After publishing my post on no longer being financially independent, several media outlets picked up the story and thousands of comments on their respective platforms ensued. The main criticism was that my expenses were way too high and that I am greedy. As a result, I thought it would be useful to discuss the impact greed and inflation have on my family’s household budget.
It’s true. Spending over $250,000 a year after tax is a lot of money. Our family of four could live on less just like I could stop eating donuts to regain my Bowflex body from high school. But we choose not to due to greed. I greedily want to live the best life I can afford for my family before I die.
I didn’t study my ass off in college, get an MBA part-time for three years, spend 13 years working 60+ hours a week while saving 70% of my income, and write a couple of bestsellers to then live an average life. My goal is to live a rich life that has maximum freedom.
Due to our choice to live a certain way, we must pay the price. And that price means for one or both of us must go back to work or get consulting jobs after 9-12 years of freedom.
Actions have consequences. We must deal with them accordingly.
The Acceptance Of Greed As A Wealth Destroyer
Many of you, like me, have traveled the world, studied abroad, or lived abroad for years. As a result, you know how good we have it here in the United States.
We are one of the most abundant nations in the world. Here are some of our country’s defining features:
- Endless supply of running water
- The world’s highest obesity rate
- Wifi everywhere
- Massive national debt
- One of the world’s highest GDPs per capita
- A relatively stable government
- The strongest defense sector
- Cutting-edge innovation
- Laws that protect the rights of all people
America is one of the greatest countries in the world. However, after living in America for a while, we might start taking for granted how good we have it. The more we take something for granted, the greedier, lazier, and more entitled we sometimes become.
Coming To America From Malaysia
I came to America in 1995 for high school after having spent four years at the International School of Kuala Lumpur, Malaysia. I saw both poverty and wealth.
One of my closest friends lived in a studio apartment with his sister, mother, and father. Their living arrangement consisted of bunk beds along three sides of the studio. They ate their meals and played board games in the middle.
I still remember taking a trip up to the island of Penang where we visited a popular temple. Although I had been warned not to give any money to the beggars, I gave a coin to one. Instantly, I was swarmed by a couple dozen people who pulled at my clothes and arms also wanting money.
We lived in a comfortable government-provided house given that my parents worked for the U.S. Embassy. But seeing so much poverty was jarring. It also made me fear ending up poor, which made me study harder in school to give myself a better chance.
Seeing How The Rich Lived Was The Start Of My Greed
While living in Kuala Lumpur, I also saw how the rich lived. They drove Porsches to the Royal Selangor Golf Club and lived in nice homes in Kenny Hills. I vividly remember one evening having a Mercedes Benz SEL 250 with fur-covered seats pick me up to go to a party hosted by one of my dad’s rich contacts. I was blown away by how the top 0.1% lived.
Having witnessed both poverty and wealth naturally made me want to choose the latter. I think most rational people would as well. But seeing how the rich lived is also dangerous. As this is how greed begins.
I remember thinking, why not me too?
Wanting More Than The Basics Is Greedy: Examples
Living in a home larger than a studio apartment with four people is greedy because I saw my friend’s family do just that. Although it was cramped, they made things work. How can we live in a three-bedroom home with two bathrooms when there are ~150 million homeless people in the world and up to 1.6 billion people who lack adequate housing? Greed.
For those without a genetic disorder, eating so much to the point where we have to regularly buy bigger clothes is greedy. There are close to 900 million people in the world who are malnourished. How can we disrespect them by eating more than we should when so many don’t even have enough? Greed.
Owning a car when you can walk, bike, or take public transportation is greedy. Cars kill, cause injury, and pollute. But we look beyond the negatives because we are lazy or selfish for safety and convenience. If you do buy a car, nobody needs more than a used Honda Civic.
If you want biological kids or a fifth child, why? According to UNICEF, there are roughly 153 million orphans worldwide. Every day, an estimated 5,700 more children become orphans. Children are often relinquished due to war, natural disaster, poverty, disease, stigma, and medical needs. Why not adopt instead of having your own? There are some couples who decide to have many kids without considering adoption.
We could slash our budget by $100,000 by forsaking private Mandarin immersion school and saving for college. However, we highly value education. As a result, we must pay the price by working to pay for the cost. Otherwise, we’d just be complainers trying to freeload off others.
The Greed Of A Better Education
One of the most memorable things about attending a public high school was the amount of drugs and violence I witnessed. Personally, I got suspended once when a big guy pushed me over while I was tying my shoe. I punched him in the face and broke his glasses. He never messed with me again.
Luckily, I didn’t get into any knife fights with the kids who brought weapons to school. But I did end up shoplifting with my tennis teammate, who was a senior and I, a freshman. Due to my greed for wanting nicer clothes, I accepted his influence. As a consequence, we got caught and were punished by our parents.
During senior year I also was punished for prank-calling people like the Jerky Boys did on the radio. Oh yeah, when I was a freshman, one guy even introduced me to LSD tabs and pot. This was my experience attending McLean High School, considered one of the better public schools in Northern Virginia.
Now as an adult looking back, I realize I got in a lot of trouble partly due to the school environment I was in. My parents didn’t get back from work until after 5:30pm pm so I hung out with my peers. By the time my parents got home from work, they were often too tired to hang out. I don’t blame them.
A Better School May Have Helped
If I had gone to a better school, maybe I wouldn’t have gotten suspended and gotten in trouble with the law. Maybe my Spanish and Mandarin would be fluent as well. Maybe I would have had a better career with no need to retire early because I loved my work. We’ll never know for sure.
But because I am lucky enough to have earned and saved enough money to pay for a private Mandarin immersion school, I figured why not at least try with my son. Perhaps our daughter will enjoy the experience as well starting in September 2024.
It’s nice to at least try things once. If things don’t work out, we always have the option of changing schools and saving.
I changed schools every two-to-four years growing up due to my parent’s line of work. It forced me to learn how to socialize as the new kid.
The Desire To Minimize Violence
The greed of desiring the best education possible is also accompanied by the fear of violence against my children. The most amount of violence I’ve ever experienced so far has been during public school, including college.
After being a high school tennis coach for three years as part of my investigation to see whether private school is worth it, my observation is the more involved parents are in their kids’ lives, the less violence there is at school. Due to the cost of tuition, there is more buy-in from their parents.
In a study conducted by the Cato Institute, researchers found that about 94% of school shootings that occurred in the United States from 2000 to 2018 occurred in public schools, while only about 6% occurred in private schools.
If you have money and are worried about the safety of your kids, you might also be willing to pay for private grade school tuition too. Of course, every public school is rated differently. Hopefully you can find a well-rated one that is safe, which would be ideal.
The Best Way To Combat Greed
If you want to reduce your greed, then the best way is to be cognizant of the suffering of others. The more you can understand how people less fortunate than you live, the more you can control greed from making you spend more than you really need.
Unfortunately, many of us get used to our circumstances and have a propensity to want more over time. This is the problem I currently face.
Originally, in 2012, my wife and I were content with living on a fruit farm in Hawaii on $80,000 in passive income. Then we had kids starting in 2017. If only we could better control our desires, we could better control our suffering.
When you live in a capitalist country like America, it’s hard not to want more. Hence, another solution to beating back greed is to move to the countryside or a slower-paced, less wealthy country.
My desire to combat greed is also one of my main motivators for writing so much for free on Financial Samurai. It feels great to help people gain more financial courage and solve financial problems. This site will never have a paywall.
Inflation Hurts Families The Most
Now that we’ve talked about how greed destroys a family’s wealth by wanting more than the basics, let’s take a look at inflation’s impact.
Take a look at this wonderful inflation chart. What do you notice?
If you have kids, inflation is the biggest destroyer of a family’s wealth. Single people without kids can sidestep the most egregious items above.
It is almost impossible to retire early or stay retired with young kids given the rapidly increasing costs to raise them.
Surprise! Kids Are Expensive
If you have kids, you will want to buy a bigger house than a studio apartment. One bedroom for the parents and one bedroom for the child is a desired minimum. But you might get greedy and want a third bedroom for guests or an office to work from home.
If you have kids, an economy car may not be good enough given you care about safety. Larger cars tend to cost more. Anybody driving in the city will know that it doesn’t matter how safe of a driver you are, there are plenty of reckless drivers who will smash you. Can you imagine your kid getting hurt in a car accident because you wanted to save money on a car but could have afforded more?
If you have kids, you will naturally have to pay more for food and beverages. You could bulk purchase a bunch of processed food from Costco to save money. But you may also want to spend more on healthier foods to minimize disease in the future.
If you have kids, your healthcare costs will go up because the premium is based on the number of people in your family. If both of you have retired early, then you will have to pay for unsubsidized healthcare insurance. Our family pays $2,300 a month.
If you have kids, you’ll face the burden of saving and paying for college tuition and fees. After aggressively saving in my 529 plan for almost seven years, I’m not confident I’ll have enough saved up when my son goes to college in 2036. It’s no wonder hundreds of thousands of people have such a large student debt burden that it’s become a political issue.
Take Seriously The Responsibility Of Parenthood
There’s a good saying for men, “Having kids doesn’t make you a father; raising them does.”
I understand why some parents decide to not raise their children. Being a parent requires a tremendous amount of patience, endurance, nurturing, and kindness. I also understand why some parents shake their babies to death or leave them at the doorsteps to an orphanage. Raising children is hard.
However, actions have consequences. If we decide to create life, we must stick around to nurture our children until they are adults. Otherwise, it’s unfair to the child who never asked to be born.
The cost of raising children isn’t just about the money. It’s also the burden society has to bear for experiencing gun violence, auto thefts, robberies, mugging, rapes, and murders.
If you get a chance, ask your assailant next time how was their childhood and where were their parents? Chances are high they didn’t have parents who took the responsibility of raising their kids seriously.
Do The Best That You Can Then Be At Peace
One of my biggest fears as a parent is raising children who become burdens to society. Instead of giving more than they take, they take more than they give.
Parents can’t control the outcomes of their children. However, we can do our best to plan for the future by saving more, investing more, teaching more, and spending more time with our children. If we truly do our best, then even if our kids turn out to be menaces, there was simply nothing more we could do.
If you don’t have kids or have adult kids, try to have compassion for parents of young children trying to do the best they can. It’s not easy saving for retirement, saving for college, balancing work and childcare, and trying to live a good life.
Inflation hits families the most. Then when you add on the desire of wanting more for your children than you had growing up, it’s easy to see how a family’s costs can balloon.
If you want to be richer and more free, don’t have children! But if you want children or it’s too late, you’ll likely have to work very hard to provide for them. You will also have to face the many dilemmas on how much you are willing to pay for their well-being.
I have my guides for private school tuition, how much to spend on a house, and how much to spend on a car. But it’s up to you to decide what’s best for your family.
The Solutions To Combating Inflation For Families
Defeating inflation is straightforward, but not easy. Due to greed and our many desires, it’s hard to keep expenses down forever.
The best way for families to combat inflation is to save and invest regularly for as long as possible. History has shown the S&P 500 outpaces inflation by about 7% – 8% on average a year. History has also shown the real estate market outpaces inflation by a more moderate 1-2.5% a year. But with leverage, real estate investors can do well.
Once you can get neutral real estate by owning your primary residence, affording a family gets easier. Your costs are largely fixed if you pay cash or take out a mortgage, while inflation helps inflate away the real cost of debt.
In addition, inflation acts as a tailwind for your home’s value over time. Focus on building that down payment if you plan to have a family and know where you want to live for at least five years.
Investing in the S&P 500 is free and easy. You can buy an S&P 500 ETF like SPY and dollar-cost average as much as you can with each paycheck. Preferably, you at least contribute up to the maximum 401(k) company match and then invest what’s left over. After 10 years, you will be surprised at how much you accumulate.
Raising a family in a big city will still cost a lot. But it will be more manageable if you follow my suggestions.
Reader Questions
Do you think inflation hurts families the most? How much does greed play a factor in the cost of raising children? Do you think it’s greedy to want to provide the best life possible for your family even though millions of people have less? How are you combating inflation and greed?
Listen and subscribe to The Financial Samurai podcast on Apple or Spotify. I interview experts in their respective fields and discuss some of the most interesting topics on this site.
Join 60,000+ others and sign up for the free Financial Samurai newsletter. Financial Samurai is one of the largest independently-owned personal finance sites that started in 2009.