From time to time I get emails from readers of my blog asking me for some advice or suggestions regarding their situation. Most of them are not unusual and a general advice does suffice. So usually they are not worthy of a blog post. But every once in a while you get some really interesting questions and that’s exactly what happened a few days ago. A reader wrote to me asking for some advice and I responded. Then I felt like it may be useful advice if there are others in a similar situation. Also I wrote a lot about my own thoughts about why I am unschooling my daughter and what the repercussions could be. So I thought I should copy-paste my response here in my blog. With the reader’s permission I am reproducing our conversation with some information redacted.

Email conversation #1

Hi, Just came across your blog, and read most of the important pages. Loved it! We have 2 kids. Started late but want to work towards Fire. As per your calculators, we are ready to retire after 5 years.

reynd: That’s awesome news! Retiring early is something very very few can do, so consider yourself lucky even though you feel you have started late :).

I have a question for you. So you have enough corpus to retire, but do you ever worry about your child? I tend to think that ok I can retire in 5 years, but perhaps I should work another 10 to build up a nest egg for my kids. Does this thought come to you or how do you process it?

reynd: I am probably not the right person to ask for advice on saving up for kids because my thoughts are a bit radical :). I wrote a post on how I feel about saving for kids whether for education, marriage or inheritance.

Having said that, if you feel the need to save up for kids, you can use this calculator to figure out how much you need to save for their education and then decide if you are ok with moving your retirement a little further down to help them. If you are not as radical as me, then I suggest you save up a bit for them before you retire, rather than live with the guilt that you could have done better. While I did say that we are not saving up for our kid, we are investing the money that my kid’s grandparents are giving her. So I can’t say that we are not at all saving for her.

Also, I am currently abroad, with no chance of PR (even for kids), until they are 21. So its return now or never (they are under 10 years). I miss my parents and would like to return but the thought of kids again stops me. They do have a good life here, clean air, not much competition etc. Do you have a word of advice for me?

reynd: Again, this is a personal decision. My answer may not work for you unless we are thinking alike and finding people with like mindedness is very rare. But that does not stop me from giving advice :). I would suggest that you move now if at all possible. This may mean you have to delay your retirement because I don’t know your potential income once you move.

It might actually benefit the kids than harm them. I know the competition is intense and the environment is not as good and life is a bit difficult over here. But that is also something that the kids these days need badly. Think about it this way. If they grow up here and face challenges, then they can live anywhere. But if they grow there, then they will be used to a good life there and will find it very difficult to adapt to difficult situations elsewhere. When they are young, they are very flexible and adapt easily without much fuss.

The way you can help them with this transition is to give them your full support and not burden them with results and expectations. So while school may be tough, if they come to a supportive family at home, low grades won’t be a stress. But everything else is a bit of struggle which is good. Still the decision is your’s and your family’s. So think and talk with them.

Thank you for taking the time to read and awaiting a response. Kind regards,

reynd: My pleasure and hope I was of help. Thanks for writing!

Email conversation #2

Thank you very much for this detailed reply :-)

Since then I read more and more of your blog. It is very eye opening. I have a few questions, I hope you will reply this time too :-)

So I recently came into some money thats what is going to help us FIRE in a few years. So now that markets are already so high how does a new entrant go the 70:30 route? Since you are also now debt heavy and in your blog post mentioned the reason being markets are high. So should I stick to a different allocation?

If you made your calculations correctly then I would suggest sticking to 70:30 irrespective of market conditions. Just keep rebalancing to 70:30 when you need to. Now, if you know what you are doing (you understand the financial world a bit, a little bit of macroeconomics and a bit of how market cycles work), then you can try the varying asset allocation that I do. But as far as I can tell, it is not faring any better than 70:30. Believe me. In fact I am wondering if I should go back to 70:30 and leave it that way. But if you like you can still give it a try. But make sure you have enough buffer to handle any miscalculations on your part. I have a buffer of more than 20% on top of my 4% rule. So I am hoping I am in the safe zone. But only time will tell.

Next, about kids :-). Is your child a US citizen? (Please ignore this if too personal). I ask this because I find lot of US kids in India and their parents don’t have this dilemma since they can go abroad later in life easily. Whereas for Indian kid (mine are), they may have to repeat the cycle again when they grow up.

It is not personal at all. Almost everything about our personal life is on the blog anyway :). My daughter was born in India after we moved to India. So she is an Indian citizen like us. If she ever wants to go to the US, she will have to jump through the same hoops like we did. We also had the confusion of whether we should have a kid while in the US or in India, but in the end decided to move to India and then have a kid (mostly my decision, but my wife was very supportive).

Also, you don’t save for kid (well except funds from grandparents), do you worry about the future world? Like you say you would be happy for child to do what they like even if they become a carpenter. While this sounds fine, but what about the practicality of it? You are in a good position since you took up tech jobs that paid well and with good investments you could retire. Do you ever worry that what if the child lands into a low paying profession then they would never have this luxury of early retirement?

You make some good points here. I will have to write a little bit about my thought process to help you understand why I am doing what I am doing. So for starters, yes I want my kid to take up whatever profession that will keep her happy. It could be low paying or high paying. The reason I say that is because I don’t want to put any undue pressure to direct her into a high paying job. If she is lucky to have both a passion for a high paying job and she is somehow able to find one, then that is great. If not, at least she will be happy doing what she likes. And hopefully that means she might not even want to retire because she is enjoying it so much.

Now it is entirely possible that while she is enjoying the work, she may not be able to make enough to sustain. That is where I have a plan. Basically my job is to teach her financial planning once she is able to understand finance. Then, when she turns 18 she will have her own investment which I have been saving up (the grandparent’s fund). I am expecting it to be sufficient for her to choose her career path. May not be sufficient for foreign education without scholarship. Or she can use the investment wisely to plan her own retirement. Again, not enough to retire at 18, but if she invests properly (does not bite into the investment that I give her) and has a job that will give enough for her food and shelter, she should be able to retire by 37 like me. I want her to learn things the hard way. I don’t plan to give a bunch of money, give world class education and let her have fun. Because then, the minute she has a challenge in life, she will not be able to solve it. And I don’t think I will be alive longer than her to help her all through her life.

Having said all that, the last trump card I have is that if things don’t go according to plan, then I will be helping her with our retirement money. If I had made the projections properly, my corpus should easily outlast our (wife and my) life while supporting our daughter. Because like I said, when I retired, our expenses had everything including my daughter’s and my parents expenses. So eventually I am sure I can take care of her as long as we live. Once we pass away, if she is unable to find a proper financial path then all our money is her’s. If she just follows my 70:30 plan she should do ok until her death. But if I have come to this last trump card, then I must have failed as a parent to teach her everything a kid needs to learn to live a good normal (not rich) life. If I don’t reach this step then our remaining money can go to philanthropic efforts.

Coming to the question about whether she would like to live a normal life like ours, it is entirely up to her. If we raised her with good values, minimalism and anti-consumerism and if she has assimilated everything well, then she will be satisfied with the middle class life with what we saved for her and what we will give her from our corpus. If she is not satisfied, we can’t help. She needs to fight her own battles and become rich and enjoy the comforts :). Remember that this is only my/our thought process. It may not apply to everyone and I am not sure if it applies to you. You and your family will have to figure out what your thought process is and then retire or save for them based on that.

Please don’t mind my questions, its actually not about you personally, but I want to know the view of a an early retired parent who also unschools. My younger child does not like to goto school and has already declared she does not like to study (I try to teach her since we plan to move to India). So I am thinking I may have to take another route with her but then worry about her future as well.

Yeah, unschooling or home schooling is another can of worms which is again completely a personal choice. Whether it is possible for you to give enough attention to help them learn. How supportive is family etc.

I am in country which makes the decision harder. Its actually a great place for kids (no pressure at least till grade 6), good transport, healthcare etc. But due to the nature of my visa we can’t get even PR till I retire! And kids will get it after 21 (if they hold a job) . That coupled with wanting to be with aging parents, and the lack of social life here is what makes me want to be back in India.

I totally understand your dilemma. Unfortunately I cannot advise since there are so many things that are personal choices and situations and some decisions are more subjective than something that can come out of a formula. All I can say is don’t worry too much about the kid’s future, because no matter how much you plan, they may not pan out the way you intended.

Thank you again for taking the time. And thank you for the blog. It has been an eye opener.

My best wishes! Feel free to ask any other questions you have because it also gives me some clarity on my thoughts and the opportunity to have someone poke holes in my plans. No plan stands the scrutiny of the masses.