Embracing Financial Wisdom in Life's Journey: Lessons from Jonathan Clements
Life has a way of surprising us, doesn't it? One moment we're meticulously planning our future, and the next, we're faced with an unexpected turn of events that reshapes our entire world. This is the story of Jonathan Clements, a beacon in the world of personal finance, whose journey offers us profound insights into living a financially and emotionally rich life.
A Life-Changing Moment
Imagine this: You're 61 and nearing the end of an illustrious career. You have a loving family and a retirement plan you've nurtured for decades. Then, in the span of a doctor's visit, your world shifts on its axis. This was Jonathan Clements' reality when he received a stage four cancer diagnosis earlier this year.
But here's where Clements' story becomes truly remarkable – and where we can all learn a valuable lesson about resilience, priorities, and the true meaning of financial wellbeing.
The Tapestry of Financial Wisdom
Before we delve into the heart of Clements' journey, let's appreciate the richness of his contributions to the world of personal finance:
- A novel
- Eight books filled with easy-to-understand personal finance insights (that's more than the "Harry Potter" series, by the way)
- Over 1,000 columns for the Wall Street Journal (enough to wallpaper a small apartment)
- One of the best personal finance websites (HumbleDollar)
Clements didn't just write about money; he wove a tapestry of financial wisdom that's both practical and profound. So when life threw him this curveball, he had a wealth of knowledge to draw from. I’ve absorbed so much wisdom & personal finance advice from Jonathan Clements over the years.
Here are some of his best financial lessons:
1. Compound Interest is King: "Save as much as you reasonably can and do it as soon as possible, so that compound interest can work in your favor for a very long time." This isn't groundbreaking, but it's the bedrock of financial success. Start early, save often, let time do the heavy lifting.
2. Control What You Can: Life is full of uncertainties, but Clements reminds us to focus on what we can influence – our savings rate, investment costs, and risk tolerance. It's like tending to your own garden; you can't control the weather, but you can choose what to plant and how to care for it.
3. Embrace Your Limitations: "If I have any investing superpower, it's the belief in my lack of investment ability, my willingness to just buy broad market index funds and shovel money into them month after month." Humility beats hubris in the investing game. Know your limits, stick to a simple plan.
4. Delay Gratification (and Social Security): Pushing back your Social Security claim to age 70 isn't sexy, but it's smart. It's like getting an insurance policy against living too long. Future you will thank present you.
Clements also wrote a great deal about living a good life:
1. On Saving and Spending in Retirement: Transitioning from saving to spending in retirement can feel like learning a new dance. Clements suggests starting with small steps – a nice dinner here, a weekend getaway there – until you find your rhythm.
2. Embrace the Struggle: "We are, as humans, not built to relax. We are built to strive." Retirement isn't about endless margaritas on the beach (unless that's your thing). Find something to work towards, even in your golden years.
3. Security Over Perfection for Happiness: "People need to do what it is that is necessary to feel financially secure. I think that one of the keys to happiness is the sense of financial security." Sometimes, the "best" financial decision on paper isn't the best decision for your peace of mind. Financial wellbeing should be the goal.
The CFPB's Recipe for Financial Wellbeing
What is financial wellbeing? Clements and his fellow personal finance writers point to research done by the Consumer Financial Protection Bureau (the CFPB) which identified four key ingredients for financial wellbeing:
1. Confidence in achieving your financial goals
2. Solid money management habits
3. Long-term planning skills
4. Financial knowledge and execution ability
It's not just about the numbers in your bank account - it's about how those numbers make you feel and what they enable you to do.
The Kinder Questions: Your Financial Compass
As a financial life planner, I spend a good deal of time listening and working through our client’s answers to George Kinder’s Three Questions. People tend to be so moved by their own answers to these questions that change actually happens. Clements wrote about Kinder’s Three Questions and the broader movement of financial life planning in 2015. As he lives out the days of his life on a finite timeline, Clements has written about what he’s learned since his diagnosis, and what stood out to me most about his reflection are the things he didn't do:
1. He didn't go on a spending spree. No luxury cars or round-the-world cruises. Instead, he found joy in the simple things - writing, coffee, exercise.
2. He didn’t stop working. He found purpose in progress, even in the face of a terminal diagnosis.
3. He didn't start burning through his savings. A lifetime of frugality doesn't disappear overnight.
4. He prioritized estate planning. Updating wills, consolidating accounts, reviewing beneficiaries - all the unsexy but crucial tasks that make life easier for those left behind.
The Heart of the Matter: A Life Well-Funded and Well-Lived
Jonathan Clements' journey isn't just a lesson in personal finance –it's a masterclass in living a life well-funded. It's not about dying with the biggest bank balance. It's about using your resources to create a life of purpose, security, and contentment.
Whether you're looking at decades of possibilities or facing a more immediate horizon, the principles remain:
1. Save thoughtfully
2. Invest wisely
3. Plan with heart
4. Use your resources to cultivate joy for yourself and your loved ones
This is the true alchemy of wealth – where money becomes a tool for living your most authentic life.
In the end, financial wellbeing isn't about having the most zeros in your account balance. It's about having the confidence to face whatever life throws at you - be it a dream vacation or a dire diagnosis - knowing that you've built a financial foundation that can weather any storm.
So take a page from Clements' book. Save for tomorrow, but live for today. Plan for the worst, but hope for the best. And remember, in the grand equation of life, it's not the numbers that count - it's what you do with them that matters.
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Stephanie Bucko and Cristina Livadary are fee-only financial planners based in Los Angeles, California. Stephanie is the Chief Investment Officer and Cristina is the Chief Executive Officer at Mana Financial Life Design (FLD). Mana FLD provides comprehensive financial planning and investment management services to help clients grow and protect their wealth throughout life’s journey. Mana FLD specializes in advising ambitious professionals who seek financial knowledge and want to implement creative budgeting, savings, proactive planning and powerful investment strategies. As fee-only fiduciaries and independent financial advisors, Stephanie and Cristina never receive commission of any kind. Stephanie and Cristina are legally bound by their certifications to provide unbiased and trustworthy financial advice.