project.
I mean, if this is the, uh, thelast thing I do and, and it works, I
will happily take that as a legacy.
We all are so happy to dothis for you, Jonathan.
It's, it's been a realhonor, so thank you.
Yep.
The best form of friendship isbeing able to show you're a friend.

(01:21:55):
Thank you for listening.
Visit vogel center.net to make acontribution to the Jonathan Clemens
getting going on savings initiative.
And read the best of Jonathan Clementsclassic Columns on Money and Life.
This concludes this special podcast.
We'll have a new episode nextmonth and hopefully meet many of
you in October in San Antonio.

(01:22:17):
In the meantime, visit boglecenter.net bogleheads.org.
The Bogleheads wiki bogleheads Twitter,the Bogleheads YouTube channel,
bogleheads Facebook Bogleheads.
Reddit, join one of your local Bogleheadschapters and get others to join.
Thanks for listening.

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The $1,000 Gift From Jonathan Clements To 18-Year-Olds | Bill Bernstein & Christine Benz | 160

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}The $1,000 Gift From Jonathan Clements To 18-Year-Olds | Bill Bernstein & Christine Benz | 160