Every parent knows that having kids complicates your financial life. The most recent federal estimate puts the average cost of raising a child born in 2013 until age 18 at nearly a quarter of a million dollars — $245,340 to be exact. And that doesn’t even take into account saving for college.
Your actual cost will vary, of course, according to who you are and where you live. The bottom line, though, is that you’ll need a sound financial checklist when planning for a child. It should address your employer’s family leave policy, as well as anticipated child care costs, health insurance and, eventually, paying for college.
Recently I fielded an interesting question from a young investor: “How can an average college grad accumulate $1 million?”
Now, $1 million is not what it used to be. It is certainly not the ticket to the good life that it was 20 or 30 years ago. But it’s still a really nice down payment on it. Plus, they always say the first million is the hardest.
As a species, humans are woefully ill-equipped to be successful with their finances.
Thousand of years of evolution on the savannah have given us a host of instincts that kept us alive. Those same instincts have a tendency to trip us up when it comes to financial decisions. The list is long and illustrious and includes stunners such as:
(Or: You ARE a unique Financial Planning Snowflake)
Our daughters Quinn and Rowan are in many ways polar opposites. Quinn frequently takes 30 minutes or more to wake up in the morning, and all she wants to do is snuggle. Rowan just as frequently wakes up smiling and laughing. Rowan has light-colored and textured hair. Quinn was born with a full head of dark hair. The list of differences goes on. The fact that my daughters are so different frequently fills me with wonder and amazement. And I can’t wait to see what unfolds for them in the future.
Our daughter Quinn was born with a full head of luxurious, dark hair. Unlike most infants, hers never fell out. Over the years, we let it grow. Everyone complimented her on her long hair.
Last month we cut it all off.
October takes on a different twist with two young children. We spend most of our time discussing the merits of Halloween costumes: Princess, Lady Bug, or Butterfly, oh my!
Life is never boring in the McCann household.
This quarter, I thought I would share an equally exciting topic. My most common piece of advice…
Sumer is here and the weather is beautiful in San Jose. The McCann clan has settled into a blissful summer routine. We had lots of family fun last quarter and are looking forward to a relaxing summer. As relaxing as things can be with two children under the age of three!
The markets have been relaxed lately as well. Every potential global upset has produced a “Meh, whatever…” from the stock markets as indexes repeatedly reach all time highs. Pundits, however, have no shortage of things to talk about. Is it just me, or does everything seem to have a partisan slant lately? You can get your liberal news, your conservative news or your funny liberal or funny conservative news. But you can’t just seem to get… news. Maybe I’m being nostalgic, but I just don’t remember so much of an agenda back in the Walter Cronkite, Tom Brokaw and Peter Jennings days. Which is unfortunate, because to be successful investors it is best to have a clear-eyed view of the investing landscape. Which brings me to my topic for this quarter…
Dear Clients and Friends,
The sun has finally come to San Francisco! If you're not familiar with the pattern of seasons here in SF, we have finally entered our sunny and warm fall season. It's a relief after our extremely cold and foggy "summer". In addition to the wonderful weather, I have additional good news to report. If you haven't already heard, my lovely wife Colleen is pregnant with our first child! She is due October 18th and we couldn't be more excited! We've been busily nesting, arranging, preparing and simplifying our home in preparation for the coming whirlwind of activity.
Dear Clients and Friends,
I hope you are enjoying your spring! Wasn't it Tennyson that said "In the spring a young man's fancy lightly turns to thoughts of ... finances." Maybe I'm just remembering it wrong. Certainly there has been a lot going on in the world. In a few short months, the sentiment on the US market has turned decidedly more positive. There is increasing consensus from economists and pundits that recovery in the US is tentatively taking hold. Meanwhile, in what can be considered a big flip-flop of sentiment, many developed and emerging markets are suddenly seeming a lot more risky. From debt problems in the Euro zone, to unrest in the Middle East and North Africa, to a hot real estate market in China, risks seem to abound in the world. Watching events play out should certainly remain interesting. I am confident that a globally diversified and disciplined investing program will continue to provide a sound basis for clients to realize their financial goals.
On a more personal note, the current change of seasons is probably prompting you to dust our your closets, pile up your donations for the Salvation Army (tax deductions!) and generally blow the cobwebs out of your home. Of course, there is always more to it than just taking a load of junk down to the recycling center...
Dear Clients and Friends,
Happy Holidays! I hope this note finds you in good cheer. Normally, I send this update shortly after the close of the quarter, in this case I would publish the Q4 update in early January. However, since the topic of today's letter contains information on tax planning that may be helpful, I thought it would be advantageous to get the information out to you before the end of the (tax) year. You might be quick to point out: this leaves me free to enjoy the holiday without needing to work on a quarterly update. But I'm sticking with my tax year story.
I have been diligently following the debate on extending the Bush era tax cuts, since it has a bearing on Bootstrap clients. During the debate, there were many critics and supporters of raising taxes for families making more than $250,000. It struck me - if you are so inclined - that a great way to register your opinion would be: just give the money away. This thought led me to today's subject: charitable giving.
Note: The contents of this site are general in nature and not intended as specific investment advice. All investments are subject to risk; including loss of investment value. If you have any question regarding investments or concepts in these pages, please consult with an investment professional.