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January links and snippets

January 29, 2020

Links:

A reminder to myself to to keep investing in long bull markets – they can last a really long time!  Anyone who pulled out of the market after the big dip in December 2018 missed out on big gains in 2019.

The existential dread of Mini Brands.   You can buy (tiny) branded plastic junk, wrapped in more plastic. Have we reached peak consumerism? This concept makes me feel a little sick.  I have heard that when you have kids, plastic junk just starts flowing into your life, and it is really hard to stop it. 

I had missed this post from October on GRS, where Jacob Fiske Lund of Early Retirement Extreme gave an update on the past years of his life.  I used to comment on his blog (and vice versa, at least before he became popular).  Despite generally not wanting to make the same choices as he did (RV life, etc.), I very much admired his logical and determined approach, in addition to the way his mind worked and his writing style. It was a pleasure to read this update!  I also read the comments, and thought this response from Jacob was also true:  “The sudden popularity of the FIRE-movement has resulted in […] people jumping into w/o thinking about why they’re doing it; basically treating FIRE as a product they can consume to become happy.”

For parents of babies: Complaint to HR

Snippets: (A snippet is a thought that I might have expanded on and turned into a blog post, had I wanted to spend more time blogging.)

I performed a few unnecessarily financial calculations.

1) Having a second child would delay our FI (w/house but not health care) by 9-12 months. This number is (lots!) smaller than I expected, but (as usual) it is a simplified calculation.

2) Our house in a high cost area delays FI by at least 5 years.  This wouldn’t be solved by renting, it is driven simply by our desire to live in a high cost area. Yikes.  A lot of this is driven by the maintenance budget I hold, which is perhaps more generous than it needs to be.

3) My estimated social security earning will increase by about $1.2k/year for each year worked in the next 5 years, then about $800/year for 5 years, then $600/year for 10 years.. then even less than that. This assumes the current rules apply and I begin withdrawals at full retirement age.

4) The cost of me being a stay at home parent would be approximately $75k+/year, calculated as Gross Income – Childcare – Taxes Saved (estimated). Our taxes saved aren’t as dramatic as some families since I shelter a large fraction of my income already.  This is just the in-the-moment costs, not the salary growth, not the retirement growth, and not the benefits.  (We mostly use T’s benefits anyway.)

I calculated this after reading a post where a SAHP came up with a significantly lower estimated cost for his/her family.  It obviously depends heavily on the earning potential. Also, the assumptions on how much a SAHP can save the family, outside of childcare, seemed inconsistent with my experience, as a working parent who doesn’t hire things out. Would I really have more free time to optimize spending/finances/household if I was a SAHP? Parenting a young child is pretty consuming.

So… this is a cost I’m unwilling to take on until we are significantly closer to financial independence. The cost of reduced hours/reduced salary is something I’d consider, but it isn’t compatible with my job & child care options right now

8 Comments leave one →
  1. January 30, 2020 7:46 am

    We generally don’t dictate what people get our kids, but we did ask my MIL to return the shopkins that she got for DC2. We just can’t even with shopkins.

  2. January 30, 2020 9:17 am

    Thanks for the link to Jacob’s post – I had missed that one. It was good! Buying our townhouse delayed FI, but I think only by a couple years as we were already at 70% to FI in our old place. If/when we leave this city, we would move to a similarly HCOL area, which helps be more okay with the cost of it. I’m glad having a second child wouldn’t delay your FI too much! I don’t yet have my 40 quarters – in 2021 I should – and I’m excited to play around with the SSI calculators once I do!

    • January 30, 2020 10:48 am

      You could probably fake the data with https://ssa.tools, which I thought was superior to the actual SSA website for playing around.

      What really hits the FI timeline for the house is the amount I hold in the budget for yearly maintenance/improvements (and of course, property taxes). I think the maintenance costs should trend down after we’ve finished addressing deferred maintenance, but it makes me more comfortable to hold it. But, renting in a HCOLA would likely not help us much, only moving to a lower cost area. Which is not a plan we are pursing.

  3. January 30, 2020 12:24 pm

    “assumptions on how much a SAHP can save the family, outside of childcare, seemed inconsistent with my experience, as a working parent who doesn’t hire things out”: my calculations reach the same conclusion. I just don’t spend much at all on work related stuff that isn’t more than compensated, by ten fold even, by the income that I make by working instead of staying home. Heck I would probably spend more if I had more leisure time to contemplate things to do. My hobbies are not free, not even money blogging.

    Which isn’t to say I don’t want to stop working. I’d like to. But not to save money as a SAHP.

    I am wrapped up in doing tax related calculations right now, it’s the thing my brain wants to be consumed by as if being intense about it will make the tax forms arrive sooner and be done faster.

    The plastic toys unwrapping craze makes me sick. LOL surprise toys especially. I’m very vocally judgy about them to JB to warn them against wanting them. They want everything they see!

    • January 31, 2020 10:18 am

      Exactly, stopping work is still desirable, but it won’t save the family money by any stretch of the imagination. If I didn’t pay for child care, I’d feel obliged to take LO to a bunch of activities/play dates, and probably have more developmental toys. This can be low cost and even free, but not ALL of it is. And that is just for LO, not even considering my own needs. I could probably reduce food costs a bit, though. (I could do that anyway, but would see it as a priority if I wasn’t working.)

      • January 31, 2020 11:42 am

        My maternal grandma always said she worked BECAUSE she had 7 kids. She was willing to have her salary go for “help”.

        I remember Jean Kerr (an essayist/writer from ~1960s, wrote Don’t eat the daisies that got made into a Doris Day movie) writing something similar– she wanted to sleep in and the only way she could was by working enough to afford a nanny.

  4. February 3, 2020 5:41 am

    I’m glad you posted the link to Jacob’s update on GRS! Even though I found his views a little extreme, I always found I resonated with his posts more than say MMM. Good to hear he’s doing well.

    I ran the numbers at some point and, once we have two children, it makes short term financial sense for my husband to be a SAHD (day care costs are bonkers). Luckily that’s actually a thing he wants to do. The big question is how hard it’ll be for him to return to work afterwards. His boss says people do it all the time in his field, but still feeling cautious.

    • February 6, 2020 10:49 am

      That’s cool that he is interested! We’d have to have at least 3 in daycare for a SAHP to even begin to be on the table from a financial perspective – and I can say 3 kids won’t happen, much less 3 of daycare age. Even 2 is not really the plan at this point. A career break would make me nervous too. It annoys me how little support there is in society for career breaks and part time work options to get through the young parenting years.

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