Sadly giving up on early retirement and going back to work(financialsamurai.com)
financialsamurai.com
Sadly giving up on early retirement and going back to work
https://www.financialsamurai.com/sadly-giving-up-on-retirement-and-going-back-to-work/
23 comments
Odd to me, I have always been the "fun parent" the kids wants to play with constantly. My wife probably feels like he does, but she basks in it because it's finally time for her to be alone and recharge.
> However, the Fed needs to pivot by the end of the year to prevent a 10%+ nationwide decline in real estate prices.
No they don’t! Think of how many couples are holding off on kids because of the housing prices.
No they don’t! Think of how many couples are holding off on kids because of the housing prices.
Sounds like the bigger listen here is if you want to fire, don’t have kids
Per Brookings, it costs $310k to raise 1 kid 0-18. That doesn’t include college, daycare, and opportunity costs.
If you want to FIRE, don’t have kids. I have kids, they’re expensive.
https://news.ycombinator.com/item?id=33991744
If you want to FIRE, don’t have kids. I have kids, they’re expensive.
https://news.ycombinator.com/item?id=33991744
especially two
If it's going to cost $1,500,000 for two kids to go to college in 12 years, the result will be that almost no one goes to college. At that point, any post-secondary education is going to look good to employers.
Seems logical, but even today, how many families have $250-350,000 per kid to send to college? I'd argue, not many, even among relatively high earners. Yet college applications and enrollments seem to be at all-time highs.
Student loans and later calls for debt forgiveness are the enablers.
Yup, and I suspect that we're hitting the limit of what people are willing to put up with.
Just curious what makes you suspect that now? When 4 years first crossed the six-figure boundary, people were in shock and said the rising costs couldn't continue. Same when tuition averages exceeded $50,000 per year. What, in your eyes, makes today any different?
The number of former students in student loan default or those who are struggling to pay off their debt while trying to "have a life" is becoming increasingly public. I think a large % of students taking out loans don't realize just how difficult it will be to repay. They're becoming more aware of that.
It's a gradient, not a binary switch. As the price rises it reaches a point where there's not enough "oxygen" to continue. More and more people realize it is not such a good deal. That level is a lot higher with government guarantees of course.
More and more people are learning that the large amount of debt they're saddled with to go to college can set them back more than the advantage of a college degree can make up for.
If it is true that a college degree can pay for itself in a few years after graduation, then the amount of demand for college degrees would rise (it's a no brainer to do it right?).
But the production of college degrees is somewhat limited by the availability of positions, and is not infinite. Therefore, if demand rises but not the supply, the cost _must_ rise to match. Therefore, after some time, the cost of a college degree slowly grows to match the potential future value of having that degree (fuelled by free debt).
I think at some point in the last couple years, the cost of a college degree has, on average, grown to almost match the future value in earnings accounting for the debt repayment.
But the production of college degrees is somewhat limited by the availability of positions, and is not infinite. Therefore, if demand rises but not the supply, the cost _must_ rise to match. Therefore, after some time, the cost of a college degree slowly grows to match the potential future value of having that degree (fuelled by free debt).
I think at some point in the last couple years, the cost of a college degree has, on average, grown to almost match the future value in earnings accounting for the debt repayment.
I only see this with people trying to check the “college education required” box, rather than trying to acquire a marketable skill. From my perspective, this was always the case, but there doesn’t seem to be any “cultural knowledge”. My naive assumption is that college recruiters/counselors are pushing people, who don’t have marketable interests, into debt, and the students don’t know any better, for whatever reason.
I agree that more people think that way than 10 years ago. However I still think it's a tiny portion of the college-age population.
The college wage premium was inverted during Covid. As of now, you net more over your entire life if you do not go to college.
The problem with that conclusion, even if true (I'm sure if you dig into the study you'll find all kinds of assumptions that you may or may not agree with) is that it's based on average earnings. And as we all know, everyone believes they are above-average, or their outcomes will be above-average. It's easy to read a study such as yours then dismiss it because it includes graduates with degrees that many people assume have little earning power.
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“OK, this is my belated April Fool’s Day post[...]”
The $1.5 million number is a joke
The $1.5 million number is a joke
Not really. If your kids go to an Ivy League school that could be $75,000/year for tuition alone in 13 years, (assuming $40k/year/person for tuition now plus 5%/year increases), plus room and board and spending money for 5 years (assuming they both go for Masters Degrees) you're looking at maybe not $1.5 million but over $1,000,000 for 2 children.
Feels like a trivial message ("yeah you need a regular job to raise a family unless you have FU money") packaged as a grand experiment. On the flip side, single folks or those without kids have been retiring for a long time (without calling it FIRE)
I think that's a waaaaay bigger issue for him to address than the financial ones. Maybe there's truth to that experience but going back to avoid your children makes it seem like something is seriously out of whack here.