Wealth Podcast Post

Child Free Wealth with Jay Zigmont

George Grombacher October 21, 2023

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Child Free Wealth with Jay Zigmont

LifeBlood: We talked about child free wealth planning, the different financial planning considerations for couples without children, some key areas to be mindful of, and how to get started, with Jay Zigmont, CFP, PhD, child free wealth expert, and author.       

Listen to learn how many people have decided to remain child free!

You can learn more about Jay at ChildFreeWealth.com and LinkedIn.

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Our Guests

George Grombacher

Jay Zigmont

Episode Transcript

george grombacher 0:02
Jay sigma is a CFP and a Ph. D. He’s a child free wealth specialist doing life and financial planning for child free and permanently childless people. He’s also the author of portraits of child free wealth. Welcome, Jay.

Jay Zigmont 0:17
Hey, thanks for having me. George,

george grombacher 0:18
I’m excited to have you on. Tell us a little about your personal life more about your work, why you do what you do.

Jay Zigmont 0:26
So my wife and I are childfree. And it was one of those things where I, my background is actually in healthcare and coaching in academia. And I went to become a CFP. And I realized there was never once mentioned in any of the CFP literature about being each offering. It’s like, it just doesn’t exist. And I started researching this and saying, Well, how weird are me my wife. Now, we’re both PhDs. We’re weird by nature. So you know, maybe we’re weird for another reason. But like the how where we are, because we’re childfree and the life living and come to find out somewhere around about 20 25% of the US is child free, but yet it’s completely ignored. Since it’s one of those areas. Yes, there’s very little that’s new and finance. But this is one of those. I don’t know, pioneering areas.

george grombacher 1:09
All right on. Well, I’ve got three kids. And I can tell you that it certainly has an economic impact on you, Jay.

Jay Zigmont 1:17
Well, it’s funny because you always go, Well, your child freeze, you must be rich, like a money fairy that comes in, he just drops off checks. You know, income disparities are still there. But you’re right, it’s about 18 grand a year for kids on average? Times three, you’re running up the bills?

george grombacher 1:34
For sure. For sure. So, all kidding aside, so 20 25% of United States adults are child free. So that is that is a big, that is a big number. So you had the thought of why are we talking about this? Why? Why do you think we’re not talking about it?

Jay Zigmont 1:53
Well, I think part of it is there’s just this assumption, oh, you’ll change your mind. Which is not the case. I mean, from my book portrait chapter, while they interviewed people that are 21 We’re getting sterilized. So I mean, like, this is not like, uh, you know, just a random thought they have these people that don’t have kids aren’t planning on having kids. And it’s just one of those things where it’s like, hey, you know, we can just do the same financial plan, you’ll just take the kids out, that’s not true. Or, hey, you know, this is just a phase. No, that’s not true, either. And if you actually look at the data, when we get to millennials, and Gen Z, the percentage, they’re saying they’re going to be childfree are much, much higher. And the people were like, Yeah, but they’ll change your mind. I’m like, No, I don’t think so. I mean, we’re talking about people that, you know, that I did a study to look at why people choose to be child free, and most of them have more than one reason, very well thought out, starts with, you know, hey, just didn’t want to have kids finance, economics, politics, environment, medical reason. I mean, good, good reasons. My wife and I just had the chance of dying if she gets pregnant made our decision. Pretty simple. But I think there’s just this assumption that, well, maybe they’ll just change your mind.

george grombacher 3:03
Yeah, it’s people putting their values on other people, right? Because I, it’s obvious, but I always wanted to have kids. So why wouldn’t everybody else always want to have kids?

Jay Zigmont 3:12
Well, it’s funny. My wife and I have lived all across the US. We’re in the northeast, people were kind of like, Yeah, whatever. You don’t want kids your choice. Get to the Midwest, people were like, well, you know, you really need to, we’re not living in the South. And there’s no other choice. Like you have to have kids. You know, and I live in Mississippi in a post real world. And it’s the politics of it are quite challenging. I mean, it’s, it’s just, you know, our governor public, Jana said, Well, we’re not looking at Banning contraception yet. Like, yeah, okay. Well, definitely want to impose on people. So.

george grombacher 3:47
Yeah, yeah, there’s, there’s there’s a lot going on there, Jay, that we’re probably not going to be able to tackle today. But so we can just create the same plan. Just take out the kids. Why? Why doesn’t that work?

Jay Zigmont 3:59
Well, let’s start at the end. Yeah. So if you look at most childfree, folks, they want to die with zero. Yeah, their goal is not to pass on money to the next generation. Well, if you’re not going to pass on money to the next generation, most financial planning kind of falls apart. So if you’re if you’re a financial planning nerd, we do these things called Monte Carlo simulations, which is the chance you’re going to run out of money, and you know, 99% chance you won’t run out of money. Well, that’s a 99% chance of failure for Joffrey person. So that changes everything. And then we go to the next step and say, well, most childfree folks that I work with don’t really want to retire rather than approaching fire financial independence retire they’re approaching file financial independence, live early, where they’re trying to find the dimmer switch at work and work life balance throughout their life and, and it just keeps going on and on and on to the basic assumptions of finding answers don’t fit like even a simple one buying a house. Well, if you’re not going to stay in the air, you don’t need the school system by house a choice not a requirement, but that’s a core Arizona standard financial planning.

george grombacher 5:05
So lots of important stuff.

Jay Zigmont 5:08
Yeah, I mean, it’s, it’s, you know, I did it once I did an article that was doing it for kitsis.com on beach calm helping people reach out free population, it originally just held 15 days of being childfree changed your financial plan, and then I like, couldn’t stop at 50. So like, just keeps going,

george grombacher 5:25
it just keeps going. I get it. So that’s, I think that that is a really, I find it to be really interesting, the whole fire thing, work life balance, we’re talking a lot about where we want to work, how we want to work, where we want to live, where we want to live. And certainly, when you have children, your flexibility, at least from my experience is, is a lot less it’s it’s it’s very different. So being able to have these conversations with with yourself about it, and then with a potential spouse about it about what’s most important. Do you find that people have have come to the decision about we’re not going to have kids? And if one partner has on the other hasn’t? How does that conversation go? Or how do you have that conversation?

Jay Zigmont 6:22
The way I say is if you’re still debating having kids, I’m not the right financial planner for you. But obviously, I don’t plan until you’ve decided your child, right? There was an interesting person in my book, who happens to have got married, decided they were child free. And then sometime later in the marriage, she changed her mind. And it’s a really interesting topic to this to discuss. And he said it this way. He said, he decided, yeah, okay, we’ll try to have kids because he’d rather, you know, him be miserable and whatnot. And it was really one of those kind of debates, do we stay together? What do we do when, in actuality, in the end, because of fertility issues didn’t work out. But it’s one of those that the best answer I’ve ever heard is having kids it has to be too enthusiastic, yeses. If one person’s kind of well, that causes issues, you know, and that’s hard. You know, it’s finding that right match. I call it, you know, compatible baggage. We have very compatible baggage coming to marriage. It’s more than just kids. It’s finances, life, everything else. But it has to be too enthusiastic. Yes.

george grombacher 7:26
I think that that’s a great way to describe it. Certainly, Relationships are hard. And then you throw in some other people, it’s going to make it a lot harder. And then if you throw in some extra people, and one person didn’t really want those extra people then probably not going to be a successful family unit or relationship or anything else. So

Jay Zigmont 7:45
well, we get people always ask childfree, folks, well, would you regret it if you don’t have kids? And I might answer I hate to say it is little, little snarky, is I’d rather regret not having kids than regret having kids, you really can’t change your mind.

george grombacher 7:59
Yeah, sometimes little snarkiness. Is, is is is I think, appropriate. So it’s, I think, appropriate. In terms of wanting to spend all the money, I’m sure that Well, I don’t know. Don’t some folks have charitable community type desires?

Jay Zigmont 8:20
Well, yeah, if you actually look at the data, the the foundations that raise money, they’re really good at understanding who gives them money, who doesn’t let’s just be real on that, you know, they’ve got a data science and they figured out childfree people give a higher percentage and a larger amounts. Cool. That’s one way to do it. But it’s about different options, when we say is living the life of childhood wealth means you have time, money and freedom to do what you enjoy. So for example, I’ve had people in their 30s that can cut back on work, because the member said they didn’t wanna retire, they want a different life. They’ll find a different career and enjoy throughout their life, and then invest the money in themselves, rather than just passing it on when they die. It’s also a question of your goals, if you want to just raise money for charity. Cool. I have other people that are like, Yep, I’m going to take a job at a nonprofit making, you know, whatever 20% of what I would have made in a commercial area, and help them throughout my life. And that works, too.

george grombacher 9:12
Yeah, I appreciate that. So I am the victim of my own sort of bias or blind spots here. I’m thinking it’s going to be a man or a woman that you’re working with. But I’m sure that there’s plenty of people that are same sex. Do you have thoughts on that?

Jay Zigmont 9:30
Yeah, so the study, there’s a study out of Michigan that looked at adults over 18 And what percent are child free, and they found about 20%. Were child free by choice? 5% were childless, not by choice. And they found in that same sample, about just shy of 8% were LGBTQ plus, but a lot of the LGBTQ plus population 49% were child free. So you know, nearly half. And it’s interesting in the LGBTQ plus population that seems to be this guy. have a pretty sharp split that people definitely not having kids and definitely having kids. And there’s a little less of the crossover, you know? Well, that happens. It happens.

george grombacher 10:09
Yeah, I appreciate that. What are. So we talked about, obviously, retirement, buying a home. And he talked about a list of 15 things that grew to be a lot more than that. For people who are listening to this, and they say, You know what, I’ve never even thought that I should have specific financial planning, because I’m different than a lot of people the traditional market. What are some of the some some other things that they should be thinking about?

Jay Zigmont 10:40
Yeah, what I tell people is, ask your financial planner, how your plan is different because your child, right? If they say it’s not different, well, that’s that’s a bad sign. You know, if they say you can change your mind, that’s even worse. If they say, Well, I don’t know. Look at it. That’s that’s a that’s at least odd. And the way I look at it is with childfree. Folks, we need to figure out their life plan first, then their finances than their taxes. To example, somebody comes it calls me and says, hey, when can I retire? I usually reply and say, Well, do you want to retire? Well, they say no. Okay, well, no, how you asking? When can I retire? What happens is the standard financial plan in Georgia, I can take your financial plan, and most parents plan to plan is just a different set of numbers. Three kids, two kids, college numbers change. It’s just a different set of numbers. But it’s all the same plan. Child free, folks, I have people who already have three different sets of goals in the same year, you know, oh, I’m gonna be a pilot. Today, I’m gonna go back to school, I’m gonna do this. Okay. And that’s normal, to the point where the plan needs to, to reflect that, you know, I do ongoing financial planning intentionally because of that, you know, even some simple things, you know, well, you tend to tell 10 to 12 times your income for life insurance, not if your child frame, because if nobody’s relying on your income, you don’t need life insurance. But you do need disability insurance. Normally, other ones we get commonly as well, who’s going to take care of you when you’re older? Well, I’ve got people in there, Michael is in their 40s, to figure out a plan for long term care, either money set aside or insurance, so they can handle that. Now, the common one is childfree, folks are expected to take care of their parents more often. It’s the old you don’t have kids, so you could take care of mom, you know, all of these things get in there. And we have a program we call the eight no baby steps for child free folks. And one of the Step seven is plan for mom and dad, because that much of an impact. You know, what happens is, if you look, you got that pile of books behind you look at any financial book, it all assumes kids are in there. And what ends up happening is if you’re getting advice online, you’re getting advice that doesn’t match your life. And that’s a challenge.

george grombacher 12:48
Yeah, those are, those are major, major, major planning opportunities and necessities that if you were just looking at traditional stuff, you would probably probably gloss over the importance of disability insurance. It’s important for everybody, but very much more so probably for what we’re talking about here. And then having a plan for care as we age. And I don’t want to say that you’re getting stuck with mom or dad, because your brothers and sisters have kids, and it’s going to be easy for you. But that sounds like that probably does happen more than more than we might think

Jay Zigmont 13:23
it does. And I think the hard part of it is all of those things are just built into the standard financial planning and financial planning software. Like I actually have to literally like hack the planning software I use to make it work for childfree people, because you have to take all these pieces out and you’re like, Oh, now how do I create a software that says, I want to die with you over 70 net worth constantly go up? A great example of this is if you look at somebody that charges on a percentage based AUM basis, you know what they’re charging a percent of your assets, they want your assets to go up your entire life? Well, if you’re child free, and you want your assets to go down, there’s a conflict of interest in there that I’m not sure you’re gonna be able to solve.

george grombacher 14:02
Yeah, I appreciate that. So you are, you are blazing the trail in a lot of respect and created a new category of financial planning that that means you need different software and different this different that. So as you’re thinking about how to make different How are you thinking about charging, you mentioned AUM, how do you how do you charge for your services?

Jay Zigmont 14:27
I’m advice only I charge on either a monthly retainer or hourly basis, the way I work because I meet with my clients every month, we work on it for about an hour, hour offline. And when what my rule is, is when you no longer get it, I want you to fire me because they come and go because what happens with many childcare folks is we’ll get a good place get their plan in place. They’ll be good for six months, 12 months, a couple of years, man like oh, by the way, I want to move to Portugal and you’re like, oh, let’s redo your whole plan. You know, and, and it’s I intentionally use that based upon the model, because if somebody’s trying to dive a zero, device only model is a bit less of computational complex somewhere, but you’re not, you’re not incentivized for their their net worth to constantly go up, I actually find more than half of my clients, I’m talking about how to spend money rather than how to save money, which would go against some of those classic financial planning models.

george grombacher 15:25
That’s a fascinating thing in today’s world, that people are struggling to figure out how to spend their money versus hold on to it or just have enough of it.

Jay Zigmont 15:35
Well, I mean, so here’s how we did the law, the guy was your plan, we come up with a plan for long term care. Yeah, well, we put money aside or insurance, but also scary to 70. And then some cash cushion at the end the cash cushion and usually reflects kind of the clients comfort level or whatever they want to go. And then we look at their numbers, they go, Okay, how much do you have to spend to spend the rest of your money. And it’s interesting, I actually called the blueberry problem where I have these people that have been savers forever, they buy them, they buy the frozen blueberries, because they’re dollar cheaper than the fresh blueberries. And I’m like, just buy the damn blueberries, you’re fine. Like you’re okay. And it’s really, really hard. Because yeah, money guilt comes in there, and, you know, different mental models and the behavioral side, to say, Hey, I just need to save, I need to work harder, you know, you can just enjoy your life. And it’s interesting on my intro meetings and other hours to get to know people, a third of them ended up in tears or close to because they realized, oh, they feel like they’re heard. And there’s another option. And that’s the hard part is that shift of saying, Okay, here’s something that the planet fits you versus the standard life plan. And by the way, that plan says, We got to go spend money, which by the way, can be given to be invested, whatever it is, but we need to have a plan for that.

george grombacher 16:54
As you’re having conversations and working to bring on new clients. People talk about the importance of having a niche, and being really specific with with the person or the kind of person that you’re serving. How is how is this being received?

Jay Zigmont 17:13
Yeah, so this is one of those like, it’s like I’m I’m a PhD in research. And one of the rules of research is, if you find a gap in the research, the gap may be there for a reason. Like, that’s just not a reason to do it. So like when I started off on this, like, maybe there’s a reason why I had somebody the other day, I was in a Facebook group with financial planners, and we’re taught di was zero. And he goes, Well, those are clients that Nick Murray would tell you to go away from, and he’s one of the big numbers guys on us. Because, you know, they’re out there running. Like, no, I’m running to them. So I started this, and I’ll tell you, it’s been awesome. You know, I didn’t, I wrote the book that a lot of I do a lot of press. And on the same day MarketWatch did an article calling it the best new idea in retirement, and Wall Street Journal did a full article on it. And you know, what, market, watch the Wall Street Journal, do a full article on childcare, financial planning, you do pretty well after that, like, hey, you know, like, I just gotta be honest that, you know, I’d be in all the numbers, all the goals I want to get to, I’m actually having a bigger issue that I’m trying to talk to financial planners and say, hey, please come help this population? Because it means 20% of the US. I can’t handle that many people.

george grombacher 18:19
Right, right. No matter how good your systems are, Jay.

Jay Zigmont 18:26
You know, I spent half of my time talking to child free folks about their finances and the length of time talking to financial people, child free, folks. And I will tell you, it’s been entertaining. In some cases in Stan Oh, there’s when I was at a conference about a year ago, and guy up front says we’ll deal with people without kids is the worst. Like, you can’t say that, buddy. Because if you said that about any other minority group, could you do better dealing with blank is the worst, the whole conference would shut down. But that bias so strong, and what he really was saying was estate planning for childfree, folks, and some challenges was gonna be Power of Attorney executive. He didn’t get to that part. But that’s really what he meant. And I’m like, can I just get people to stop saying stupid stuff? We’ll start there, and then go and then working on the rest?

george grombacher 19:07
No, that’s a bigger problem, Jay? Oh, oh, man. I think that that is awesome. At least at least people are being honest. You know, I’d rather I’d rather than be be honest about things, but he just hadn’t thought about he or she hadn’t thought all the way through anyway. Or maybe they had. Why am I guessing?

Jay Zigmont 19:28
I think what happens is, it’s called a pro needless bias, the whole society as a bias. You’re gonna have kids, it’s just part of the family plan. You go to school, you get married, you have kids buy a house, all this stuff is built in being able to point out like, well, child free people want families. Oh, no, no, no, we have families, just different families who don’t have kids. Oh, you’re not going to leave a legacy. No, we’re gonna leave a legacy. It’s just not gonna be a genetic legacy. Like, it’s just the terminology and the structure. You know, I had somebody that worked for me. I was one of them healthcare. She stops me in the hall. She says, I’ve been thinking about you and your wife. You’re both really smart. You really need to have kids. I’m like, Who the heck do you think you are? But, but that’s just like the, the stuff that we deal with and it’s, you know, it’s okay. I mean, I had somebody else. I heard a story about another financial planner who started to serve childfree folks and he he had kids himself and stopped because like at his church, he was getting bashed because well you hate kids. You hate it. Yeah, I’m like, good. It’s not we don’t hate kids. It’s just it’s a different way of life. It’s not better or worse different.

george grombacher 20:32
Yeah. Well, I love it. It is a dealing with fascinating to be on the on the bleeding edge of a new kind of planning and everything that kind of goes along with that good, bad and ugly and indifferent. So I appreciate it. Well, Jay, thanks so much for coming on. Where can people learn more about you? How can they engage? Where can they get a copy of portraits of child free wealth?

Jay Zigmont 20:59
Yeah, and get a free copy ebook child free wealth.com/book You can also visit our website Chapo trap wealth on all the socials except for Twitter because, you know, they he said childless folks shouldn’t have a vote. You know, just kind of have fun with that. And the Joffrey wealth podcast that we’re Yep, podcasts. Excellent.

george grombacher 21:16
Well, if you enjoyed as much as I did, share your appreciation and share today’s show with a friend who also appreciates good ideas, go to child free wealth.com and learn more about this discipline of planning, and then go to child free wealth.com/book and pick up a free copy of portraits a child free well to check out the child free wealth podcast wherever you listen your podcasts. Thanks again, Jay. Thanks for having me. Till next time, remember, do your part by doing your best

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