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  #81  
Old Posted Oct 3, 2019, 12:47 PM
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Originally Posted by Nomad9 View Post
*person disputing this*

What kind of expenses does that “conservative” calculation take into account? Private school tuition? A car per kid in high school? Overseas vacations? College tuition? I don’t think my (middle/upper middle, but frugal) parents spent anywhere close to $1 million raising 3 kids, let alone 1. Maybe taking opportunity cost into account, but it’s doubtful they would’ve invested all of the excess anyway.
Yes to private school tuition (necessary in most major cities), yes to overseas vacations (I couldn’t imagine not taking multiple each year), yes to college tuition. Plus the usual clothes and food, fees for activities, child care (nannies in the early years, babysitters thereafter).

I should make clear that I am talking about a two-income household where both parents are hardworking professionals (working at least 50 hours per week), living in an expensive city with high real estate costs and marginal public schools.

In 2015 the average cost of raising a child in the UK was estimated to be £230k (£250k in London). Granted that was worth more in dollars at the time, but that means the cost in sterling has probably rising dramatically too:

https://www.telegraph.co.uk/news/ukn...UK-230000.html

This estimates $234k in the US (or $285k including inflation, which is the right way to think about it):

https://smartasset.com/retirement/th...aising-a-child

And that’s only to the age of 17, so it excludes college (which could as much as double the figure for some private universities).

Bear in mind these are only averages. They don’t take into account higher costs in certain regions, or in cities (where private school might be necessary), or focus on two income households where both parents are professionals and work way more than 40-hour weeks (meaning much higher child care costs).

It also doesn’t take into account real estate costs (the need for more square footage, which especially in cities is very expensive). The additional interest cost on a mortgage is part of the “cost of having children”. And it doesn’t take into account the opportunity cost if that money had instead been invested, which is also part of the true cost. That $285k invested at 5% for 20 years would be worth more than $750k just by itself.

Add all of that up - the $285k average after inflation (reflecting the rising cost of food, clothing, etc over the child’s early life), plus an upward adjustment for a more expensive geography, plus college tuition, plus real estate, plus opportunity cost, and the true cost is easily $1+ million.
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  #82  
Old Posted Oct 3, 2019, 12:49 PM
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Originally Posted by jtown,man View Post
I think this entire post is a little bias. You make kids out to be nothing but burdens. Simple fact is that men end up making more money when they get married and have kids. Women end up making less, true, but aren't they making like 75% of what men make or whatever anyways?

Seriously, how many parents pay for their kids college or grad school tuition and living costs? I literally don't know anyone in that category. We all took loans, worked, or joined the military.
By what logic do you think men make more money because they have kids?

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Originally Posted by the urban politician View Post
I think 10023 is right, but in typical fashion he is missing the entire point of having children.
I’m not missing any point (child YouTube stars notwithstanding, no one is arguing that children are a profitable endeavor). But most people have kids without any grasp of how much it will actually cost them financially.
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  #83  
Old Posted Oct 3, 2019, 12:50 PM
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Are they factoring in the tax advantages, which are considerable? $1 million sounds high. In Manhattan or Central London, yeah, but I cannot imagine a typical middle class couple in Dayton, OH is spending anywhere near $1 million, even considering opportunity cost.

Anyways, discussions of cost completely miss the point. Having my kid is, by far, the greatest thing that ever occurred in my lifetime. And it's anecdotal, but I find that having children strengthens your focus and makes you a better employee and person.
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  #84  
Old Posted Oct 3, 2019, 12:54 PM
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Originally Posted by Crawford View Post
Are they factoring in the tax advantages, which are considerable? $1 million sounds high. In Manhattan or Central London, yeah, but I cannot imagine a typical middle class couple in Dayton, OH is spending anywhere near $1 million, even considering opportunity cost.

Anyways, discussions of cost completely miss the point. Having my kid is, by far, the greatest thing that ever occurred in my lifetime. And it's anecdotal, but I find that having children strengthens your focus and makes you a better employee and person.
I’m talking about the upper middle class, not the middle class (which would be called working class here). And I’m certainly not talking about Dayton, OH, which is irrelevant to me personally because I would never live somewhere like that.

The additional focus on work because all you care about is your kids is probably true, but to me that is one of the least appealing aspects of having kids. It sounds like a very boring, one-dimensional life.
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  #85  
Old Posted Oct 3, 2019, 1:05 PM
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Quote:
Originally Posted by jtown,man View Post

Seriously, how many parents pay for their kids college or grad school tuition and living costs? I literally don't know anyone in that category. We all took loans, worked, or joined the military.
I'd agree that most do not - at least not all of it, and certainly not in the U.S.

Those parents who do pay for all of their kids' post-secondary education are likely pretty wealthy, and so the overall "cost" of having kids (from a nanny to clothes to tuition) is probably a drop in the bucket anyway.
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  #86  
Old Posted Oct 3, 2019, 1:54 PM
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I'd agree that most do not - at least not all of it, and certainly not in the U.S.

Those parents who do pay for all of their kids' post-secondary education are likely pretty wealthy, and so the overall "cost" of having kids (from a nanny to clothes to tuition) is probably a drop in the bucket anyway.
That’s a wrong assumption.

For the upper middle class, college tuition is something that stretches them financially, but something they do to avoid burdening their kids with student loans. It’s definitely a sacrifice however.
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  #87  
Old Posted Oct 3, 2019, 1:57 PM
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Originally Posted by jtown,man View Post
I think this entire post is a little bias. You make kids out to be nothing but burdens. Simple fact is that men end up making more money when they get married and have kids. Women end up making less, true, but aren't they making like 75% of what men make or whatever anyways?

Seriously, how many parents pay for their kids college or grad school tuition and living costs? I literally don't know anyone in that category. We all took loans, worked, or joined the military.
You don't know anyone whose parents paid for their college? I have been "paying" my kids college tuition since they were born basically (putting money away specifically for that purpose). My parents somehow manage to pay for 4 kids to go to college (3 of them to private universities) on a solidly middle class income (both government jobs), scholarships helped and financial aid but they were paying a huge chunk of their income. Still blows my mind how on earth they managed that on an income way lower than what i have, and I couldn't imagine doing that on my income. The lower housing prices that boomers got lucky with played a big role. Yes, Grad school is another story, almost everyone I have met pays for that themselves (loans).
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  #88  
Old Posted Oct 3, 2019, 2:07 PM
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for the second time now, i listed "#4 have some children" purely for ordering purposes. in no way will having kids make you financially wealthier.

having kids is very expensive and disruptive to your life, and that's why it's a really good idea to have your career (money) and marriage (stability) in place first before making new mouths to feed.

that's all i meant.

if you don't want kids, then super, don't have any. the world absolutely does not need any more children whose parents don't want them.

but we are literally biologically programmed to procreate, so most people end up doing so one way or another at some point in their life. my point was that if you want to have a greater chance for success in life, AND if children will be in your picture at some point, it's far better to wait until you have your education, career, and marriage in place. people who put the baby cart before those other horses needlessly make things more difficult for themselves. that's all.
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Last edited by Steely Dan; Oct 3, 2019 at 7:52 PM.
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  #89  
Old Posted Oct 3, 2019, 2:13 PM
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Originally Posted by 10023 View Post
Yes to private school tuition (necessary in most major cities), yes to overseas vacations (I couldn’t imagine not taking multiple each year), yes to college tuition. Plus the usual clothes and food, fees for activities, child care (nannies in the early years, babysitters thereafter).

I should make clear that I am talking about a two-income household where both parents are hardworking professionals (working at least 50 hours per week), living in an expensive city with high real estate costs and marginal public schools.

In 2015 the average cost of raising a child in the UK was estimated to be £230k (£250k in London). Granted that was worth more in dollars at the time, but that means the cost in sterling has probably rising dramatically too:

https://www.telegraph.co.uk/news/ukn...UK-230000.html

This estimates $234k in the US (or $285k including inflation, which is the right way to think about it):

https://smartasset.com/retirement/th...aising-a-child

And that’s only to the age of 17, so it excludes college (which could as much as double the figure for some private universities).

Bear in mind these are only averages. They don’t take into account higher costs in certain regions, or in cities (where private school might be necessary), or focus on two income households where both parents are professionals and work way more than 40-hour weeks (meaning much higher child care costs).

It also doesn’t take into account real estate costs (the need for more square footage, which especially in cities is very expensive). The additional interest cost on a mortgage is part of the “cost of having children”. And it doesn’t take into account the opportunity cost if that money had instead been invested, which is also part of the true cost. That $285k invested at 5% for 20 years would be worth more than $750k just by itself.

Add all of that up - the $285k average after inflation (reflecting the rising cost of food, clothing, etc over the child’s early life), plus an upward adjustment for a more expensive geography, plus college tuition, plus real estate, plus opportunity cost, and the true cost is easily $1+ million.
Yes, having kids costs money. Though what you are describing here involves doing things "right" - almost perfectly in fact. At least on a material level.

Many, maybe even most parents, have kids and yet simply do the best they can.

Given that at least some kids are essential for society to continue, and that those kids we have collectively should ideally grow up in the best conditions, makes IMO a pretty strong case for the state giving parents a bit of helping hand.
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  #90  
Old Posted Oct 3, 2019, 2:16 PM
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The lower housing prices that boomers got lucky with played a big role. .
no shit.

my parents bought the house i grew up in wilmette, IL (one of chicagoland's nicest burbs) for $27,000 in 1976, they lived in that house for 27 years and sold it for $675,000 in 2003.

talk about luck.

man, i sure hope the home i bought 2 years ago will be worth 25x its purchase price 25 years from now. i never imagined that i might someday own a $10M house
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  #91  
Old Posted Oct 3, 2019, 2:20 PM
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Originally Posted by 10023 View Post
By what logic do you think men make more money because they have kids?
Men with children in their home are more likely to be hired and earn more than those without.

Anecdotally I can tell you that there is some additional drive to provide that seems to kick in after having children. At least for me, it did. So maybe that's part of it. Anyway, children are expensive, but the only families spending anywhere close to $1 million raising them are upper-middle-class families that are paying for all of the toys, vacations, tutors, brand clothes, etc. and a vast majority of families in the developed world aren't anywhere close to being in that income bracket.
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  #92  
Old Posted Oct 3, 2019, 2:24 PM
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Originally Posted by Don't Be That Guy View Post
Men with children in their home are more likely to be hired and earn more than those without.

Anecdotally I can tell you that there is some additional drive to provide that seems to kick in after having children. At least for me, it did. So maybe that's part of it. Anyway, children are expensive, but the only families spending anywhere close to $1 million raising them are upper-middle-class families that are paying for all of the toys, vacations, tutors, brand clothes, etc. and a vast majority of families in the developed world aren't anywhere close to being in that income bracket.
I dunno, this reeks of selection bias to me.
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  #93  
Old Posted Oct 3, 2019, 3:11 PM
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Agreed. London always give me a bit of sticker shock.



Groceries seem much, much cheaper in Europe than New York, and I think maybe cheaper than the U.S. in general (groceries in NYC are much more expensive than the rest of the country). I've grocery shopped in Berlin a few times and spent half of what I am accustomed to spending for similar items in NYC. The price difference isn't even that drastic between New York and grocery stores in other parts of the country.

--- a few 2019 grocery examples:

- artichokes 5 for $2.75 italy market; 2 for $5 usa foodland grocery

- pound of apples in croatia grocery 62 cents; 75 cents per pound at usa winn-dixie grocery

- $3.81 for 1/3 pound chicken breasts switzerland grocery; $3.20 for 1/3 pound organic breasts at usa publix grocery
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  #94  
Old Posted Oct 3, 2019, 3:38 PM
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Originally Posted by 10023 View Post
Yes to private school tuition (necessary in most major cities), yes to overseas vacations (I couldn’t imagine not taking multiple each year), yes to college tuition. Plus the usual clothes and food, fees for activities, child care (nannies in the early years, babysitters thereafter).

I should make clear that I am talking about a two-income household where both parents are hardworking professionals (working at least 50 hours per week), living in an expensive city with high real estate costs and marginal public schools.

In 2015 the average cost of raising a child in the UK was estimated to be £230k (£250k in London). Granted that was worth more in dollars at the time, but that means the cost in sterling has probably rising dramatically too:

https://www.telegraph.co.uk/news/ukn...UK-230000.html

This estimates $234k in the US (or $285k including inflation, which is the right way to think about it):

https://smartasset.com/retirement/th...aising-a-child

And that’s only to the age of 17, so it excludes college (which could as much as double the figure for some private universities).

Bear in mind these are only averages. They don’t take into account higher costs in certain regions, or in cities (where private school might be necessary), or focus on two income households where both parents are professionals and work way more than 40-hour weeks (meaning much higher child care costs).

It also doesn’t take into account real estate costs (the need for more square footage, which especially in cities is very expensive). The additional interest cost on a mortgage is part of the “cost of having children”. And it doesn’t take into account the opportunity cost if that money had instead been invested, which is also part of the true cost. That $285k invested at 5% for 20 years would be worth more than $750k just by itself.

Add all of that up - the $285k average after inflation (reflecting the rising cost of food, clothing, etc over the child’s early life), plus an upward adjustment for a more expensive geography, plus college tuition, plus real estate, plus opportunity cost, and the true cost is easily $1+ million.

million dollars to raise a kid? real estate? college?

come on nigel that fanciful scenario is a sliver of the population.

maybe like a fifth at best?

for one thing by far most people do not even go to college, even stretching the term, much less have their family pay for it.

as far as costs, you could just as easily say a similarly large poverty group on the other end of the spectrum raise kids on nothing. their uncle sam pays. actual reality is over 50% of kids under 18 received some kinds of means-tested assistance.
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  #95  
Old Posted Oct 3, 2019, 5:21 PM
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10023 is citing opportunity cost as part of his $1 million claim which may or many not be true depending on your career path(es). If a couple are both highly paid professionals and the mother takes five years off to be a stay at home mom (and she made minimum $100K on her own) to raise a couple of kids, that's a half million right there in opportunity costs in missed wages.
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  #96  
Old Posted Oct 3, 2019, 5:22 PM
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Everyone seems to be missing my point as much as Steely’s.

Never did I say that my estimate was true for most of the population. I specifically said “for an upper-middle class couple”. Yes it’s a fraction of the population, but it’s my fraction of the population, so that is the math I am looking at if we are to have kids. Especially as someone who is very adamant about staying in the city, about eating well, and about being able to travel (and I don’t mean cruises and all-inclusive resorts).
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  #97  
Old Posted Oct 3, 2019, 5:35 PM
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Originally Posted by JManc View Post
10023 is citing opportunity cost as part of his $1 million claim which may or many not be true depending on your career path(es). If a couple are both highly paid professionals and the mother takes five years off to be a stay at home mom (and she made minimum $100K on her own) to raise a couple of kids, that's a half million right there in opportunity costs in missed wages.
In theory, yeah. But those wages would be taxed higher, and in my anecdotal experience childless households don't "save more" they just spend on other crap instead of baby crap. So instead of baby they spoil two dogs and vacation in the Seychelles or somewhere, and it's a wash.

And child care, the big expense, is partially subsidized by the tax code (you can partially deduct it and pay much of it pre-tax).

And most married professional moms don't completely quit work these days. They usually only do that if dad makes serious $$ or if they live modestly.
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  #98  
Old Posted Oct 3, 2019, 5:43 PM
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Everyone seems to be missing my point as much as Steely’s.

Never did I say that my estimate was true for most of the population. I specifically said “for an upper-middle class couple”. Yes it’s a fraction of the population, but it’s my fraction of the population, so that is the math I am looking at if we are to have kids. Especially as someone who is very adamant about staying in the city, about eating well, and about being able to travel (and I don’t mean cruises and all-inclusive resorts).

your pet niche is what is missing the point of reality. 17% of nyc lives in abject poverty (a record low btw, which is good news) and 25% of children under 18 do. they live in an expensive big city too, adamantly or not.
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  #99  
Old Posted Oct 3, 2019, 6:34 PM
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Originally Posted by JManc View Post
10023 is citing opportunity cost as part of his $1 million claim which may or many not be true depending on your career path(es). If a couple are both highly paid professionals and the mother takes five years off to be a stay at home mom (and she made minimum $100K on her own) to raise a couple of kids, that's a half million right there in opportunity costs in missed wages.
I’m not even talking about lost earnings for the mother (or father). Just about the fact that $10,000 which I spend this year on child care would be worth close to 3x that in 20 years time if it goes into an investment portfolio.
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  #100  
Old Posted Oct 3, 2019, 6:36 PM
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your pet niche is what is missing the point of reality. 17% of nyc lives in abject poverty (a record low btw, which is good news) and 25% of children under 18 do. they live in an expensive big city too, adamantly or not.
That’s great. Nothing to do with my point though.

I am specifically talking about the cost of having kids for upper-middle class households.

Lots of poor people have kids they can’t afford. I’m just pointing out that most of those who are relatively well off would be shocked if they actually considered the math.
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