Episode Summary: Jonathan Clements Explains Why Dying is Hard Work

Masters in Business hosted by Barry Ritholtz features an intimate and profound conversation with Jonathan Clements, a seasoned personal finance columnist formerly with The Wall Street Journal and Forbes, and the founder of HumbleDollar. Released on January 17, 2025, this episode delves into Clements' extensive career, his transition from active mutual funds to indexing, his role in financial education at Citigroup, and his personal journey following a terminal cancer diagnosis.

Introduction: A Legacy in Financial Journalism

Barry introduces Jonathan Clements as a distinguished personal finance columnist who penned over a thousand columns during his nearly 25-year tenure at The Wall Street Journal. Clements' candid announcement of his terminal cancer diagnosis sparked widespread dialogue on personal finance, life satisfaction, and the importance of estate planning.

Career Beginnings: From London to New York

Jonathan shares his journey, starting from his upbringing in London, education at Cambridge, and early career at Euromoney magazine. Influenced by his father’s legacy in financial journalism, Clements initially pursued a career in journalism, working for a local newspaper in Washington D.C. and later moving to Forbes in New York City, where he became the mutual funds reporter.

[02:56] Jonathan Clements: "I was given the mutual funds beat and the core article as the mutual funds reporter for Forbes magazine."

The Rise of Indexing Over Mutual Funds

At Forbes, Clements observed the volatility and short-lived success of star mutual fund managers, leading him to advocate for index funds. His consistent promotion of indexing eventually contributed to the index fund revolution of the late 1990s and 2000s.

[08:53] Jonathan Clements: "If you can just match the market's return minus some tiny amount for an index fund's expenses, you're going to outperform the vast majority of investors. And that annual advantage snowballs over time."

Clements discusses the pivotal role of ETFs in democratizing index investing, making it accessible beyond Vanguard and Fidelity through platforms like BlackRock's iShares.

Transition to Citigroup and Financial Education

Seeking a change from journalism, Clements joined Citigroup as the Director of Financial Education for the startup MiFi. Despite initial challenges, including regulatory hurdles and the onset of the 2008 financial crisis, he utilized this role to enhance financial literacy among small investors.

[24:40] Jonathan Clements: "I realized I had enough to retire if I wanted to. I was 51."

HumbleDollar: Empowering Personal Financial Narratives

In 2016, Clements launched HumbleDollar, a platform encouraging individuals to share their personal financial stories. This initiative fosters a supportive community where readers openly discuss their financial lives, promoting transparency and mutual learning.

[33:22] Jonathan Clements: "It's become a place where people happily talk about their own finances and the readership tends to be very supportive."

A Terminal Diagnosis: Redefining Life and Finances

Clements candidly shares his stage four lung cancer diagnosis, detailing his decision to make this information public to foster open conversations about mortality and financial planning. This moment marked a significant shift in his life, prompting a deeper reflection on money, happiness, and legacy.

[47:36] Jonathan Clements: "Death is hard work. You realize how much crap you've accumulated, and how hard it will be for your family to figure out your finances."

Estate Planning and Financial Simplification

Faced with his mortality, Clements undertook extensive estate planning to ease the burden on his family. He streamlined his financial accounts, updated wills, and made strategic gifts to minimize tax implications for his heirs.

[49:28] Jonathan Clements: "I closed out unnecessary accounts and started trashing papers that no longer served a purpose, simplifying things for my wife and kids."

Financial Wisdom: Saving, Indexing, and Knowing Oneself

Reflecting on his career, Clements emphasizes the importance of disciplined saving and the advantages of index investing. He advocates for understanding one’s personal financial needs and aligning financial strategies accordingly.

[55:10] Jonathan Clements: "The smartest thing I ever did was to be a good saver. If you're a good saver, everything's going to turn out fine."

He also highlights the psychological aspects of financial management, urging individuals to reduce financial worries by adopting prudent saving and investing habits.

[56:00] Jonathan Clements: "Please find some way to worry less. If you do the right stuff financially, you live beneath your means... things are likely to work out just fine."

Personal Reflections and Life Satisfaction

Clements discusses how his diagnosis reshaped his relationship with money, allowing him to spend more freely on experiences and family while ensuring financial security remains intact. He underscores that money facilitates happiness by removing financial stress, enabling personal fulfillment, and fostering meaningful relationships.

[53:38] Jonathan Clements: "Money can buy you the financial freedom to spend your days doing what you love... and spending special times with friends and family."

Mentors, Reading, and Continuous Learning

Clements acknowledges influential mentors, particularly Leslie Levin, who honed his journalism skills. He shares his love for reading, especially works that shaped his investment philosophies, such as Burton Malkiel's Random Walk Down Wall Street and Charles Ellis's Investment Policy.

[68:28] Jonathan Clements: "Investment Policy is the most influential book on investing that I've ever read."

Final Advice: Embrace Personal Financial Strategies

In his concluding remarks, Clements advises recent graduates to explore journalism as a learning experience but encourages them to transition into more lucrative careers thereafter. He advocates for individualized financial planning tailored to personal needs rather than following generic advice.

[58:56] Jonathan Clements: "Know yourself because everybody has different financial needs and different financial worries... customize your finances to your own needs."

Conclusion: A Legacy of Financial Insight and Personal Courage

Barry and Jonathan wrap up the episode by appreciating Clements' contributions to financial journalism and his bravery in sharing his personal struggles. Clements expresses his desire to continue writing and helping others navigate their financial lives until the end.

[62:15] Jonathan Clements: "While I can still write, while I can still get my fingers on the keyboard, I hope to keep punching out a few more articles."

This episode serves as both a professional reflection and a deeply personal narrative, offering listeners invaluable insights into financial management, the importance of personal satisfaction, and the courage to face life's ultimate challenges with grace and wisdom.