Podcast | Jonathan Clements – The Humble Dollar

Today I chat to Jonathan Clements from The Humble Dollar. Jonathan is the author of 9 books, the most recent being ‘My Money Journey’. He has worked for Forbes magazine, The Wall Street Journal and Citigroup, and has been semi retired since 2014. Jump in, Jonathan was really interesting to chat to!

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Introduction – Jonathan Clements

On board today we welcome Jonathan Clements, the founder and editor of The Humble Dollar blog. Jonathan is also the author of 9 books, with the most recent being ‘My Money Journey’ which includes money journeys from not only himself, but from 30 others who have found financial freedom.

Jonathan was born in London and has moved over to the USA, he was hired by Forbes magazine as a junior reporter and was then hired by the Wall Street Journal where he was the newspaper’s personal finance columnist. He then joined Citigroup in the wealth management division as its director of financial education, where he earned the big bucks, but was also completely miserable. He called quits in 2014 and has been semi-retired ever since, working on projects that he really wanted to, such as writing books and launching The Humble Dollar.

Jump in, Jonathan was really interesting to chat to!


Episode 52: Jonathan Clements – The Humble Dollar

jonathan clements, the humble dollar

Show Notes

“Managing money may be simple, but it isn’t easy. Most of us struggle to save diligently, invest intelligently and figure out what will make us happy. HumbleDollar aims to help readers make rational financial decisions, especially when it comes to retirement. But we’re also acutely aware of the human side of money. Want a happier, more prosperous financial future? We advocate a relentless focus on the things you can control. Try to spend thoughtfully, save diligently, hold down investment costs, minimize taxes, avoid unnecessary investment risk, buy insurance against major financial threats and give some thought to your heirs. And as you do all of these things, keep an eye on the big picture, so you don’t shortchange one of your financial goals or end up with a yawning gap in your insurance coverage.”

Jonathan Clements


Episode 52: Jonathan Clements – The Humble Dollar

Jonathan Clements – The Humble Dollar

Captain Fi: [00:00:00] Ladies and gentlemen, this is your Captain speaking. Welcome aboard the Financial Independence Podcast.

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On board today is Jonathan Clements, the founder and editor of Humble Dollar, and he’s also the author of a book he’s recently released called My Money Journey. Jonathan, how you going mate?

Jonathan: Hey thanks for having me on your podcast.

I don’t think I’ve ever done a podcast based out of Australia before, so this is a thrill. Oh,

Captain Fi: welcome mate. I appreciate your patience with the time zone differences. Sometimes it can be a bit tricky.

Jonathan: Yeah, well, as soon as we get off, I get dinner and a glass of wine, so,


Captain Fi: that’s a good deal. And when I’ve get off, I think I’m gonna have some pancakes and maybe another cup of espresso. So mate, awesome. Thanks so much for your time today. Before we get stuck into it, would you be able to tell the listeners a little bit about yourself?

Jonathan: Sure. So I have a bit of a funny accent and people are wondering where that comes from. I was born in London, England, but my parents moved to the United States when I [00:03:00] was three years old. So I actually grew up speaking with an American accent, got packed off to boarding school in England when I was age 10, where they beat the American accent outta me.

I moved back to the States when I was 22 and slowly but surely the English accent has disappeared. So I’ve been here in the States since 1986 working. When I came across from England, I joined Forbes Magazine as a junior reporter, which basically means I was a fact checker. Then I got hired away by the Wall Street Journal and I ended up spending almost two decades at the Wall Street Journal, where I was the newspaper’s personal finance columnist.

But From there, I went. As my friends like to say to the dark side, I joined Citigroup, its wealth management division in the US as its director of financial education. I did that for six years, earned a ridiculous amount of money and was completely miserable. So I left Citi in 2014 and I have [00:04:00] been semi-retired ever since, which means I’ve done a whole bunch of different things and I’ve probably worked harder than at any time in my life, but I basically got to do what I wanted to do, and that includes writing a bunch of books and launching this website, humble dollar.com, which went live right at the end of 2016.

Captain Fi: That’s a pretty impressive resume, mate. I know , we were talking earlier and you sent me a copy of your latest book to read, but I had no idea that you had actually published nine books.

Jonathan: Yeah, I mean, I don’t want to make any great claims to originality cause it’s basically the same book written, nine different times, it’s just, you just change the paragraphs around and you can fool people most of the time.

That’s funny man. Now one of the things you discover about personal finance is once you understand it, it’s really pretty simple. I mean, wall Street wants to make you think it’s as complicated as anything so that you hire some high price financial advisor, you buy all these complicated investment [00:05:00] products.

But the truth is, personal finance is super simple. You save a goodly amount of your income, you put it into a diversified portfolio of investments. You hold down your investment costs, you try to limit the amount you pay in taxes and you focus on the long term. And if you do that sort of stuff, Good things will happen.

The problem is most people fail. They can’t save enough money. They just keep getting tempted by, the latest bobble they see in the store. They get panicked when the stock market goes down. They do all these things that shoot themselves in the foot. So that, as simple as personal finance is, many people do not find it easy.

They end up basically imploding their own financial future.

Captain Fi: Yeah. Keep it simple. , is what I just hear from everyone one of my favorite books is JL Collins, the Simple Path to Wealth. And it doesn’t really get any [00:06:00] simpler than that, does it? Index funds and state along course.

Jonathan: And that is certainly my philosophy and it’s what’s allowed me to spend the last nine years of my life. Essentially doing what I want to do. The whole notion of financial independence, the whole fire movement, that didn’t exist when I was in my twenties and thirties. That’s a relatively recent phenomenon.

Instead, those of us who were able to become financially independent at an early age did what was in this sort of the fire handbook. We just did it without having a label for it, without knowing that there was this thing called fire. So for, many years I lived way well below my means. I lived in a house far smaller than I could have afforded.

I saved great gobs of money and I stashed as much of that money as possible into broad market index funds and rode, the huge stock market. Rally that [00:07:00] we’ve had over fairly the past 40 years, and that’s what’s allowed me to reach financial independence. I just never had this notion of phi or fire or any of that.

It was all just winging it for my generation. Yeah.

Captain Fi: Well it’s the come an interesting terminology, the lexicon of fire, financial independence, retire early. It means something a little bit different to everyone really. I mean, we’ve heard that everybody or not everybody wants to, quote unquote retire early.

But, everyone does need to reach financial independence if they wanna leave their work. And yeah, there’s definitely some interesting attitudes behind, what does early retirement even mean, or, semi-retirement or work optional. So what I’d love to know is Jonathan, what does financial independence mean to you?

Jonathan: When I think about financial independence or financial freedom, to me it really comes down to two things. One is that you get to spend your days as you wish. I mean, in the end [00:08:00] time is the ultimate limited resource. If you blow all your money, you can always, go back to work and earn more.

But you know, if you waste time, hey, they aren’t making any more of it, you’re eventually gonna run out of time. So time is the most precious resource, and to the extent that you can control how you use your time, that is one of the key components of financial freedom. But the other key component of financial freedom is not worrying about money.

 Financial freedom doesn’t mean you can buy anything you want. Financial freedom doesn’t mean that you have more money than your neighbors. Financial freedom means that you don’t, most of the time give much thought to. How much money you have and how you’re gonna pay for things. Now, of course, if you have unbridled desires for this or that, you want the yacht, you want take these super lavish vacations.

Yeah. Reaching financial independence is gonna be really difficult because no matter [00:09:00] how much you accumulate, there’s a good chance that your spending desires are gonna run ahead of the income you can generate. So part of financial independence, part of being financially free is to have some sense of what your needs and wants are, and the ability to declare, this is enough for me to be happy.

And for those folks who can’t do that, who constantly dream of the bigger house and the faster car, and the more lavish vacation, I think actually reaching financial independence is really difficult because you will never have enough money. So part of financial freedom is not just. You have to decide what you do with your time every day and not worrying about money.

It’s also having the capacity to say, this is enough. I don’t need a whole lot more than this.

Captain Fi: Yeah. Was it get referred to the hedonic treadmill, like when people just looking to the sort of the next

Jonathan: upgrade? Yeah, I mean the hedonic treadmill is a [00:10:00] huge issue and it’s the way we’re wired. I mean, the reason we are here today is because our hunter gatherer ancestors trove relentlessly for more.

They never said, Hey, let’s take the weekend off. Hey, we got enough food. Don’t worry about hunting tomorrow. No, the reason. Our ancestors survived is because they relentlessly sought more. And that’s the way we’re wired. But if you want to have a sense of contentment, you need to find some way to step off the hedonic treadmill and say, what I have is enough.

And to be satisfied with what you have. And that’s for a lot of people, it’s a real challenge. I mean, in our consumer society, we are constantly being tempted to buy more. Obviously, the marketing division of every major corporation is trying to get us to spend more, but also it’s wide within us.

We look at our neighbors, we see how they live, and even though they may be suffering crushing debt, we don’t see that. All we see [00:11:00] is the bulbs. They have the big house, the foster cars, and so on. And it’s hot to say to ourselves, Hey, maybe I’m missing out.

Captain Fi: It’s really funny that you describe them as ball balls, because I’ve actually heard a couple of other people that use the exact same word.

And I’m starting to think that is just a perfect description for when people adorn themselves with all this crap. Oh, I need this, quote unquote designer luxury item. And people seem to be plastered in logos and, advertising for companies and really it’s just like bobbles and trinkets.

It’s weighing you down really when you think about it.

Jonathan: When we think about what are components of a happy financial life, it really has three pillars to it. First, something we’ve already talked about is this sense of financial security, the sense that you have enough. Here in the US there was a, Interesting study [00:12:00] actually conducted by the federal government into people’s sense of financial wellbeing.

And the biggest driver of people’s financial wellbeing is simply having a modest amount of cash in the bank. People who had $250 or less in the bank had the lowest sense of financial wellbeing. Whereas once people got to $5,000 or more sitting in the bank in liquid assets, their stated sense of financial wellbeing was vastly higher.

So , one component of a happy financial life is this sense of financial security. The other component of a happy financial life is to be able to spend your days. As you wish to have this sense of purpose. Now, if you have a job that you love, I would argue that you know that is the best of all possible worlds because not only do you get to do what you love every day, but you get paid for doing it, having.

That ability to spend your days doing stuff that you find [00:13:00] challenging, that you’re passionate about, that you find interesting, that you feel that you’re good at, that is the second key component of a happy financial life. And the third key component of a happy financial life is to have strong social connections, to be surrounded by friends and family.

The richer that network, the happier people tend to be. So when I talk about these three pillars of a happy financial life, you know the things I didn’t mention here, are having a luxury car, having a huge house wearing designer clothes. Those are not components of happy financial life. They may give you a brief thrill on the day you acquire them, but they are not gonna deliver a lasting happiness.

Captain Fi: Yeah, it’s interesting, I know recently there’s been this renewed focus on living your rich life and Ramit Seth’s been it is awesome documentary. And he talks about, I guess cutting mercilessly from things that you don’t care about so that you can spend lavishly on, on things you [00:14:00] do.

And I know spending has been, I guess, a big issue for me. Just my, I guess my quote unquote money trauma is, I grew up fairly poor. And frugality is ingrained in I’d say my culture and my family. So spending’s just not something that I kind of do, so I mean, I know some people love to buy those things, whether that be like a designer handbag, and don’t get me wrong, I’ve got some expensive items.

Here in Australia there’s a really great boot called made by Aen Williams, the leather craftsman. And I’ve had these boots for 15 years. They were obviously very expensive and you just get them resold and I’m hoping that they’ll last another 15. And so I can definitely appreciate having a quality item.

But yeah, just personally I really find it hard to understand why people do go for the sort of the designer labels. Why do you think people buy luxury

Jonathan: goods? I think that, you know why people buy luxury goods in many cases, it’s not because they’ve personally [00:15:00] looked at it and said, oh yes, that is a superior good and that is something that, will make me happy.

They look around them and say, what is it that other people who you know, I perceive to be successful and famous and so on have and when they see the items that they have, these other people, then they mimic them. I mean, I think a lot of spending is done, to use the term under the influence, we’re under the influence of celebrities.

We’re under the influence of, wealthy people we see on tv. We’re under the influence of corporate marketers. They’re trying to send the message that these goods will give us a happier life. And it’s simply not the case. , there may be a brief thrill involved, but the thrill, to go back to the phrase the, you used the hedonic treadmill, the thrill passes.

Really quickly. But I wanna just pick up on something you mentioned about how thrift was ingrained [00:16:00] in you. In this book that I edited this, these 30 essays, about how these 30 people, one of whom is me, reach financial freedom means the number one attribute that these people have in common is they are all great savers.

And in many cases the reason they’re great savers is because this is a value that was passed down through their family. This is what they learned growing up and. This is something for anybody who’s a parent out there. I mean, if you want your kids to have a happy financial life, not to be constantly wanting more, not to be dealing with masses, amounts of credit card debt and big car loans and goodness knows what else, teach them the value of thrift because that will serve them well for the rest of their lives, and that is the one quality that will ensure that they eventually reach financial freedom themselves.

Captain Fi: Yeah, it’s so important, isn’t it? [00:17:00] Passing on that education now. Jonathan, I was reading that you are an avid cyclist now. I actually used to love riding track. I used to race at the feller drum and I I love getting out and riding downhill. And one of the things that I’ve noticed about a lot of cyclists is cyclists tend to be, I guess, a bit more in touch with the environment.

And one of the things that I love doing it involves the environment is getting out and gardening. I’m a bit of a perme geek, so, love permaculture and I do eventually wanna buy a hobby farm and set up a bit of a food forest. And what I’ve noticed is that, There’s so many parallels between gardening and like environmental conservation and personal finance.

And so whilst I’m not a parent yet and actually pursuing financial independence was a huge part of wanting to start a family. But I’ve noticed that when you garden. It’s basically the same process as [00:18:00] investing. You put in the hard work, you build capital which, might be like building a garden bed or improving the soil.

You buy your investments, which you know, is like your seedling. And then you tend to it. You look after it and you add to it, and after some time you, you get a reward. You get a yield, whether that be like fruit, dividends from a tree or your harvest, being like selling your capital gains.

But the delayed gratification and hard work, it’s basically a sort of very similar concept. And so, I was thinking, maybe this can be a great way to begin teaching my kids about financial independence by getting them started early in the garden with something that’s a bit more tangible and easy for to understand.

Jonathan: Yeah, that’s a very interesting idea. I think one of the things that in terms of teaching financial lessons to kids beyond, teaching them through a wonderful analogy like gardening is, the other great way to [00:19:00] teach kids is to tell family stories. So, if you lecture your kids, like you should live beneath your means, they’re gonna completely tune you out.

But if you tell them stories such as, how you managed to save money in your twenties, you got outta college, like everybody else, whoever you know comes outta college. You live in the shitty apartment, you have a low income, and yet somehow you managed to save some money.

And these are the ways you did this. Those, the stories that they hear and that influenced their thinking. Now, I had one huge advantage of most other people, which is, I had a great family story. If you go back to my great-great-grandfather on my mother’s side, when he died in 1889, the newspapers described him as being one of the richest man in England.

He and his brother had a series of businesses in Liverpool the most [00:20:00] valuable holding of which was a cigarette company called COPE Cigarettes. Anyway, this fast family fortune got passed onto my great-grandmother and she lived high on the hog, and then she passed it off to five children of one of whom of course was my grandfather.

And within. Short order. The great family fortune was spent. It went on wine, women and song. In the case of actually my grandfather, it, it went on farming, but j a gentleman farm. And so I grew up with my mother telling the story of how the great family fortune got blown and how my grandfather and his four siblings just squandered this money.

And that was the story that I heard and my three siblings heard. And we, all four of us are extraordinarily careful with money and it’s because of that great family story.

Captain Fi: Wow, that’s really interesting. I’ve [00:21:00] heard the, the saying about generational wealth and how, it’s usually lost within three generations. But I think passing on those stories are really interesting. I can’t say that my father so my parents were separated and I never really grew up with a dad.

But I did know him and from time to time did spend a few weeks here or there with him. And he did tell me about our family story in that we for, at least from my father’s side they migrated to Australia as landowners to be grazers and run sheep farms in South Australia.

And they had farms in the South Australian pastoral area, which is basically a big, it’s not really appropriate for cities or living, but it’s just a really. Desert or expansive area, which can be used for farming, but it’s not very high value land. But they had quite a lot of land there.

And also in the southeast of South Australia as well. And this is, well, geez, going back over a hundred years ago. And yeah slowly by slowly [00:22:00] it was all lost. So the sort of family dynasty, if you could call it that, went from, having all these farms and all this money and yeah all fritted away within, I think it was five generations.

Jonathan: Oh, five generations is pretty good. My great-great grandfather’s fortune was gone within two.

Captain Fi: Yeah, it’s interesting. Look, I love some of your expressions. it’s cool to chat to I guess, a fellow Brit because, not a lot of people know this, but I’m actually a British as well.

Not that I’ve, grew up in England or even been there. But that’s where my mum’s from. And if I try and put on my accent, she’s from Liverpool also.

Jonathan: Very good.

Captain Fi: So, yeah, it’s interesting hearing some of your sayings like living high on the hog and yeah, it just reminds me of my mom cuz she used to use quite a few of those sayings as well.

Jonathan: So you’ve never been to England and never been to Liverpool?

Captain Fi: No. But really looking forward to heading over.

So, I retired from a flying job about, oh gosh, I’d just say over a year ago now. To [00:23:00] pursue, I guess you’d call it semi year retirement just to work on passion projects, bit of writing, bit more podcasting. And one of the things that I’d love to do is travel a bit more. And yeah, the uk I’d love to head over there and find catch up with family over there.

It’ll be kind of weird cuz they are your family but you don’t really know them. So, but anyway, we, I’m gonna go over and give it a go, but I just wish Brexit hadn’t happened cuz it kind of ruins the strength of the old British passport.

Jonathan: That is true. It is very unfortunate and so, yes, traveling in Europe it’s become, that little bit more difficult because, once you’re.

In, within the European community, you still have to go through possible control to get into the UK now, which is a serious bomber, I dunno what the Brits were thinking.

Captain Fi: And of course the other place that I want to check out is the usa obviously a huge place. But I definitely wanna go and check out Seattle is like a big, a bit of an aviation mecca for me.

Definitely wanna go and see Boeing Field. Also wanna check out like the air and Space [00:24:00] Museum, the Smithsonian. What do you reckon? How about Philly? All I know about Philadelphia culture is, it’s the home of the Fresh Prince of Bel Air.

Jonathan: So, Philly is, was early in.

The US’ history the biggest city and the principle city. I mean, this is where, the Constitution and the Declaration of Independence were written. And this still has a fair amount of historical buildings down in the old city. It’s actually a very cool place to live. It’s like New York City, which is where I used to live.

But as I joke to people, it’s like New York City, but everything is one third off. So Philadelphia’s a great foodie city, but the restaurants are far cheaper than they are in New York. They have great live music but again, things are cheaper than New York. And of course, americans will tell you it’s a great sports town.

I mean, Philadelphia fans are totally rabid. On a Sunday in the fall, in the autumn when [00:25:00] the Philadelphia Eagles are playing, half the people you see walking the street are wearing Philadelphia Eagles t-shirts. I mean, it’s just the city is stops when the games are on. It’s always the best time to go to the supermarket cuz you know, you can get through in a flash.

Captain Fi: Yeah. And the world famous Philly cheese steaks everyone’s talking about, I gotta try one of those.

Jonathan: Yeah, well, my cholesterol is maybe a bit too high, so I have to watch out for those.

Captain Fi: Oh, look, I’ve I’ve been focusing a bit more on health now since being, semi-retired.

 I use the word semi-retired just cuz I do work on projects. But, since solving, flying that’s been a big focus. As a shift worker it was, oh it was rough. But yeah, Philadelphia, what else? Always Sunny in Philadelphia. That’s one of my favorite TV shows. Charlie, Kelly, Dennis sorry Glen Howton and like Danny DeVito.

Gods so funny. I think I wanna go and try and find their pub.

Jonathan: I think it’s, the interesting thing about the US is because of sort of the US’ cultural dominance, because of Hollywood, [00:26:00] People around the world have very specific images of what the United States is. Right. I’m not saying they’re wrong, but it’s like people have ideas about the United States in a way that they, don’t have ideas about, Australia or New Zealand or France or Italy, simply because of the US’ cultural dominance.

And to a degree, when people come here, they come here looking for some particular image of the US that they, found in movies and TV shows and I think sometimes they might be a little disappointed.

Captain Fi: Yeah, it’s interesting cuz that American culture, it’s so, it is so pervasive and I think it actually influences like the culture around money and personal finance quite a lot as well, all around the world.

Jonathan: Well, I think that is true. I mean, certainly, one of the biggest changes in the financial world in the period that I’ve been following personal finance and writing about [00:27:00] money has been the index fund revolution. And it was probably the most famous person I’ve known, well in my life is Jack Bogle, the founder of the Vanguard Group, and the man who in 1976 launched the first index mutual fund.

I probably first met Jack in, 19 87, 19 88, and, was regularly in touch with him from then until the end of his life. And it was a great privilege to know him and to watch what he managed to do, taking index funds, which, you know, when I met Jack or just, Really a minor part of the US financial scene to the point where, at least here in the US money in index funds now is greater than the money that’s in actively managing mutual funds.

I mean, it’s been an extraordinary achievement. I mean, that is Jack’s legacy and the legacy is now, spread around the world. I mean, in every country I [00:28:00] know of, index funds are available, people may not be able to invest quite as cheaply as we do here in the us. But you can indeed, Buy funds with rock bottom manual expenses, so much less than the expenses on these actually managed funds that, the financial industry would love to push because they’re so much more profitable.

Not for the investor, but for the financial industry itself.

Captain Fi: Yeah. What a brilliant man. The work that he’s done to really make wealth growing so available, achievable, and affordable for basically the everyday person. Yeah, pretty amazing legacy to leave behind and how bloody awesome that you got to meet him and know him quite well.

That’s geez, that’s bloody awesome.

Jonathan: Yeah, I mean, the only thing I would say about Jack was he was so charismatic and so driven that I always worried that, he didn’t, give over enough time, To himself and to his family. I mean, right up until the [00:29:00] end, he was pounding away at his message.

But, after his death, I was I actually met one of his daughters and she said that, she really was, didn’t really feel like he was an absent father. He was always home for dinner in the evening. , they used to joke that, they didn’t really know that he had a job, which I was happy to hear because it just felt like Jack was so driven , so anxious to push this message that, investing can be done more cheaply, that index funds are the way to go.

That I worry that he neglected his family, but at least from what she told me, that wasn’t the case.

Captain Fi: Yeah, that’s beautiful. Cause I know a lot of people, one of the whole reasons we invest is as you said right in the beginning of our conversation, it’s, time is the limited resource.

And as Vicky Robbins said, well that’s money is time. Time is money. It’s the same thing. It’s your life force. And by. Choosing to be careful and mindful about how we spend our money building our [00:30:00] passive income. We can buy our life back. And one of the huge motivators for people is family.

Certainly it is for me. So it’s, yeah, it’s beautiful to hear that he was able to live that awesome family life and leave such an awesome legacy. I’d see what Jonathan, you’re a very experienced man. You. A bit of an expert in this area, I would say

Jonathan: hey, you know what?

Yeah, it’s just this is what happens when you’ve been kicking around the financial industry for, coming up on 40 years. I mean, it’s just, you meet a lot of people and, you you get a little bit of credibility just because you’ve been kicking around for long enough.

It doesn’t mean you’re any smarter than anybody else. You just get points for endurance.

Captain Fi: Yeah. It’s funny, cuz I mean, I’ve been blogging and podcasting now for about five years and yeah, people often get in touch with me on social media and they kind of think I’m some kind of expert and I’m no I’m not an expert.

I’m just like a guy picked up a microphone and a keyboard. But yeah, hopefully one day I, I hope to reach that level. But yeah man, [00:31:00] so I guess just on that we’ve talked a little bit about your journey, but I’d love to hear a bit more about, I guess, your journey to financial independence and how you started out.

So, how did you start learning about money and how did you discover Index Fund and ultimately meet people like Jack Bogle?

Jonathan: So, when I was in college, I was the kid who swore that I would never get married and never have kids. Within a year of graduating college, I was in engaged.

Within two years I was married, and within three years I had a kid. So I was a father at age 25, married to somebody who was a PhD student, and I was living in, One of the most expensive cities in the world on, as I mentioned before, a junior reporter’s salary. I was working at Forbes Magazine at the time, and I had to grow up financially really [00:32:00] fast.

I had to learn how to get by on a relatively modest. Income in this extraordinarily expensive city. I mean, my now ex-wife and I, joke about it. Those were the lean years. Just getting a pizza on a Friday night was a major extravagance. That was how I learned to be super thrifty and, that plus, working as a financial writer and, having to learn about this stuff so that I was always at least one step ahead of my readers so that, whatever the topic was for this week, I would bone up on it so that at least I could appear as an expert when, the article was finally written.

So as a consequence of the thriftiness that I had to learn one of the things that happened when I bought. A house in 1992 was I bought a house that seemed like it was a stretch at the time, but it really wasn’t. It was less house than I could have bought, [00:33:00] and in many ways it was not a good life decision.

I lived in that house for 20 years and always felt like I just didn’t really like the place, but as a consequence of living in a house that was less than I could afford and by the end far less than I could afford for 20 years was I was able to save. Great. Gobs of money. And that’s how, over those 20 years, I managed to amass enough to achieve financial independence.

 I did fine with investing thanks to index funds. I had career success. My income went up and up, but you know what really? Drove the growth of my portfolio was having very low fixed expenses. In particular, having this house that was relatively inexpensive, where the mortgage was modest, and I paid it off in a dozen years.

Thanks to my low [00:34:00] fixed expenses, I was able to save extraordinary amounts of money over those 20 years, even as I raised two kids, even as I paid off my wife in the divorce, even as I put my kids through college, that was more than anything the key to my financial independence was just, low fixed costs and saving great gobs of money.

Captain Fi: Yeah, it doesn’t really have to be I guess super complex. Now, so you moved to New York around the time of a pretty significant market crash as well, didn’t you? was it the Black Monday? Market crash. That’s a really interesting time to be starting out your career in finance.

Jonathan: Yeah. I got outta university in England in 1985, and I worked for a specialty finance magazine in London for 13 months. And then moved back to the us specifically to New York because frankly the standard living for a sort of, a young reporter in England to use the technical expression totally [00:35:00] sucked.

I mean, it was just a miserable existence. I doubled my income moving to the states, even though when I came to the States I was just a student reporter. But yeah I arrived in the States in August of 1987 with, Absolutely no money. Got this job at Forbes. So I was at Forbes Magazine when the stock market crashed on October 19th, 1987.

Still the biggest percentage, one day percentage decline in the history of the market. And at the time, market quotes were not readily available on the third floor of the Forbes building, which is on, was then on fifth Avenue in New York. In one corner of the third floor was this traditional Dow Jones ticker tape.

I mean, it was like a scrolling pale brown paper that came out of this machine with the latest news headlines. And that was the closest we got [00:36:00] to live market updates. And I remember that Judo, somebody saw that the Dow Jones Industrial average was down a hundred points. And, it had been a rough.

A couple of weeks heading up to that. So the word spread quickly that the market was falling. Then early afternoon, again, across this ticker tape, it came out that the market was down 200 points and everybody knew it was a big day. And finally the market closed and they managed to calculate what the Dow had fallen.

And it had fallen 508 points which was just at the time, just an extraordinary number. I remember a couple of the more senior writers rushed down, hopped into a cab and headed down to Wall Street cause they wanted to see whether anybody was jumping out of any windows when they got down there. Which of course was purportedly what happened during the 1929 crash.

[00:37:00] Yeah, it was a wild day. I had a friend at the time who was a broker for a firm that no longer exists, called Prudential Base Securities. And this guy Paul, I spoke to him on the phone, off the market close and as he said, he was gonna go to his house, get his car, and he was gonna drive into the city and pick up her, his mother and get her out of the city cuz he was absolutely sure there was gonna be rioting in New York City.

It was October 19th, 90 87 was a wild day.

Captain Fi: Wow. That sounds incredibly stressful. And I want to ask you more about this, but I want to unpack that a little bit later when we start talking about your finances. But before we go into that well first of all, I just wanna just double check so when we talk about a point, cuz I guess this terminology is something that’s always confused me a little bit, so a point.

Is that a fraction of a percent of the index?

Jonathan: Well, at the time, and this [00:38:00] is gonna be a little bit off, but on Black Monday the Dow Jones Industrial Average, which today is somewhere around 34,000 back then of course, because, the stock market was at a much lower level. So the Dow Jones Industrial average on Black Monday, roughly speaking, fell from like 2250 2,250 to 1750.

So that was the 508 point drop. And on a percentage basis it was over 20% of the market’s value at that time. But the points refers to the, the points as measured by the index, not percentage points.

Captain Fi: Ah, okay. Because I know sometimes, like when we talk about financial products, like index funds and we talk about like the fees being a percentage point which is like a fraction of a percent, it’s like a 10 a basis point, right?

Yeah. So yeah, a basis point. So it’s a slightly different terminology for the Dow Jones. Yes. Right. [00:39:00] Yeah. Okay. Oh, that makes sense. But yeah. Hey, so what, it went from around 2000 and now it’s all the way up at 34,000. That’s pretty insane compounding games over the last few decades.

Jonathan: Yeah. And when you think about it, when every anybody says to you, well, gotta get out of the market, it’s too high, it could drop.

Well, imagine you, you bought just before Black Monday, when the Dow Jones Industrial average was around 2250, and yeah, you would’ve bought it and you would immediately got hit with a 20% plus loss. But today, if you had held on, you’d be at 34,000. Right? So even if you bought in any particular year at the worst possible time, if you have that long time horizon, you’re gonna do just fine.

Yeah. If I, had that perspective back in the 1980s, just to. Buy and hold and not worry so much, how much richer would I be and how much less time would I have wasted? Thinking [00:40:00] about the financial markets, whether this is a time to buy or sell, I mean, I have over my career mostly been at a buy and hold investor, but still, in terms of thinking about the market and whether it’s high, whether it’s low, even though I didn’t act on it, all of that thinking was a colossal waste of time.

And if I could, get my kids to do anything, it would be, just buy the market. And don’t look and don’t worry about it cuz you’re gonna be just fine in the end. If the stock market doesn’t go up over time, it means that something truly terrible has happened to the global economy and it doesn’t matter what you own because the only thing that will have any value is gonna be canned goods and ammo.

You know

Captain Fi: if

Jonathan: Yep. If the global economy stops growing, it doesn’t matter if you own bonds, it won’t matter if you have money in the bank cuz all of that’s gonna [00:41:00] end up being worthless as well. Right? So, You have to be an optimist. You have to believe that every day, billions of people around the world wake up and say to themselves, how am I gonna make my life better today?

And the resulting energy is why the global economy grows, over time. And because the global economy grows, a broad basket of stocks will also appreciate, and that is as simple as it is, you just need to have faith that people will continue to make their lives better. And as a consequence, if you own stocks, you’ll benefit from that.

And if you doubt what I’m saying, just think back to the pandemic. In 2020, the economy closed down. People didn’t go out of their homes. And yet somehow [00:42:00] people found a way to be productive. Businesses found a way , to operate. Restaurants started opening up, sitting out in the streets so that people could eat without getting covid.

I mean, the ingenuity that was unleashed by the pandemic, the people’s desire to keep moving ahead was extraordinary. And it will continue to be extraordinary, which is why uni a globe, globally diversified portfolio of stocks is the best investment you can make.

Captain Fi: Yeah, I love that. Like the ingenuity of people and the sort of relentless growth of the market.

My businessman or Matt, he says to me all the time, pessimists sound smart, but optimists make money.

Jonathan: And that’s absolutely true. I’ve seen it my entire career.

Captain Fi: Yeah. Well, I guess that’s a really good segue talking about, I guess, people and how like creative people and business owners can be.

So your latest book, and I’m gonna say this again, of nine. Your latest, your [00:43:00] ninth book, my Money Journey. It covers 30 people’s money journeys, including yourself. Could you explain or just talk to us a little bit about the book and the process of, I guess, curating and gathering those essays and what people can learn from it.

Jonathan: My Money Journey grew out of this website that I founded at the end of 2016, and for which I write and for which a whole host of other people write. Some of them are financial experts, some of them are just everyday individuals who happen to have a keen interest in personal finance.

And to these folks, one of the things that I say repeatedly is, you may not be an expert on the financial world, but you are an expert on your own life. So if you write about the financial experiences that you’ve had, you can write about it with [00:44:00] authority. So against that background, when we thought about doing a book, based on the website It seemed an obvious thing to do to have 30 people who have written for the site write about their financial journeys.

And, the website has attracted over the years a whole host of people, from all kinds of different backgrounds. So the book includes an essay by, a guy who was in the army by a guy who works in a chemical plant in Iowa by somebody who’s a Unitarian minister, somebody who’s a high school teacher.

These are all people from varied backgrounds, but they all have this intense interest in finance, and they have all either achieved financial freedom or they’re well on their way. So I had not only myself, but 25 other people who have written for the site write about their financial journeys.

And that’s how the book came [00:45:00] together. And I think for anybody who. Is able to pick up a copy or get their local library to order a copy so they can read it for free. What you will see is that many of the essays, hit similar themes. A lot of people made mistakes early on.

We all do when we start out, we. Think that we know far more than we do. We tend to be overconfident. We imagine. We know which way interest rates are headed, which way the stock market is headed. We imagine we can pick individual stocks that are gonna beat the market and eventually, the world comes along and knock some sense into us with a two by four.

And then we settle down and we do mostly the right thing for many decades, and that’s how we achieve financial freedom. So you’ll see that in those essays. You’ll also see the virtue of thrift, you’ll see the virtue of simplicity just sticking with simple financial products. You don’t need to buy into all this complexity that Wall Street pushes.

[00:46:00] You will see in the essays the influence of parents. I mean, it’s just scary how. Much influence parents have on their kids. As a parent, I find that scary to realize, when I speak it’s like a megaphone to the is of my children. And finally, one of the things that you see in the essays is that, we all need to reach the point where we say, I have enough, that I’ve masked enough.

This is enough for me. And in our modern culture, that’s very difficult to do. But if you’re gonna achieve financial independence and you’re gonna be financially happy, at some point you do need to say, I have enough.

Captain Fi: That’s such a key tenant, isn’t it, to the journey. It’s, I guess like simplicity, but then knowing when you have enough.

And that was a bit of a personal challenge that I had. So I’m really looking forward to getting stuck into reading it, mate. So, again, thanks very much for giving me a copy of the book, and I’ll certainly [00:47:00] put a link in the show notes to where people can buy a copy of My Money Journey.

Is there a way that people can buy it directly from you so that you’re gonna receive the complete commission as opposed to a

Jonathan: reseller? No, it doesn’t matter where people buy it from, I think, my take is gonna be pretty much the same. I presume Amazon is a huge deal in Australia.

So it’s available on Amazon. You can go to the publisher who’s actually UK based, called Harriman House and and buy it directly from them. And actually, if anybody goes to my website, humble dollar.com and they search on my Money journey and they get to that page, the. They’ll see that there is a discount code that they can use to order the book from Harriman house.

Now you’ll have to look at it and see with the discount code, which will knock 30% off the list price. Once you add in the shipping costs. Maybe it’s not as good a deal as going to Amazon. I’m just not sure. But if anybody wants to check that out, that might be worthwhile as well.

Captain Fi: [00:48:00] Oh, awesome.

 I’ll be putting a link to that in the show notes

we will get back to the show in a moment, but for now, I wanna ask you a question. Do you have a side hustle? And if you do, is it scalable? My side hustle is building and running websites a form of digital real estate. Now, it might sound tricky to make money online, but really they’re just small online businesses that have low overheads, high margins, and which you can easily scale by outsourcing.

If you’ve ever read the Four Hour Work Week by Tim Ferriss, then you’re on the right track. What I love about websites is just like my investments, they’re working 24 7 to make me richer and I can put as much or as little effort into running them as I like. I can pay a writer to produce a piece of evergreen content, which is then edited and posted by virtual assistant.

Then it can be viewed potentially millions of times and easily updated by my editors over the years to remain relevant. If you want to learn more about this lucrative side hustle and retraining for the [00:49:00] Digital Workforce revolution, then check out my article about making money online and read my review of the E-Business Institute and their online self-paced courses.

The E-Business Institute cover everything from total beginners. Right through to advanced web design and how to buy, renovate, run, and sell websites for profit. As a graduate of the E-Business Institute, I can’t thank Matt and Liz enough for the valuable web skills I’ve developed. And now I can enjoy growing my portfolio of websites for semi-passive income.

Captain FY listeners can register for free access to some of their resources by following the link in the E-Business Institute review article on captain fy.com. So what are you waiting for? Start learning how to build a portfolio of digital real estate and use websites to make money today.

Now it’s interesting, this is probably a bit of a selfish question here, but as someone who’s personally struggling to, to try and write their own book and yeah, and you’ve written nine.

Can you speak to, I guess, some of [00:50:00] the challenges and highlights of writing a book, and I guess this leads into what early retirement might look like to you. You mentioned before you’ve been working harder than ever as a writer and publisher. So yeah, I’d love to hear about the experience becoming a published author.

Jonathan: There’s really two different questions there, so let me ask onto the first one first, which is writing a book. So, if anybody wants to write a book, here is my best advice, which is sit down every day for 30, 40, 50 days and write a thousand words a day. They could be good words, they could be bad words.

Just get it down on paper. And after, 40 or 50 days, you’ll have 40 or 50,000 words, which is a book. And then you can go back and start looking and saying, does this really make sense? Do the pieces really fit together? What’s missing? What needs to be rearranged?

But at that point, you’ll have [00:51:00] not only eliminated the anxiety that. I’m never gonna be able to write enough words to produce a book, but two is, you will have it in front of you and you can start to see all the flaws. So, my number one piece of advice to anybody who’s writing the book is just write down a whole bunch of words and don’t worry about the quality.

And then you can step back and look at it and say, what have I got here and how can I fix it? I’ve done that multiple times. I’ve written, books in 30 or 40 days, just banging it out. It’s tough to do if you know you have a full-time job, but I never took a book leave to write any of my books.

I wrote them, in the morning, I wrote them on the train going to work. I wrote them in the evening. I wrote them on the weekend. I just got it done, outside of my regular work time, because I didn’t wanna give up my paycheck and it worked for me.

Captain Fi: Wow. You’re a very driven individual,

Jonathan: John.

Well [00:52:00] that may be true. I think my girlfriend would agree with you. So that brings me the sort of second part, which is this sort of semi-retirement period, which has has now lasted nine years. So I left City and in 2014 I’ve been doing stuff that I wanted for the past nine years.

And it has been, and this is how I describe it to people, it’s been my second childhood. I didn’t have a childhood., in my twenties, I didn’t have all that time, going to bars and partying and so on because I ended up being a father so quickly. So I’ve had the payoff in my fifties, which was I suddenly, I was financially independent.

I could do all the stuff that I didn’t get to do in my twenties. And so I’ve, I have had the pleasure of sitting at a bar on more than one occasion over the last nine years. But I’ve also done stuff that I’ve always wanted to do. I tried my hand at teaching college. I got involved in a technology startup that went nowhere.[00:53:00]

I gave a bunch of paid speeches, which I’ve always enjoyed doing. I love getting in front of an audience and, seeing if I can make them laugh. I wrote a number of books and I launched this website. And the website has been one of those things that has. Been a surprising success. I didn’t really set out to launch the website that I have.

But along the way I’ve created this community of people who tend to be, approaching retirement or in retirement. , if you go and you look at the comments on articles, it is, I like to think one of the most civilized places on the internet, we don’t have people slinging mud at each other.

We, if people get overly political, I, stamp out , that part of the conversation. It’s really been a great pleasure to build something that people enjoy coming to day after day. I mean, the site isn’t huge, but, this year [00:54:00] the site will probably have something like, 5 million page views.

That’s tiny. By internet standards. But you know, for me it’s been a great project.

Captain Fi: No, that is huge. That’s very impressive. I did wanna ask a bit about the humble dollar. And so, there’s a whole bunch of awesome resources that I’ve seen on there. I literally just did the two minute checkup.

And it’s got some really awesome information that, helps focus you on certain areas. And, I think it just, it says exactly what’s on the label. It’s a checkup that gets you starting to think about your finances. And that’s an an awesome calculator tool that you have.

Jonathan: Can I just tell you something really cool about that, yeah. And this is the nature of the website. So I had, with somebody else, I’d developed a spreadsheet. Which basically was the two minute checkup. It’s much more refined now, but it was basically the two minute checkup.

But, I can do a little bit of, html programming, but I’m a babe in the woods. But there was a guy who has written for the site, he [00:55:00] was a software engineer, and I said, could you turn this into a calculator? And he did it for me and he did it totally free. And, that is, just tells you a lot about the website.

I mean, the website is supported partly by advertising. But at this point, the bulk of the site’s revenue, and the way I, I pay costs is through donations. People just donate. They don’t have to, but they just donate to support the site and keep it running.

Captain Fi: Yeah, that’s bloody awesome, man.

It’s actually quite nice and easy to navigate. I haven’t noticed any annoying advertisements at all, which is funny cause I do have advertisements on my blogs as well. I actually have a couple of websites and I’ve been running them as like a bit of a, I guess a side hustle that’s turned into a business that I run part-time.

Partly inspired by Tim Ferriss’s four hour work week. But I probably spent too much time stuffing around on them. But I really love your website mate. It’s really. Awesome. It’s [00:56:00] simple. , the information is right there. Also you’ve got a really good navigation bar and articles on sort of everything from money, mindset and behavior, through to retirement savings in investing spending careers.

Yeah, there’s everything there. And something else that have found really interesting, and it’s something I want gonna start getting involved in is you share the wisdom page. So you’ve got over a hundred questions or frequently asked questions on I guess personal finance that everyone can chime in and it’s almost like a forum.

Jonathan: Yeah, it is. I mean, I created the voices section as a way to focus the collective wisdom of readers. And so, we have. Questions along the lines of when should claim your government pension? What did you learn from your parents? What was your biggest financial mistake?

What’s the best financial book you’ve ever read? Questions like that. And people, chime in. And it’s a place that people can go if they’re thinking about a topic and [00:57:00] see what others think, and see it in a sort of orderly fashion. And hopefully, give them some ideas that could help them with, their own financial life.

Captain Fi: So where was the humble dollar born? Like how did you have the idea to start posting on the website?

Jonathan: So, when I left Citigroup in 2014, I, Had enough money to retire, but I didn’t really wanna retire. I wanted, I knew it was important to be doing something with my days.

So when I left I did write a regular column for a while for the Wall Street Journal, my old employer. But one of the other things that I did when I left was to write and publish this annual financial guide. And this was inspired by learning about, self-publishing and how you could self-publish through Amazon.

My idea was to create this annual financial guide, update it right up through December [00:58:00] 31st, hit the button and have it available the next day for people to buy with all the latest stats and a lot of sort of background information about making financial decisions. So, I did this for a couple of years and it was a hell of a lot of work.

And getting it out the door on December 31st with everything up to the minute was pretty, pretty taxing, as you might imagine. And the problem was, three days later it was outta date. So I was like, yeah, this is not the way to do it. So what I did was I took that money guide and I made it the core of this site which became Humble Dollar.

And then I thought, well, maybe , I’ll block myself a little bit and I’ll see if anybody else wants to block. And that’s really the genesis of the site. I didn’t. Even though I own the url, jonathan clements.com, I didn’t want it to be about me. I wanted it to be a site that [00:59:00] was, was not attached to any one individual.

And so I went looking for a name and, because of my sort of, belief in the importance of thrift and not being able to guess the market’s direction and not being able to pick hard stocks that you should just index. I was mulling around with words that might work. And of course, I’m sure every U R L that you think of has been gone, all the good ones went years ago.

And, I would sit there, banging in domain names, trying to find a domain name that might be catchy. Might be original. And around two o’clock in the morning in November before the December 31st launch of the site, I woke up in the middle of the night and it was like humble dollar, and I got outta bed and opened up my laptop and I banged it into GoDaddy and it was available.

So I bought it. And that’s how Humble Dollar was born.

Captain Fi: Oh, that’s awesome. Look, , I think the name, it suits perfectly because [01:00:00] look you are a very humble man and, very knowledgeable and very humble. And so I think it’s, I think it’s absolutely perfect, mate. I absolutely, I love the site.

What are some things that people can learn from the site and your newsletter?

Jonathan: I think that a lot of what financial writing is about is not so much getting people, On the right track. I mean, it’s pretty easy to know what to do. As I’ve mentioned before, I think what is hard is staying on the right track, and this is why, financial websites can be helpful, is to say, Hey, look, here’s a community of people.

And they too, are being careful about their saving and spending. They too are bothered by the volatility in the stock market, but they’re staying the course. They too are thinking about issues like, how do I pay for a nursing home? Or when do I get my government pension? [01:01:00] Or, how much of my money should be in US stocks, or how much should be in foreign stocks?

And this is a chance for people to essentially check in with a community of like-minded people and get some validation that. Helps them to stay on track. And, that is crucial. One of the things that I I talk to people about a fair amount is something called the tipping point. So if you, when you’re in your twenties and you start saving and investing, it’s really a discouraging business.

Because in the initial years the only reason your portfolio is growing is because the raw dollars you stock away. I mean, you’re not gonna make very much in the financial markets, given the relatively small amount of dollars you have invested. But if you stick with it for a dozen or 15 years, you hit this tipping point.

You hit this point where thanks to a combination of the raw dollars, you sock away. And the investment [01:02:00] returns that you’re earning, you get to the point where those investment returns start to rival and surpass in any given year the raw dollars that you’re putting away. And at that point, your portfolio is hitting on both cylinders and it starts exploding in size.

And at that point, you don’t really need persuading about the value of saving and investing. But what you need is the validation through those initial 12 or 15 years to stay on track to get to that tipping point. And once you get to the tipping point and you see the power of saving in stock market compounding, that’s when the light really goes off and it becomes substantially easier.

But you know, I hope the site helps people to get through to that tipping point where they really start to see the value of thrift and the value of stock market compounding. Yeah.

Captain Fi: Well, I think it’s brilliant. You’ve built this community and I’m looking forward to receiving the newsletters and [01:03:00] listening to what, and reading what gets published.

So yeah, thanks for building such an awesome resource.

Jonathan: Ah, it’s been my pleasure actually. It’s been a lot of

Captain Fi: fun. Now look I’d like to change up the interview a little bit now and just ask a bit more about, I guess, your personal finances, if you are happy to talk about that. Sure. Fire away.

Awesome. Now, I think I know the answer because you have met the the father of index funds himself. But what personally do you invest in and why?

Jonathan: So my portfolio is really pretty simple. My target percentages call for 20% in short term bonds and 80% in a globally diversified portfolio of index funds.

And I, split my money roughly equally between US stocks and foreign stocks. So that’s the 80% that’s in stocks and it’s all entirely in index funds. And then for the short term bonds, I’m split between, conventional,[01:04:00] US government bonds and US inflation index treasury bonds.

And the reason I’ve settled on 20% in bonds as my target is quite simple, I imagine that, in Australia as here in the US there’s a lot of talk about something called the 4% rule, which is in any given year, you can pull out 4% of your portfolio and spend that money and then step up that percentage, that dollar amount with inflation and

you should be able to last through 30 years your portfolio through a 30 year retirement. So, based on the 4% withdrawal rate, if I want five years of portfolio withdrawals in conservative investments that are unaffected by the stock market, I should have about 20%. And that’s how I ended up with 20% in short term bonds.

Now, I’m not yet at the point where I’m living off my portfolio I’m don’t really have an [01:05:00] intention of fully retiring, but I keep that, 20% on the notion that, If something happens and I have to suddenly start living off my portfolio, I do have that 20% in bonds nonetheless. I am 60 years old, and I have 80% of my portfolio in stocks, and most people would say, wow, that’s a lot of money to have in stocks for a 60 year old.

But to me, I have a very high risk tolerance. I know I’m globally diversified. I’m know I’m not gonna get derailed just because, one or two stocks get in trouble. And I do know that if the stock market enters a bear market, I do have five years of spending money sitting there in short term bonds to carry me through that bear market.

Will I wait for the eventual recovery?

Captain Fi: Wow, that’s a pretty impressive burn rate. Because, we talk about I guess having an emergency fund or having fu money. And then I guess it was a bit of a trial by fire in that when I left full-time work and I’m like, okay, well I need to be a bit more sensible and hold a bit more cash.

I’m [01:06:00] holding a about two years worth of cash but yeah to be talking to someone as experienced as yourself with five years maybe. That’s got me thinking perhaps I need to adjust my allocations and maybe hold a bit more.

Jonathan: Well, you’re substantially younger than me,

and it sounds like you’re covering much of your expenses with your businesses, so, maybe two years is fine.

Captain Fi: Yeah, well, it’s quite interesting. So I’ve got a portfolio of index funds, which I mean, they, it spits off more in dividends than my cost of living. And I’ve got my, my partner and I live together and we rent.

So she is a healthcare worker and. Her salary is three times our annual spending as well. So, at the moment she’s just stocking away as much as possible into her into her investments, her superannuation, which I guess is kind of like a, the 401k and into conventional brokerage accounts.

And I’ve also got an investment property which is. Pretty much cashflow neutral. The rent pretty much [01:07:00] covers all of the costs of running the property. So that’s like a little backup for us. And then, yeah anything that any surplus putting towards, just saving towards this hobby farm.

We’d love to buy like, five or 10 acres of land and set up a bit of a permaculture paradise, which would be awesome. And yeah, running these websites is a lot of fun. I try to reinvest like you do with a humble dollar, try and reinvest any money that’s created into growing the site.

And I guess you’d call that bootstrapping a business, but Yeah, it’s a lot of fun. And I’ve actually sold a couple, so yeah. Selling them and putting the money towards buying this dream farm. It’s just, yeah, it’s really cool. It’s coming from, I guess like someone who I felt like I’ve struggled financially a lot.

Even though looking back, I realize I’m actually incredibly blessed and privileged with, my finances to be able to have such a high paying job and to be in a position to be able to save. It’s almost like I have to pinch myself cuz sometimes it doesn’t feel real.

Jonathan: Yeah. But you know, I think, you, when we were talking beforehand, you had [01:08:00] mentioned about, whether I had any advice for people who were trying to achieve financial independence.

And I think when you, I think about the financial independence, retire early movement. If people really are. Focused on retiring super early. I think one of the things that’s important is, not to close the door completely on earning an income. I mean, I think financial independence, as I mentioned before, is about having control over your own time.

But, you don’t want to exclude the possibility of earning income down the road. I mean, if you have professional credentials, for instance, you wanna keep them up because you don’t know what’s gonna happen. I mean, if you retire super early, you could be. Living off your portfolio for decades and decades, and maybe the world will not treat you as well as you would like.

Maybe you know, you misfortune strikes and you end up spending a lot more than you thought. [01:09:00] So continue to have the ability to earn income is important. So I think the fact that you have this sort of collection of businesses and different options is great. I mean, I think that’s important to have that financial flexibility.

If you are trying to achieve financial independence and thinking about how to use, how you’re gonna use your time, and making sure that if things go off the rails, you’ll still be okay. Yeah,

Captain Fi: like diversification almost. And I know a there’s a lot of very clever people in the community that have said, well, and Vince Scully being one of them here in Australia, and he know, he always says that your ability to earn an income is one of your biggest assets.

And coincidentally, not a lot of people actually ensure that properly that income earning ability. And so yeah, I think that’s spot on the money. John definitely have to, keep that potential for earning an income. And it’s funny because people in the fire dogma, they get all their nose how to join oh, you’re not retired, you are, still [01:10:00] working on this or you’re still earning income from that.

, but I think that’s like a key part of financial independence is to actually be able to continue to earn an income, but as you say, in a way that suits you.

Jonathan: Right. I mean, financial independence is, is not the finish line. You need not to retire from something to retire to something, and this is whether you’re retiring at, 30 or at 60, you need to have something in mind that you’re gonna do with your time after you leave full-time work.

We all need a sense of purpose in our life. We need a reason to get up and out of bed in the morning. So before you, you quit that job, have a wishlist of things that you want to do that you know you are gonna find fulfilling. That will give you a sense of purpose. And if per chance it happens to, make you a few bucks, whether it’s US dollars or Australian dollars, that is not a terrible thing.

We shouldn’t have this silly notion that, [01:11:00] Retirement means you can’t possibly do anything that makes you any money. I mean, what a ridiculous notion, why should retirement, be this black and white notion, either you’re, a wage slave, working 40 hours a week or you’re not working at all.

I mean, that was the conception that, my parents had that when you retired, you didn’t do anything. But it’s not, healthy thing and it’s not a great way to have a sort of, a sense of purpose to your life.

Captain Fi: Yeah, I think that’s very well said. And I guess this kind of blended semi-retirement or even like I, I know there’s people that sort of talked about different types of fire coast Fire or Flamingo Fire or, barista fire.

I think it’s bloody awesome, the idea that you can work part-time on something you love but really achieve that sort of flexibility to be able to prioritize, hey, I want to be home with my family. Hey, I really wanna prioritize my health. And if you’re able to, even earn a very modest amount of income, whether that’s like a part-time job or a business or a [01:12:00] side hustle, when you consider the the 4% rule or the you multiply that annual income by 25 and that’s how much index funds.

You would theoretically need to produce that income. Working part-time can be incredibly powerful to get you to fire

Jonathan: quicker. No, absolutely. and to the extent that, you don’t have to draw on your portfolio right away because you have that part-time job. That means, you have longer to earn investment returns.

And as a consequence, if you do later decide that you’re not gonna work part-time anymore, thanks to the intervening portfolio growth, you may be in much better financial shape. So, yeah. Working part-time in retirement, whenever retirement happens is a very smart thing to do.


Captain Fi: So I’d love to know did you have a particular sort of fire or fire number that you were working towards in terms of a portfolio size or a passive income that you wanted to support you?

Jonathan: I really didn’t, , I, [01:13:00] Actually, even though I’ve been talking about the 4% rule and, having 20% of my portfolio in short term bonds, the fact is, even if I retired today, I would not spend 4%.

I mean, , I don’t need to spend that much to do, the things that I want. I’m just so used to living, relatively modestly that I don’t have great demands. I mean, , it’s not like I, I go out to eat, once or twice a week.

I travel and so on, but I don’t need grapes, gobs of money to to have a happy life which I just wanna come. Again you had mentioned about advice for people who are interested in financial independence. I would mention one other thing, which is, if you are gonna retire early or step off the career at treadmill and work part-time and so on, one of the things that you need to check in with yourself on is whether this is gonna lead to a sense of [01:14:00] dissatisfaction.

If the friends that you have continue on the career track, they continue to earn tons of money. They upgrade to the expensive car, they buy the beach home, whatever it is, if you step off that career track, you work part-time, you don’t work at all, you are not gonna be able to.

Afford as ritzy lifestyle as they potentially are. And you need to know in your heart that you’re happy with that trade off, that you’re, giving up, being, working for the man in order to have your time back. If you’re gonna do that, and then you find yourself jealous of those who continue to, work long hours and pull in big incomes, financial independence, retiring early may not be for you.

Maybe that’s not what’s gonna make you happy. I mean, I would hope that you could overcome that jealousy, but I think that there are certain people who can’t.

Captain Fi: Yeah that’s a really interesting point. And I’ve definitely noticed that even in my friendship group the [01:15:00] people that are still working upgrading their lifestyle, I do often wonder, oh I wonder what it would be like.

So I’ve got a friend of mine who, he loves his toys. Just bought like a, brand new sports car. And we went for a drive-in, and didn’t get me wrong, it’s a beautiful car and we had a lot of fun. But I think for me, the novelty kind of wore off after about an hour. And I’m like, okay I’m actually in this cramped little cockpit.

The suspension’s really bad and , the clutch is really difficult. So

Jonathan: I I remember quite a few years ago I wrote a story about money and happiness and how, money doesn’t necessarily buy happiness and somebody, Commented, well a money can buy a jet ski and a jet ski would make me happy.

And I was like yeah, I’ve ridden a jet ski and I rented one for an hour and the first 30 minutes were fun and the final 30 minutes was like, when’s this hour gonna be up? Yeah, sure. It’s, it has a novelty, but the jet ski is not gonna make you happy for the rest of [01:16:00] your life.

It will make you briefly happy, for a while. And then you’re gonna get over it there was a great survey and I wish I’d clipped the article. But unfortunately I didn’t. It was in the New York Times and it mentioned that in the survey, people were asked the top three things they wanted to buy, and among the top three was a boat.

And then there was a list of the top three things they regretted buying and among the top three was a boat.

Yeah, we want these toys, but they really don’t deliver what we think they will. Yeah,

Captain Fi: I’ve heard that with boats, the two best days are the day you buy it and then the day you sell it.

Jonathan: And I think that is so true. Of course, I have to tell you, , When I became a columnist for the Wall Street Journal, a PR woman phoned me up and she said, you know what the two best days in an columnist life are, the day [01:17:00] they start and the day they quit.

And there’s a lot of truth to that. When you get on , the treadmill of writing a regular column, it can become a grind. And I see a lot of people who start blogs and they’re full of enthusiasm. And after about four or five they’ve discovered that this is much harder than they ever imagined.

And , their blogs just peter out. I’ve seen it happen so many times. Don’t imagine that, writing a blog for a living is one, gonna make you rich, and two is gonna be easy.

Captain Fi: Yeah, it’s definitely a labor of love. I’ve really enjoyed doing it and I guess for me it kind of served two purposes.

And I think initially really it was just about keeping me honest and accountable on my sort of journey to financial independence. And then it maybe similar to the humble dollar, it’s morphed into this community and these readers that seem to absolutely love the content.

And it’s just become this awesome passion side and it’s [01:18:00] one of the things that I really look forward to doing is writing and podcasting to be able to, speak to amazing people like yourself. And yeah, I’m just super glad that I I randomly wrote that first article.

And yeah, it’s taken me down a rabbit hole of, I’ve paid for some training and, part of a like an online business training community now and running a couple of different websites, which obviously unashamedly commercially focused. But it’s been great.

It’s been one of the best things I think I’ve done career-wise.

Jonathan: yeah, I would say that’s true as well. But I am at age 60 starting to think about how I can do less. It’s not that I wanna stop writing or I wanna stop running the website, but I am planning with the next couple of years to try to start putting up less content.

I just, I work . Way too many hours. And, it’s not really quite as balanced to life as I would like to have. Too many hours in front of the laptop and [01:19:00] not enough time out in the sunshine. Yeah, I mean, here I am. Yeah it’s 8:00 PM here in Philadelphia.

And, I haven’t had my dinner and here I am talking to some guy in Australia. Oh, man.

Captain Fi: Wow. We’ve been chatting for over an hour. This is great. Well, look I’ve really enjoyed chatting to John. I’ve got a couple more questions

I guess, a big one is how did you decide that, I guess enough was enough and you were ready to pull the trigger on fire and begin your semi-retirement almost a decade ago?

Jonathan: So, when I was at Citigroup as I said, I was director of financial education for the wealth management division, but for anybody who’s ever worked in the financial services industry, I presume this is true in Australia, it’s certainly true here in the United States, It is so regulated. I spent my time dealing with lawyers and compliance people, and it was just miserable.

I was just like, everything I wrote was like, you say, could it be this? And they say, no. You can’t say [01:20:00] could, maybe you can say May, may instead of could. I mean, they were just picking through these words, and I just felt like I wasn’t making any difference in the world. And so, even though I was earning more money that I’ve ever owned in my life, I knew that I needed to be doing something else.

I needed to spend my days, making the world a better place rather than just fattening my own portfolio. And I, I had plenty of money. I knew I could retire. I ran the numbers, I knew that What my monthly expenses were. I knew if I never worked another day in my life, I could cover those costs.

And so, I I called it quit. I waited to get my last bonus. As soon as it cleared into my bank account in January, I walked into my boss’s office and told them, I was quitting. And, as it happens, nine years later, I’m still earning enough to cover my living expenses. So, in the meantime, my portfolio has just kept growing.

But it was [01:21:00] undoubtedly, the wisest decision I made, not from a financial point of view, I, the wise financial thing would’ve been to just keep working and collecting that big paycheck. But , in terms of a smart way to lead my life, Getting off that treadmill and doing my own thing has been the right choice.


Captain Fi: Because often people talk about wealth being a combination of, money health family, like spiritual health. And I think, yeah, from a wealth point of view, it sounded like I guess pulling the trigger in retiring from Citi was the best decision for you. And what does your life look now in, quote unquote semi-retirement?

I know you’ve still been working really hard as an author, but I’d love to hear about what your day-to-day lifestyle is like now.

Jonathan: So, I live in downtown Philadelphia. My house is about, Eight minutes walk from my daughter’s son-in-law and grandson. So I have a two year old grandson and at least, once a week, I go in, I pick him up from daycare, and we go to the playground [01:22:00] together.

We hang out at the house and read books and, play with the cars and that I’ve bought for him. So that’s a huge part of my life. Every morning I get up and as long as it’s not raining, I go out cycling. I try to cycle 20 miles every morning. And I bought the house that I have in Philadelphia because, I can get onto this trail where there are no cars and I can, ride without having any risk of getting hit by a car, after about a minute.

From leaving my house I’ve had some pretty gnarly accidents over the years and I’m anxious to avoid future ones. So being able to ride 20 miles and not deal with any cars is a great luxury. So yeah, I get up early, check the website, go out for my 20 mile bike ride, come back, and then I put in a long day in front of the laptop.

I do try to take a nap every day. I do try to take a walk in the middle of the afternoon, and [01:23:00] then generally I knock off about five 30 and Elaine and I sit down. We have a glass of wine, talk about our days, and for me , that’s a great day. Spend time with the people I love and spend the time doing what I love.


Captain Fi: sounds wonderful, mate. I’m trying to ride a bit more as well, and I’m really close to some downhill trails and so I recently bought an e-bike and I know some cyclists aren’t the biggest fan of e-bikes. But it’s really helpful to get me to the top of that here. I’ll tell you what,

Jonathan: well, one of my pleasures at age 60 is whenever I can overtake somebody on an e-bike.

Oh, I think wrong.

Captain Fi: I think you’ve put me to shame, John.

Jonathan: I think you, I think it’s cool and , I have to tell you, when somebody comes whizzing by on their e-bike and I know that they’re having electrical assistance, it really does bug me. All

Captain Fi: right. Noted. I will not ride my e-bike around you if Philadelphia.

Oh, mate. [01:24:00] Hey, I’ve had an awesome time chatting to you today, mate. Thanks so much for your time. It’s just been a pleasure to be able to unpack the wealth of experience that you have. Look, it would be a miss of me not to ask you these generic questions that everyone hates. Don’t get me wrong. But I still think it’s important to see what people like you are reading and listening to.

So, other than your nine books, of course, I’m wondering if you might be able to recommend any resources that people can use to, I guess improve their life or their finances whether that be books, podcasts, or any favorite websites that you might have.

Jonathan: One of the things that I monitor pretty closely Is Twitter actually there is here in the US and I assume, you can tap into it from Australia.

There is a great community of people on financial Twitter here in the US and it’s my way of keeping up with the financial world. If you [01:25:00] carefully curate the list of people you follow on Twitter, You can keep up with the financial world, you can get the inspiration you need, you can find out about the latest academic research.

Twitter for me is my way of finding out about the world. If there’s an interesting podcast that somebody’s raving about, I’ll, I probably won’t go and listen to it, but I will go and, look at the transcript of the podcast because that’s much more time efficient. If somebody’s raving about some new piece of academic research, I’ll go and look at that.

It really is, it’s my way of keeping up with the world. So it’s not that I necessarily go and look at any particular website every day, or I listen to any particular podcast instead. I follow Twitter closely, see what people are interested in, and then I use that to guide me to the stuff that I think will be helpful to me and interesting to me.

Captain Fi: Yeah I recently got on Twitter and I mean, Social media is something I probably spend far too much time on. But I’m starting to [01:26:00] learn how to use Twitter a bit better. And yeah, it can be an awesome resource once you’ve got those curated lists.

Jonathan: Well, yeah, the thing is you just have to be very selective about who you follow, cuz otherwise, your Twitter feed is gonna be a whole bunch of junk and you won’t see the good stuff.

So you need to be very careful about who you follow. But if you follow the right people, you can pick up great insights on Twitter.

Captain Fi: Yeah. Oh I’m gonna have to go and have a look at my list cuz I think there’s a bit of spam getting in. I might’ve followed a few trash accounts.

Oh well, hey look I guess finishing up, mate, is there anything you’d like to mention today or anything you’d like to bring up that we haven’t covered?

Jonathan: We’ve talked about so much, but I would say to people, If you’ve got five minutes to spare, go to humble dollar.com, check out the website, this everything is free.

Take a look around and, if it’s not for you, that’s fine, but if you find something of value, well, I’ll be happy about that. , the site is my way of giving back. I don’t make a lot of money off it. [01:27:00] It’s really, after what’s been, a very lucky life where I’ve, managed to make a reasonable amount of money, this is my semi-retirement hobby.

That takes up way too much time. And if other people can find value in it, then I’m a happy camper.

Captain Fi: That’s awesome. And I’ll put links in the show notes as well for anyone that’s listening. Well, it’s humble dollar.com. Pretty simple. Chuck that into Google. And bloody have a read.

It’s awesome. But I’ll put links in the show notes just above the transcript. And also Jonathan if people want to find out more about you or get in touch how can people do that?

Jonathan: If people go to the website and they go to the about tab, my bio is there. You can also find out a list of all my books and so on.

And if you already wanna shoot me an email, you’ll even find my email address there.

Captain Fi: Awesome dude. Well, thank you so much for your time and thanks again for everything that you’ve done with your books and with the humble dollar. You’ve built some awesome resources to give back.

Very interesting man. You’ve definitely led [01:28:00] a pretty awesome career in finance and you have a wealth of information to pass on. So, mate, thank you so much for your time today. Really appreciate it.

Jonathan: Hey, it’s been a great pleasure. It’s been fun talking to you. Thank you. Oh, absolutely.

Captain Fi: Pleasure is all mine, mate.

So next big question. What glass of wine, what bottle of wine are you gonna crack tonight?

Jonathan: I don’t know. I’ll have to go out and see what Elaine has opened up. But I’m actually a big fan of Aussie wines. I mean, the Aussie Shiraz is great it’s one of my go-to wines.

I also a big fan of new Zealand’s Savion Blanc. That’s also another my go-to wines. So, yeah. It may well be a New Zealand Savion Blanc tonight, it is summer here, so, that’s when, my preference leans Towards white wine. Ah,

Captain Fi: look how that warms my heart that you would say that there’s some awesome wines from down here and I’m actually originally from down near the Coonawarra region.

So I’ll tell you what we’ll chat later and I’ll have to send you a bottle of one of my favorite wines, which is a Winds Coonawarra Cab, [01:29:00] south Black label. It’s not terrifically expensive but it is one of the, in my opinion, one of the best wines. And look, I’m not a wine guy, but that is just whenever you go, if you order a Kunara Cab Sav, you’re never gonna be disappointed.

Yeah. Well thanks for the tip. My pleasure, mate. Well, thanks very much and enjoy your team mate. It’s been an absolute pleasure. We’ll catch you later.

Jonathan: All right. Thank you bye.

Captain Fi: Thanks for listening to another episode of the Captain Fire Financial Independence Podcast. To read the transcripts or check out the show notes, head over to www.captainfire.com for all the details. If you have a question for the captain, make sure to get in touch. You might even make it on the airwaves.

You can reach me online through the Captain Fire contact form or get in touch through the socials. I’m active on Facebook and Instagram, as well as a number of online [01:30:00] finance and investing forums. And finally, remember the information presented on the show and the links provided are for general information purposes only.

They should not be taken as constituting professional financial advice. You should always do your own research when making any financial decisions and make sure it’s appropriate for your personal circumstance.

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