For 15 years, Jonathan Clements wrote a column in the Wall Street Journal extolling the virtues of investing prudently.
Now facing a terminal cancer diagnosis, Clements is looking beyond his readers to the next generation, collaborating with the city of Boston and Northeastern University’s Summer Youth Employment Program to provide cash grants to young people from low-income homes to open investment accounts.
“This is going to add another tool for young people, another skill that they’ll be learning through the Summer Youth Employment program,” says Alicia Modestino, associate professor of public policy and urban affairs and economics at Northeastern and research director of the summer jobs program.
“We already know that the program’s really impactful in increasing academic aspirations, developing soft skills and work readiness, increasing high school graduation rates and reducing criminal-justice involvement,” Modestino continues. “Now, alongside that, we’re going to put skills around financial capability.”
Clements is a longtime reporter and columnist at the Wall Street Journal, penning more than 1,000 “Getting Going” columns from 1994 to 2008 and from 2014 to 2015.
Columnist Jason Zweig — Clements’ successor at the Journal and longtime friend — called Clements the “voice of reason.”
“In a crazy market full of propaganda, and bad ideas, and crummy logic, and negative emotion at the bottom of the market and euphoria at the top of the market, he always just counseled people to be prudent — watch costs, don’t take crazy risks, diversify, buy index funds, etc.,” Zweig says. “He’s probably helped hundreds of thousands — maybe millions — of people achieve greater financial security through the advice he’s given.”
Alicia Modestino, associate professor of public policy and urban affairs and economics at Northeastern, will be following how the participants choose to use the money deposited in their new Roth IRAs. Photo by Alyssa Stone/Northeastern University
Last year, Clements was diagnosed with a rare and terminal form of lung cancer. He faced it “the only way he knew how,” as the paper put it — he offered advice.
Meanwhile, Zweig and other colleagues and friends want to ensure that Clements’ advice and his legacy endures.
The first thought was to create a journalism award in Clements’ name.
“To say he didn’t like that idea would be an understatement — he hated it,” Zweig says. “He said the last thing the world needs is another journalism award.”
Instead, Clements suggested that his friends raise contributions through a nonprofit to give cash grants to young people from low-income homes to open no-fee, no-penalty Roth IRA accounts. The grants will be financed through donations to the John C. Bogle Center for Financial Literacy and by sales of a book of Clements’ columns.
But where to find these young people?
That’s where the summer jobs program comes in.
Zweig has focused much of his writing on behavioral economics and, years ago, wrote an article highlighting the work of The Abdul Latif Jameel Poverty Action Lab (J-PAL). The lab has done a lot of research on the motivational impact of cash grants and was receptive to Clements’ idea.
The lab suggested that the Summer Youth Employment Program and Modestino — whose contributions it had recently awarded — would be a great place to implement the idea and study its effects.
Modestino was thrilled and presented the idea to the city of Boston.
“I said, ‘You’re gonna give young people 1,000 bucks for retirement? Yeah, I’m pretty sure the city’s going to want to do this,’” Modestino says.
The city “jumped right in,” Modestino says.
“The City of Boston’s Worker Empowerment Cabinet is excited to support this Roth IRA pilot, which empowers our young people to start building wealth early,” Trinh Nguyen, chief of the City of Boston Worker Empowerment Cabinet. “By pairing financial resources with education, this initiative gives youth the tools and confidence to plan for their future, while positioning Boston as a model for how cities can invest in the financial well-being of the next generation.”
This summer, 50 youths in the jobs program were randomly selected to participate in seminars on how to invest for retirement and set up a Roth IRA account. Then, half of the participants were given $1,000 to invest in their account, and the other half acted as a control — able to invest their own money, but not given the $1,000.
Modestino will follow the youths to see what they do with the money.
“They can do nothing with it and leave it in the account. They could change the investment mix, they could contribute to that account, they can withdraw from that account. They could take all of the money out of the account the next day and do whatever they want with it,” Modestino says. “It makes it salient and relevant for them to think about their future, think about financial security, practice good financial habits and budgeting, and learn more about investing — all of those good things.”
Modestino says that the program will expand next year to hundreds of participating kids, to even more participants in the future, and she hopes it will spread to summer jobs programs across the country.
Zweig agrees.
“We’re hopeful that as the program iterates, develops and deepens over time, that it can become a model not just for Boston, but for cities around the U.S. and around the world,” Zweig says.
It would be an impactful legacy for Clements — and a fitting one.
“The idea was innovative, it was unusual, it was clever and creative, and it was focused entirely on other people — particularly forgotten people who might otherwise live their entire lives and never participate in the financial system and never benefit from the power of rising markets over time,” Zweig says. “Jonathan doesn’t want them to be forgotten,” Zweig concludes. “The way he wants to be remembered is by helping us remember them.”
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