Childfree Wealth®

Breaking Free from the 9-5: FIRE vs. FILE

• Dr. Jay Zigmont, CFP® & Bri Conn • Episode 20

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Childfree Wealth Podcast is a show hosted by Bri Conn and Dr. Jay Zigmont, CFP®, focusing on finances for childfree and permanently childfree individuals. During the month of May, they are the topics of financial independence & retirement.


In this episode, they explore the concepts of FIRE (Financial Independence Retire Early) and FILE (Financial Independence Live Early) and how they differ. While both are rooted in financial independence, FIRE is focused on retiring early and FILE is focused on achieving financial independence in order to live life on your own terms, regardless of age.


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The Childfree Wealth Podcast, hosted by Bri Conn and Dr. Jay Zigmont, CFP®, is a financial and lifestyle podcast that explores the unique perspectives and concerns of childfree individuals and couples.

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Disclaimer: This podcast is for educational & entertainment purposes. Please consult your advisor before implementing any ideas heard on this podcast.

Bri

All right. Dr. Jay. So we previously talked about what Standard Life Plan is and retirement. Can we talk more this week about FIRE versus FILE? So financial independence retire early versus financial independence live early. Can you tell us more about that and what those concepts are?


Dr. Jay

Absolutely. So just a shout out. There actually is a Childfree FIRE financial group on Facebook. Get a chance to join that Cody runs a good group there. There are a whole bunch of online groups talking about FIRE right now. It is like the topic FIRE is on FIRE. No no really can't go to that, that's too lame.


But financial independence retire early, part of that comes out of people just hating their jobs let's be real on that. Jobs suck and I want to quit my job. Makes sense. And I want to do it early. Makes sense, but to do that I have to be financially independent and I have to retire early. And the FIRE movement, you'll hear it said there are all different varieties of it.


And my thing on the FIRE move is to pick a recipe and stick by it. I don't care which one. There's lots of them. They all work. Yeah, you'll see a lot of people, you know, they like the Boggle approach and how they, you know, pick one specific ETF and just let it run. And I'm being vague because I can't tell you which ones, but you can Google those things and they'll say it and do this and do that.


Cool. If that works for you, great. Yeah. Pick up the book, Simple Path to Wealth. Read it, follow it. You'll get to FIRE. It is that simple. You don't have to make it more complex. But just like everything else, there's like different flavors. So in the FIRE world, it goes from lean FIRE, which my example is that's like eating ramen noodles for your life to fat FIRE, which is like you have your own private chef.


Bri

That sounds like my type of FIRE.


Dr. Jay

I'm okay with that. And somewhere in the middle is chubby FIRE. And, you know, there's all different levels. And by the way, there's no exact math on it. You know, they'll fight over, well, I'm fat FIRE’d and you go, well, but what's your expenses and what's your you know, we talk about a previous episode that a lot of the FIRE groups use, the safe withdrawal rate, which is 4%, which has its own things back and forth.


But let's just use the number and that says if you have 25 times your expenses, that's your FIRE number. So, you know, you can FIRE at that. Well, if I'm fat, FIREing my number is probably five or 10 million minimum, where if I'm a lean FIREing, I might be able to do it for 500,000 or less now mind you…


Bri

500,000. Really?


Dr. Jay

Yeah. So watch this, 500,000 will get you about 20 grand a year in expenses. If you've paid off your house and you're in a low cost of living area, you can do that, by the way, not by much, but yeah.


Bri

That seems real tight.


Dr. Jay

Okay, well, that's lean FIRE! That's the whole point I wasn't kidding about that! That’s you living on ramen noodles.


Bri

Huh? I guess I just never expected that to be like something people are like, “Yes, that's what I want to do.” Yeah. Just very surprising to me.


Dr. Jay

Well, I mean, this is where we start mixing FIRE with minimalists and all that. And I mean, there's ways to do it and I'm not judging. You can do it however you want. You know, we all have different things, you know. So my own numbers, you know, this is what me & my wife have talked about it's kind of like five million's the minimum. Ten is where I'd like to be, which is a fat FIRE number.


And I want to buy a boat and travel the world. And, you know, the difference between 5 million & 10 million is whether or not we have a crew member to help us out. Now, by the way, that sounds a little ridiculous. It is. But I…


Bri

Hey, I don’t think so! I am, I am like ready to hire somebody to buy my groceries today.


Dr. Jay

Well, and this is the question of what life you want to live. You know, the earlier you want to retire, you either need to make more money, you need to have less expenses.


Bri

Yep. Very true.


Dr. Jay

You know, I live in Mississippi, and it's cheap to live here. I mean, cheap. You could buy a house that’s livable for 50 grand. And in other areas, you can't buy a house for less than a half million.


Bri

Okay. So when you say you can buy a house for 50 grand, those are probably like way out in the middle of nowhere, though, aren't they?


Dr. Jay

Yeah, I'm in the middle of nowhere. I have no DoorDash. I have no delivery. I don’t even have pizza delivery. Actually, they deliver one day a week or something like that. But like, yeah, I'm not when I say I'm in the middle of nowhere, I'm 30 minutes from the grocery store.


Bri

What? Wow!


Dr. Jay

You can be in the middle of nowhere and have a low cost of living life. And I mean, it's just a different way of living. You know, my next move, I'll probably live in a city where I can have some DoorDash. Like seriously, I want some delivery, but all of that will adjust your FIRE number. So if you hate your job, you want to quit, you want to retire as early as possible lower your expenses.


Bri

Very true.


Dr. Jay

Now, the one that I start having some issues with is this concept of barista FIRE. Now, barista FIRE is, hey, this is where it comes from. Doesn't mean you literally have to be a barista, but I'm going to go be a barista at Starbucks and get my health care benefits and retire. So I'm going to be picky here. If you're still working, you are not retired.


Bri

Yes, I agree with that 100%.


Dr. Jay

Then barista FIRE cannot exist.


Bri

Yep.


Dr. Jay

Now, yeah, I can see the hate mail already of people, you know, living the life. But here's the thing. From a financial standpoint, a financial plan about retirement is different than a financial plan about still working.


Bri

Because you still bring in that income and not having to pay for those health care expenses, you’re getting it from somebody else.


Dr. Jay

Yep. Really what they're talking about is I want to quit what I'm doing and do something else. I'm okay with that. That's not retirement. See this? This is where it sounds like semantics, but your goal will change your financial plan. And I found this when I was researching for my book Portraits of Childhood Wealth. There are a whole lot of childfree folks that didn't really want to retire.


They wanted to just like cut back on work or like start a business or a nonprofit or do something else. And then they would do that for the rest of her life. See retirement is part of the Standard Life Plan. You work 25 years, you get to watch you retire. You're done. Well, that doesn't fit us. So I coined this concept called FILE, Financial Independence Live Early, and if FIRE is an on/off switch for work, FILE is a dimmer switch. It's about doing the right amount of work at the right time, in the right place, and finding that balance.


And let me give an example of this. So the gentleman book, his name's Ryan. He had retired early and found that it kind of sucked like kind of like, yeah, this is kind of boring, whatever. And the challenge with FIRE folks is always like, what do you do two years after you retire? You know, you've gone through your bucket list.


You're like, Hey, I've done all those. I've done the traveling. Now what? So Ryan said, hey, didn't love it. So he went back, he opened his own company. He actually does some marketing stuff. His rules: Never more than 25 hours of work. Never on Friday. Never before 10 a.m. I'm liking that. What do you think, Bri?


Bri

Those are great rules. I kind of have similar rules for myself as far as days I start and times I start because I think it helps you control a little bit of your life more, especially when you do work for yourself and have the option. And so I'm all with that 10 a.m. don't start before 10 a.m. because I like to go do things in the morning.


Dr. Jay

Yeah. And when I met him, he was packing up him, his wife, and his dog, and they were going to go to Palm Springs and work from there for a month.


Bri

Oh, Palm Springs, my heart's in Palm Springs. I’d like to have a house there.


Dr. Jay

So he was, he's living what I would call the FILE lifestyle. Balanced. He has this idea. And by the way, the downside of FILE is you don't actually stop working and your retirement actually will be delayed if it even exists at all. But he loves it and he didn't use the term FILE. That's my term. But I poked him a bit like, okay, you own your own company?


Yup. I said, So what happens if somebody wants to work with you on Friday? Like, can you turn down that client? And he was on the West Coast and he had somebody in the East Coast that I always wanted to meet before 10 a.m. He's like, yep. I just told him I can't work. I don't I'm not available.


They kept on pushing me for this time for this day. We said nope, we had to part ways as a customer. I’ve got to give him credit because I'm not sure I'm not I'm that good of like pass up a customer.


Bri

Really?


Dr. Jay

Oh, I'm my problem is if a customer needs help, I get suckered in all the time.


I have pretty set hours. Yeah. So Fridays I cut out about 3:00/3:30. But if somebody really needs me, I'm probably going to be there because they need me. And I don't know, maybe that's just my guilt. I don't know what it is.


Bri

Okay. So question with this, do you have email and email notifications set up on your phone?


Dr. Jay

Yes.


Bri

See, that's where you and I differ. I do not have… I have my email, but I have it turned off. So I have to manually go in there and turn it on to look at it.


Dr. Jay

Yeah, you're better than I am.


Bri

Well, you're getting those notifications and then you see it. Whereas like, I just don't see it.


Dr. Jay

Yeah, but that doesn't mean that the people, like, don't need the help or something like. And I literally have a worry list. I have a list of clients that I worry about because wherever they are in their life, what's going on. And I break my rules for those people on the worry list.


Bri

I don't know. Dr. Jay, I’ve got to give it to you. I guess, good for you. But also like boundaries, man!


Dr. Jay

I'm with you. By the way, this is the FILE problem, okay? What happens when you get offered overtime? Whatever you get work. If you run your own company like I want to live a FILE life. I actually made a shift. I had, I had been working more towards FIRE. Yeah. I had date at 59 and a certain number I want to buy a boat and I and the other and I was like, okay, boating is what I enjoy.


I haven't had a boat in a decade. And I broke down and said, you know, you know what? I'm going to buy one now, not the dream boat, you know, a nice one, just okay, enough and go enjoy it. But that delays my FIRE number and that's kind of like my first step towards FILE. Like I was like, I'm going in that direction, but I'll tell you, mess my hand a little because I'm like, that's going to slow down my numbers and mess things up.


I will tell you, funny one. So because we serve childfree folks, we serve DINKs and SINKs, dual income no kids & single income no kids, my boat's name is THINK, two healthy incomes no kids. So on my calendar, it says I have thinking time that is when I go on the boat.


Bri

Okay… let's… I saw this on the calendar and I was actually going to ask you, I was like, wow, you do a lot of thinking. But now that you say it's part, I make so much more sense. Okay.


Dr. Jay

Okay. Bri literally has my schedule over like literally it says thinking time on it. So my wife will be away at a conference. I'm going to go on the boat for the week and you know, that's when I write or do whatever I do. You know, I'm working on writing my second book right now, but that's my thinking time, right?


Yeah. But what I'm trying to do is I'm trying to embrace more of this FILE lifestyle of kind of like that balancing act. I will tell you, it's somewhat harder than FIRE because FIRE is like, I'm just going to go balls to the wall. I'm going to work as hard as I can so I can quit work as quick as possible.


Bri

Hmm.


Dr. Jay

FILE is more of that balance. That's, I don't know, maybe it’s more of a generational thing. Okay, so my generation, I was raised. You always work hard. You know, my parents taught me no matter what you do, you are the best at it. You're going to be the fry cook at McDonald's. You're the best at it. You just always. But that's stuck in my head and that's probably of my own psychosis of, you know, got to be the best that it got to do that.


Well, maybe, you know, I need to shift that. I mean this is part of being childfree is we can do different things differently. Maybe I need to shift into that FILE approach a little bit more. I can see a break. You think I'm crazy?


Bri

I know. I totally get where you're coming from because it's very much like what I was raised to do to, like, on all the time. And I just had some experiences of my life. This is something that everybody knows. But I actually was found unconscious about five years ago and I'm all right. But it was just an eye-opener that I need to like.


I signed my will last week and I'm 25 years old. Like, I hope that is not. And I have to I hope it doesn't have to be used anytime soon. But it really made me realize that, you know, nobody knows what tomorrow is. And it's important to also live and enjoy life now and be around the people that you care about because you don't know if you're going to be waking up tomorrow.


So I got really good with my boundaries after that happened and it was kind of just a wake up call for me, one that I got quite early in life.


Dr. Jay

And, you know, I've had my own wake up calls, but I still am stuck. So, by the way if you want to get like, crazy about this as you go into this FILE/FIRE debate and all that, you start going to like your own psychology and the life plan, the standard life plan. You want to see, you want to mess with somebody, retire at 40, and then they go, “Wait a minute, that's impossible.”


No, it is possible, especially if you’re childfree, right? So it starts like this. We all have these things are inbred in us. And hopefully we don't all need to go unconscious to like figure that out, that we should find a balance. But it's the old school way they used to call it the Protestant work ethic, you know, it's just the way our culture was made, our country was made, is you just got to work yourself to the bone and we need to get rid of that and find a balance.


The FIRE, like it's a psychology of like work really hard and be done. FILE’s like, let me figure out what's important in life. Yeah, we talked about the book Die with Zero sets that balance between, you know, time, money, and health. Let's do that now.


Bri

I 1,000% agree.


Dr. Jay

So I'll give an example of this and she may join us on a podcast in the future. One of my clients is a DINK, dual income no kids, when you have two incomes you can embrace the FILE approach and what we call the gardener and the rose, where one's growing and one's providing support. And in their case, she took a six-month sabbatical to figure out what's important in life.


Awesome if you can afford it. A six month sabbatical. Way to go, you know, and the way I do a sabbatical, you take two months off to watch Netflix, do nothing. And I'm not… literally watch Netflix. You need to stop working then too much for what you want to be and two months to do it. She's writing a novel.


She's got the novel done. She's not going to be a, you know, work on publishing as an author. That's the FILE lifestyle. That's the balance.


Bri

Yeah.


Dr. Jay

Gave up a great paying job to go do it. Set back her retirement technically yeah but she'll write for the rest of her life.


Bri

And she's probably a lot happier.


Dr. Jay

Oh, I can tell you she is.


Bri

Yeah.


Dr. Jay

And you know, I've had other people, you know, embracing FILE. I got one. That's what I doing the AT trail. I got somebody else who's taking a sabbatical trying to figure out what they want to be. I got another one that's balancing this and going, when do I sell my business and when do I cut out? And the answer was, well, I'm not going to cut out my business, but I'm going to spend more money and like enjoy it.


I'm like, okay, whatever that combo is. Yeah, it's something I want to, you know, for somebody, a lot of people want to start their own business or start their own initiative, start their own nonprofit, or follow their dream. I go one going back to school, I don't know all different types of things. Then people go, “Well, that's not possible if I want to retire.”


You're right. Because if you want to retire, you've got to keep going up in the path like the hedonic treadmill. You just keep working more, you buy more. So you work more, you buy more. I call the gerbil wheel just constantly. You're just running it. You're not getting anywhere. But if you can stop and go, “Hey, you know what? Would I be happier if I was making half as much money but working a job I enjoy?” The answer’s, yes.


You know, I call it Marie Kondoing in your life, get rid of the stuff you don't enjoy and focus on the stuff you do. And people go, “Well, that's ridiculous!” Well, it may be but, you know, what? Does the big house and the big mortgage make you happy? No. Well, then sell it. Downsize. People go you can't do that. Yeah, you can. And, you know, if you downsize, you might be able to shift jobs.


Bri

Mm.


Dr. Jay

And that's what people are like, huh.


Bri

That's crazy. I think that is… those are all very good points that are often over thought because, you know, I was watching a show and the person is debating whether or not to sell their home and they said it feels like they're failing because they worked really hard to buy this home, but it's just too much for them.


Why keep it? You don't have to keep any of those things. That is that's the standard life plan liked we talked about in a previous episode, coming and telling you you have to look, nobody said you had to do that. And I sometimes feel that pressure, seeing people buy houses like I don't actually want to buy a house, but the only time that I think I should buy a house is when I see a post from somebody who's bought a house.


So it's very much ingrained and I think especially in my generation where we grew up on social media and we see what people are doing all the time, it can be very easy to say we need to do that too and then go and do those things which delay what we actually want to do.


Dr. Jay

Yeah, and let's be real FIRE is much sexier than FILE on social media. So if I can make here's my great house and here's my private chef and here's my whatever I want to show off. That's a FIRE life. FILE is like, you know what? I cut back. I'm going to work as a librarian for his life because I enjoy that.


That does not show so well on social media.


Bri

Yeah, it's not as exciting to look at. It's not that...


Dr. Jay

That being said, I will say one of the final spins I do see a lot is the nomads. They all live in a camper van, but not always as sexy as social media makes it out to be either. But you know what? Cool sell the house, move to an RV, cut your cost, and do it.


From my book. And somebody he and his wife moved to Colorado are living in RV with their two cats now, by the way, living in RV, that's questionable. Living with two cats in an RV. I don't know. I had a cat, two dogs, so be crazy. But he's making video games and video games are one of those like, you either made no money or a lot of money. There's nowhere in between. And she's working in health care and he's kind of the rose growing at this point they're happier than ever.


Now somebody would look at him. Yeah, but you're living in an RV. If it worked for them, it works for them. Now we can have a separate discussion about like people that live on boats, that's glamorous, but people that live in RVs, that's the same thing.


And I say that as a boat person, but, you know, like, you can find that balance and live your life and for anyone listening, we'll link to taking a sabbatical, the Gardener and the Rose, FILE and all that, all those articles so you can dive in. But really, the question is, “What do you care about?” And for most people, the answer is, I don't care about retirement or passing on money, in the childfree population.


Dr. Jay

So okay, what do you care about? Well, I care about giving back. Go do that now. You don't have to wait until you're 70.


Bri

Yeah.


Dr. Jay

As Bri was calling out, you might not get 70.


Bri

Yeah, you. You just never know.


Dr. Jay

So Bri are you a FILE or FIRE person?


Bri

I have not like, set. I don't think I'm a FIRE person, so I'd say I'm a FILE person. Yeah. Thinking about it, I'm a FILE person.


Dr. Jay

By the way. You don't have to pick one. It's not like, you know, you got to pick a denomination for church, but it's like it just shifts the approach. I will say one spin on FIRE that I do like Cody Garret one of my colleagues over at Measure Twice Planners talks about FIRE, as financial independence recreational employment.


I like that reframing. I don't use that one because people get the FIRE term is just too well known to do that. So I'm challenging people to use the term FILE, although FILE does not sound really as cool as FIRE. I'm with you. Like, you know, like it's the more boring one, but it works. I do wonder. I just wonder, I don't have an answer. Is FILE more of a choice for people who are childfree because you don't have the same requirements, same pressures as somebody who has kids might be? Might be something that's unique to us or more unique to us. I mean, not that parents can't do it, but I think it is an option. And FILE combines very well with Die With Zero.


So if saying, hey, I don't care about how much money I pass on next generation, cool. We'll make sure you don't run out of money, but maybe you can make different choices. The core of FILE when I really dive into this with clients is you can make different investing choices. Rather, investing in the market you can invest in, you invest in, you going back to school, taking time, maybe taking a sabbatical, invest in you, starting a business… You know whatever it is. Yeah. If people go well, is that the best financial choice now. No. It's not is I think bringing really more joy.


Bri

Yeah. I mean that's exactly what my wife and I are doing right now. It is not the best financial choice for me to go back and go through my CFP, but I'm way happier than what I was doing. And so I think people need to find that for themselves, what brings some joy.


Dr. Jay

I don't know. I will tell you, everybody is listening to this in the comments. Share what brings you joy. What is it that really brings you joy in life? And then my next question is, so why don't you do it? You know, here's here's a fun way to do it with your friends go around the room and ask them if if money didn't matter, what would you do for a job?


And now you could do anything you want. And what usually happen, people go around the room. And one of my favorite answers was something wanted to be the bartender at a swim up bar. That's a pretty nice gig. Okay, let's be real.


Bri

I like that. I would do that for a job.


Dr. Jay

I'd be a boat captain, you know, like, think like below deck, you know, I'd be the captain on the boat or whatever. So I go, okay, cool. What? You know, what do you want to go around the next after everybody gives their answers, go have fun, laugh, go around the room one more time ago. So why don't you do that now? And people are like, “Uhhhh Uhhhh…”


Bri

Yeah yeah.


Dr. Jay

If you want to go be the bartender at the swim up bar you might not have a fancy house or a fancy car, but you could have a different quality of life. Go do it. Why don't I go be a boat captain? Because we're embracing Gardener and the Rose. My wife's got her chance right now for the career, but I'll tell you when it's my turn to be the rose, I'm going to be the boat captain.


Bri

Do you have the hat, too?


Dr. Jay

No. My head is way too big for those hats, you know, just. Yeah, it doesn't fit well time. But I do have a shirt that says, “I'm the captain. What I says goes.” So, you know.


Bri

Oh, my goodness.


Dr. Jay

I’m joking with you. But where I'm going with this is we have this discussion. It's a fun one, especially around some drinks. And what you'll find is most people are not doing what they enjoy.


Bri

Yeah.


Dr. Jay

And they'll go well because of finances. And that's where I go, “Bull.” If you're going because of finances, really what you're telling me is, well, I make a hundred grand. I can't give up 100 grand to go be the bartender at a swim up bar. So really what you’re really telling me is 100 grand is enough for you to be miserable?


They go, no. Well, I didn't say it that way, but I'm like [throws hands up]. And then they’ll go, well, but I went to school for all this. That's nice. The choices you made when you're 18 does not have to impact you when you're 40.


Bri

Exactly.


Dr. Jay

Or 25 or whatever.


Bri

Yeah, I did not go to school for finance, I can tell you that much. But here I am.


Dr. Jay

Where I'm going with this is don't make retirement the goal if that's not what you want, make your happiness the goal.



People on this episode

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Dr. Jay Zigmont, CFP®

Host
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Bri Conn

Co-host