Kids & FIRE
TLDR: Kids and FIRE - what is the impact, motivation and how to explain post FIRE life
We had this very interesting conversation around kids in one of FIRE telegram channels. The question was posed by someone relatively young at the start of their career around 25 years old.
How does having kids impact FIRE?
How do you explain post FIRE lifestyle to kids and does it have an impact on their motivations in life?
Both very good questions.
Kids & FIRE
Without getting into a philosophical bend on the meaning of life and propagation of our genes discussion, let us first tackle the financial aspect of raising kids.
There is no two ways about this - raising kids is expensive.
Back when humanity was primarily a agrarian society the more kids you had, you had more hands in the farm which help with your ability to grow more. Also humanity is plagued with a variety of diseases and there was very little that could be done to protect the kids. So the families tend to be larger to account for both.
But in the current era most families tend to stick with 1 or 2 kids, with the odd exception of 3 or no kids.
What does it cost?
The cost of raising kids will vary according to
your lifestyle
where the kids goes to school (public or private)
holidays
Enrichment classes
Extra circular activities that you enrol etc.
The estimate that I have seen when it comes to Singapore is 340,000$ per child to the age of 21.
So for two kids that would be 600K, (there is bound to be some costs that can be shared).
This figure is by definition an estimate and things can change a lot based on the above list of variables and your lifestyle.
So should you have kids?
If you start nickel and dime-ing every single expense in your life in the pursuit of FIRE, your life will be miserable. The decision to have kids is something you need to discuss with your partner and arrive at. Finances can be a consideration in that discussion but cannot and should not be only driving consideration. If it is, then your approach to FIRE is all wrong and trust me you will not enjoy your post FIRE retirement.
Having kids will have an impact on your finances, the more kids you have, your overall expenses will go up. This will delay you in reaching your FIRE goal.
Post FIRE & Kids
If you have reached your FIRE goal, great job. You have marked a big ticket item from your goal list as complete. But it doesn’t mean you sit on a beach doing nothing right? You still are doing something that you enjoy doing. The temptation to relax after the mad sprint towards FIRE is true. But trust me you will be bored out of your mind in 3 months. You will want a establish a new routine suited to your post FIRE goals.
When it comes to explaining what you do to your kids, that is trickier. I would recommend the following steps
Share your motivations on why you are pursuing FIRE
Teach them about money, finances and spending
Given them a quarterly / yearly update on your progress towards FIRE (With or without the actual figures, which is up to you)
Explain your post FIRE plans
FIRE doesn’t mean that they cannot buy new clothes or toys or what they want
Allay their fears on their education and future
Describe the positives of a post FIRE lifestyle - Longer holidays, more family time, more personalised attention etc.
Motivate them on financial prudence and encourage them on their FIRE journey early
Conclusion
Having one or more kids will impact your FIRE goal, but that should not be the only consideration when it comes to having kids. So engage your kids in the FIRE journey for successful post FIRE life.
Good luck and Happy Investing
#MyFatFIRE
