Nobody Told Me

Jonathan Clements on his learnings and what he wished he had been told in his twenties, or told more loudly so he would have listened.

For the last 30 years, I have had the opportunity to attend great seminars, training courses, conferences, and read many good books and articles.  I very much enjoy my role as a financial adviser, constantly trying to learn more so I can provide better advice.

Jonathan Clements, a long-time personal finance columnist for The Wall Street Journal, is one of my favourite authors. He recently wrote an article on his website reflecting on his learnings and what he wished he had been told in his twenties, or told more loudly so he would have listened.

  1. A smaller home will enable you to save and invest earlier to accrue retirement income-producing assets.
  2. Pay off your mortgage as soon as you can. Your mortgage interest rate will typically be higher than the post-tax return from many investments.
  3. Watching the market doesn’t improve portfolio performance. It’s just a huge time waster.
  4. Nobody knows what the short-term investment performance will be. Clements wrote that one of the downsides of working as a columnist for The Wall Street Journal  was that “…you hear all kinds of smart, articulate experts offering eloquent predictions of plummeting share prices and skyrocketing interest rates that – needless to say – turn out to be hopelessly, pathetically wrong.”[i]
  5. You will end up treasuring almost nothing you buy. Most of the stuff we buy gets thrown away. This is where millennials seem to be wiser than us baby boomers.  They are more focused on experiences than possessions.
  6. Will our future self approve of the decisions we make today? Pondering our future self doesn’t just improve financial decisions. It can also help us make smarter choices about eating, drinking, and exercising.
  7. Relax, things will work out. As I meet with younger lawyers and professionals, I sometimes see a glimpse of the anxiety that I suffered in my 20s and 30s. In the early years of your career there is so much uncertainty. What sort of career, you will have? How will financial markets perform? What misfortunes might come my way? Clements encourages by saying “…if you regularly take the right steps – work hard, save part of every paycheck, resist the siren song of get-rich-quick schemes – good things should happen. It isn’t guaranteed. But it is highly likely. So, for goodness sake, fret less about the distant future, and focus more on doing the right things each and every day.”[ii]

Some great thoughts from Jonathan Clements on the Humble Dollar website.  I trust one or two of his observations resonate with you.

Andrew Nuttall is an Authorised Financial Adviser with Cambridge Partners, a fee only financial advisory practice based in Christchurch.  Andrew’s Disclosure Statement is available free of charge and on demand.  He can be contacted at www.cambridgepartners.co.nz telephone 03 364 9119.

[i] https://humbledollar.com/2020/02/nobody-told-me/

[ii] https://humbledollar.com/2020/02/nobody-told-me/

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