Wednesday, July 03, 2024

Should you prioritise Financial Independence over starting a family?


I want to answer a reader's question that was posed to me lately. This person found someone very attractive, but she wants to prioritise early marriage and children. However, because this reader is close to FIRE, he is conflicted about choosing FIRE or jumping into the relationship. 

It is time to share my updated thoughts on this blog because I suspect my earlier articles may have had an undue influence on him. I am OK with changing my mind on this blog as I age. 

First, there are solid arguments for a single guy to choose FIRE over starting a family. This would be my choice in my 20s, having only started dating when I could live on investment income (because I can pay for every date with dividend payouts). For a guy, his bargaining power grows exponentially as his portfolio grows, and you be fixated on a kind of woman, but not a specific one, so go for someone only when your bargaining power goes up. Truth is, for most guys, the dating scene can be very cruel, with dates on Tinder trying to sell ILPs to you and most women going after that "6-foot-five investment banker with blue eyes." 

But as I got older, my mind started to change on this matter. 

Suppose you are a guy, and you've already been shopping around. You are already in your mid-30s with a solid career and educational qualifications. You find someone more attractive than your previous set of dates, and she is similar in professional credentials. 

I fail to see why her desire to start a family should stop you guys from going ahead; you're adamant about attaining FIRE. 

Some points of consideration :

a) Suppose there is a fear of divorce. The national statistics should not apply to readers of my blog. Suppose the rate of divorce is 30% in Singapore. Your probability of divorce should be much lower if both of you are not married at too young and have degree qualifications. Adjust your probabilities as you know more about your date. 

b) The idea that marriage and kids can slow down FIRE does not account for the government policies that are specifically designed to maintain a heteronormative society via the BTO/EC systems. While a single guy can probably FIRE much earlier, he will lose out on the capital gains from a leveraged residential property that only married couples can buy. So far, the increases in my EC valuation exceed how much I spend on my two kids. 

c) Folks don't understand that marriage and kids can build one of society's most potent economic units as you reap economies of scale. Statistics show a retired couple spends less than two singles living separately. 

The final point I want to make is that many readers may be fixated on the remaining single FIRE thought leaders, but I don't believe that they will have the last laugh.

Just because a person is wise with money does not make them wise regarding relationships. If someone has money and is unattached, it may even say something about their personality!

I don't believe that any of my happily single friends have a plan to counter loneliness, which can kill at a rate faster than heart disease, and it actually gets more complicated to form friendships as a guy after your 50s. I don't see Gen Z running up to me to get me to play D&D with them. 

At the end of the day, we can learn from the tragedies we read about in the press, the cases of Yang Yin  
and Mitchell Omg / Audrey Fang may be lurking in the corner, waiting to pounce on the elderly who are financially independent.

Who will spend your money in the end?

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