AMA Q&A Part #4 - Is FIRE and Having Kids a zero sum game?
Question on whether FIRE and having children is a zero sum game. The short answer here is, yes, having children will make attaining FIRE more difficult, but is it a zero sum game? No.
Why does having kids make FIRE more difficult? These are the 2 main reasons for me.
1. Additional cost from schools, enrichment classes, additional mouth to feed, medical, insurance and the list goes on forever. This can easily come up to 5k per month or even more, depending on how many kids you have, what schools they go to, health issues and etc.
2. The chance of Geo-arbitrage goes out of the window. 10 years ago I dreamt of having a million dollars portfolio, then retire at 40 in Thailand or something with my then gf/now wife. Well, I achieved the million dollar portfolio and a fully paid flat. I could have just rent out the flat, and stay ultra comfortably in Thailand now living off the rental+ dividends .
For the 9 months that I lived the FIRE life, I set a budget of 5k per month (based on my annual yield). This is only sufficient for myself and to support 1 child. I didnt make any adjustment to cut any spending as I wanted to maintain the same quality of life as when I was working.
The other kid was financially supported by my wife who was gainfully employed.
So, there you go, it's still possible to FIRE with kids but you will need to think super long term. End of the day, it's all about the cost. Kids will give you a different kind of joy (and pain as well.)
1 tip to all my young friends planning for FIRE. Plan for it with the "worst" case scenario of having kids. Dont plan based on what you think you will do 10 years later. Your mindset will change, and accidents can happen to derail your DINK plan. If you still dont want kids 10 years later, then congrats, you would have a very robust retirement plan.
I am speaking from experience. Wife and I were so super sure about not having kids when we first met at 20 years old. Now we have 2. Planned, not accident. haha.
All the best!
Aiyo...Happy RI Mate, same here same here....whaha. My wifey told me that she does not want kids after marriage as she is only interested in her career...so if I cannot accept this fact, the marriage is off...so I told her I am fine with no kids...even better mah. As fate will have it, we ended up with 2 kids too. Huat Ar!
ReplyDeletelol, sounds like 2 is the magic number~ Yeah, my friends will always comment that I am the last person to have kids. I ended up having more kids than them. haha. They are either 0 or 1.
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