Childfree Wealth Podcast is a show hosted by Bri Conn and Dr. Jay Zigmont, CFP®, focusing on finances for childfree and permanently childfree individuals. The show covers a wide range of financial topics, including budgeting, investing, saving, and planning for the future. In this episode, Bri and Dr. Jay use their expertise and experience to provide listeners with practical advice and strategies for building wealth and achieving financial independence.
You can expect to gain a deeper understanding of how to navigate the unique financial challenges and opportunities that come with being childfree. Whether you are just starting your financial journey or are already well on your way to achieving your goals, this episode offers valuable insights and actionable advice to help you build wealth and secure your financial future.
Resources mentioned:
Like the show? Leave us a rating & review. If you want to join the conversation, email us at podcast@childfreewealth.com, follow Childfree Wealth® on social media, or visit our website www.childfreewealth.com!
Stay up to date with Childfree Wealth® by signing up for our newsletter here! Schedule a meeting with a Childfree Wealth Specialist® here!
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Disclaimer: This podcast is for educational & entertainment purposes. Please consult your advisor before implementing any ideas heard on this podcast.
Childfree Wealth Podcast is a show hosted by Bri Conn and Dr. Jay Zigmont, CFP®, focusing on finances for childfree and permanently childfree individuals. The show covers a wide range of financial topics, including budgeting, investing, saving, and planning for the future. In this episode, Bri and Dr. Jay use their expertise and experience to provide listeners with practical advice and strategies for building wealth and achieving financial independence.
You can expect to gain a deeper understanding of how to navigate the unique financial challenges and opportunities that come with being childfree. Whether you are just starting your financial journey or are already well on your way to achieving your goals, this episode offers valuable insights and actionable advice to help you build wealth and secure your financial future.
Resources mentioned:
Like the show? Leave us a rating & review. If you want to join the conversation, email us at podcast@childfreewealth.com, follow Childfree Wealth® on social media, or visit our website www.childfreewealth.com!
Stay up to date with Childfree Wealth® by signing up for our newsletter here! Schedule a meeting with a Childfree Wealth Specialist® here!
Instagram | Facebook | LinkedIn
Disclaimer: This podcast is for educational & entertainment purposes. Please consult your advisor before implementing any ideas heard on this podcast.
Bri
Hey, everyone, we're back. We've previously talked about financial independence, retire, early retirement and financial independence live early this week, we're talking all about achieving financial independence. So, Dr. J, what's the secret to achieving financial independence?
Dr. Jay
I think if I wanted to know the secret to financial independence, I would go on tik-tok and look at these thousands of different posts on there that tell you how to do that, right?
Bri
Yeah. TikTok. Absolutely.
Dr. Jay
Okay. Seriously, if you go on TikTok or Instagram and you say, hey, what's the secret to financial independence? There's at least 100 people trying to sell you something to get you there. Well, it's IULs or crypto or real estate or, you know, taking a loan or… Have you seen those?
Bri
Yeah. Have you seen the latest TikTok? It's, “Financial gurus be like: take $20 from the LLC you made in the morning and go buy yourself a Mercedes. DoorDash for the day and then go buy an investment property…” and just all of these things that it goes on and on. It's quite funny.
Dr. Jay
That sounds about right. And okay, so I have like a love hate thing with finfluencers as the term goes. And part of it is because people start mixing recipes, you know, a little of this, a little that the other part of it is most of them have no financial background or, you know, certifications or licenses or anything or they're trying to sell you something.
So if you if you see a podcast like this one that says it's the secret to financial independence, you got to look at it sideways because the actual secret financial independence is really, really boring, is doing the right things over time for many years. It is not buying a product. It is not investing in something. It is not taking out a loan to invest.
It is not life insurance. It is getting out of debt, having a budget, emergency fund and saving for the future. That's it. It is nothing further than that.
Bri
Yeah, and that's not flashy. It's like you said, boring.
Dr. Jay
Right? And people go, well, but it's impossible. No, it's not impossible. It's hard. It's not easy. It's harder when you are barely making ends meet. But it's not impossible. It's about doing the right things over and over and over. And I hate the term right, because what's right for one person isn’t what is right for another. But it's about doing the adulting stuff of finance over and over and over.
And I say over and over, because you can't just get it right once and call it a day. So let's pull this apart. The first step is get out a budget. Why? Cause you got to tell your money what to do with it. Yeah. My mother always said if you had a $20 bill in your pocket, it finds something to do or a hole in your pocket and it's gone. And that's true. And it's even worse now with credit cards, because we could just swipe and you don't even notice. Like you could tap and you don't even realize you can. You can pay for something without even taking your phone out nowadays is like you just walk by something and you pay for it.
Bri
Yeah. And the whole watch thing, paying with your watch.
Dr. Jay
Oh, yeah. Like, so if you don't… If you don't give your money a job, forget it. Yeah, it's gone. And by the way, got to remember, you started with Amazon one click. They figured out how to get the money from you fast enough. It's getting faster and faster. And what they're realizing is, if I make it easy for you to pay, you're more willing to do it.
Bri
Absolutely. That's one of the secrets of marketing. That's my background, is remove that friction so people buy.
Dr. Jay
Cool. So when the budget we're trying to cause friction.
Bri
Yep.
Dr. Jay
Now budgets are like diets. Diets, there are hundreds of them out there. And the best one is the one that works for you. I don't care which app, which structure you use. Bri, what do you use for budgeting?
Bri
I use the free Google Sheet budget template.
Dr. Jay
That works. We'll also link that we have a money management system. The one I use that looks at my shows codes and won't. You can do You Need a Budget (YNAB), Mint, EveryDollar, whatever app you use I don't care. Pick a budget and stick to it. Now, here's the thing. The first month when you budget, it will not go well. It just won't.
Something will go wrong. The hot water heater blow, the transmission blows the target. Six something I happen. The whole point is when it comes to financial independence is we just make improvements our budget every single month. The key is your budget tells you both what you can and cannot spend money on. Now we all have our bad habits.
Mine is Amazon. You know, if you want to know if you have a bad Amazon habit, the test is do you know what's in the package when it comes to your door? Now we have a little delay here to the middle of nowhere. So two day deliveries are probably closer to four. Unfortunately, things show up here four days later and I'm like, What did I order?
That is not a good answer.
Bri
Yeah.
Dr. Jay
So you want to get our budget and we'll come back to we'll do a separate episode on budgeting. But you need to have budget. If you are as a couple, you need to budget together. Now you get have separate financial plans, you can have separate accounts, but you want to have a budget for the overall for the house, for the expenses.
You need to have some type of discussion about where we're spending our money. So I've seen some couples like, “Oh, I'm going to be financially secure, so I'm going to make them pay for everything.” Like that's not that's not going to fly. I even see people, well, we put on their credit card so it doesn't count even though they’re both paying off the same credit card. Really? Play whatever games you want.
Bottom line is, I bring in X. I have to spend X no more, no less. So we've got a budget. You also hear it called, you know, $0 based budgets and other things. Bottom line is, beginning the month, you need to have an answer. And then my recommendations every single week you check to see how you're doing.
Because if you wait to the end of the month, it's too late. Yeah, yeah. So I check every week, kind of go, where's it going? Good, bad or ugly. And usually the one that I have to adjust is eating out. You know, dining out kills a lot of budgets. And I'm like, oh, last week was rough. This week we need to stay in and cook. You know, it's a balancing act.
So you work that through and I'm not hating on people for eating out too much or the old avocado toast trope at this point. Like it's not the avocado toast, but what it is, is you don't have a plan for your budget, your money, you know.
Yeah, you can save money. I mean, my wife and I dumb example, she likes Starbucks. I bought her an espresso machine and the Starbucks coffee. Guess what? She can make it at home for nothing.
Bri
Did you buy the cups, though? That's my wife. I got the cups, the specific disposable cups for when she leaves the trips. Otherwise, she doesn't like to make it at home.
Dr. Jay
I don't have to go that far because my wife likes using a reusable cup, so it works perfect. But I mean, it sounds silly, but it can save you a good amount of money. I don't care where you save. I don't care where you spend as long as you have a plan for the first step of financial independence. Get on a budget.
Second step, get out of debt. Now, Bri's a marketer, so I'm going to hate on marketers for a minute, and I'm not hating on Bri. I’m just hating on marketers in general. Marketers have taught us that there is what's called good and bad debt. The key is they're both debt. You owe people money for stuff. They say, well, student loans are good debt.
Go ahead and ask anyone right now with a six-figure student loan. If that's a good debt, the answer is no.
Bri
No, they’re drowning.
Dr. Jay
Right. They were buying a house is good debt. Well, they just launched 40 year mortgages, which means you're not going to make any progress. You're just going to pay interest for your entire time. Well, then guess what? You might as well just pay rent.
Bri
Yeah.
Dr. Jay
Good versus bad debt. Ignore that. Debt. Bad. So if you have debt, get out now, people will fight me on this and that's okay. I'm in the no debt camp because the bottom line is, whatever percentage you're paying in interest, if you pay it off, that's a tax free risk free return on the money. Credit cards, 20, 30% interest.
You pay those off, you’re getting 20% of your money. You're not going to beat that in the stock market. Pay off your debt. Those finfluencers who say, hey, you should take out a loan and 10x your money and ughhh, they're not pricing in the risk and all the other stuff. And by the way, if their method really worked, they wouldn't be teaching you how to do it they’d just do it themselves.
And by the way, life insurance is not going to do it either. An IUL or whatever today's product they're trying to sell.
Bri
You, Jay, you're hitting on some hot topics there.
Dr. Jay
Oh, infinite banking. You're buying an insurance product to get your money back.
Bri
Yeah. You don't need to do that.
Dr. Jay
Pay off your debts and don't buy anything fancy.
Bri
Mhm.
Dr. Jay
Now we'll come back to the investment, that's a separate topic and maybe we’ll have to do a whole one on why not to buy IULs and some of the other life insurance policies, but you got to get out of debt and to get out of debt you have to make it a priority. So here's how you do this first step lock all of your credit cards so you can't use them.
Now, some may sound a little harsh. It is. Here's the bonus with locking your credit cards. If you lock your credit cards, you can't use them and no one else can. No stealing it or whatever. And it also gets rid of subscriptions because they can't bill to you. Used to be before COVID, the hardest to get rid of was a gym membership.
Cancel the card. It usually gets rid the gym membership like you know.
Bri
Yeah.
Dr. Jay
So first thing is you got to stop taking out more debt. Debt allows you to steal from your future. If you want to be financially independent, you can't be using debt. Now, once you get your credit cards paid off, we can have a separate discussion on if you pay it off every month and the points. But the first step is to get to zero debt, which by the way, most Americans may never get there in their lifetime.
It’s sad to say, but the hardest network to get to is zero, where you owe nothing to anybody.
Bri
Yeah.
Dr. Jay
So people go, Well, what about my student loans? Yeah, pay those off too. Now, if you're on like a public service loan forgiveness, you have a plan to pay it off over time. I'm okay with that. But you got to get rid of them. You got to get rid of the debt. It's part of your plan. And you know people talk about, I need to feel secure with my money. Well, the way you feel secure with your money is to have money, not to be paying it to somebody else.
Bri
With the student loans you brought up good topic. What about people who have like the federal student loans and they're waiting on what was supposed to be a $10,000 forgiveness, but who knows if that's going to happen? What do you say there? Do you say put in a high yield savings account and pay it off if it starts again or?
Dr. Jay
Just I'm good with that plan. Put it aside. Student loans are gonna be the last thing you pay off anyway, but if you're waiting for the restart, put the money in a high yield saving and once they restart, dump it all on the student loans because you're not paying any interest rate this second. But don't make that excuse are going well.
I'm hoping in the future they pay off some loans. Yeah.
Bri
They've been talking about that forever.
Dr. Jay
Yeah, they've been talking about for decades. Okay. It's not going to change. So that is something you can have to pay off now. By the way they suck. I mean, like, that's it. There's no other technical term behind it. You’ve got to pay off the debt.
The one thing people will debate on me is whether I should pay off your mortgage. Look, I got a mortgage at two and an eighth. I can make more in a high yield savings account. Okay, you keep your money in high yield savings, but once the high yield savings comes back down, you should pay off your mortgage. Yeah, it's a math equation.
You go, well, maybe I should keep my mortgage, but invest in the stock market. Well, then what you're doing is essentially borrowing on your house to invest in the stock market.
Bri
Yeah, we had a long discussion about this one day.
Dr. Jay
We did. And I'm not sure, you know, you can you can argument and say, hey, I want to take out debt to invest in the stock market. You're now doubling your risk. You can actually lose more than you started with.
Bri
Yup. There is risk.
Dr. Jay
So we get on a budget, get out of debt, then we save an emergency fund 3 to 6 months of expenses that gets kept in a high yield savings. Don't invest your emergency fund. Like that just like sits there boring. It's just there incase stuff happens. Then you save and invest. But I've already set all that foundation.
What do you think, Bri?
Bri
I agree with it, and I think it's important to have those foundations set up so you can go forward because if you're not… If you're building on sand, then it's easier for your home or metaphorical home to wash away than if you're building on a solid foundation like rock. And so if you're getting your debt gone and setting yourself up with savings, you're building on rock, then you have a better foundation to start with versus if you're building on sand with a bunch of debt hanging out there.
Dr. Jay
Yep. And once you get out of debt & got that emergency fund, we start investing. That's when people get excited about finance, like they don't like paying down debt, but they like investing. Well, investing and paying down debt is essentially a return, just like investing. So you should be happy about paying down debt, but, you know, it just doesn't have the same psychological fun. Let's call it that.
When it comes to investing, people do have financial independence, like, oh, I have to have my money work. You do. Now, here's my question. I'm gonna throw it to Bri and let her answer this one. Bri, do you want your investments to be sexy or do you want them to work?
Bri
I want them to work, and I don't want to have to look at them.
Dr. Jay
Okay. Simple passive investing works. Here's the rule. I'm going to have all of you follow. You only invest in things you understand. Now, that sounds simple, but understanding investment means you understand what you're investing in, how it impacts your financial plan, and where you keep it, which, you know, like tax advantages, you know, like 401(k) or taxable accounts.
So somebody says, hey, you should invest. I'm going to keep picking on an IUL. Can you truly help me understand what that product does now? But I've studied it. I still don't 100% understand what they're doing besides making the insurance company money.
Bri
Yeah.
Dr. Jay
I understood it. I understand stocks, bonds, ETFs, mutual funds. I own parts of companies or I own parts of in a bond case, you know, money they owe me. That I can understand. Simple passive investing says I don't invest in one's particular stock the way I like to look at it is you invest in three things the whole U.S. stock market, the world stock market and some bonds.
There's lots of ETF can do that. Very low fees. Set it, forget it, come back when you need it. Now, that's super boring and not sexy because you know what? I don't want my stock to go up or down based on who tweeted what today.
Bri
Oh, that's a good point there. Some people have some strong tweets.
Dr. Jay
I mean, you know, the stock market, I know on average over time will go up. I just want to ride that. I want… I want your finances to be boring so your life can be awesome.
Bri
What about this is I agree with that statement. This is something that people said to me, what do I invest in? The stock market's down. I'm losing money. Are you selling? If you're not selling, you're not losing money. That's just the current value. That's like saying your house, you lost money in your house. Well have you sold your house today because the prices are down.
Dr. Jay
Yeah. And what happens is if if your investments are keeping you up at night like you're watching them go up and down, that means either one of two things. Either you don't understand the investments or you're taking on too much risk.
Bri
Yup.
Dr. Jay
If you're riding the rollercoaster and like going to panic sell, you are invested way too much in risk. You know my goal, personal goal is to check my finances twice a year. Getting out. Yeah. This is what my net worth is. Or not. By the way I am not there yet. I'm still struggling, you know, like I check it once a month or once a week, you know, depending on how I'm doing, but I'm in this world, so I get a live up and downs.
But your goal should be twice a year you go, “Yep. Still going in the same way.” Then today's craziness. It won't matter. Yeah. Yeah.
Bri
You're going to. You're going to hate this. And I actually hate this, too. I just did some rolling things over, and I turned on text notifications because I wanted to see when my stuff rolled over. Well, now I don't know how to turn them off. So every day at midnight, I get a text with what my balances. And it is a roller coaster right now and I hate like I don't want to see this, so I need to figure out how to turn it off.
Dr. Jay
But I block that number or something.
Bri
Something like that.
Dr. Jay
Yeah. So remember I said financial independence is boring.
Bri
Mm hmm.
Dr. Jay
I want your money to be boring. People like. Well, but I could. Yes, you could do. Doesn’t mean you should. So I'll give you an example. My own personal investing I do the same thing. Three funds: world, U.S., bonds. The ones I happen to invest in are ESG funds. So it takes out the ones that are like, you know, investing in oil and others.
So there's some options and we'll have a separate discussion now. And I keep 10% of my money for gambling. Now I do this for a living and I’m an investment advisor. You know, it's I do. I really have trouble just being really boring. So I keep 10% my money and I can invest in the individual stocks or whatever. I like this week, by the way, that 10% invest does not do better than the boring stuff.
Bri
Yeah.
Dr. Jay
It is purely so that I don't touch the rest of my money.
Bri
Yeah. Sometimes just have that little play money in there.
Dr. Jay
Now, by the way, if you could just set it and be boring, great as the right answer. I'm like.
Bri
Yeah, don't, don't be playing with it unless you are that was that's something you really feel.
Dr. Jay
Yeah and buy like never day trade because if you day trading kind of a tax bill is more than what you out well you come back to that but the buy set it forget it here's what you're trying to do you're trying to let your money work on itself. You know, we talked about, you know, whatever the eighth wonder of the world where they call it now the cap.
Yeah I would start compounding interest and you know money throwing money is growing money is real money when your financial independence go to point that is called the tipping point where you're making more money on your investments than you are in your paycheck. That is a beautiful point when you look at it for the last year, and I made more money doing nothing than my job.
Now, by the way, it's also a gut check because then you're like, “Well, no, why am I working?” That's a separate discussion. We had a we had a separate discussion on that FILE & FIRE. But you want to get to that point. So here's some measures to know if you're going to take action. What I want you to measure is not your credit score.
Credit score is useless. Credit score tells you how you work with debt. Instead, measure your net worth. Your net worth is a measure of financial independence. The first step is to get to zero net worth. Now, net worth is everything you own, minus everything you owe. So zero net worth means at least a breaking even. I don't owe anybody more money than I owe.
Perfect. That one is the hardest to get to. Most Americans struggle with that and we'll never have a positive net worth when you come out of college. $100,000 student loan debt. Sorry, we with a negative hundred thousand dollar net worth, you’re digging pretty hard to get out of that hole. That's why so low from the second measure.
So yes and zero. Next one is $100,000 net worth. When you hit on $100,000, go take yourself out to dinner. You know, celebrate. You now have enough money that you're like, hey, if I take a year off of work, I'm okay. You all like I'm going in the right direction. And $100,000 is where money starts kind of growing on its own.
It's like growing more and more. You know, the running joke is the first million is the hardest. The second one's easier, so I should just start with my second million. No, no, you can't really do that. But that first hundred thousand, you know, it's actually helping you to have a foundation and it's growing. Once you get $100,000, set it, forget it.
It will be $1,000,000. It's just a matter of time. Now, there's a point somewhere in there where you're going to hit what we call the boring middle. You've gotten out of debt, you got $100,000, and now you're just waiting for your money to grow where, like, if you do nothing, it will be fine. And then people are like, “Yeah, but what do I need to do?”
Nothing.
Bri
Stop touching it.
Dr. Jay
Yeah, that's nothing.
Bri
That's hard.
Dr. Jay
Let it grow. People are like, well, but, you know, in ten years I'll be able to retire or, you know, to file whatever cool. As long as you don't mess with it, then people go, Well, maybe if I got fancy, I could boring. Got you here. It'll get you there. Yes. If you want some good books, Simple Path to Wealth.
There's also the Little Book of Common Sense Investing by John C. Bogle. If you really want to get like technical, there's a book called Random Walk Down Wall Street and Random Walk Down Wall Street says over time, stocks go up and to the right. And really anyone that believes they know why is full of it. Like, it's like like they did all the analysis and they're like, yep, bottom line is set it, forget it, let's do it thing.
Now, while we're talking about financial independence and you want the secret because that was what we started with. It's boring. So what happens then? People go, Well, what about x, y, z app? And I am not going to name any of them here that says this app can get me to pay down my debt further or invest or you know, like gives me like confetti going when I buy stocks or rounds up this or all of those are tricks that are trying to make boring stuff fun.
But here's the thing. If you don't have a plan, & you're not following it. They're just cool tricks. And usually what happens is then I get like, you know, meet with them and they go, I've been on such and such an app forever. And I look at what it's investing in and I'm like, “Okay, whatever, you paid a lot of fees, but working with it” or like, “Oh, I pay down this credit card a little bit here.”
Cool. You know what would’ve worked better if you had focused on it. Just done it. Now, if an app works for you, fine, but gaming making a game is not going to make it any faster. If you can master the boring stuff and let it be boring, you will achieve financial independence. Now, if you're barely making ends meat, you first got to get past the rent and ramen stage.
You got to get enough money that you can get there. But budget. Get out of debt. Save & invest. Over and over and over. it works. And it's just not sexy.
Bri
Not at all. And it's it's not flashy. It doesn't catch people's attention as quickly.
Dr. Jay
So. All right, praise the help me. So you're the marketing expert. How do we make something as boring as this interesting and then, like, fight the algorithms to make it work?
Bri
I naturally just get really excited about finances. So I think.
Dr. Jay
Okay, you're special.
Bri
I have a little bit of bias there, but talking about it and just educating people that it can actually be really easy to do it and you don't need all these apps to do it for you because it's rather simple. But getting that education out there, talking about it and like you've mentioned before, influencers who don't have certifications, well, they can talk about it, but like you and then soon to be me, we can't talk about things in the same light because we've gone through and got education and have these certifications.
And so doing what we can to talk about it and showing up where the other people are, it's really important. We just have to get our faces out there. And so that's my answer for you.
Dr. Jay
Yeah, I don't know. Everybody has to find their own answer. But just keep in mind boring works.