Jonathan Clements “If Money Can Buy Happiness, Then Why Doesn’t It?” “Because People Don’t Spend It Right.” by Meb Faber

Guest: Jonathan Clements. Jonathan is a financial writer based in New York City. He’s the author of the award-winning Jonathan Clements Money Guide and a new book, How to Think About Money. Jonathan spent almost 20 years at The Wall Street Journal, where he was the newspaper’s personal-finance columnist. Between October 1994 and April 2008, he wrote 1,009 columns for the Journal and for The Wall Street Journal Sunday. He then worked for six years at Citigroup, where he was Director of Financial Education for Citi Personal Wealth Management, before returning to the Journal for an additional 15-month stint as a columnist.

jonathan Clements

Date: 9/1/16

Run-Time: 51:39

[drizzle]Topics: Episode 19 is a fun, unique episode, delving into the connection between “more money” and “more happiness.” Turns out, Jonathan has literally written the book on this complex relationship. Do you know what studies suggest is the “line in the sand” for annual income, separating happy and unhappy people? Good chance it’s lower than you think. But why? Jonathan tells us. That dovetails into a discussion about how people should spend their money in order to optimize their happiness. It turns out that spending our money on “experiences” with important people in our lives produces far more intrinsic happiness than money spent on “things.” Next, Meb leads the discussion into familiar territory – investing. Jonathan notes two major traps most of us fall into when investing: 1) overconfidence, and 2) loss aversion. These two Achilles Heels tend to inflict significant damage to our portfolios. So what’s our best defense? Jonathan gives us his three-pronged strategy. The topic then moves to portfolio construction, with Jonathan noting how his own approach has changed from a U.S.-centric, core-holding starting point to a global-market-portfolio starting point. Next, they move to a topic less discussed on the podcast: retirement. Jonathan gives his thoughts on withdrawal rates, portfolio management strategies in retirement, and even timing suggestions on when to start taking Social Security. There’s far more on the show, including what studies say about the effect of kids on happiness, why we need to flip our advice to our children (instead of “pursue your passions early in life” it should be “work your butt off early and save, so you can pursue your passions later”), and finally, specific action steps you can take right now to be a better investor. What are they? Find out in Episode 19.

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Links from the Episode:

Running Segment: “Things I find beautiful, useful or downright magical”:

  • Jonathan – Allow for ample time in between deciding on a course of action and actually acting on it
  • Meb – Photos printed on wood

Read the transcript here.

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