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January 16, 2020 | Kids

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.

I have no kids. Forty-nine years ago I married Dorothy to be with her. Not to have a family. She was good with that. If you get through this life with one true, forever friend, she once told me, you’re lucky. I got mine.

Why do most people have children?

Historically, it made great sense.  Farming families needed hands and backs. Having children was like creating loyal employees you didn’t need to pay.

Tribes and cohesive societies needed to thrive, protect their turf, survive. Numbers were critical. Children give us a way of passing on culture, values and purpose.

Religions need fresh adherents. Size matters to the faith leadership. So organized religion has always made motherhood and parenting godly.

Mostly though, people have kids just because they want to. They replicate and relive their own experiences as children. They’re wired to reproduce. Nature is all about the propagation of a species. In case you were not so inclined, the divine powers made sex. It’s fun.  And guess where that leads you?

Of course people love their offspring. Sacrifice for them. Turn parenting into a life-long job. It gives many their sole or greatest sense of meaning and accomplishment. Not a week passes I am not astonished at the lengths parents will go to in order to cushion their offspring from the realities of life.  Look at the legions of young adults at home these days. It’s historic. We coddle and protect our spawn even when they’re far from youth.

Children are expensive. Zero to 18 costs about a quarter million, all in, studies show. But it’s not just daycare, clothes, food, sports, toys, programs, bail and schooling. Many maternity leaves are unpaid. Lots of new moms decide nurturing their child trumps a paycheque. People buy houses when they have families, even if the kids don’t care. They load up on needless insurance out of hormonal guilt. They eschew mobility and job opportunities because they don’t want a six-year-old to leave her friends. They eat into retirement savings to keep a 28-year-old cocooned at home. The economic sacrifices are endless.

On a larger plane, human reproduction has forever changed the earth. When I was born there were a little over two billion people. Now we’re pushing eight billion. My parents had four kids, which was normal. Now the fertility rate is 1.6 per woman, and the average family is 2.5 people. As women have become universally educated, more critical to the economy and equal in all regards, motherhood has waned. This is most evident in the developed world. As a vibrant middle class explodes in developing nations, the same trend emerges. The fertility rate in China now equals ours, and births are falling by two million a year.

So humans evolve. Now that we’re all talking about climate change, living in a world where half the animals have perished over the course of my marriage, that must be good. Eight billion cannot become twelve or sixteen without dystopian consequences. Why would anyone wish to birth children into a dying world? Perhaps we have turned that corner. If so, it will be an improving global standard of living, more education and economic opportunity that does it.

By the way in Canada we have a negative birth rate. The population would be steadily declining, were it not for immigration. Look at government policies. We pay people – actually quite a lot – to have children. The child benefit has helped remove millions from the tax roles. Kids are as good for the economy as they are tough on family assets.

In fact the decision to have a son or daughter is probably the most profound financial one people ever make. It ripples through every aspect of daily, professional and matrimonial life, and lasts decades. And yet it’s the one that’s most emotional, least logical and often taken as granted. Like breathing.

If you have a family, consider this advice from a guy with no skin in the game: plan for it. Utilize the tax-free growth of an RESP. Collect the free grant money. Don’t go out and load up on the wrong kind of insurance. Don’t buy real estate you can’t afford because of junior. The kid can be a happy renter. Try not to helicopter. Don’t forget your own financial well-being and retirement savings. Ask adultlets at home to pay rent, or the utilities. Good training. Only fair. Move if your family will be stronger financially. Kids adapt. Realize that having a big educational nestegg for your child is worth more than annual trips to Mexico. Teach them what schools don’t. Ethics and (of course) finances.

There. You’re all set.

By the way, Dorothy told me I’d be a complete moron if I wrote this blog. “I’m trying,” she said, “to save you from yourself.”

What’s your best friend for?

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January 16th, 2020

Posted In: The Greater Fool

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