Jonathan Clements: Why Simple Beats Complicated Every Time (SB1760)

Summary

Podcast Summary: The Stacking Benjamins Show

Episode: Jonathan Clements: Why Simple Beats Complicated Every Time (SB1760)
Date: November 12, 2025
Host(s): Joe Saul-Sehy, OG
Guest: Jonathan Clements, founder of Humble Dollar, former Wall Street Journal columnist

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Episode Overview

This episode features a rich, heartfelt conversation with the late Jonathan Clements—an influential personal finance writer known for making money advice simple, actionable, and focused on living the life you want. The episode is both a tribute and a masterclass, drawing on Clements' key philosophies about saving, investing, and why simplicity consistently trumps complexity in building wealth. Interwoven are insights from Clements’ book, My Money Journey: How 30 People Found Financial Freedom and You Can Too, with lessons gleaned from a variety of real-life financial journeys.

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Key Discussion Points and Insights

1. The Simplicity Principle in Finance

• Keep Investing Simple:
  Clements strongly advocates for low-cost, broad-market index funds over complicated products. Complexity, he argues, is often a “red flag,” benefiting Wall Street more than investors.

  “People, unfortunately, associate complexity with sophistication... If you struggle to understand it, stay away from it.”
  —Jonathan Clements (48:25)

• Simplicity and Security:
  Most people who achieve financial freedom do so by adopting simple, time-tested habits—not by outsmarting markets or chasing fads.

2. The Power of Habits Over Willpower

• Financial Success Is Built on Habit:
  Developing habits around saving, spending, and investing (rather than relying on sporadic willpower) is a constant across successful money journeys.

  “You want to take these good behaviors that accord leading a good life and turn them to something that you do instinctually.”
  —Jonathan Clements (46:51)

• Automatic, Systematic Approaches:
  Automating savings and investments helps reinforce these habits and reduces reliance on discipline.

3. Start Frugal, Finish Free

• Gradually Rising Standard of Living:
  Many contributors in Clements’ book (and he himself) were frugal in their youth, gradually increasing their lifestyles as their finances improved.

  “You do not want to start life in first class. You want to start in economy and end up at first class at the end. And then you’ll really appreciate it.”
  —Jonathan Clements (42:44)

• Majority of Wealth Built by Saving Early and Consistently:
  Almost all interviewees achieved freedom by persistently living below their means and saving over decades—not through windfalls or “big score” investments.

4. Parental Influence and Raising Savvy Kids

• Parents Shape Financial Future:
  Children deeply internalize their parents’ attitudes about money, whether they copy them or rebel.

  “Whatever it is you do as a parent, it is a megaphone into the ears of your children and they will carry that with them through the rest of their days.”
  —Jonathan Clements (39:27)

• Being Mindful of What You Model:
  Clements candidly shares how his own children inherited his frugal tendencies—sometimes to the point of excessive caution.

5. The Long Game: The Financial Tipping Point

• Slow Start, Then Compounding Acceleration:
  Building a nest egg feels painfully slow at first; the real momentum comes a decade or more later, when compounding and market returns begin to outpace contributions.

  “If you get through those 10 or a dozen years, you will hit that tipping point. And suddenly nobody has to persuade you to save…”
  —Jonathan Clements (43:10)

• Mistakes Aren’t Fatal:
  Most people fumble along the way—market timing, bad investments, etc.—but persistent, strong savings habits overcome early missteps.

6. Home Ownership: Rent vs. Buy Debate

• Locking in Housing Costs:
  The main reason to buy, says Clements, is to fix housing costs and force savings; the break-even point is usually around 7 years.

  “If you take out a fixed rate mortgage...the principal and interest...will stay the same. That’s the reason you buy a house, to lock in your housing costs.”
  —Jonathan Clements (53:12)

• Be Mindful of Flexibility:
  Renting is preferable for those early in their careers or who foresee frequent moves.

• Control Housing Costs for Long-Term Success:
  Whether renting or buying, keeping housing affordable is crucial for building wealth.

7. The Role of Insurance and Margin for Error

• Prepare for the Unpredictable:
  Emergency funds and proper insurance aren’t optional—they’re essential to weathering crises (exemplified by Annika's story of huge medical bills covered by insurance).

  “We all need to run our financial lives using this key phrase: margin for error.”
  —Jonathan Clements (63:48)

• Biggest Risks:
  Health shocks, disabilities, or lawsuits can derail plans—protection is a form of peace of mind.

8. Security, Annuities, and Paying Down Debt

• Consider Psychological Security:
  Clements sees value in paying off the mortgage before retirement—not always for the mathematical advantage, but for the peace of mind.

• Annuities as Income Stability:
  For retirees without traditional pensions, a “plain vanilla immediate fixed annuity” can provide a reliable floor income, complementing Social Security.

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Notable Quotes & Memorable Moments

| Time | Quote | Speaker | |-----------|------------------------------------------------------------------------------------------------------------|-------------------------| | 39:27 | “Whatever it is you do as a parent, it is a megaphone into the ears of your children and they will carry that...” | Jonathan Clements | | 42:44 | “You do not want to start life in first class. You want to start in economy and end up at first class at the end.” | Jonathan Clements | | 43:10 | “You will hit that tipping point. And suddenly nobody has to persuade you to save.” | Jonathan Clements | | 46:51 | “If you do things based on willpower, life is really tough...what you need to do is...based on habit.” | Jonathan Clements | | 48:25 | “Complexity is a red flag... If you struggle to understand it, stay away from it.” | Jonathan Clements | | 53:12 | “That’s the reason you buy a house, to lock in your housing costs. But it only makes sense if you’re going to stay there for a reasonable time.” | Jonathan Clements | | 63:48 | “We all need to run our financial lives using this key phrase: margin for error.” | Jonathan Clements |

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Timestamps for Key Segments

• [11:37] Advisor survey: Investment trends (ETFs, stocks, alts)
• [36:48] Jonathan Clements joins interview
• [38:03] On the genesis of Humble Dollar and My Money Journey
• [39:27] Parental influence on children’s money habits
• [42:44] Frugality, regret, and enjoying rising lifestyle
• [43:10] Financial tipping point: When compounding accelerates
• [46:15] The power of saving and recovering from mistakes
• [46:51] Habits vs. willpower
• [48:25] Simplicity vs. complexity in investing
• [50:42] Dennis Friedman’s story: frugality, renting, and buying
• [53:12] The rent vs. buy decision—locking in costs
• [55:15] Housing costs and life-quality tradeoffs
• [56:52] Clements’ own approach: 100% index stocks, paying off mortgage
• [59:04] Security, annuities, and mortgage payoff in retirement
• [61:00] Annika’s story: medical emergencies and the value of insurance
• [63:48] Emergency funds and “margin for error”
• [64:56] What surprised Clements after years of financial wisdom
• [67:21] Book details: My Money Journey and final thoughts

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Natural Flow, Humor & Relatability

As always with Stacking Benjamins:

• The tone is friendly, conversational, and funny, with running gags (e.g., Ohio jokes), personal anecdotes, playful interactions, and pop culture asides.
• Clements wryly shares his past mistakes and regrets—making him deeply relatable.
• Memorable moments like the “TikTok Minute” and Key & Peele job/robbery bit (23:28), which segues humorously into lessons about persistence, habits, and the slow build of wealth.

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Summary & Takeaway

Bottom Line:
Jonathan Clements—and the 30 stories in My Money Journey—highlight that financial success is about doing repeated small, simple things well over time, resisting the allure of complexity, knowing yourself, protecting against big risks, and remembering that money is a tool to a better life, not an end in itself.

As Joe Saul-Sehy summed up:

“You can make mistakes and, you know what, most of the time it's not going to kill you. You're going to be okay. You figure it out and, and you make it. That was inspiring to me in this interview.” (72:46)

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For further resources, episodes, and to join the Stacking Benjamins community:
Visit stackingbenjamins.com and check out the book My Money Journey.

Transcript

[Joe Saul-Sehy]

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[Doug]

This Friday, the NBA on prime crew and I are back with another exciting Emirates NBA cup doubleheader. First, Bam Adebayo and the Heat take on Jalen Brunson and the Knicks. Then Steph Curry and the warriors square off against Wemby and the Spurs. If you're not a Prime member, just sign up for a free 30 day trial. Heat Nicks, warriors spurs coverage starts Friday at 6:30pm Eastern only on Prime. Restrictions apply. See Amazon.com Amazon prime for details.

[Joe Saul-Sehy]

Hey there Stacker. Well, today we're going to dive into one of my all time favorite conversations and it's one that's poignant today because it's a greatest hits that's as relevant today as it was when we recorded it. But more than that, it's from 2023 and it's the first time that I sat down with Jonathan Clements, the former Wall Street Journal columnist, founder of the Humble Dollar and sadly, friend guy that I feel lucky after this conversation that I was able to get closer to who just passed away this summer. And what I loved about Jonathan was not just the way that he lived, which you'll hear on today's episod. The the way that he died. He spent the last year after his diagnosis still coaching people and walking through this experience in real time, in real life and helping so many, so many people. He's just helped so many people over the years and of course I'm going to miss him. And I know that the personal finance space is going to to miss him. As you'll hear, Jonathan had this rare gift of cutting through the noise of investing, saving and money management. He got to the heart of really what matters, habits, priorities and the way that money supports the life that you actually want. I want to bring this back now because as we head into the final stretch of the year, it's easy to get lost in the weeds, isn't it? Like you're optimizing, you're tweaking, you're chasing higher returns. The this is the perfect reminder that financial freedom isn't just about having more money. It's about peace, it's about flexibility, and it's about intention. So as you listen, what I'm hoping you'll do is pay attention to the stories that make you pause the moments where you think you know what that is me 100% maybe it's about how you're raising your kids to think about money, how you're handling debt, or whether you're trying to do just too much all at once. And when you finish today's episode, I'd love to hear your reflections. What is the one money habit or the mindset shift that's helped you to live a better life? Not a richer one, but a better one? You can either drop your answer in the Spotify comments, love some of the discussions we have in Spotify, or share it in our basement Facebook group where other Stackers are talking about this same stuff every day. Speaking of living your best life, I mentioned on Monday that we had open to our wait list our Success sessions. Well, now what? As of today, they are open to you. The success sessions are 10 small group coaching sessions. We cap them at a maximum of 30 people designed to help you put a real plan in motion. And it's all going to be done by just after the beginning of the second quarter. Imagine we begun the second quarter of next year. It's something you didn't do all this year, all last year, all the year before and you knew you needed to is done. So if you've ever wanted to build your financial plan yourself, even if you're thinking about hiring people, knowing what's going on and being the CEO of your own personal situation is so important. You can get [e-mail] success sessions. Easy for me to say. And when you go there, you'll see even more. It's ten 90 minute sessions with this small group. Of course there are a bunch of perks. There's a bunch of bonuses. This is our best training every year happens just once at the top of the year. Don't let another year go by. All right. I am so excited we can play this gentleman again. And we can honor Jonathan Clements by just doing what. By showing you what he was great at. He was great at living, he was great at helping, and he was fantastic at mentoring, which is what he's going to do on today's episode. That's the second half of the episode. The first half of the episode. Really interesting too. It's funny, I was as I was going through this entire episode to decide whether this Was our greatest hits episode or not the whole first half all applicable today, two years later, the investment products people are using today. A great question from Nick and of course, busting on Ohio, which is always relevant. All right, Steve Cranker up.

[Jonathan Clements]

I, Maxwell east, neighborly being of sound mind and body, to hereby bequeath the following. To my wife Rose, who spent money like there was no Tomorrow, I leave $100 and a calendar. To my sons Rodney and Victor, who spent every dime I ever gave them on fancy cars and fast women, I leave $50 in dimes. And to my other friends and relatives, who also never learn the value of a dollar, I leave a dollar.

[Doug]

Live from Joe's mom's basement, it's the Stacking Benjamin Show. I'm Joe's mom's neighbor, Doug, and are you ready to put your financial house in order? Today we welcome the man behind the popular Humble Dollar blog and the former Wall Street Journal personal finance columnist Jonathan clemons for our TikTok minute. How do you get rich quick? One creator has an idea some of you may have actually tried. And in our headlines, you know, what you're invested in, what products are advisors recommending for their clients? One source is out with their list. Plus, we'll throw out the Haven lifeline to a lucky stacker with a financial conundrum which OG will swoop in and answer. And then I'll share some mind blowing trivia. Sure to entertain your friends at work or your next social function. You're welcome. And now, two guys who put the diss in every function. It's Jo and O. Ja Ja Jaja.

[Joe Saul-Sehy]

G. I think that means we make the function. We make every function better. You and I show up. It goes from an okay thing OG to a party.

[OG]

To party.

[Joe Saul-Sehy]

Yes, absolutely. The meter swings up. Hey, everybody. Welcome to we'll interpret that word however we want podcast. I'm Joe Salsihai, Ever Joe Money on Twitter and across the card table from me, ready, strapped in, set to go on another work week. It's Mr. O.G. how are you, man?

[OG]

I am fantastic. It's Monday and it's way too early for a Sunday. Or Sunday. See, I don't even know. You should have seen the stuff I was doing this morning. I poured coffee beans into the coffee filter. Not in the hopper. I was like, I was like, I need coffee. And I poured the whole. I filled the whole thing up with coffee beans right into the filter that didn't produce the coffee I was desiring.

[Joe Saul-Sehy]

Did you actually start the coffee?

[OG]

No, I. I Caught it beforehand.

[Joe Saul-Sehy]

Good, because you can't put the wet beans then into the.

[OG]

Oh yeah, just, you know. So I don't know what day it is. Sunday, Monday, you put the beans in the dryer.

[Joe Saul-Sehy]

Is that like how do you dry the beans?

[OG]

Just lay them, set them out. So it's a manic mine.

[Joe Saul-Sehy]

A great show. We got Jonathan Clements here.

[OG]

I wish it was Sunday.

[Joe Saul-Sehy]

It's. It's about time for people who don't know because that's my fun day. Today's our fun day with Jonathan Clements here.

[OG]

And I don't have to run.

[Joe Saul-Sehy]

It is about time we got him. For people who don't know who Jonathan Clements is, he is for personal finance geeks. We have had so many people who had been on this show who've said that Jonathan Clements helped build their worldview of investing. Of course, as Doug so eloquently you said earlier, he's the former Wall Street Journal personal finance columnist, Humble Dollar Blog. He's just written his ninth personal finance book and they're all just fantastic. But before that, we've got a heck of a headline and a big time show. Oh, gee, why don't I go over the. Let's go over the run a show, you and I here for a second. So everybody, we just need a second. Okay? Yes. So we'll be. Hold on just a sec. Why don't you guys listen to this and we'll be here. AI agents are everywhere, automating tasks and making decisions at machine speed. But agents make mistakes. Just one rogue agent can do big damage before you even notice. Rubrik Agent Cloud is the only platform that helps you monitor agents, set guardrails and rewind mistakes so you can unleash agents, not risk. Accelerate your AI [e-mail]. that's R U B R I K dot com. That's the first half. You got what we're going to do?

[OG]

Yeah, no, I got it.

[Joe Saul-Sehy]

Well, almost. Let's. Here's the second half. This message is sponsored by Navy Federal Credit Union. As the holiday season rolls around, we know that you strive to do everything you can to bring cheer and joy to your loved ones. And as a credit union dedicated to serving all veterans, active duty and their families, we understand that every little bit counts. That's why for a limited time, you could earn a $250 cash bonus when you spend $2,500 with Navy Federal's cash rewards and cash rewards plus cards in the first 90 days, of course, Stackers. This is part of a big financial plan, right? Don't get yourself into debt. Make sure that you are spending and saving with a plan. But you know what? The giving doesn't stop there. You could also earn up to 2% unlimited CA with these cards. So saving up for whatever the season brings just got a little easier. Give joy, get joy. Join now@navy federal.org Navy Federal Credit Union. Our members are the mission. Navy Federal is insured by NCUA. Visit Navy federal.org cashrewards for details. Cash back terms and conditions apply. Offer ends January 1, 2026. Jonathan Clements waiting in the wing. So let's get to our headline. Hello, darlings.

[OG]

And now it's time for your favorite.

[Joe Saul-Sehy]

Part of the show, our Stacking Benjamin's Headlines. Our headline today comes to us from Investment News. This is a study Investment News just did about investment directions and financial advisors. Oh, gee. It walks through what products financial advisors are recommending and which ones they think they'll use more of in the next 12 months and which ones they think they'll use fewer of in the next 12 months. And this is always interesting because I know a lot of people who listen to podcasts like this don't use professional help. And like you and I have said on countless occasions, the discussions pros are having about money and the discussions the DIY community is having about money often are so, so, so different. It's remarkable. And I think both of them maybe need to be a little closer to each other. But before we get to this survey, when it comes to types of investments, is there any type of investment you see your practice using more in the next 12 months than you used in the last 12 months?

[OG]

No, because how could a year, how could just a simple year result in doing more of one thing or less of another? That seems too much of a fundamental shift. You know what I mean?

[Joe Saul-Sehy]

Well, it might not be based on the last year. It might be, you know, at some point you may turn the ship a little bit and go, oh, we've got some new data over the past 20 years or whatever.

[OG]

Bitcoin, maybe.

[Joe Saul-Sehy]

Were you surprised a couple weeks ago, Rick Edelman on the show saying more clients looking for bitcoin and more advisors saying that they work with crypto. The crypto is, is a piece of the puzzle that they want to make sure that they deal with for their client. Did that surprise you?

[OG]

I think his definition of more was probably skewed by some different timeframes because I guarantee it's gone down in the last year or two as the bitcoin frenzy kind of petered out a little bit. But no, we don't have a lot of that either. It's just not a. I've yet to see the investment use of it. You know what I mean? It's a speculation and it's certain that people are making money on it. But people make money doing all sorts of things, speculating, but people are losing lots of money on it too. I just can't see the thing that produces value. It's like precious metals. It's like gold. Gold is not an investment. A company who produces gold, a company who mines for gold, that's a different thing. But a pile of gold, it doesn't do anything. It just sits there. So tell me what it's good for and then I can tell you how it fits into the plan. I mean I guess maybe we continue to move more and more to. From. From mutual funds to ETFs. There's still some products that you just, you know, are okay as mutual funds. But anyways, I'll be interested to see what this article says here.

[Joe Saul-Sehy]

No. Well, it's funny that change is one of the biggest changes that advisors are making. The currently used by advisors. 90.1% of advisors surveyed said they use exchange traded funds. And I bet if we, if we went through our listener base I bet that would be closer to. I would think 70 just. And that's non scientific but maybe we should run a poll in the basement about what. What things people are using in our own community. But 90.1% of advisors use those. 78% use cash and equivalents. I was surprised that's not a hundred. It seems like every advisor to have some cash and equivalent. Third mutual funds 63.9% recommend mutual funds. 50.8% just over 50% recommend individual stocks. That number is higher than I thought that it would be.

[OG]

OG yeah, it's so hard to. I mean if you just look at the last, I don't know, 10 years worth of timeframe, you know, we're. We get questions from people sometimes that are like hey, I noticed that the Nasdaq is up 30% and my portfolio is up 8. What gives? It's like, well, what gives is that, you know, that's five stocks that are pulling the entire index and that's happening to the S and P also four or five companies that are representing half of the return or more of the return of the whole index. Which is actually proving the point of why you just want to be diversified anyway. So why would you want to focus on trying to pick the next five horses in that 500 person horse race. That doesn't seem like an easy task.

[Joe Saul-Sehy]

Interesting to find out what those individual stocks are. They're recommending 47% individual bonds. And I think that probably has more to do with where interest rates are because if you buy an individual bond you could just ride it and not have that. That sinking sound on ladders.

[OG]

You can do a lot depending on your type of client.

[Joe Saul-Sehy]

34.8% in ESG funds, separately managed accounts 33% the only numbers here that truly scare me. You know the 50.8% individual stocks, I'd love to see more data on that before I went good or bad fixed annuities. 30.9% does not necessarily bother me because creating an income stream for a retired person that they can't outlive, I might get that. But 30.4% into variable annuities. And think about this. Of 100% of the population, while you and I are not anti annuity, do we think 30% of the population needs an annuity?

[OG]

Yeah. That's a big number.

[Joe Saul-Sehy]

That number seems kind of high. Where are advisors headed in the future? Let's take a look at that data. When I asked you which investments advisors expect to use more of 49.7% are going the way you are. Nearly one in two people who are were interviewed said they plan to use more exchange traded funds next year than they used last year. That is a good sign paying attention to cost getting away from active management.

[OG]

Well, I mean you can have those things in mutual funds too. The reason we use them is because of the liquidity. And it sounds really silly to say, you know, if you've got two funds that are exactly the same and one's a mutual fund and one's an etf, they're gonna be priced about the same, if not the same and they're gonna have the same stuff in them generally speaking. But if you're rebalancing or something like that, you gotta wait till the end of the day to get your final price. And so you don't know. You say you want to sell 10% of this fund and you don't know what that 10% dollar amount is until 4 o' clock this afternoon. And now you got to wait till tomorrow to buy it. But you don't buy it until 4 o' clock the next day. And it doesn't seem like a big deal to be. It's just a day. Right. But sometimes those days do matter. Do we talk about if you miss the single Best day in a year, your return goes down a whole bunch. So we can't predict when that's going to happen. And certainly sometimes it does by accident, right? This money doesn't get invested or something, but with an ETF you can sell it at 2 o' clock in the afternoon and buy the next one at 200:1. You're fully invested the whole time. Just removes a chance of a screw.

[Joe Saul-Sehy]

Up basically if there is no price difference and you have materially the same type of investment on the inside. If I could have a car that has, I don't know, some thing added, let's say XM Radio, right, has Sirius XM for free versus one that doesn't. Everything else is the same. I think that's kind of the analogy, isn't it? Like most of the time it's not going to matter. But if it's the same price, why the hell wouldn't I get the thing that gives me the option to get the price lock in versus the type of investment that doesn't?

[OG]

And there's some other benefits too. There's some tax benefits in a non qualified account and that sort of thing that ETFs are better for. So you don't want to overlook those either. But we use it and I think a lot of people would say mostly because of the liquidity.

[Joe Saul-Sehy]

24.1% say they're going to use more cash next year. That is an ugly number. Not, not liking that. If you want to hear OG and my commentary on cash, go back to next Monday's show. 23.6% said they're going to use individual bonds, bond laddering strategies. That makes sense. 17.8% say I'm not going to change it. Nearly 20% of advisors, almost one in five say not going to do anything different. This is the. Without going further, other investment alternatives. Looking at alts, some of these quirky investments, 11 and a half percent say they're going to use more alts next year than last year. And of the alternatives that they're going to use, 50% of them say they're investing in funds or recommending funds that give them access to alternative asset classes while 20% are just diving in themselves making direct investments in alternative products or projects. And, and of those using alternative investments, a lot of people wondering what do we mean by alternative investments? Private equity 29% long short strategies 16% 15% in managed futures 14% in a macroeconomic trends 12% equity market neutral 11% in options trading. And and we go, we go down down that rabbit hole from there. So few more people og I feel like with questions about where the economy's going, there's a few advisors, one in ten dipping their foot into that pool, going, maybe I need to eke out other, other ways of making money than just long term hold.

[OG]

But you don't have to.

[Joe Saul-Sehy]

You totally don't. Don't. Sometimes I think that's advisors overthinking, which is interesting because when looking at client concerns, what are advisors saying their clients are worried about? 85% said within the past six months, client asked about the impact market volatility would have on their portfolio. And your answer to that would be very positive impact, I would imagine.

[OG]

Yeah. Yeah. If you're, if you are saving, this would be a good thing.

[Joe Saul-Sehy]

82% said clients had asked about what inflation would do, their portfolio or their plan. That's a good question for people to ask.

[OG]

That would ruin it.

[Jonathan Clements]

That would blow it up.

[OG]

Which is why, you know, you see such aggressive behavior toward getting rid of inflation. So it's like you got to take the medicine. The medicine is maybe a recession, but they're trying to figure that out. Right? Trying to keep that from happening. A soft landing is the buzz phrase.

[Joe Saul-Sehy]

36% say people asking about the Secure 2.0 Act. 35% cite client questions about fees and costs. 26% say clients ask about what tax reform might mean. Only 25% 1 in 4 advisors say that clients ask them about crypto. 22% said clients were asking about ESG investing. We'll link to this piece and Kevin Bailey will also dive into more in our 201. Of course, we'll also link to it on our show notes. Show [e-mail] 201stacking benjamins.com 201 that's our newsletter that comes out the day after every Monday, Wednesday episode. Always free.

[OG]

Sweet.

[Joe Saul-Sehy]

Stackingbenjamins.com 201 and if you get the 201, you'll see in there your unique code that you just give to people to refer the 201 to other people. Coming up next, it's time for our TikTok minute. This is the part of the show where we take a look at a TikTok creator and see if they're doing something that is creative or maybe not that creative. And today's, Today's person. Oh gee. Today's creators have a new way to make money. No, not creative. Well, let's see.

[OG]

You might recognize creative way of making money.

[Joe Saul-Sehy]

We'll see you might recognize these people. I actually don't think it's that. It may not be that creative. They think it's creative. You may recognize these voices. I'll explain more after we listen to these two people figuring out the best way to rob a bank.

[Doug]

Now, I know this plan is foolproof. Check this out. First of all, you and me start working at the bank. Doesn't matter the position, okay? Just so long as we get in there, all right? Then we just go there every day, do the work, gain their trust until we get them in the palm of our hand.

[Dakota]

All right?

[Jonathan Clements]

That's how we get the money.

[Doug]

That's the beauty of it, bro. They deposit the money into our bank accounts week after week, month after month. They not even gonna know they be arrived. And then 20 or 30 years later, we walk out the front door like nothing even happened.

[Joe Saul-Sehy]

Mother, that's called a job.

[OG]

Nice.

[Joe Saul-Sehy]

Key and peel right there.

[OG]

Key and peel.

[Joe Saul-Sehy]

I saw that one on TikTok and thought, well, there's some genius right there. You don't have to rob the bank, just get a jail.

[OG]

It's just like how you invest. How do you become a millionaire?

[Joe Saul-Sehy]

Just teeny tinies, day after day. And it's amazing. They don't even see it coming. Nobody arrests you or anything.

[OG]

It's awesome. Walk out the front door.

[Joe Saul-Sehy]

They don't even know. Hey, let's throw a Haven lifeline and tackle some of life's most important questions. Today we're going to throw out the lifeline to Dakota. Hey Dakota.

[Dakota]

Hey Joe and Og. This is Dakota. My current site is closing in six months and as part of that, my job is leaving me and moving to Ohio. I can relocate, but I have little desire to live in Ohio and my wife has even less. Since I love my wife more than my job, I will be unemployed or with a new company by the end of the year. I have not yet begun applying but there are currently multiple job openings in my area. Some background. We are mid-30s with over 400k in our 401ks and have a 12 month emergency fund. My wife is employed in a different professional field and assuming she does not lose her job two, our emergency fund could stretch out to 36 months. If I stick around until the site closes, I will get the equivalent of five months salary between a severance and retention bonus. Prior to the job loss announcement, we were budgeted to have a surplus this year equal to one month's expenses and have been planning to increase our contributions either to our kids 529 funds or to our taxable brokerage fund. Should we still increase our investing as planned or hold on to all the cash we can to expand our emergency fund?

[Joe Saul-Sehy]

Thanks, Dakota. Thanks for the question. And oh, gee. First. First is first. Great job. Saving on their part to be ready for this moment because who knows when something like that's going to happen. And if you have a 12 month reserve, it certainly expands the number of options. And if you don't want to move to any place, it just. I don't want to pick on Ohio. Just. I know you want to pick on Ohio. I don't want to pick on Ohio.

[OG]

Oh, I've already got it loaded up. So there was this news article, this news story from a Fox News station in Austin a year ago. We saw it and we couldn't. They played it in Dallas. It was so funny. So basically Ohio has been doing a lot of. Advertiser had been doing a lot of advertising in Austin to move to Ohio. So they, they were interviewing some Austinites about that advertising campaign. This is what Austin folks had to say about it.

[Jonathan Clements]

Of Ohio.

[Doug]

How about Austinite? Something tells me their views are a little different. Can you point out Ohio on this map?

[Joe Saul-Sehy]

Yeah, right here. I believe they are right up in here somewhere. That's them. Yeah.

[Jonathan Clements]

So they know where it is.

[Doug]

But would they move there from here?

[Joe Saul-Sehy]

I don't want to say never. I can't imagine anyone moving from Austin, Texas to Ohio for any reason. And nobody wants to move to Ohio.

[Jonathan Clements]

Okay then.

[Doug]

But that whole four seasons thing is kind of nice, right?

[Joe Saul-Sehy]

We have spring, summer, hot and hotter. That's four seasons.

[OG]

I'm okay with that.

[Joe Saul-Sehy]

I'm originally from Michigan.

[Doug]

Why'd you move here?

[OG]

I'll get away from the colds.

[Doug]

What would it take to get you to move to Ohio?

[Joe Saul-Sehy]

Literally nothing. I would literally never move to Ohio.

[Doug]

Million dollars.

[Joe Saul-Sehy]

No. No.

[Jonathan Clements]

How would you feel if you woke.

[Doug]

Up tomorrow and you were in Ohio?

[Joe Saul-Sehy]

I would cry. I would cry and then I'd move.

[OG]

No one would move to Ohio ever, for any reason.

[Joe Saul-Sehy]

Ohioans send your hate mail to [e-mail].

[OG]

It was a news story and it's on the Internet, so it has to Cincinnati.

[Joe Saul-Sehy]

I like Cleveland.

[OG]

I like you and I both have about Kentucky.

[Joe Saul-Sehy]

We have some problems with Columbus, although I do own a Columbus. I just.

[OG]

My son has been threatening to apply to Ohio State. And I said, well, I hope you have all sorts of money.

[Joe Saul-Sehy]

Yeah, that's a bridge too far. I won't go there.

[OG]

Exactly. Yeah.

[Joe Saul-Sehy]

Yeah. So I Guess we should get to Dakota's question. Does Dakota keep the plan increase or does he stockpile cash?

[OG]

I think you're really comfortable with a year's worth of. Worth of cash and if that makes you fine, you know, comfy, then I think you kind of go according to plan. What I would do alternatively is just add an end date in there and just say, okay, we're going to let this thing kind of drip down and do its thing because we're pretty sure I'm going to be able to find work and lots of opportunities here in your area. But if I don't buy such and such a point, then we're going to switch to being a little bit more, A little tighter on the budget, a little more austerity plan. So maybe you say, well, we'll let the 12 month reserve drip down to nine, we'll let it drip down to six. But if we're still hunting for work and our emergency fund's down to nine months, we're going to kind of postpone the. We're going to go back to the way it was just for a short period of time. So if you're pretty confident that you can find work, which it sounds like you can or are I should say, then then yeah, I think it's fine. Keep the plan. That's why you have the emergency fund. Gives you the flexibility.

[Joe Saul-Sehy]

Absolutely. I just think he's done so many things right. You know, there's, there is also. I'm not sure, I'm not sure this, but based on his age and just using the rule of 72, I'd love if he looked in his financial plan and saw if that money just grew. If he gets the financial independence picture that he wants at this point and there seems like there might be a possibility there might be coming in a little close. But. But could be. Og that he could be. Oh, boy. I'm about to use a phrase that I don't like. Coast, fi. Coast.

[OG]

Fire. Oh boy, oh boy.

[Joe Saul-Sehy]

But the great thing, what that means is that he may not need to save significant amounts of money at this point because he did such a good job of saving earlier on. And if that's the case, Og he could. His ability to accept a job that he likes for significantly less money where he can't save as much expands and really expands his horizons of all the things that he could possibly do. But it's what I like about knowing. Knowing kind of what your plan is. Where you're.

[Jonathan Clements]

Yeah.

[OG]

Where you are on the path.

[Joe Saul-Sehy]

Right?

[OG]

Yeah.

[Joe Saul-Sehy]

Yeah. Where that ball of money gets you. Thanks to Dakota for that question in Dakota. Don't give me the look, Doug, because Doug already knows what we're going to say. Dakota's getting some great swag for calling into the Stacking Benjamin show. It's our Haven Life Greatest money show on Earth. Circus T shirt. And you'll get one too if you've got a question for us. Techiebenjamins.com voicemail Jonathan Clements is a guy who I'm so honored. Humble dollar, but man, that is the least of what he's done. He sits on the advisory board of Creative Planning, one of the country's largest independent financial advisors. He's the author of nine personal finance books. He spent nearly 20 years at the Wall Street Journal where he was their personal finance columnist. Six years at Citigroup where he's the director of financial education for their US wealth management arm. Born in England, educated at this little college called Cambridge University, lives in Philadelphia, and he is now renovating a house, which I plan to ask him about. Jonathan Clement's coming up next. But Doug, before we get there, I think you've got some trivia about today's date in history.

[Doug]

Hey there stackers. I'm Joe's mom's neighbor. Tugging man oh man, after last weekend's road trip to the beach. Gotta tell ya, gas prices are through the roof. Prices well over three bucks a gallon. If I wanted to get robbed, I would have just asked Joe's mom for a loan. But today is an important day in history because one of the early auto barons ensured that gasoline would have a promising future after he patented the gas powered motor car. Here's a question. Who was this individual who today has me snarking about Sunoco and mad about Mobil? I'll be back with that villain's name right after I figure out how the heck to siphon gas out of the neighbor's Tesla. This episode is brought to you by Progressive Insurance. Fiscally responsible financial geniuses, monetary magicians. These are things people say about drivers who switch their car insurance to Progressive and save hundreds. Because Progressive offers discounts for paying in full, owning a home and more. Plus, you can count on their great customer service to help you when you need it. So your dollar goes a long way. Visit progressive.com to see if you could save on car insurance insurance, Progressive Casualty Insurance Company and affiliates. Potential savings will vary. Not available in all states or situations.

[Joe Saul-Sehy]

It's time for Black Friday. Dell Technologies biggest sale of the year. Enjoy huge savings on select PCs like the Dell 16 plus featuring Intel Core Ultra processors and with built in advanced features, it's the PC that helps you do more faster. And with built in advanced features, it's the PC that helps you do more faster plus earn Dell rewards and enjoy many other benefits like free shipping, price match guarantee and expert support. They have huge deals on accessories that pair perfectly with your Dell PC and make perfect gifts for everyone on your list. Shop [e-mail] deals I gotta tell you stackers, nothing has made my life better in the past month than adding AG1 to my morning routine. It's one easy level scoop per day. It comes in three different flavors. I like the original flavor, but they have tropical, they have berry. It actually tastes good. And what's even better is not only me, but my spouse. Cheryl started taking it once she dug into exactly what AG1 is all about. You could do that too. It has been fantastic. First of all, my awareness of my energy throughout the day. I noticed a bump right away. Now you might think, well that's a placebo, Joe. Like you start taking this thing. I've had such busy days, I've completely forgotten about it until the end of the day. And then when Cheryl starts sharing with me what a great day she's had and then I share with her what a great day I've had and we're like, wait a minute, what's changed? Well, the answer has been AG1. So while crowded airports and travel are causing strain on our system, antioxidants, probiotics and functional mushrooms help support immune resilience. As we've got more darkness in our life with the time change at this time of year, shorter days that could throw off your rhythm. Superfoods and B vitamin support help steady energy without that crash. And holiday meals, well, you know that means you're getting lost in sweets and snacking. A full spectrum of micronutrients from Whole Foods help fill nutritional gaps. AG1 One scoop added to 8 to 10 ounces of water every morning on an empty stomach. I use it, Cheryl's using it. I think you're gonna love it too. Head to drinkag1.comsb and they're gonna give you a free welcome kit with an AG1 flavor sampler and a bottle of vitamin D3 plus K2. When you first subscribe, that's drink AG1.

[Doug]

Hey there stackers. I'm former petroleum distribution engineer and future bicycle appreciator. You know, if gas prices keep going up like this, Joe's mom's neighbor Doug. The price of a gallon of gas probably wasn't on the mind of the subject of today's trust trivia question, which was who was the automobile pioneer who patented the gas powered automobile? Well, he definitely wasn't thinking price per gallon of gas because he bought it in liters. He was in Germany. And his name, well, that was none other than Karl Benz. And now let's welcome longtime Wall Street Journal personal finance columnist and the man behind the Humble Dollar blog, Jonathan Clements.

[Joe Saul-Sehy]

And I'm so happy we finally have him here. I don't know what took us so long. Jonathan Clements joins us.

[OG]

How are you?

[Jonathan Clements]

Great, Joe, thank you so much for having me on. It's a great pleasure.

[Joe Saul-Sehy]

Well, I'm glad that you were able to talk with mom a little bit upstairs and now hang out with us. So we got to start here, Jonathan, because you write in a recent piece on your website that you moved to Philadelphia and you bought a house. And you have 10 rules around buying houses. But one of those rules is you don't like basements. Jonathan, we have organized our entire life around mom's basements. Why don't you like basements?

[Jonathan Clements]

So it goes back to the late 1980s when I was a junior reporter at the time at Forbes magazine. When I say junior reporter, reporter is basically a glorified fact checker. So I was in New York City, I was married, I had a young daughter, and being a reporter, I had no money. So I lived in this part of a brownstone in Brooklyn which included the basement. And I shared the basement with a considerable number of mice and cockroaches. And I have been scarred ever since. So I just have a thing against basements because basements to me mean vermin.

[Joe Saul-Sehy]

The only cockroach here is Doug. So we're probably good, but we're not here to talk about that. You have this new project where you have 30 people that have written with you for you, a humble dollar who contribute to this. Tell me how this project came together. What was the inspiration?

[Jonathan Clements]

So this book really grew out of the website humbledollar.com, which I launched right at the end of 2016. And for the site, I have a lot of amateur writers who have a keen interest in personal finance who write for the site. And one of the things I say to them all the time is you may not be an expert on the financial world, but you are an expert on your own life. So one of the things that I consistently encourage the writers for the site to do is to write about things that they have experienced. Fast forward six years. And we got this idea of doing a book where people talked about their financial journeys, and it turned into this book, My Money Journey. And it's about these 30 people and how they reached or are endeavoring to reach financial freedom. So that's really the genesis of the.

[Joe Saul-Sehy]

Book you talk about. This ended up with themes that even maybe you didn't expect as you see the essays coming back from people. I want to mention these themes and if you don't mind commenting on these, you write first that if you're a parent, you're molding your child's financial beliefs, maybe even more than you know.

[Jonathan Clements]

Absolutely. If you are a parent, it is absolutely scary how much influence you have on your children. Your children may mimic you, they may head in the completely opposite direction, but whatever it is you do as a parent, it is a megaphone into the ears of your children and they will carry that with them through the rest of their days. And you see this in the 30 essays in my Money Journey. So many people talk about the influence of their parents on their own financial habits. You know, in many cases, the people who write for the book had Depression era parents. And those depression era parents were super frugal, super scared of the stock market. And this influenced their kids either to shy away from the stock market themselves or to head in the other direction. Say, okay, my parents never dreamed of doing anything other than putting money in the bank. And even that they did reluctantly, but I'm going to take the risk of investing in the stock market. It's just amazing how much influence our parents have on our financial lives.

[Joe Saul-Sehy]

One of the essays I'm going to ask you about here, coming up, is from a writer and financial planner, Annika Headstrom. And she writes about lovingly about her dad, Olaf, who she said was an amazing saver, but he would commonly miss a belt loop. He would often not quite belt up his pants the way that he could. So she noticed everything. One thing I wondered as I was listening to you talk right now, how has that been for you? You have two children like I do. Have you seen your kids money habits kind of reflect your own or go in a different direction scarily.

[Jonathan Clements]

So I have two kids. One's 30, the other is 34. Both of them are extremely careful with money as I am, and to some degree, I look at the way they behave and say, hey, kids, you should relax. It'll turn out okay in the end. I may have not known that when I was starting out, but I can tell you for sure it's going to turn out okay. My younger kid, my son Henry, who's 30 years old, just got his PhD. Took him seven years.

[Joe Saul-Sehy]

Congratulations.

[Jonathan Clements]

You know, so he's had seven years where he was basically living on 30 grand a year. Henry told me not so long ago that through the course of his PhD, he, he managed to save up more than $100,000.

[Joe Saul-Sehy]

Really? Oh.

[Jonathan Clements]

And I was like, yeah, maybe those lessons about thrift and living beneath your means, maybe I emphasized them a little too much.

[Joe Saul-Sehy]

You, you have Jonathan, actually several writers who say that, that while they, many of them were frugal, in fact, the whole first part of your book is about people being frugal and saving. A lot of them regret they didn't do more when they were young.

[Jonathan Clements]

That's true. I mean, a lot of people do look back and say, hey, this financial journey turned out okay, and I wish I'd been a little bit freer with my money. I certainly feel that myself. On the other hand, Joe, I would say to you that one of the ways to ensure that you have a happier life is to enjoy a gradually rising standard of living. If you spent your 20s staying at Motel 6, when you get to stay at a Hyatt in your 60s and it seems like the lack of luxury.

[Joe Saul-Sehy]

Versus the other way around, if you don't save, you stay at the Hyatt and you're forced into the Motel 6 later on, it doesn't feel the same.

[Jonathan Clements]

It doesn't feel the same. You do not want to start life in first class. You want to starting economy and end up at first class at the end. And then you'll really appreciate it getting.

[Joe Saul-Sehy]

To your message with your son. One of the themes, and I'm going to skip ahead here a little bit, was that often your writers didn't know they were successful until much later. Like, you know, you stumble along, you feel like you're in the fog, but then all of a sudden you realize, I did it. Like, there's this aha point.

[Jonathan Clements]

I guess it's so true. You know, financial success is not one lucky stop. It's not one lottery ticket. It is a lifetime of doing pretty much the right thing, year after year, decade after decade. One of the notions that I like to talk about is this notion of a financial tipping point. When we start out in the financial world, when we start out as adults and we begin to save, making financial progress seems agonizingly slow. And the reason is the progress we're making is largely driven by the raw dollars that we sock away. But if you Persist in socking away money year after year, you eventually hit this tipping point. And the tipping point is this. Not only is your portfolio growing because of the money you put away, but the investment returns you earn in any given year start to equal and exceed the raw dollars that you are putting away. And suddenly your portfolio explodes. It's hitting on both cylinders. And you go through this period where after taking forever to get to any sort of decent sum, suddenly your money doubles and triples and quadruples in rapid time. But to get there, you have to get through this rather grudgingly slow accumulation. That might take ten or a dozen years. But if you get through those 10 or a dozen years, you will hit that tipping point. And suddenly nobody has to persuade you to save. From then on after, you're going to want to do it because you see that the results are so fabulous.

[Joe Saul-Sehy]

And the writers in this piece write a lot about the mistakes that they made along the way. And some tried market timing, some went into some crazy investments. And what's interesting about what you say, Jonathan, is when you start off, you can make some of those mistakes early on and they don't kill you because you have an accumulated amount of money. Certainly, hopefully you get to broad based indexing or a much more, a much more equitable strategy as you build the, build the pile. You know, I'm thinking about Nick Magi had the book last year with a very simple message of just keep buying. When you're young, just keep buying and buying. And that seems to be a theme that resonates all the way through your book. These people, through thick and thin, continued to just keep buying.

[Jonathan Clements]

The number one thing they did was to be good savers. I mean, if there's any, any financial virtue that you want to have, it's to be a great saver. Because if you're a great saver, it will paper over a multitude of other financial sins. One of the things that I like to think about My Money Journey is that it's an inspiring book. Most of us do make financial mistakes. Most of us, particularly when we're younger, we try our hand at picking stocks. We delusionally imagine we know which way the stock market is headed or which way interest rates are headed. But if we persist with the saving, it's going to turn out okay. So that is one of the messages I hope that comes through to readers of My Money Journey, which is, even if you mess up, even if you mess up multiple times, you can still reach financial freedom. You can still get your 60s and have a perfectly comfortable retirement. All you need is this one simple ingredient, which is you're going to live beneath your means and save regularly.

[Joe Saul-Sehy]

You know, what resonated with me wasn't just that great. Savings helps you write as one of the things. One of these overarching themes is that it's a savings habit. And I know when I was younger it was saving, the word saving in that partial sentence that was attractive to me. But as I'm getting older, I realized the key word isn't so much saving as it is habit. The habit of frugality, the habit of saving money, about turning these into automatic systems almost in a way where it's second nature to us. The habit piece to me, Jonathan, really resonates all the way through the book.

[Jonathan Clements]

So, Joe, before we started recording this, you know, we were talking about exercising, you know, and a lot of people struggle to exercise, and they get up in the morning, and it's an act of willpower in order to go out for a run or go to the gym or whatever it is. But if you do things based on willpower, life is really tough. If you sit there and say, I really, really don't want to go to the candy machine today, pretty soon, you know, something's going to happen. You'll have a rough moment in the day, and you'll be in front of the candy machine. So what you need to do is to do things not based on willpower, but based on habit. And it takes a while to take good behavior and turn into habits, but once they are habits, they're unstoppable. So, yeah, you want to have the savings habit, just like you want to have the healthy eating habit, just like you want to have the exercise habit. You want to take these good behaviors that accord leading a good life and turn them to something that you do.

[Joe Saul-Sehy]

Instinctually when it comes to money. It's interesting because where to your point, it isn't about discipline, it's about systems and habits. It is also another paradox, I think, with investing, that new people, maybe to our show, or new people to Humble Dollar, I think would think, is that this must be incredibly complex. And you write that right in your introduction. It doesn't have to be complex. And all the way through it kind of another theme that resonates. You don't write this explicitly, I don't think anywhere, really. Complexity sometimes is a red flag when it comes to investing.

[Jonathan Clements]

People, unfortunately, associate complexity with sophistication. And everybody wants to be sophisticated. Sure. You know, we all want to be able to say yeah, I'm a sophisticated guy. And so if you're going to be sophisticated in the world of investing, what you're going to end up doing is exactly what Wall street wants you to do, which is to buy hedge funds, to buy complicated investment products. Because the more complex investment product is, the higher the fees that Wall street can charge. That's why if you want to grow wealthy over time, not only do you need these great savings habits, but you want to invest in, in simple financial products. And probably the simplest and lowest cost financial product out there is an index fund, a broad market index fund that'll give you thousands of securities in a single mutual fund or a single exchange traded index fund, and they'll charge you three or four cents for every hundred dollars you have invested each year. I mean, index funds in their simplicity are gold. Anything that is labeled sophisticated or complicated, if you struggle to understand it, stay away from it, because you're much more likely to end up making Wall street richer than yourself.

[Joe Saul-Sehy]

That's a great transition into some of the individual stories that I'd. And I'd like to dive into just a couple of them. Dennis Friedman, who kicks off the book, kicks off a section about fierce frugality. Dennis, by the way. And the reason I think it's a great transition, Dennis, her years about indexing. He hears about something called a spider which is buying the S P500. This radio talk show host introduces him to the NASDAQ index, which he is day trading. And we won't go into this story, but he and his family lose a bunch of money day trading before he realizes maybe I should just buy and hold this and become a long term investor. The piece of Dennis's story that I found very interesting though is this idea of not just frugality, but frugality and renting. He rents a place, he has a choice early in his life between two places to rent. One is 300amonth, the other is 500amonth. So he goes with a 300amonth rent. Seems like Jonathan initially a great decision, but I think for a lot of people out there, they sometimes have this aha. That this low rent comes with some ugliness.

[Jonathan Clements]

Sometimes it does indeed. I think in Dennis's case, if I recall, he ended up living next to a drug dealer, which was a bit of a downside. He also had his apartment broken in. You know, he had his laundry stolen out of the building. Laundry machines.

[Joe Saul-Sehy]

That's right, yeah. Left it downstairs and there's all his clothes are gone.

[Jonathan Clements]

Yeah. So Dennis is Actually, one of the most popular writers for Humble Dollar. And his modesty and his honesty really appeal to readers. And when you read that chapter of the book, you can see why he's just so brutally honest about his financial life with readers that you come to not only appreciate him as a person, but to see the mistakes that he made. I mean, Dennis actually ended up buying an apartment, but it was, if I recall correctly, 789 square feet. And he lived there for more than three decades. But he did it reluctantly. His boss had to persuade him to go ahead with the home purchase because he was terrified of taking on that big mortgage debt. Today, I'm happy to report Dennis has actually sold that apartment. He now lives in a house in Southern California, recently got married during the pandemic. And Dennis is now in his early 70s. And I think, you know, after years of maybe excessive frugality, he's having, you know, the retirement that he really deserves.

[Joe Saul-Sehy]

Well, and he talks about the, you know, if he'd stayed in that rented property next to the drug dealer and just dealt with it. He, of course, talks about how he was saving so much money when his laundry was stolen. No big deal, because the clothing didn't cost that much. And he was saving so much on his housing cost that that was great. But he talked about by the time that he left the house 35 years later, the rent on that 300 apartment had grown to, I believe, 15 or $1600. And his housing cost would have never been nearly as low as they were if he'd stayed in the same place. But in the back of my head, as I'm reading this, Jonathan, and part of the reason I wanted to ask you about his story is he bought that house, I believe, in the 1980s. And we're seeing now in life, people are changing jobs far more often. They may relocate far more often. I'm hearing some of the younger people on the Internet now saying maybe this idea that buying a house is not the boon that it used to be, maybe dealing with the cost of an apartment rising and having the flexibility may be a better. A better fit. Where do you come down on this rent versus buy thing?

[Jonathan Clements]

Well, so one of the things that Dennis mentions is that as you pointed out that he had stayed in the apartment, the rent would have risen considerably over the decades and certainly would have been far greater than the mortgage they ended up taking on in terms of monthly cost. So the reason you buy a house is not for the home price appreciation. I mean, if you take the home price appreciation and Then you deduct all the costs associated with owning a home. You know you'll make almost nothing. But what you do when you buy a house is one, you force yourself to save. With every monthly check that you send to the mortgage company, you pay down a little bit of the principal. And two, you lock in your housing costs. Because if you take out a fixed rate mortgage, you know your mortgage payment will not go up. Your homeowner's insurance may go up, your property taxes may go up, but the principal and interest that you pay to the mortgage company each month will stay the same. That's the reason you buy a house, to lock in your housing costs. But it only makes sense if you're going to stay there for a reasonable time. It's the same with the financial markets. If you don't have a long time horizon, you should not be owning stocks, you should be in cash investments or in bonds. Similarly, if you don't have a long time horizon and you should not be owning, you should be renting a home. And so what is the break even point? I say that ideally you should have at least seven years and preferably longer. You really push it. Maybe you can break even on a house in five years. That won't be the case for people who are buying during the craziness that we saw early last year. But yeah, it all comes down to time horizon. And if you're early in your career and you can't see staying put for more than a couple of years with your current employer and you may end up heading somewhere else. No, don't buy a house. Rent homes are not short term investments.

[Joe Saul-Sehy]

Well, and I also don't want to lose his, his overarching theme, which is control your hosing housing costs for the win. Even if you rent, controlling your housing costs goes a long way. Because he says if he didn't control his housing costs, no matter what he did, he wouldn't be able to save nearly the amount that he saved.

[Jonathan Clements]

So, Joe, you know, in terms of my own financial journey, one of the crucial components of that was I owned the Same House for 20 years and it locked in my housing costs at a very low level and it allowed me to save prodigious amounts of money. But I'll tell you, in retrospect, I so wish I didn't live there. It wasn't the greatest house. You know, it was a sort of I stretched to buy it, or at least it felt like I was stretching to buy it. It was on a relatively busy road. You know, I ended up scratching, spending tons of money on renovations because I was trying to make it more to my liking. And probably I would have been smarter to either stretch to buy a more expensive home or to help hold off a couple of years until I could have bought something more to my liking. So those 20 years in that house were great financially, but, you know, in terms of enjoying life, maybe not so great.

[Joe Saul-Sehy]

Which is funny, because for people that don't read the Humble Dollar, you're renovating the house that you're moving to in Philadelphia, right?

[Jonathan Clements]

I am. In fact, as I talk to you, I am actually living in an Airbnb because, you know, the home I own here in Philadelphia is your typical Philadelphia row home, which means it is small and unless I want to drive myself completely crazy, living there through the renovation would not be advisable. But I have learned the lesson of my past, and I am spending a considerable time or amount of money renovating this apartment so that it is much more to my liking. I'm actually spending more on this renovation than I paid to buy my first home, which is a little scary.

[Joe Saul-Sehy]

And in your own story that leads very much into your story, which is also in the frugality section of this book, you do two things with your money that I want to talk to you about. First, one is 100% stock index portfolio. But outside of that, you drastically put money toward your mortgage. The stock piece sounds incredibly aggressive. The mortgage piece sounds absolutely 100% conservative. Talk to me about this portfolio mix and how that works for you.

[Jonathan Clements]

So go back to the early 1990s. Interest rates were significantly higher then than they are today. Not only my mortgage rate, which was over 7%, but also bond rates as well. Nonetheless, at that time, the interest rate on my mortgage was considerably higher than the interest rate I could buy by purchasing bonds. So the incentive was there to pay down the mortgage. It was the best bond I could buy. And that is indeed what I did. I paid off that mortgage in about a dozen years, if I recall correctly, because I could get a guaranteed 7% by paying down the mortgage. Whereas if I bought bonds, you know, maybe I would have got five or six. Now, having said that, we are in a different situation today. You know, remember we had not so long ago mortgage rates that were below 3%. There are a lot of people around the country who have homes with mortgages of around 3% today. You can go out and you can buy, you know, high quality bonds that pay more than 4%. So is paying down a mortgage the great financial strategy today? That it was when I was doing it. I can't make that case. I think that for a lot of people, buying bonds today is probably better than paying down your mortgage. That said, I would say to anybody listening to this, ideally, if you can, you should get your mortgage paid off by the time you retire, because when you retire, you don't want that added expense. But right now, solely on the numbers, you're better off buying bonds than paying down your mortgage.

[Joe Saul-Sehy]

That resonates also a lot through a lot of these. These writer stories, Jonathan, which is this idea that we seek security. You know, a lot of us don't know that we were successful until you get well past that point. And then we seek this. This feeling. And paying down the mortgage gives you that feeling. It makes me sad, by the way, that none of your writers are writing about how great annuities are, which really they should be. I mean, think about how much we want security. The annuity business should be so much better than it is. It kind of makes me sad.

[Jonathan Clements]

Well, it depends what sort of annuity you're talking about.

[Joe Saul-Sehy]

Well, true. Yeah.

[Jonathan Clements]

So, you know, I would say to retirees, particularly those who don't have a traditional company pension, you know, who want that fixed income, you know, a plain vanilla immediate fixed annuity. Annuity is a good use of your money. And in fact, I intend to use part of my nest egg to buy an immediate fixed annuity that pays lifetime income so that I do have that regular income. And one of the things that that can do for you, because it provides you with that floor of income to cover your retirement expenses along with Social Security, of course, is it can free you up to be more aggressive with the rest of your portfolio. So I am a relatively aggressive investor. You know, I still have a very high percentage of my portfolio in stocks. But to have the confidence to do that, you want to know that you can cover your fixed expenses in retirement. And between delayed Social Security benefits and having an immediate fixed annuity that can provide that sense of security and free you up to be more aggressive.

[Joe Saul-Sehy]

Well, I do like the two things together. I mean, when we talk about Social Security annuity, but also paying down your mortgage and not having that bill feels a little bit like an annuity as well. You know what I mean? Just this huge. This huge weight off your back. All right, I want to talk about Annika Headstrom's story because she has twins like my spouse, Cheryl, and I do, so I definitely feel for her story, but her twins came at a fairly high cost. Can you tell us a little bit of Annika's story.

[Jonathan Clements]

Yes, Annika's twins were born prematurely, very prematurely, and they ended up spending an additional, if I recall correctly, three months at the hospital. And the medical bills ran to seven figures for those twins. And this is in many ways the ultimate financial emergency, one that you cannot shy away from. Anybody who ever has ever had a kid knows that you will do everything in your power to make sure that your kids are okay. Unfortunately, you know, they had the health insurance to pay for it. One of the things that people, I hear is, you know, people don't want to get health insurance. They don't like the premiums, yada, yada yada. There are two great reasons to have health insurance. One is the negotiated discounts the insurance company has with the medical providers. If you are paying full freight at the hospital with your doctor, it's going to be extremely painful. The insurance company ensures that you get those discounts. But second, and even more important is the out of pocket maximum. So on my insurance policy this year, the out of pocket maximum is $5,600. That means, you know, whatever happens this year, I know that I'm not going to end up paying more than $5,600. Similarly for Annika, you know, the thing that would save her from bankruptcy is the out of pocket maximum on her health insurance so that she could pay for the medical attention that her newly born twins lived, that she could handle those seven figure bills. So anybody out there who says, you know, nah, I'm young, I'm healthy, I don't need health insurance. You are out of your mind.

[Joe Saul-Sehy]

I feel like the people who skimp on insurance is back. I haven't been a financial planner a long time, but when I was, it was always the people that were cutting it close. You know, people that did had these razor thin margins. So like the first thing I'm going to cut is my insurance. And that is just the worst, the worst. Sadly, I think those people need more insurance and then maybe raise those deductibles, those out of pocket numbers as you get better. What was interesting to me too about Annika's story is at the same time this is happening, she's finding out this new house that they're living in. So her twins are at the hospital. She's paying a million dollars over there or through insurance, luckily, but at the same time she's got these housing problems. Like there's this also resonating theme of Jonathan, things come up in your life and to think that they're not going to come up the acc happen. Heck, we talked about some of your. When you and I were talking about exercising, some of your epic crashes on your bicycle, stuff happens out of the blue. And being able to handle that, I think resonates throughout the story as well. This emergency fund idea.

[Jonathan Clements]

Sorry. We all need to run our financial lives using this key phrase, margin for error. You need a margin for error in your. In your financial life. And that means having a certain amount of money in the bank. It means making sure that you have insurance that will cover the big financial risks in your life. You know, we're talking about the potential of getting sued, the potential of having a bad turn in your health, the potential that, you know, one of the spouses in a relationship will die and leave the other one in the financial urge. You need to think about the risks that are in your financial life and make sure that you have some margin for error so that when the bad things happen, the wheels don't go completely off the bus.

[Joe Saul-Sehy]

My last question for you, Jonathan. People, I'm sure listening to us think, well, Jonathan Clements, heck, he's seen everything between the personal finance column, between all the humble dollar stuff, between the, you know, this is your ninth work. So much stuff out there. There still has to be something that surprised you some. Aha. When you were putting this book together, what surprised you as you were doing this?

[Jonathan Clements]

That's a great question. I think one of the things that surprised me when I sat down to write my essay is how my financial life has really fallen into two parts. The first 20 years of my financial life, I was everything that we've talked about today. I was saving regularly, holding down costs, building that nest egg, getting to that tipping point, trying to ensure that I had this financial security, trying to ensure that I was on track for financial freedom. And then when I look back at what happened in the subsequent 15 years, you know, the 15 years since I reached that point, I started to realize how chaotic my financial life looks. And, you know, I've changed jobs, I've tried multiple different things. You know, I've moved a reasonable amount, and it's been a lot of fun. I was the kid in college who swore he would never get married and never have children. Within a year of getting out of college, I was engaged. Within two years, I was married. Within three years, I was a father. You know, I did everything early on. You know, I was so precocious, I even got divorced early on. I did not spend my 20s partying like so many other people did. You know, I was raising kids, I never sat at a bar, I never went to a club. But because I was so careful financially through this 20 years, I got to my 40s and suddenly I had this financial freedom. And I've used it over the past 15 years to do all kinds of different things. You know, I tried my hand at teaching personal finance at the college level. You know, I worked on a financial startup that went down in flames. I launched Humble Dollar. I've done a bunch of books. You know, I lived in different parts of the country. It's been a wild 15 years, but it was made possible by all those good financial habits early on.

[Joe Saul-Sehy]

Red roof in early. So you can get the Hyatt later on.

[Jonathan Clements]

Absolutely. And who knows, maybe one of these days we'll even go for like a Marriott or something.

[Joe Saul-Sehy]

Getting crazy now, man. Get super crazy. The book is my money journey. How 30 people found financial freedom and you can too. 30 inspirational stories from different people who've written for humble dollar and I believe available everywhere. Jonathan.

[Jonathan Clements]

Available wherever good books are sold and bad ones as well.

[Joe Saul-Sehy]

It's so great to finally meet you. Thanks for helping our stackers get a little bit better with their money today. I really appreciate it.

[Jonathan Clements]

Hey, it's been a lot of fun, Joe. Thanks for having me on.

[Joe Saul-Sehy]

This is Chris from Heavy Metal Money. When I'm not raging in a mosh pit, I'm stacking Benjamins. So honored and love talking to that guy og Jonathan Clements. That's big. Thanks to Jonathan for hanging out with us. You know this, this idea of buy versus rent, buying a house early on, you see so many people og that worry that buying might be, might be a problem. You and I have talked about renting. Certainly Jonathan Clements even just said, right, you heard him, that renting still may be the better option for some people. But certainly if you can predict the future and get ahead by buying and locking in, that price could be a good deal.

[OG]

Certainly depends on the timing. We bought our first house in 2004, I think 2003, 2004, and sold it 10 years later for the same price. We did a really stupid thing. So this is operator error and self inflicted. But our first house was interest only. So for 10 years we paid very little principal on our house. So not only did we live there for 10 years, but we also didn't appreciate and we didn't make any headway on the actual principal balance or not much anyway. And you contrast that with the timing of our house here in Texas where we were like, oh my goodness, we're paying 50% more for. It's a bigger house for sure than what we had in Michigan, but we're writing a bigger check. And now here we are aggressively paying the house off with a low rate and a 15 year term and it's appreciated by roughly double in the last 12 years or 10 years. And so now we have this huge, these two opposite experiences of the same process, right? Buying a house and getting kicked in the face. Buying a house and it's not almost paid off, but it's on its way to being paid off early and tons of equity. So some of it's timing, I think, and then also just getting lucky, you know, and being able to be in the same place for a long time.

[Joe Saul-Sehy]

But for somebody in their, in their 20s, in their early 30s, hanging out with us, listening, you know, Jonathan said it certainly depends on how long you're going to stay with your job. It's like this seven year crossover point. But do you pull that trigger? Do you pull the buy house trigger if you're not sure? Or do you, do you not this.

[OG]

I mean this is a lot like the rich dad, poor dad thing. The poor dad in rich dad, poor dad every time he got promoted, got a bigger house and kept on increasing his lifestyle with that promotion. Where this works to Jonathan's point in his example was I bought this house, I got a payment that's whatever $700 a month and it's tight. And I'm like, this probably was a terrible idea. In 10 years from now, through normal pay raises and promotions and all that sort of stuff, it won't be as tight. And in 25 years from now, it certainly will be a drop in the bucket. But the key is to allow that to happen. If you're going to make a mistake there, the mistake is I bought this house, it was kind of tight and then I got a big promotion and I bought another house and it was kind of tight and then I got a promotion and my spouse got promoted and we wanted to go to a better school district so we got another bigger house and it was kind of tight. And you never let that opportunity for that gap of cash flow, you know, and that equity build to happen. So, so yeah, I mean if you're 25 and you're, you're excited where you are from a town standpoint and living your experience and you want to be there for a while, that's a, it's a great way to build equity. Except for the 10 year period where it doesn't happen and that Happens on occasion.

[Joe Saul-Sehy]

It is, it is.

[OG]

What's your history?

[Joe Saul-Sehy]

Well, and it's interesting because I think looking at the demographic patterns pre Covid, you and I would have said the the chance that you're going to be able to stay in the same residence is much, much lower than it was 30 years ago because you're going to change jobs and the chance that you may move towns, move locales and it's going to be a pain in the butt to live in this house anymore is much lower than it was 30 years ago. But post Covid and looking at what's going on in office real estate, you got to say those odds of staying in the same house og significantly went up in the last four years.

[OG]

Oh yeah, they've certainly gone up for sure. Yeah. Especially if you're in a career that allows for that flexibility. But even if you end up choosing wrong in terms of the time period, you just get unlucky like we did in our first. There's things that you can do to help that if we would have had a normal mortgage over that 10 year period, we would have established some equity. If we would have stayed another 10 years, I know the value of that house because who doesn't Zillow their own house, you know, or their own ex houses.

[Joe Saul-Sehy]

Right. I just hit refresh over and over and over.

[Jonathan Clements]

Yeah.

[OG]

So I know what the value of my old house is in Michigan and it would have worked out okay. You know, now we'd be 20 years into this, into that purchase, you know, on the downhill side of that mortgage and the market has recovered and so on and so forth. So had we done it the right way and if we stayed in the same house and paid a normal mortgage payment, you know, yeah, the first 10 years sucked, but the next 10 years were awesome. So we would still be in great shape and interestingly enough have a much smaller mortgage payment than I have now. Which is what, you know, Jonathan's example was a good benefit of that. So we did the rich dad, poor dad thing one time for the poor dad. We went, ooh, new house.

[Joe Saul-Sehy]

Woo. I do love the just the general theme in your story and in Jonathan's stories that you can make mistakes and you know what? Most of the time it's not going to kill you. You're going to be okay. You figure it out and, and you make it. That was inspiring to me in this interview, by the way. Speaking of that, let's go to the community calendar. We have gotten some wonderful reviews from people and officially I put your name in the hat for a book. If you. If you leave us a review and send it to me wherever you are. We got a nice message from listener Katie, by the way, who happens to be in Ohio OG she says she's attached a screenshot. She's an Ohio State alumna and loved the banner about the rivalry. It's a nice surprise to my already favorite podcast. I hear you have a plethora of books you're just giving away. Let's just put our collegiate rivalry aside. I have five out of five stars. Listen to every podcast. Unlike Paula, I know way too much useless trivia and love to add to my useless knowledge with Doug's weekly trivia. Please send a book to this Ohio State grad turned Mainer who loves finance and and books. When she said she's moved to Maine. Love me some Maine.

[OG]

That's pretty cool.

[Joe Saul-Sehy]

Yes. You don't hear people joking about moving to Maine.

[OG]

No, no. Because it's cool.

[Joe Saul-Sehy]

It's absolutely awesome. You know what? And I wrote right back to Katie and gave her a choice. At this point in the game, I gave her a choice of five different books because I have so many. So don't leave us a review because you want a book. Please, please. No. But if you leave us a review and you send it to me official, I put your name in a hat. But right now I'm giving people a choice because I got to get some. Mom is complaining about the number of books that we have sitting here from people that have either been on the show or want to come on the show that just send us these books for us to prep for interviews. Also coming up this week on Thursday, I will be on Instagram at 5pm Eastern. Guest still to be determined or we might not have a guest. Might just hang out. Maybe we can get OG on Instagram one of these days. Stacking benjamin maybe.com welcome gives you not just our Instagram account but also our YouTube channel, our Fireside for the Fireside chats where you can ask the questions out loud to our guests. Stacking benjamin.com welcome gives you the welcome guide. If you're not here because you want to hang out with us on social media, you're not here because you are hoping to know Doug's trivia answer like Katie does. You're here because you need better help in your corner. OG and his team are taking clients so head to stackinbenjamins.com OG that's the link to him and his team schedule so that you can begin making decisions your future self will thank you for stacking Benjamins.com OG all right, that is it for today man. Lots of people to thank, lots of takeaways. But Doug, let's narrow it down. What would you say our top three are?

[Doug]

So what should we have learned today? First, take some advice from Jonathan Clements. Use index funds whenever possible, pay down mortgages and make mistakes along the way. By doing, you'll find yourself much more in the game than if you don't invest at all. Second, robbing a bank? Maybe just working there is a better option. But the big lesson. What a surprise to learn that Carl Ben's both created a deep knee workout routine and an automobile. That guy was multi talented, am I right? Thanks to Jonathan Clements for joining us today. You'll find his book my money how 30 people found financial freedom and you can too, wherever books are sold. If you're buying from Amazon, click the link on our show notes and you'll help the show. Head to stackingbenjamins.com for those. Thanks to everyone who's already done that. This show is the property of SB Podcasts, LLC, Copyright 2023 and is created by Joe Salsihai. Our producer is Karen Repine. This show was written by Lacey Langford, who's also the host of the Military Money Show. With help from me, Joe and Doc G from the Urban and Invest Podcast, Kevin Bailey helps us take a deeper dive into all the topics covered on each episode in our newsletter called the 201. You'll find the 411 on all things money at the 201. Just visit stackingbenjamins.com 201 Tina Eichenberg makes the video version of this show. Once we bottle up all this goodness, we ship it to our engineer, the the amazing Steve Stewart. Steve helps the rest of our team sound nearly as good as I do right now. Want to chat with friends about the show later. Mom's friend Gertrude and Kate Junkin are our social media coordinators and Gertrude is the room mother in our Facebook group called the Basement. So say hello when you see us posting online. To join all the Basement fun with other stackers, just type stackingbenjamins.com basement not only should you not take advice from these nerds, don't take advice from people you don't know. This show is for entertainment purposes only. Before making any financial decisions, speak with a real financial advisor. I'm Joe's mom's neighbor Doug, and we'll see you next time back here at the Stacking Benjamin Show.

[Joe Saul-Sehy]

Sa Sam, you know all Last week, OG we didn't talk about Father's Day. How was your Father's Day?

[OG]

It was. Trying to remember.

[Doug]

Good.

[OG]

Yeah. No, it's great. Watched a little golf, watch a little U.S. open. A lot of us open, actually.

[Joe Saul-Sehy]

What was the story of the guy who won the US Open? He apparently has some family story. Do you know that story? Clark was his last name. His.

[OG]

His mother had passed away while he was in college, so they had talked a little bit about that, I guess. He's been a pro for a while, but not really successful and has won twice this year, obviously, including the US Open. So kind of sort of turned it around. Was kind of the major piece there. So. Watched a little bit of that. Made some shish kebabs on the grill, which is fun. I have this grill pan. I love grilling vegetables in a grill pan on the grill because you don't have to, like, skewer it, you know. You know, and they get smaller sometimes, you know, if you just throw them on the grill, sometimes they fall through the grill grates or whatever. But I have this grill pan.

[Joe Saul-Sehy]

Yeah, mesh. Mesh net pan.

[OG]

Yeah. This one's. This one's like carbon steel. And so it's like cast iron, but a little bit different. And if you haven't cooked in cast iron or you haven't broiled something in a cast iron pan before, you are doing yourself a disservice. Because take a casserole, for example, right? You put it in there. You know, you cook it, you take it out. What do you do with it when you take it out of the oven? You have to let it sit cool. Yeah, you set it on the stove and it gets cool. Those cast iron pans or those carbon steel pans retain heat like crazy. So you put it on the grill. You get it to about 550 degrees. So steam's coming off this thing or smoke, whatever it is. You put the vegetables in there, they cook. And then you can take it off the grill and, you know, put it on the. Put it on the table and it's still going to be hot. And so you're eating hot food for the. For the day or, you know, the dinner as opposed to, you know, normally you cook it and you'd set it on a tray and. And now it gets cold sitting outside. Well, not in Texas it won't get cold, but you get the idea. I noticed this the first time we broiled some chicken in a cast iron pan, and I went back for, you know, like another half of a piece, and it was still piping hot because the pan stays at, you know. Now the downside is that if it's, you know, you're kind of sort of still cooking it, you know, so you can't be okay with it still, you know, cooking a little bit. But such a great piece of cookware. Carbon steel grill pan from Made In. I would, if you want to, if you want to sponsor us. I love my, I love our Made in stuff. It's pretty sweet.

[Joe Saul-Sehy]

Good work. Back to golf for just a second. I've, I've watched that golf documentary Full Swing, which is made by the same people who did the Formula one documentary on this.

[OG]

Is this the live VPGA thing? My wife was talking about this.

[Joe Saul-Sehy]

The first season has a lot of that because that was right when that was when that was going on. So you've got. The only reason I knew because I don't actively follow golf. What is neat about this and the tennis one? Both of them. Now when I watch golf or tennis, I know some of the players are just like the Formula one thing. Like, I see people that I recognize now and I go, oh, okay. Now I know a little bit more about them.

[OG]

I started watching Arnold's new special on Netflix. It's like becoming Arnold or something. And you know, obviously, I wouldn't say obviously, but a lot of people have seen Pumping Iron or you know, whatever that thing from the 70s. This is him now reflecting on his career, you know, and kind of his, his own autobiography type.

[Dakota]

Good.

[Joe Saul-Sehy]

Worth it because he's, he's, he's got some like full time job at Netflix now.

[OG]

Oh, does he?

[Joe Saul-Sehy]

He's like in charge of all their action content now, apparently. I mean, that's, that's at least the advertising campaign they do with him is that he's in charge of all their action stuff.

[OG]

What's more impressive is that, you know, you see, you go to the gym, right? And you go, okay, today I'm going to work chest and tries, right? So you do three sets of 10. You do three sets that. You know what I mean? And he's like, yeah. When I went to the gym, there's a wall that was completely wood and there was some chalk. And I would write chest, arms, back, biceps, triceps. But he's saying it in German, which is kind of funny. And then he goes, I wouldn't stop until the wall was filled up with tick marks. He's like, So I do 20 or 25 sets of each body part every day. It's like, you go, man, I really worked out hard today. I put in a solid 35 minutes at the gym. I have a thing about watching people who are the best at the world at what they do. You know what I mean? Like, and he obviously was the best bodybuilder in the world in his prime.

[Joe Saul-Sehy]

So I heard a similar story from Dwayne Johnson. Like, back in the day, he would just spend all day at the gym.

[Jonathan Clements]

Yeah.

[OG]

I mean, it's kind of sort of his. You know, that's his job. Right. And I get that. You know, if you got the. If you got the money to spend all day working out, might as well. That's right.

[Joe Saul-Sehy]

But we have strong vocal muscles because we.

[OG]

La la la la la la la la la. But anyway, I watched the first episode. I thought it was good fun to see. So that and Extraction two coming out. That already came out. Actually, I haven't watched it yet, so I'm gonna go blow some stuff up in the movie room.

[Joe Saul-Sehy]

Don't want to sit next to you if you're blowing stuff up, Chris Helmsworth.