Have the net worth, but not the income.

[FUEGO]

As for your main question, it sounds like you have all these assets but can't figure out how to get income from them sufficient to live on. Focus on total return of all the assets. Equities will increase in value over the long term, so the theory goes you can spend a percent or two of your principal and the gradual increase in investment prices will offset your sales. Add that percent or two to the 2-2.5% or so dividends you can get from most equities and you have your 3-4% annual spending.

I can't really talk about bonds much because I don't see them playing a big roll in a 30-something's portfolio since they have real returns right around zero now. Cash has negative real returns (after inflation). But I may have a non-traditional view on investments.

I personally hope to be around 35 when I pull the plug in another few years, and I am planning on having a very high allocation to equities as long as fixed income investments yield around zero in real terms. YMMV of course.

 

[FUEGO]

Regarding kids, here are a couple older threads that exhaustively discuss what it costs (or doesn't cost) to raise kids:

http://www.early-retirement.org/for...ple-say-kids-are-expensive-daycare-58343.html

http://www.early-retirement.org/forums/f30/how-did-kids-affect-your-retirement-plans-49943.html

http://www.early-retirement.org/for...your-kids-to-wear-2nd-hand-clothes-57111.html

And don't forget that if at least one of you in the marriage is ER'd with kids, your child care costs can drop to zero since you can take care of the kid full time.

 

[Walt34]

Don't forget braces!
And wisdom teeth
And higher auto insurance premiums
And ...

Got them done at NIH for free since I was "unusual" and they were developing a technique for it.

By the time the wisdom teeth had to be pulled I was on my own and paid it myself.

When I was 16 Dad told me to get a job to pay the additional premium, which I did.

There are workarounds....

 

[kombat]

No offense to any parents here, but I always roll my eyes whenever I hear a parent enumerate all the ways in which having children has diminished their quality of life, but then inevitably finish off by saying, "But they were worth all the expense, suffering, and sacrifice."

Don't you kind of have to say that? What's the alternative? Admit you made a horrible mistake that you can't undo? Goodness, what would the other parents think if they heard you admit you regret having children? You'd be run out of the PTA!

 

[beowulf]

IMHO, the whole ER/economic argument about whether or not to have kids is kind of silly. Either you and your spouse want to have kids and be parents or you don't. If it comes down to how it will effect your plans for ER, then you really don't want them and should take a pass. People who earn $500K a year have kids and people who earn $20K a year have kids. They adjust their lifestyles to make it work.

 

[MichaelB]

A few (hopefully final) comments on the financial impact of children. According to a Fed study recently released (here) (discussion thread here) couples with children have greater incomes than couples without children. Their net worth is lower, which makes sense (at least to me). The variable that most affects net worth, however, is not children but college education. The additional net worth than is enabled by college ($170K) is much greater than the additional net worth of childless couples ($78K).

The message is that what matters most is college education.

On a personal note, I have never known anyone that made a choice about family based solely or even primarily on cost or finances. The desire for children was always driven by other deeper motives.

 

[Dimsumkid]

Braces and wisdom teeth are not 100% certain expenses that will have to be incurred. Odds are not all of the kids will need all of the procedures. And they may be partially covered by insurance. And even if we do incur the expense, it is a one time expense.

Just got braces yesterday for DS, cost was $6900+ and private insurance doesn't cover this. We've been talking to a few friends for referrals, surprised to find out braces have been recommended (and billed for) more than 1 time.

 

[Bestwifeever]

No offense to any parents here, but I always roll my eyes whenever I hear a parent enumerate all the ways in which having children has diminished their quality of life, but then inevitably finish off by saying, "But they were worth all the expense, suffering, and sacrifice."

Don't you kind of have to say that? What's the alternative? Admit you made a horrible mistake that you can't undo? Goodness, what would the other parents think if they heard you admit you regret having children? You'd be run out of the PTA!

A couple of times we tried to return them but I had lost the receipt. Man was DH mad at me.

 

[REWahoo]

IMHO, the whole ER/economic argument about whether or not to have kids is kind of silly. Either you and your spouse want to have kids and be parents or you don't. If it comes down to how it will effect your plans for ER, then you really don't want them and should take a pass. People who earn $500K a year have kids and people who earn $20K a year have kids. They adjust their lifestyles to make it work.

Exactly.

 

[2B]

A couple of times we tried to return them but I had lost the receipt. Man was DH mad at me.

I hear you can drop them off at a fire station, no questions asked. That might be especially tempting when they are teenagers but it might not work.

 

[Bestwifeever]

Here you go: Cost of Raising a Child Calculator | BabyCenter

This calculator includes things like a few grand for housing the child--oops, forgot to spend that! Another grand for transportation for 8-year-olds--oops, forgot to spend that! And I don't think the tax breaks are included. Reminds me of the economists' calculation of the value of the stay at home parent.
...

Just for fun and because I hardly ever get to quote myself and to see how far I can derail this thread before it meanders back to its topic, I'm throwing in this story about how much dads and moms are worth in terms of their household duties--$80,000. How did we ever survive.

Report finds wages for household work 3 times greater for women - chicagotribune.com

The website matched U.S. Department of Labor wage data to 13 different fatherly household tasks to calculate the index. Among the jobs were barbecuing, which was matched to the Labor Department's category of "cooks, all other;" killing spiders was matched to "pest control workers" and mowing the lawn was matched to "grounds maintenance workers."

 

[jclarksnakes]

Kids can be expensive. As soon as mine finished college I broke their dinner plates and changed the door locks.

 

[FUEGO]

I hear you can drop them off at a fire station, no questions asked. That might be especially tempting when they are teenagers but it might not work.

At some point they figure out how to get back home on their own.

 

[scrabbler1]

No offense to any parents here, but I always roll my eyes whenever I hear a parent enumerate all the ways in which having children has diminished their quality of life, but then inevitably finish off by saying, "But they were worth all the expense, suffering, and sacrifice."

Don't you kind of have to say that? What's the alternative? Admit you made a horrible mistake that you can't undo? Goodness, what would the other parents think if they heard you admit you regret having children? You'd be run out of the PTA!

There are many websites out there in which parents express regret that they had children. Do a simple search of the words "Children" and "regret" and you find many of them. They are anonymous posts, of course, so those parents won't get run out of the PTA.

Although I knew years before I could ER that I never wanted to have kids, I also know that there is no chance in hell I could ER at 45 if I had kids. That and my life would be miserable if I had kids, besides not being able to ER.