‘I grew up poor’: My wife and I have a $1.2 million real-estate portfolio, and $225,000 in income. Are we financially secure enough to start a family?

My wife and I have been married for 12 years and have not started a family yet, with the exception of our two Labradors. We both are in finance, and have several years of technical experience in our professions.

We have a $1.3 million dollar real-estate portfolio that has positive cash flow, roughly $225,000 in income, and have a $125,000 investment portfolio that would be labeled by professionals as very aggressive, along with retirement accounts that exceed $100,000 and are invested in low-cost index funds.

I am beginning to experience work fatigue, and don’t think I want to sustain the mental drain furthermore. We want to start a family and thought planning this stage of our life would be easier. But now, at times, it feels like we are behind in building wealth for our future generations, as well as creating the next generation.

We have been told “there is no perfect time to start a family,” but it is starting to feel like that time is now, coincidentally. We want to be as active as possible with our future children’s development, and feel fortunate enough that we could have one of us home full time and sustain our current lifestyle.

I guess my real question is, when it comes to financial security, when is enough actually enough? I grew up poor and am constantly striving to save, invest, acquire and repeat to the point where it seems obsessively excessive.

Dog Dad, Currently

Dear DDC,

I have good news and bad news.

Few people have enough money to have children, but they do it anyway. And you earn more than three times the median income of the U.S. Most parents do it one day, one week, one month and one year at a time. Start a 529 account when you bring your first child home, and name yourself as beneficiary until the day your child gets their own Social Security number, then change the listed beneficiary. 

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I have more good news and bad news: If you have work fatigue today, brace yourself for a rollercoaster of a ride if/when you decide to start a family, and sleepless nights in those early years. But as with most jobs, if you really enjoy it and you’re getting as much from the job as you put into it, you will hopefully sleep as long as your young child does.

Here’s another dollop of news — and this too may need a spoonful (or two) of sugar to help the medicine go down: Assuming you are in your 30s now, given that you have been married for 12 years, it will get more expensive to raise a child the longer you wait. You will also need to factor in the age at which you wish to retire and how that may be impacted by their college years. 

The Brookings Institution, citing U.S. Department of Agriculture data, recently estimated that the cost of a middle-class family raising two children until each child reaches the age of 17 would — when adjusted for higher inflation as the years roll by — total $310,605, up from a previous 2017 estimate of $284,594. The means a family will spend $26,011 more to raise a child to the age of 17.

“Other parents may decide to make trade-offs, whether that means having fewer children, moving to less expensive areas, or working longer hours,” the Brookings researchers added. “Prospective parents are faced with these tradeoffs in part because, unlike other advanced nations, the U.S. provides far less assistance in the form of child allowances, child care, pre-K, and paid family leave.”

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You’re not alone in your procrastination. “These higher costs may lead many prospective parents to wait to have children or decide not to have children at all,” the Brookings report said. In 2021, a Pew Research Center poll noted that 44% of non-parents of child-rearing age said that they were unlikely to have children someday, up 7 percentage points from 2018.

Here’s something to help alleviate your anxiety: The career website Zippia created this tool for people who are considering having a first child. It aims to give them an idea of whether they’re financially ready. The “Should I Have a Baby?” calculator will ask you to input your household status, income, region, insurance and any existing debt or credit-card payments to determine if you can “afford” to have a child.

We are all products of our childhoods. You grew up poor, and may have a residual fear of losing what you have. It’s never a good idea to make investment decisions — buying or selling — out of fear, and it’s also not the best idea to forego having a family due to the same feelings of financial insecurity. Even if you won the lottery, that unease would sooner or later be replaced by something else.

Finally, aside from the “miracle of compounding interest,” one of the most common ways to build wealth is through real estate, so keep doing what you’re doing. You own your own home, and you have investments that will continue to grow. This is a decision that you are making together, you have a dual income, and you do have choices. That’s a luxury not everyone can afford.

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You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com.

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The Moneyist regrets he cannot reply to questions individually.

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