Episode 71

Published on:

23rd Aug 2023

071: Jay Zigmont - Build the Life You Want: Life & Financial Planning for an Underrepresented Population

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Dr. Jay Zigmont is a PhD, CFP and the Founder of Childfree Wealth. He is a fee-only, advice- only fiduciary and the author of The Portraits of Childfree Wealth . Most financial advice treats parenthood as the default. Dr. Jay has built a financial planning system that caters to the unique needs of those whose futures don’t include kids.

Today, Jay joins the show to talk about why having children has become a default scenario in financial planning. He details the differences in financial planning between those who choose to have kids and those who choose to be childfree, and gives advice on how to build the life you want and then have the finances fit it.

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Key Takeaways

00:58 – Jonathan introduces today’s guest, Jay Zigmont, who joins the show to talk about an early lesson that became integral to his money story and why he chose to focus on helping a unique demographic

10:01 – Jay shares the story of how he made his first million and lost it before he turned twenty-five

13:37 – Improving your money mindset

14:40 – From Adult Learning to Financial Coaching

16:21 – A systematic bias in the financial services industry

21:34 – Childless and Childfree demographics and statistics

26:31 – Key differences between planning for a life with kids and planning for a life without kids

32:08 – Long-term care

36:14 – One thing that a childfree person should do to lead to greater personal and financial success and one thing to avoid doing

37:38 – The last thing Jay changed his mind about and the thing in Jay’s life that he is most grateful for

39:31 – Jonathan thanks Jay for joining the show and lets listeners know where to connect with him

Tweetable Quotes

“The hard part is that when you run your own company, you work for a crazy person, which is yourself.” (07:24) (Jay)

“The childfree demographic is an underrepresented minority group that people aren’t talking about. And when they are talking about them, they’re judging them.” (08:19) (Jay)

“Money doesn’t buy happiness. You don’t know that until you actually have money. I was living in Connecticut, commuting three hours both ways to New York City until I could afford an apartment. I had no money. I was busting my butt. But you learn that, ‘Ok, it’s easy to make money. How do you manage it? How do you grow it? How do you keep it?’ That’s a different question.” (10:55) (Jay)

“There are systematic biases - technically the term is ‘pro-natalist’ which advocates for more kids - built into the system that the childfree folks then have to essentially unbuild. But I have to teach people financial advice that matches them.” (18:00) (Jay)

“What’s happening is the younger generations are going, ‘Yeah, the concept of working twenty- five years and getting a watch and pension is gone. The classic two and a half kids and the white picket fence and the marriage could be gone too.’ And that’s just a rethinking of The American Dream. I don’t blame them for picking a different path. It’s just a different society now than it was for hundreds of years.” (25:36) (Jay)

“I call it ‘Life & Financial Planning.’ I start with. ‘What life do you want to live?’ Then I go to what your finances are, and then your taxes.” (28:41) (Jay)

“If you ask me, ‘Hey, who’s gonna take care of you when you get older?’ My answer is, ‘My bank account.’” (33:12) (Jay)

“My answer is always, ‘Pick the life you want to live, then make your finances fit it.’ You don’t have to follow the default path.” (36:32) (Jay)

Guest Resources

Childfree Wealth Website

Childfree Wealth Podcast

Childfree Wealth YouTube Channel

Childfree Wealth Facebook

Childfree Wealth Instagram

Childfree Wealth LinkedIn

Jay’s LinkedIn

Jay’s Book

Books Mentioned:

Die with Zero

Mindful Money Resources

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Jonathan DeYoe: Hey, welcome back. On this episode of the Mindful Money podcast, um, I’m chatting with Dr. Jay Zigmont, PhD and CFP. Dr. J’s phd is in adult learning from the University of Connecticut. He’s a fee only, advice, only fiduciary, and he’s the author of the portraits of child free wealth. We’re going to get to this in a second. But Jay had earned his first million by the time he was 21 and lost it before he was 25. Learning some important lessons in the process. Going to ask about that. Most financial advice treats parenthood as the default, and Dr. Jay has built a financial planning system that caters to the unique needs of those whose futures don’t include kids. Dr. Jay welcome to the Mindful Money podcast.

Jay Zigmont: Hey, thanks for having me. You got to start off with the mistakes. Like, we got to go in the deep end. Just go right in.

Jonathan DeYoe: Absolutely. We’re just going to throw you in. It’s all good.

Jay Zigmont: I’m used to it.

Jonathan DeYoe: Great. Where do you call home, Jay?

Jay Zigmont: I’m in Mississippi. Okay.

Jonathan DeYoe: Huh. Is that where you’re connecting from today?

Jay Zigmont: I am.

Jonathan DeYoe: Did you grow up in Mississippi?

Jay Zigmont: No, I grew up in the northeast. And I got to tell you, there’s a huge culture shift. We came down here for my wife’s job, and I will tell you, we moved here, uh, just prior to Roe being overturned. But I can tell you, the running a child free financial planning firm in Mississippi in a post row world is an interesting experience.

Jonathan DeYoe: I bet I hadn’t thought about the post row world in relation to your work, but I imagine that would be interesting. Right?

Jay Zigmont: Well, protecting the privacy of my clients is a priority. I mean, our governor publicly came out and said, hey, we’re not reading your mail or tapping your phones, but, like. But what? But what?

Jonathan DeYoe: So where in the northeast did you grow up?

Jay Zigmont: I grew up in Connecticut.

Jonathan DeYoe: Connecticut, okay, well, and then University of Connecticut. That makes sense. So, growing up in Connecticut, what did you learn about money and entrepreneurship? What sort of lessons did your parents teach or did your community teach?

Jay Zigmont: All the ones you shouldn’t know how to spend your money and, uh, not keep it. I mean, I joke about it, but it’s true. When I went to high school, the only thing I learned was how to balance a checkbook, which is a complete and total waste of time at this point.

Jonathan DeYoe: Me too.

Jay Zigmont: And my parents were more of the what you should not do with money. We lived the feasted famine. I say we grew up broke. My mother was disabled and had medical issues all her life. And, uh, debt and fighting with medical bills and fighting with the health care system. That was just my life.

Jonathan DeYoe: Yeah, this is taking me off path, but it’s od to hear. I hear this often. Families growing up fighting with the healthcare system, fighting with the debt from the healthcare system. My wife and I are constantly arguing about insurance, and that’s just one thing that I think we should be able to fix. I don’t know why, 50 years later, this is still an issue. Like, we should fix this one issue because it’s such a hassle. Even if you got money, no money, have money. Healthcare system is a pain in the ass for everybody.

Jay Zigmont: Well, and I’m biased. So I come out of healthcare in academia. I worked at Yale and a few other hospital systems, and I got burnt out because I did it for the patients. But eventually you realize healthcare is about the money. It purely is. And I’m like, if I’m going to worry about the money, I might just go worry about the money. Let’s go do that and help people with that. And I don’t know. I worked as a medic. I worked in healthcare. I took care of patients. But you realize that the system is broken. I mean, just broken. And I’m not really sure how to fix it. And for my clients, Chopra folks, we talk a lot about long term care and how broken that system is. And they go, well, how do you fix it? And I’m like, I have no clue. Uh, you got to start all over and zero and redesign everything. And I just don’t know. I mean, I was having this conversation with somebody the other day about the big transfer of wealth from the boomers. I don’t believe it. Because of health care costs. Ah, yeah. If you look at long term care and all the out of life health care costs, that transfer might happen. It’s just going to go to the healthcare system, and that’s not a good idea.

Jonathan DeYoe: And now we’re way off track, which is why you see all the private equity buying up hospitals and things now, that’s where the money is going, is the hospital system. And so all the people that have the money are going, oh, yeah, we can bill higher now. So it’s like, little scary. Little scary for our healthcare future. Little scary. Hey, Jay, can you point to an experience you had as a kid or maybe a teenager that you took as a lesson and that you still believe or that you went against that became integral to your money story?

Jay Zigmont: Yeah, I have this struggle, let’s call it that. So my parents, the thing they taught me was, whatever you do, be the best at. And it’s a good message, but it’s also a rough message. They’re like, hey, if you’re going to work at McDonald’s, be a fry cook. Be the best damn fry cook. That mean. And that was just the way I was raised. And the hard part with that is that kind of comes with expectations, overachieving, whatever it is. And the hard part that is, how do you find a balance? So I jokingly say, but it’s true. I learned a lot of my money management by watching scrooge Mcduck now going back to the cartoon days. And he taught work smarter, not harder. And that is he put smarter, not harder, and be the best at it. That’s kind of where I am. The hard part is then when do you take a break and how do you find the balance? And I don’t know. I’m 45 still trying to figure that out. So maybe you have the sage advice on that one.

it, and I did it. And then in:

Jay Zigmont: Absolutely. I think the hard part is when you run your own company, you work for a crazy person. That’s yourself. It just is. I serve child free folks and to get some numbers, it’s about 25% of the US are child free or permanently childless. So it’s a large population and all of the financial places as close to get to all assume you have kids. So there’s this huge population that really needs help financially. And I don’t want to take the whole burden on my shoulders, but I’m kind of like out there financially. People like, please, other people come in and help this group so I can take a break and, and silly, but you get so driven into helping people. The, uh, other one, I follow Ziegler old school and says, you can have everything life you want if you’re helping, if other people get what they want. And that’s what I’m doing with the child free folks. But then, you know, I’m meeting with people that frankly can’t afford my service, but I’m just helping just because I have. And like, you get stuck because you really want to help people. And it’s not really about the money, it’s just these people need help and the child free folk is an, uh, underrepresented minority group that people aren’t talking about. And if they are talking about them, they’re judging them. So it’s like this passion that just. I don’t know. You’re right. I should not check my email. I should take breaks. I should do all that. Uh, but then somebody email me, say, hey, I’m struggling with. And my answer is, all right, let me help.

Jonathan DeYoe: Right?

Jay Zigmont: No.

Jonathan DeYoe: Have you thought about other ways to deliver the services? Uh, I struggle with the same problem. And so I created some digital courses. I struggle with the same problem. So I hired additional people. There’s ways. So how are you managing your own work life balance given that you’re sort of. I’ve literally never heard of anyone else that focuses on this. It’s not really a niche, I should say 25% of the population.

Jay Zigmont: Yeah. So a couple of things. One, yeah, we call a self directed product. That’s our course. 15 courses, 100 videos. We also have the one on one. We also have the podcast. We also have a free course. We just launched for the eight. No baby steps. We have a whole process. Uh, I’m writing my second book on it. They’re doing all of it, trying to get the content out there. I spend half my time talking to child free folks about finances and the other half talking to financial people go, hey, by the way, child free people exist. Here’s how to work with them, how not to mistreat them. And it’s worked. I can’t complain. I mean, it’s gotten great attention. It’s just a long uphill battle. I mean, when I did my CFP, there’s never once a mention the CFP literature of being child free. It just doesn’t exist. There’s pre kids, post kids, nowhere else in there. I’m like, well, I got a long road to go, but it’s one that’s worth it.

Jonathan DeYoe: Yeah, we’re going to get back to this and get more specific, but I do want to hear the story about before you were 25. The million made, the million lost. I think that that’s got to resonate with a bunch of people. So please tell me the story.

Jay Zigmont: So I graduated high school in the mid ninety s. And at the time, the one thing I said I didn’t want to do was computers. And unfortunately that was when the Internet was just about booming. So I moved to New York City, uh, late ninety s, ninety nine, and worked for a couple of different Internet companies. One ended up going IPO, ended up hitting my first million at 21. The hard part is when you give a million dollars to a 21 year old, it disappears. I mean, I paid for mother’s house, paid for my sister’s college. I did some good stuff. I bought an Arnold Schwarzenegger Hummer, the old school hummer. Like, I bought the toys, I got all that. And I jokingly say it’s gone by 25. But went back to school then and started working on it. I think what I learned from that was they always talk about, well, money doesn’t buy you happiness. You don’t know that until you actually have money. I actually was living in Connecticut, commuting 3 hours each way to New York City until I got a foreign apartment. I had no money. I mean, like, I had nothing. I’d offer this job, it was at 100 Wall Street. I remember the address. And I used to take a train in every day and a bus in my butt. And my parents still think I’m crazy forever leaving the hometown. But you learn, okay? It’s easy to make money. Well, how do you manage it? How do you grow it? How do you keep it? That’s a different question. And I’ll tell you that in some ways, you got to learn by making mistakes. BSc is an adult learning. It’s from experiential learning. You kind of have to screw up once or twice, and then you’re like, oh, hey, I should probably not do that again.

Jonathan DeYoe: You don’t have to learn that way, but you will learn that way. You could read a book.

Jay Zigmont: You could read a book. But here’s the thing. Most people learn by experience. You have to get in some debt to realize I shouldn’t have debt. It doesn’t have to literally be up and down that far. But I always joke about it, and I say, the way to make money accessible is humor, humility, and vulnerability. And I tell people, hey, made my first melody in my 21. Spending my time. 25. Can you beat it? And they go, no. I’m like, okay, then you can’t make their mistakes. So we’re good. And they joke and laugh, but they’re like, yeah, but I have whatever, $12,000 debt. I’m like, oh, come on, that’s nothing. We could work on that. Um, I’m behind in my savings. Okay, we go. Because it’s one of those things where if people think, oh, you just got it all perfect, they don’t admit their mistakes or admit what’s going on. And the unfortunate truth is adults learn what they want to learn when they want to learn it, and they want to learn it when they’ve got problems. People reach out to financial planner either when something’s going great, like they won the lotto, or something’s going wrong. One of those two, they’ve realized they can’t do it or whatever. And that’s where we have to be a bit more accessible, a bit more real, and say, yes, I’m not perfect either. I have an Amazon habit that I spend too much money on. Hell, we all have things I love.

Jonathan DeYoe: My entire career in the industry. I’ve been in the industry 25 years, and it’s always about, and there’s very few instances, I think you’re one of them, where they say, well, bring the clients closer. Don’t hold them at a distance. Be vulnerable. Tell them the real deal. This is where I screwed up. Yeah. I liquidated a 401k once to do something stupid. And, yeah, so I did that, too. Right. And just be honest and be directed. You can help people out better that way. I think most of us, we’re trying to pretend and signal, right? We’re trying to signal that we’re the experts and so follow what we do. Whereas if you just were open and say, yeah, I screwed up, this is what I learned. They might be more willing to learn. I think it’s great. I love the way you’re sharing that.

Jay Zigmont: Well, I mean, it’s part of the money mindset. So the way I look at it is, if you think you’re going to get money perfect, you’re wrong. It just is. Anyone that thinks they know what’s going to happen, they’re wrong. That’s the only thing you can guarantee. So if instead, we take it as a learning process and we’re always trying to get better, always trying to improve, always trying to get closer to what balance we want or life we want, then what happens is people go, oh, this is an ongoing process, and they forget, oh, well, I hear people, well, my family never taught me this, or I never. I’m like, no, Doug, uh, none of us were. You get to choose when to learn it, and you get to learn as we go through. And I find that if you say to a client, hey, I made mistake, or my other favorite is, I don’t know the answer to that one. I’m going to look it up, I’m going to take a look, and I’ll get back to you. Man, does that earn you a lot of credit with them? Because they realize, oh, you’re the expert. I got a PhD, an MBA and a CFP, and I have no clue. Eventually you get so many letters, you’re like, I don’t know. And I’ll go look that up and I’ll talk to some of my colleagues and I’ll work it through, and all of a sudden they’re like, oh, I don’t feel so dumb. It’s a process. I don’t want you to feel dumb at all.

Jonathan DeYoe: Yeah, it’s a process. Hey, how does the PhD tie in with the CFP? Did you get the PhD first? And then work on the CFP or were you in the industry when you got the PhD? Tell me how that works.

Jay Zigmont: So my PhD is in adult learning. I come out of really the coaching world, life coaching, financial coaching, career coaching, whatever coaching you want to call it, coachy coaches, all that. And my focus is really on how adults learn. And when I was doing financial coaching, the truth is people are more willing to pay for financial coaching than life coaching. The life coaching is probably what they need, but they come for the financial stuff. And the financial coaching world has got this weird gray line in between investment advice and coaching and it’s just not one that I wanted to deal with. So I went and got my CFP, started my own RAA and went down becoming an investment advisor. And what happens is my approach, so I’m an advice only. I don’t take over people’s investments, I just teach them how to do it. It’s all based on that learning infrastructure, that learning approach. My goal is to teach somebody how to do it. They work with me for 612 months, whatever. Then they go off into the wild and come back when something changes. I don’t want them paying me forever. I want to have a true mentor coach relationship. And it’s an interesting mix. I’ll tell you, the people that come out of the financial world, they have some different knowledge than I do. But most people in finance say, well, I don’t know, whatever, 80% of it’s behavioral, whatever number you want to pick, but 80% of its behavioral. So I spend 80% of my time in the behaviors and 20% on the numbers, which is actually really weird in the financial world because most people spend too much time on the numbers.

Jonathan DeYoe: Yes, totally agree. I think it’s probably more like 90 or 95%, but who’s going to quibble about that? So one of the things you say is that financial planning uses all financial planning and the CFP program and everything puts kids as the default. Why do you say that? Why do you say having kids is the default?

Jay Zigmont: So pick up any financial book you want and you look at the standard Life plan or standard life script and it says you go to school, you go to college, you get a job, you get married, you buy a house, you have kids, you retire, you pass on the next generation. That is like every textbook on finance and the life goals and the life phases. So it’s built into it. So there are assumptions that are built into the software, the process and the people doing it. So a great example of this child free folks as a whole don’t want to pass money on to next generation. That’s not one of their goals. They’re more in the die with zero approach. Let me give and live throughout my life. Well, all the financial plans assume you want to maintain your principal and never run out of money. But child free folks want to die with zero Monte Carlo simulation. For those that don’t know is they run a thousand simulations, all likelihood, you’re not going to run out of money. So if something says 99% success in Monte Carlos, 99 times, 99% of the times you didn’t run out of money, that is by definition, a 99% failure for a child free person because they don’t want to have a whole lot of money to pass on. The way I say it is, my nephews get what’s left over. And if they’re listening, well, guess what? If you get 10,000 or 100,000, I’m okay with that. If they get a million. I made a mistake. I should have given that way of money, that money away or used it throughout my life. And that’s why what happens is there’s these systematic biases. Technically, the term is pronatalist. So it’s for, hey, we should have more kids built into the system that then somebody who serves child free folks have to essentially unbuild. But I also have to teach people financial advice that matches them. That’s why I call my program the no baby steps, because it has no kids in it. But you look at any of the other financial planning programs they all have built in there. Saving for college and buying a house. Uh, buying a house is a choice for a child for person, not a requirement. All of these underlying foundations are built within the system.

Jonathan DeYoe: And it just dawns on me that the thing that I spend the most time with is the safe withdrawal rate. That safe withdrawal rate is to protect principal, right? That whole point of safe withdrawal is to protect principal so that I have principal to pass on. Until you said that, I never really understood that as a bias. I always thought, well, uh, whether it went on to my kids or went to charity or whatever, I don’t mind leaving a bunch behind. But if you have nothing that’s yours, then why put all that effort into saving more? And why. Yeah, it makes perfect. I’ve learned something today which is not something I can always say in these sessions.

Jay Zigmont: Let me challenge you even more. So in the financial world, they break people into two phases, pre retirees and retirees. How about non retirees? So our child free folks, we embrace what we call file financial independence. Live early, as opposed to fire. Fire is kind of an on off switch for work. File is more of a dimmer switch. So what happens if you are talking to somebody who’s a therapist for a living, running their own practice, going to always have some clients throughout their life, they’re doing their thing. Find a balance. What happens if your financial plan is not about retiring? What if your financial plan is not about giving on to the next generation? Those are two assumptions that are the core of most finance plans. I mean, nearly all, if you take those out, all of the planning aspects in between change. I got people in their 30s that rather than focusing on retirement, they’re like, you know what? I’m going to go back to school, become a librarian, and do something I enjoy. Take a lower salary, end up with a lower net worth, and that’s okay.

Jonathan DeYoe: So I think there may be this bias in financial services, because the vast majority of financial services today, I think, still is paid by the AUM model. It sounds like you’re more hourly or project oriented. Is that fair?

Jay Zigmont: I’m paid on a monthly or hourly. I have a subscription or an hourly.

Jonathan DeYoe: So if you’re paid on an AUM model, then you really want people to save and invest more. You don’t want them to die with nothing. You want them to have huge assets. Right? So there is a bias that feeds the CFP world or the financial services world about growing client assets. Not necessarily for their. Sure, it’s their benefit, too, but it’s also financial services benefit huge.

Jay Zigmont: Absolutely. The book die with zero, that’s kind of the handbook for a lot of the stuff we’re talking about. And if truly the client wants to die with zero, we have something waste protective, but close, we can get to zero. The percentage based AUM model has a huge conflict of interest. And really, I don’t think it’s one you can control. Because if, uh, the financial services models, the people getting paid, all want your net worth to go up and you want your net worth to go down, that’s really hard to solve. And it’s part of the reason why I picked the advice only model when I started, because I realized I can’t do an Aum model and then be telling them, hey, by the way, we should be working on spending rather than saving. I spend more time talking to my clients about spending than saving. I’m talking about, hey, how do you spend $100,000 a year on travel? Let’s do it. Let’s invest in you do it.

Jonathan DeYoe: So you said that the number of people that fit in the category, about 25%. Quarter. Right. So what kinds of couples, individuals, what are we talking about? Who’s in that group?

Jay Zigmont: So, a couple of things that are different. And I’m, uh, going to use the terms child free and childless. The census uses the term childless for people with no biological children in the community, we tend to use child free, which means you don’t have kids, don’t plan on having kids. Child free tends to be by choice. Childless, not by choice. A couple of interesting things. One, in adults over 55, 32.1% of childless folks were never married. So in comparison, 2.5% of parents were never married. So huge difference in the structure. So, for example, let’s have fun with this. Go ahead and put a couple in your financial planning software and try to tell it. It’s a couple that’s not married. They all assume they’re married. They’re just going to file married, filed separate or not. Like, you can’t even separate them. But we’re talking about couples that aren’t married. We’re talking about single folks. We’re talking about groups, different family structures than the classic parent combo. And in general, there’s a study in Michigan that found about 20% adults are child free by choice, about 5% are not by choice. So there’s a mix of the two. And when you’re looking at the numbers, younger folks, a lot of them are saying, hey, I can’t afford to have kids. I don’t want to have kids. It’s a choice. You look at, population rates are going down. It’s a heavily growing population. I’m m using us numbers, 25% in Japan. It’s something along the lines of one third are child free. So we’re talking about huge segments that are addressed, the statistical. About the same number of men as women. Actually, a little more men. But online, um, in a lot of communities, it’s a heavily women groups. 80% of my followers in my child free wealth group are women. So interestingly enough, usually it’s women reaching out from a financial standpoint, which is not norm across the industry. And you’re talking about people that say, they come to me and go, hey, I talked to a financial planner, and I said, well, how’s my plan different? They go, well, you’ll change your mind, or it’s the same, or all this judgment that comes with it. I joke, but it’s true. I have more people praying for my soul than you could count. Because, uh, it just says, serve child free people. And there’s all the judgment. I went to buy financial software for my company, and they said, hey, what niche do you serve? I serve child free people. They said, oh, so you hate kids. Oh, my God, seriously? You can’t say that. But that’s the judgment that comes with it. And this is what they’re getting in the financial community and in the political world we’re dealing with right now. So they need people to serve them.

Jonathan DeYoe: What do you think some of the. I mean, you mentioned the expense, but what are some of the maybe social or cultural forces that are driving the increase? I’m guessing it’s not an increase just in number, but also in percentage of people who are child free.

Jay Zigmont: Yeah. So the data is rough at best, because the census only looks at people over 55 because of childbearing age. When you look at the actual numbers, I’m seeing some real interesting growth around finance being a reason. I just can’t afford it. I mean, let’s be real. $18,000 a year or so to have a kid, 300 grand over 17 years. I mean, it’s not cheap. I’m not saying being child free makes you rich. It doesn’t like, it doesn’t fix income disparities. But there is Alaska. But what’s more interesting is some of the growth in the environmental, the political, the discussions. So, for example, the same state of Michigan found 49% of LGBTQ plus folks are child free. And I’ve heard people go, well, it’s unsafe to have a child in the lgbt community in some areas. And I believe I’m down here in Mississippi. I’m, uh, going to tell you, you got to watch. I mean, uh, we just recently sold our house. I had to take all my size down because I was worried somebody know whatever hurt the house or whatever else is, offers less, whatever it is, because all of those political or religious judgments are there. What’s happening is the younger generations are going, yeah, the concept of working 25 years, getting a watch and pension, and retiring is gone. The classic two and a half kids in the white bake offense. And the marriage couldn’t be gone, too. And that’s just kind of a rethinking the american dream. And I don’t blame them for picking their own path. It’s just a different society now than it was for hundreds of years.

Jonathan DeYoe: I don’t know if it’s biblical or if it just comes out of the church, but the go forth and multiply and just looking at the social, cultural norms, the number of people that belong to organized religion has been in decline for 25 years. And I don’t know what has to do with what or what leads what, but it does seem to kind of make sense, even though my practice, most people, majority of people have kids or think about having kids. I think, as you said, there’s a growing number of people who aren’t for whatever those reasons are. So from a planning perspective, what are the key differences between planning for life with kids and planning for life without kids? You mentioned the dying with zero versus leaving a legacy. But what are some of the other differences?

Jay Zigmont: And by the way, your comment there, and I don’t mean to push you, but you just showed the bias. I’m, um, sure you just said, well, or leaving a legacy. Well, here’s the thing. You can may leave a legacy. It’s not a genetic legacy. Right. Child free folks are leaving it a different way.

Jonathan DeYoe: Yes, great.

Jay Zigmont: It’s not better or worse. It’s just different. But see what’s happening? All of that language is exactly the issues we’re dealing with. The other one we deal with is, well, you don’t have a family because you don’t have kids. No, we have a family. It’s just a different family. It’s whoever we make into that family. But I like to start the end and say, okay, we’re going to die for zero. Uh, retirement is not a goal. File might be a goal. Long term care is something you absolutely have to plan for. And same with estate planning, wills, power, attorney, all that. If you really want to see something break, go ahead into the financial or medical system and have no next of kid, the system just explodes. So we start at the end and work our way backwards. The fun part of this one is people go, well, child free folks should have a higher net worth. And the answer is, not really. Single childless women have the highest net worth, over 55 in the US. But it’s by, like two grand over the next group, which is fathers. Statistically, no difference. And part of that is because a giant network is not a goal. The goal is to bring that net worth down. Think about it this way. I just had this client a couple of days ago, mid 40s, did the math. They have $3 million or so. And I said, okay, if you don’t care about passing on my next generation, we put a plan in for long term care. We get long term care, insurance, whatever it is. Every day you work is going to an estate you don’t care about. They’re like, what? Well, it’s true. Like, your money’s growing, you have to bring it down. You talk about save withdrawal rate, we have to go that plus some, um, you have to bring it down so that the government doesn’t get your money. Because at ah, mid 40s with 3 million, by the time you’re done, you’re probably going to be in estate taxes. So you’re working for an estate, that’s not a priority. And that’s why what I do, I call it life and financial planning. I start with, what life do you want to live? Then go to what your finances are, then your taxes. Somebody says to me, well, when can I retire? My next question is, well, do you want to retire? They go, no. Well then why are you asking me that question? But it’s just part of that standard process. And uh, the way I say it is, living a life of child free wealth means you have time, money and freedom to do what you enjoy. But here’s the thing. Having all the time, money and freedom is kind of like it’s paradox choice, it’s analysis prowess. It’s, you’re like, what do I do that’s hard?

Jonathan DeYoe: So what are some of those other things that you’re going backwards, you got long term care, you’re dying with zero the healthcare system. I’m just trying to get like a good list of things so people, they know.

Jay Zigmont: So I did an article for kids this, and originally it was like the top 15 things that change your financial plan. And the answer was at the end, it changes everything because your assumptions, your mindset around money is completely different. So look at it this way. If somebody says, hey, my goal is not to pass on an estate, their investing is going to be different because they may not have to take the same risks, they may not have to invest as much, they may invest in themselves instead. A large percentage of my clients have their own small business. They don’t necessarily make a lot of money on it, but they enjoy it. Where they’re making different job choices, they’re making different career, uh, retirement choices, where they’re saying, hey, I’m going to cut back on work now in my thirty s and not make retirement a goal. So when I create a financial plan, what I start with, hey, where do you want to go? And work away backwards. Usually I have to unprogram the standard money mindsets, the 4% safe withdrawal route. I’ll use it as an example just because they know it and I’m like, cool. And that assumes you want to keep the principal. And they’re like, but I don’t want to. I’m like, all right, well, then we have to set up a guardrail system instead or different structures. Life insurance, not a priority for child free folks. We can almost pass it up completely. I mean, with the exception of some corner cases, I don’t recommend life insurance. On the flip side, disability insurance is as important as it comes. And what happens is, as you start seeing the shifts, you could pick almost any area of the financial plan. Taxes, not going to get the child tax credits, not going to get a whole where. It’s going to change every single part of the plan to match that person. And I think the challenge is the secret of financial planning is most people’s financial plans are very similar. We change the numbers, but the overall structure is the same in child free folks. I don’t have two that match. I have people who will come in. I had somebody, okay, my wife’s going back to school. We have an approach we call the garden in the rose. One’s providing support, one’s growing. Wife’s going back to school. I’m, um, going to provide support. She’s going to go do this other career. I was going to coding or something. She goes into it, doesn’t like it, okay? He’s going to go and get a different job and blow up the corporate ladder. Well, that doesn’t work. Well, I want to be a pilot, okay? I want to move to another country, like all within a year. And you’re like, what’s going on? Well, the answer is when you have all the choices in the world, there’s not that set plan. So it’s really a case for ongoing comprehensive financial planning because I’m not surprised when somebody picks up the phone to me and says, hey, yeah, so everything we worked on, that’s cool. I’m going in for direction. I’m m like, well, let’s shift your plan.

Jonathan DeYoe: It sounds like life coaching. That’s why life coaching has become so important, because you’re also trying to help people figure out, given the choices they have, what would they want to do? What kind of things will they try? What are their priorities? All those kind of things. Hey, the thing that I’m not hearing that I was kind of expecting to hear was the question that who’s going to take care of us when we’re older? Does that come up? And if it doesn’t, why not?

Jay Zigmont: So we get it all the time. And I have a love hate thing with this. So when somebody says, well, you’re child free, who’s going to take care of when you’re older, the first thing that says is they’re implying they’re expecting their kids to take care of them. Right? There’s a bias there. And here’s the data. The US census found adults over 55, childless folks, 2.5% had any financial support from their family. So that’s like nothing. But here’s the thing. Same sample, 55 and older, us, 1.5% of parents got any financial support. So you want to make an assumption that somebody’s going to take care of you, you go right ahead. But the numbers don’t back it up. So we take care of our own long term care. M my goal is, by the time I hit 45, to have a plan for long term care. Included in that is their power attorneys, their wills, all that fun stuff, who’s going to be their executor and who they can trust to make those decisions for them. M we just build as part of the plan. So if you ask me, hey, who’s going to take care of you when you’re Older? My answer is my bank account. Like, seriously, I’m going to pay somebody to do it and I have that as part of my plan. The other interesting thing that’s at the flip side of that is, remember, anyone’s asking who’s going to take care when you’re older? Assume somebody else is going to take care of them. So our child free folks are often expected to take care of their parents. I actually have it built into our plan. Step seven is a plan for mom and dad because we call it the financial bingo, which is you don’t have kids, so you can take care of mom like it’s just in a statement and it’s like, well, hold on, do I have a choice? But we talk about setting boundaries and structures and money around it. But what happens is this whole question of who’s going to take everyone the older is one that should be for everybody, not just for the child free folks. But it’s pointed at us because of the assumptions that are in it.

Jonathan DeYoe: Well, and the system is set up that if I’m 90 years old and I’m infirm and in the hospital, family gets to come. I don’t have to identify who will get to make decisions because family gets to make those decisions. That’s the law. So you actually, as someone that’s serving and supporting child free folks, you have to actually guide them. Hey, you have to decide who’s going to do this so the documentation becomes way more important. Or actually, I don’t want to further express bias here. But it may be that I should also be suggesting this because maybe I don’t want my kids to make those decisions, but I don’t need to think about it because it’s just so built into the system.

Jay Zigmont: Well, its bigger question is, which of your kids do you trust to make the decision?

Jonathan DeYoe: Right?

Jay Zigmont: Okay. And here’s the thing. If you don’t have in the paperwork. So I worked as a paramedic for many years, and I went to this gentleman’s house in his 70s in cardiac arrest, and there’s six family members there fighting over whether or not we should resuscitate them. Guess what my judgment is. Paramedic is going to win. I’m going to ignore you. All employees see paperwork. And you know what? That’s heartbreaking. It just is. And as somebody that’s literally over there intubating and working through the process, you got to get your paperwork in place. Now, difference is, I’m telling white people 20s that they got their paperwork in place. And by the way, what they tell them then is get their paperwork and then check their parents paperwork. And they’re like, oh, I probably should have that. Yes. A copy of the will that’s in the safe deposit box that you can’t get access to is a waste of time. You need to have a copy of it on you for your parents. And when you say, hey, it’s all these assumptions, we just go, okay, we have to have a process. And keep in mind, a lot of the child free folks aren’t married, so you don’t even have that spouse that’s there. So we have that piece of paper. Or you might have a long term partner who’s not married who legally has no say unless it’s a piece of paper.

Jonathan DeYoe: Right.

Jay Zigmont: So that’s all just part of the process that has to be built in there. Probably the same thing you should do as parents, but that’s your area.

Jonathan DeYoe: There’s a nice default. Well, nice catch 22. Good bad parts of it. But there’s a default that supports you if you have the traditional family. Right. Hey, in a world of noise, I want you to simplify something for us. So if you’re talking to someone who you know is going to remain child free, what is one thing that they should do to create greater personal financial success? And then the flip side of that is, what’s one thing that they should stop doing?

Jay Zigmont: Yeah. So my answer is, always pick the life you want to live, then make your finances fit it. You don’t have to follow the default path. Now on the flip side, what not to do? Follow the default path. All right, so I’ll use a dumb example of this. Default path is you have to get ten to twelve times your salary in life insurance. Why? Yeah, because people sell life insurance. Don’t follow the default path, have it match you. You only need life insurance if you protect your income for somebody else that needs it. Let’s follow your path. And I think the hard part of that is people go, well, but what is my path? I go, we got to figure that out.

Jonathan DeYoe: Yeah, that’s the life coach. That’s the life coaching coming in.

Jay Zigmont: We call it the child free midlife crisis. So you’ll get a kick out of this. Get your personal, professional, financial goals. Then what? And if you’re a parent, when you do hit those goals, you pass it on to the next generation. You’re taking care of their goals. What happens once you hit your goals? And that’s hard. Our society is not meant for actually catching the car.

Jonathan DeYoe: Wow. So we started off with like a personal story, a little bit of history. I want to kind of end with some personal as well, a little bit deeper stuff. What was the last thing you changed your mind about?

Jay Zigmont: So I was having a debate, and this is going to sound silly to some people, but do I save for the future in the classic retirement or do I enjoy my money now? And what’s the balance behind that? My original answer was, I’m going to save. And then I’m 45. When I hit 55 or 59, I will make my investment and my investment being in a boat, that’s not a really investment, but it’s where you put your money and what you enjoy. Throw money away. And I decided, you know what? No, I’m buying the boat now. Now, didn’t buy the big boat I wanted. I didn’t buy, didn’t get the dream. But to try to find that balance between the two, I will tell you, there’s still some days where I’m like, hey, if I had my money from the boat in the invested in the market, my mind goes, oh, I could make more money. But then on the Saturdays when I’m sitting on the boat hanging out and doing my thing, and just for context, my boat’s name is Thai, two healthy incomes, no kids. It works.

Jonathan DeYoe: Yeah, I love that. And it sounds to me like you just sort of ate your own cooking. You built your life the way you wanted to build it, and then you’ve made the finances match, right?

Jay Zigmont: Absolutely.

Jonathan DeYoe: Which is that says something when you’re following your own path. So last thing here is, what do you, and maybe you’ve already hinted at this, I don’t know. Given the way you spend the weekends, what is the thing in your life that you are the most grateful for?

of the rose approach. We move:

Jonathan DeYoe: Yeah, it’s a privilege, for sure. Tell everyone how they can connect with you. Where do they find you?

Jay Zigmont: Absolutely. The website’s childfreewealth.com all socials child free wealth child free wealth podcast if you haven’t figured out childfree and wealth together, I’ll be on most know Jay, thanks.

Jonathan DeYoe: So much for coming on. I’ve learned a lot today and I hope that the listeners have learned. As you know, it’s okay and it’s actually positive. Thank you for correcting my own bias.

Jay Zigmont: Thanks for having me.

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About the Podcast

Mindful Money
Do you struggle with money? You’re not alone.
Money is a means, not an end. It’s a necessity of life for sure, but more money does not always guarantee a “good life”. Money enables many aspects of modern life, but as a dominant consideration it becomes destructive. 
The paradox is that more time and energy spent on personal finance does NOT create better outcomes. Unlike many other parts of life, we can’t create better outcomes by being smarter, spending more time, or putting in more effort.
Join Mindful Money author and experienced 40-year investor Jonathan DeYoe as he shares stories from artists, authors, entrepreneurs, and other advisors about how they mindfully minimize their need to think about money and get more out of life.
If you aren’t happy with your finances, feel like money takes more time that it should, or want to place your financial decisions into the broader context of your life, this show is for you. 
Each episode will draw the line between the “enough” activities that the academics tell us are additive to family outcomes, and those “little bit more” efforts that take time and sap energy, but do NOT improve outcomes.

About your host

Profile picture for Jonathan DeYoe

Jonathan DeYoe

Jonathan DeYoe is a best-selling author, speaker, financial advisor and angel investor. He is a husband, father and a practicing Buddhist. His simple underlying message brings a welcomed sense of order to financial chaos and restores a calm center to your financial life.