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On Finance: A Johnnie Perspective

April 9, 2018 | By Anne Kniggendorf (SF97)

This article features commentary for informational purposes only; it should not be considered financial advice. Investors should seek professional advice to determine what is best for individual needs.

Robert Hagstrom is a financial analyst and bestselling author who interviewed several alumni for his research.

Years ago, financial analyst and New York Times bestselling author Robert Hagstrom contacted St. John’s College.

Hagstrom was in the process of writing Investing: The Last Liberal Art, and he was looking to speak with Johnnies in investment.

It turns out that interest in financial matters is an enduring one in the St. John’s community.

Hagstrom’s research included discussions with three alumni and one former board member with an honorary degree. His book also highlighted the St. John’s curriculum and great books reading list.

The college recently retraced Hagstrom’s steps and spoke with those four investors. What advice do these specialists give their fellow alumni?

GET AN EARLY START

Lee Munson (SF97) recalls being a very money-minded student at St. John's. Now president and CIO of Portfolio Wealth Advisors in Albuquerque, back in the 1990s he visited frequently with Margaret O’Dell, then-director of Career Services, asking for leads. One of her suggestions indirectly landed him his first job on Wall Street.

Lee Munson (SF97) is president and CIO of Portfolio Wealth Advisors in Albuquerque.

Since then, Munson has contributed articles to Forbes, dispensed advice on Fox and CNBC, and written a book called Rigged Money, Beating Wall Street at its Own Game.

Munson counsels people to go for financial security while they’re young, saving the rewards of non-monetary work for their retirement years. He enjoys skiing, traveling, writing, racing cars, and mentoring students, but he views these activities as complements to—not substitutes for—his paid work.

Don Bell (SF92), CEO of magicJack and a former Goldman Sachs investment banker, found his financial footing through “embracing a business career in my twenties, not shunning it, and then spending less than I earned for many years,” he says via email.

Every year counts, but the first one or two after graduation can be instrumental in charting a path toward financial success—and the particular field of work is less important than a desire to do well.

“Except by inheritance, I don’t see people accumulate much unless they really want it and act accordingly over a sustained period of time,” Bell says. “It’s desire, action, sacrifice to get it, and sacrifice in waiting to use it—rather than financial alchemy—that yields increasing personal wealth.”

To that end, he strongly advocates for career planning in college and hunting for good internships to provide a good starting point after graduation.

Steve Bohlin (SF80), a retired managing director of Thornburg Investment Management in Santa Fe, says that as a St. John’s student, he aspired to be a theoretical mathematician. However, upon graduation he turned his focus toward securing a paycheck, working first as an auto mechanic, then briefly as a paralegal.

At a cocktail party, he met Garrett Thornburg, who was just starting his now-prominent Santa Fe investment company. Thornburg offered Bohlin a job, and for the first few years at the firm, he did the tasks no one else wanted.

Don Bell (SF92) is CEO of magicJack.

“Get your foot in the door,” he says. “Hopefully it’s not the mail room. Hopefully it’s something a little bit above that. If you’re good, your talents will be recognized. In an ideal world, you do what you love and the money will follow, but we all know that it doesn’t really work that way. So, learn to love something that you do and then put your utmost into it.”

Bohlin’s effort and dedication have paid off. He’s been recognized for his expertise by the Washington Post, The New York Times, and Barron’s, all of whom have quoted him in articles.

SAVING

Saving is a common theme among the alumni investment experts. Munson recommends setting aside 10-20 percent of total monthly income. Focus on a percentage rather than a dollar amount, and as wages increase over time, so will the amount saved.

Regardless of income level, he also suggests opening an Individual Retirement Account (IRA), either a regular IRA or a Roth. The money in the former is taxed upon withdrawal; in the latter, it’s taxed upon deposit.

“The rule of thumb,” Munson says, “is if you think your tax rate will be higher in the future, do a Roth. If you’re broke now, just take the shot. If you make a lot of money, and you think, ‘When I retire I won’t be making as much,’ or ‘I don’t think my taxes will be higher when I retire, because I’m not earning as much,’ then you just do a regular IRA.”

Bohlin’s advice is similar: Set up a practical budget and start saving, the earlier the better. “If somebody starts at the age of 22 and puts $2,000 a year into an IRA, and that IRA is earning 5 to 6 percent, at the age of 65 they have more money in their IRA if they stopped putting money in it at age 30 than somebody who started at age 30 and put $2,000 a year in until they were 65. That’s the power of compounding.”

As an aside, Bohlin adds that his interest in math has helped him delve deeply into some of the more esoteric investments he’s encountered. He approached his work the way he would a Program book—by analyzing the pieces, figuring out what was at stake, and determining what made them move.

INVESTING

Greg Curtis (HSF02), chairman and managing director at investment advisory firm Greycourt, is a former St. John’s board member. He was educated at Dartmouth College and Harvard Law School, but as an honorary alumnus of St. John’s he makes a point of spending time at the college. Recently at the Annapolis campus, he debated central banking policy with former Federal Reserve chair Ben Bernanke.

In Curtis’s view, the investing world is becoming less friendly to those who want to manage individual stocks. He thinks that the days of an English major, like him, making it in the world of investing are long gone. Regardless, he says, anyone can learn how to invest.

Greg Curtis (HSF02) is chairman and managing director at Greycourt, an investment advisory firm.

“You have to have an extremely broad understanding of how the world works and what’s going on in that world,” he says. “If you don’t, you can easily be blindsided. You need to be very broadly educated. You can’t be the kind of person who is a narrow specialist.”

Curtis clarifies that he’s not a financial planner and he advises everyone, including his own children, to seek the advice of a professional.

“If you only want to make one investment decision in your life, start putting money in the Vanguard STAR Fund, and you won’t regret it.” He adds that the minimum initial payment is $1,000, and even a contribution of $25 a month will compound quickly.

Bell agrees that investing is important—and he, too, cautions against doing it alone, likening that process to do-it-yourself dentistry. Either way, however, investing should be a long-term proposition. “Don’t buy stocks or individual funds,” he says. “Just buy S&P 500 index fund from Vanguard, and don’t touch it for at least 10 years, up or down.”

BALANCE

Munson contends that the ultimate goal in life is to balance making money, self-satisfaction, and contributing to society. “This is the holy trinity everyone has to grapple with,” he says.

He posits that investors who haven’t read the great books are less successful in striking that balance because they don’t understand their own purpose or how to be a member of a society.

Conversely, Johnnies are not only well versed in those ideas, they also have a distinct advantage in approaching financial literacy—prior experience tackling a foreign language. From Munson’s point of view, when that language is money, fluency is not just a benefit, it’s a requirement.

“Why did we learn Greek? To challenge our minds, to learn to struggle,” he says. “This is like Greek. You learn to love it or you don’t, but in the end you have to do it.”