C (2:36)

Oh, thank you. They really wanted to jam as many keywords into this subtitle as possible.

B (2:40)

SEO optimization.

C (2:41)

SEO optimization.

A (2:43)

Yeah. Funny. Okay. As I read through this book and you guys were nice enough to ask me to do a little blurb for it, so I read it early and I loved it. To me, it was a kind of Trojan horse to teach people about financial independence or fire, as you guys call it.

C (2:58)

Yes.

A (2:59)

That aren't necessarily people from the FI community. That, to me, is cool. I love any way that we can spread this message. Of course, you're here on a financial independence podcast, so we don't need to necessarily spread the message now. It's, hey, maybe we can even just really dive deep on what can people in the FI community do.

C (3:17)

Sure. Yeah.

A (3:18)

To save and optimize on having kids. I mean, you two are literally in the trenches of this right now. You have a two and a half year old son. I think that would be a fun way to really go about this particular episode. Like, we hear, and I think the number was $315,000 to raise a child until they're 17 or 18. That seems insane to me. Is that real?

C (3:42)

I mean, yeah. We approach this the same way, the way that five people approach any problem, which is skepticism and spreadsheets. So we're like. So our first reaction to that was like, there's no way that could be real. Right. But when you dig into that number, there's actually quite a bit of nuance. Kristi, you want to guide them through the weeds there?

B (3:56)

Yeah. This is the number that scared me like crazy. Because even when you're fi, you look at that number and you think, can I even afford to have kids? Regardless of whether you're fired or not. And when you actually dig in the numbers and you break it down, what's really surprising is that is an average. The thing they don't tell you is that the more people make, the more they report their kids to be expensive. So did the cost, all of a sudden, of kids go up when you get a promotion or when you get a raise? Or is this just another type of lifestyle inflation that happens when you have kids?

C (4:27)

Yeah. So it's just like every other blanket statement of like, housing is really expensive. There's no way you can afford to own a house and a car or there's no way that you can afford to retire before 65. It's like, yeah, if you do everything the kind of normal way. That might be true, but we're not normal people. Like the fire community is filled up. People look at the average and they go, okay, we'll hold my beer, let's see how much, let's see how much we can break the system. And just like everything else, we discovered that with kids, they don't cost free. It does cost some amount of money to house them, clothe them and feed them. But there's a wide amount of variability in there and that variability is a choice. Just like everything else. I go back home to my friends, family and friends back in Toronto around Christmas. As we're catching up, they will often start complaining about how expensive things are and be like, oh, I have to send my kid to camp this and I have to send my kid to like hockey or doing this activity or that activity. And that stuff can add up and also creates this misperception that these are things like sending your kid to hockey camp is something that you have to do and that's really expensive. So that's just the way it is. But it's like kids have existed before hockey for many, many decades before that in Canada.

A (5:35)

Come on.

C (5:37)

Hockey is one thing that you can choose to spend it on, but when you, when you lump that in and say this is how much things cost and you have to do all that kind of stuff, it scares people and it makes them not want to have kids, which is the opposite effect of what people want. We want to make the idea of having kids accessible. It's like, yes, you, you can spend as much as you want, but you don't have to. Here's how much it actually costs. And it turns out it's way more affordable than you think it is.

A (5:58)

Yeah, it's interesting. The quote from your book that you use mockingly is your child deserves the best, which is what society fools us with. And we're going to get into that in terms of buying items for the kids, et cetera, oh, a gas I could never buy used, or something like that. It's the same argument with all of this. That's the, your kid has to go to hockey, or in my case, they have to do year round swim at the swim club that costs $4,000 a year or they have to go to X school or they have to be in this program and it's like, who says they have to it? I think like you said, I love that we approach it with skepticism and spreadsheets. Right. That is like an all time classic. It's a classic. But isn't that what we do in the FI community? We look at the world as it is and we ask questions and we try to outsmart it. For me, I call it living the same middle class lifestyle as everybody else, but getting wildly wealthy at the same time. Yes, that's how I phrase this in my own head.

C (6:59)

Yeah, yeah. And the thing is, with families, even five people sometimes get a little bit fooled and they have their brains, their normal five brains kind of turn off when it comes to their kids. Because when it's sacrificing something for yourself, like I'm going to reduce cost of my groceries by being more efficient with like this, this, this, that and the other. Well, we're willing to do that for ourselves, but we may not be. When it comes to your kid, a different part of your brain kind of turns on like the paternal slash maternal like protective part that goes, oh, but I don't want to sacrifice on behalf of my kids. But just like you said, the trick about making fire sustainable is not about sacrificing and sacrificing now so that you can sacrifice later, which is what a lot of people misinterpret fire to be. It's about getting the same results or sometimes even better. With like what, we're spending way less money. Right. And then turning that money into passive income, which makes your life easier. So the baby gear is a great example of that, right?

B (7:48)

Yeah, baby gear. That's the thing that. And the thing is this, this might be a little bit anti fi where when I went into like buying baby gear, my FI brain turned on. It was like, can I buy the cheapest item that I can get away with? But then I realized actually there's actually a better way to do it. You should actually buy the more expensive luxury item that actually lasts longer and is very popular. Because what you do is you buy it used, you ride the depreciation curve, and then you sell it back into the secondary market. And. And it's kind of like renting that item for free. And in a way, it's cheaper than buying a used crappy one because that one will break after six months. And this one, if I can buy it for the same price that I sell it for the same price, I'm getting a much better luxury Item that's better quality for free. So in that case, spending more is actually giving you a better experience.

C (8:34)

Yeah, because kid gear has a very unique kind of properties in the way that goods depreciate. It has that kind of car effect where as soon as you drive the car off, flood, it drops it by 25%. Same kind of thing with baby gear. As soon as you open it out of the box, it drops by 25 to 50%. But because kids grow out of things very quickly, they don't actually use gear for very long. So for example, a bassinet. A bassinet is for the child free couples out there. A bassinet is like a smaller version of a crib meant for like newborns.

B (9:01)

He only used it for two months. Our kid was huge.

C (9:03)

Two to three months, then they grow out of it. They need to go into a crib and stuff. But the bassinets can be. The really expensive bassinets can be like $1,000 or 500 to $1,000 because it's got all these neat little features like it rocks itself to slee this kind of stuff. But because kids use it for very little time, the wear and tear that you get out of it is really not that high. And everything that kid related is washable by definition. There's no dry clean only kids gear out there. That company would get out of business so fast. So if you get really expensive luxury goods used, that means you're letting somebody else pay for the depreciation and then you're just buying it after the open box appreciation that cliff has already happened. And then you're using it for an additional like two or three months that when you no longer need it anymore, the price of that item is still pretty much the same that when you bought it for us. You can sell it back onto the market for the same price or in some cases you can even make a profit off of it. Have you heard of lovevery?

A (9:53)

No. No.

C (9:54)

Okay, Chrissy, why don't you, why don't

A (9:56)

you educate the smile on Chrissy's face?

B (9:58)

Okay, so these are.

C (9:59)

She made this very much. And it's obsession and it's funny.

B (10:02)

I have a problem.

A (10:03)

Okay, so what is it called?

B (10:04)

It's called Love Every.

A (10:05)

Okay.

B (10:06)

It's these subscription toy kits where they say a lot of research has gone into it. There's occupational therapists that have researched into it, like pediatricians, and then these kits that they put together that are age appropriate. It lasts for about two months. It's like your kid is from zero to two months, get this kit, and then from like two to four months, get this kit. And then they. They curated the toys so that it would be very attractive to them at that particular age so that you as a parent have less work to do because you don't have to think about what toys to get them. And because you don't know what's appropriate learning at that age, they just do the work for you. And these things are expensive. They cost anywhere from, I think it's like US$80 to over $200, depending on which age you're in per box. Then what I discovered is that on the secondary market, on Facebook Marketplace, these things are very popular, and they're very easy to sell. They go very fast. I can buy a kit for, like, it kind of holds its value, so it'll be a little bit less expensive than the full price because people are like, why are you paying almost full price for a used item? That's crazy. But some of the kids he actually really liked, and it was very useful for occupying him and, like, making him leave me alone. And I just need some time to cook dinner. And then after I was done, I could sell it back onto the secondary market for the same price. And it was so easy to sell. Like, out of all the baby items that I resold, this is one of the fastest selling items, just because there are so many parents that wanted it. It's made of wood, so it's very durable. And so even if you bought it and it's passed through multiple hands, it still looks as good as new.

C (11:37)

The interesting thing about these things is they sell as kits, and when a kid plays with something, oftentimes they lose pieces. Like one of the balls gets lost or whatever, and then the value of that thing goes down dramatically. So what she was doing, she was going around and reassembling kits from multiple partial kits that she was negotiating at a price, putting the full kit back together, and then onto the market for a profit. And then she was like, I just made 100 bucks as a love every dealer. And I was like, okay, you were supposed to get a toy, not turn

A (12:06)

this into a small business side hustle. All of a sudden, we got our

B (12:10)

kid got to pay to play with it.

C (12:12)

So we got paid for them to play with the toy. So this is kind of one of those things. This is what happens when you unleash five people on a problem. They break the system and then someone make money out of it.

A (12:19)

Yes. Unleash five people. Well, first off, on my life bingo card I don't think I ever had Bryce explaining what a bassinet was.

B (12:29)

See, we're so lame now.

C (12:31)

Yeah, yeah, yeah, yeah. But I'm just going to look at all these features it has. I could make some money off of this.

A (12:35)

This is really a big way to save because there is a glut of baby stuff on the market. Just period. You can go to any, virtually any garage sale, Facebook marketplace has a ton friends, et cetera. There's just so much baby stuff. And like we're saying we can get past the depreciation curve. So buying new, except for in very rare instances, I think clearly child car seats are the one that I know of.

C (13:02)

Yeah, car seats you have to buy new because it's a safety issue. Right.

A (13:05)

So that's a no brainer. We're not talking about safety issues. Clearly that takes the utmost importance.

B (13:10)

Right.

A (13:11)

Accepting that it seems like virtually everything if you buy it new, it seems suboptimal because virtually all of this stuff is either plastic or wood in this case or washable like clothes. And as you guys are saying, I do want to dive into this because I think this is where the optimization that again that's what we want to talk about here on choose the optimizations for how can we actually do this? Because undoubtedly there are tens of thousands of people who are listening who are like, oh yeah, I either have a young kid or I'm going to have a kid in the next year, five years, 10 years, whatever it is, I want to do this too. So you mentioned better quality and my kind of antenna, the spidey sense always goes up when it comes to like name brands. And is it truly better quality? I almost don't even know or care as long as the rest of the bozos out there are willing to pay for it because it's the name brand. So I don't know if we can actually presuppose that it's always better quality. Maybe, maybe in some cases it actually is. But again it's beside the point because in essence what you're saying is you're buying slightly used, your child is using it for X number of days, weeks, months, and then you're selling it and probably selling it for at or close to the same price you bought it for. Is that really the essence of this?

B (14:27)

Exactly. Yeah. So what happens with the Love everything? Like you said, there are other dupes that kind of resemble Love every, but those don't sell as well. Right. And they could be equally good quality or just slightly less quality or close to the quality. But Lovevery is the one that sells because everybody knows that name brand. And as soon as I put up a listing, it immediately sells with no problem. Very close to the actual brand new price.

A (14:50)

That's so interesting. Yeah, the funny one that I remember from back in the day, so my kids are now 17 and 14. It was the McLaren stroller. Now these things, I forget what we went for now. Interestingly, I just googled it. This company went out of business and they went bankrupt because they had some kind of recall. It was like a disaster. But I believe to this day, with my dying breath, that people were willing to pay a multi hundred dollar premium for these strollers just because of this name. Because it sounded kind of like the luxury car McLaren, but was actually spelled different and was totally different. It was just a freaking stroller. But yet you had regular people, like these crazy upper middle class people spending 500, 700, whatever it was dollars on a stroller. I'm like, this is lunacy of the highest order. When you could buy whatever it was. I don't even remember the brand for $80 or something. And the darn thing worked. It would be interesting to do an analysis of what holds its value. If people are willing to pay for this name brand and you can essentially rent it for $0, well, that sure beats than buying one that you're gonna buy for 80, but you can only resell for 10 or something. Do you guys dive into that in terms of like specific brands? Are there takeaways? I know each type of baby good has different, different brands. So there's not like one monolithic big baby, as you like to say. Are there brands that jump out that people could say like, oh, okay, like Baby Bjorn for the carrier, if that's still a thing 17 years later, that one holds its value. Any kind of quick hit takeaways?

B (16:24)

That's exactly it. Baby Bjorn is one of the most popular ones, to the point where I'll give you an example, we went and bought a used Baby Bjorn for our kit. It was one of the most useful things we've ever had. Basically it's a swing that he can bounce around in, which also gave us time to cook, to leave us alone for like five minutes. And Bryce went and bought a used one from Facebook Marketplace. He was coming back and he had it in his arm.

C (16:46)

Yeah, I was just holding it on like getting onto the bus and like two people pulled up to me here and say, hey, that baby beer, we have the exact same one. That's a really good one. And I was like, okay, I know this. There's some market volume on this one.

A (16:57)

Nailed it.

C (16:58)

Yeah. That's what. That's what we look for, market volume. You want to look for things in which people are looking for a specific name and a model number, and they're all, like, clamoring for that. And the best way to see it is just to test it. Go on Facebook Marketplace, search for a certain brand name, and just see how many listings of that thing come up. If there's not a lot of listings, but there's a lot of stuff like it, then that brand name itself is not that valuable. The one that comes to mind right now is the Baby Zen Yoyo. The Baby Zen Yoyo is a stroller,

B (17:23)

and again, travel stroller specifically.

C (17:25)

Probably not on your bingo card from. If you're talking about stroller, but it's a travel stroller that folds up and it fits into the overhead bin of an airplane. And because it's the first model that did this, there's lots of other models that have come up and also have a similar form factor. Now, because it's the first one, flight attendants immediately recognize it and be like, oh, that's Baby Zen Yoyo, yo. I don't need to check that. You can go right on ahead. So that one is really good value because it has that brand name recognizability, and that's durable. So, like, in a year from now, it'll still be, like the gold standard, and I'll be able to sell it back once our kid is no longer needs a stroller anymore.

B (17:56)

And you also learn how to make, like, Facebook listings like that too, because you're like, oh, this is the one that every flight attendant recognizes. So that when you actually sell it, you're like, this is the stroller. You will not get questioned. I literally had flight attendants say, you are not allowed to bring in any of them in the cabin except for the babies. And yo yo, word for word, they literally said that quote.

C (18:13)

So, like, she knows, like, we know how to speak their language. Because what every parent is looking for when they go to an airport is no hassle.

A (18:20)

Oh, yeah, that is very, very interesting. So that's one of our biggest takeaways, is we should really be buying just about everything used. Yep, that's takeaway number one for me. So we have in chapter two, can I afford to have kids? We have this USDA cost breakdown, which comes out to about $17,500 a year times the first 18 years. That's this $315,000 scare figure. It looks like there are seven categories. And what I love about the book, and it reminds me of one of my absolute favorite articles from Pete, Mr. Money Mustache, which is how to go from middle class to kick ass. I don't know that most people like there's the one, of course, the shockingly simple math behind early retirement. But for me, this other post of his is right up there in the pantheon of Mr. Money Mustache posts. And, and this on the book that I'm looking at, page 10 and 11, it's the exact same thing. It's like, okay, the regular boring. This is what everybody says versus the optimized Christy and Bryce version. Let's talk through this. So we've got seven main categories, I think housing, food, childcare and education, Transportation, healthcare, clothing and miscellaneous. And now we have this scare number that it's 17,500, but your guy's number is under $5,000.

C (19:38)

Yep.

A (19:38)

Can we go through this? I don't know if it makes sense to do a category by category or if there's anything that like, jumps out. Okay, there are five people who are listening who are like, can I afford to have a baby? I hear this number. This doesn't include college as far as I can tell. So can they. And how do you optimize?

B (19:55)

Yes, the top three categories, that's one of the things we like to do is just look at how to optimize. Like, you don't need to do everything because as a parent you don't have time to pick on every single category. But the top three catego that. Housing, the child care, the food, like, how do we take care of those three things. What we found that's a huge win for fire people for childcare is that the more flexible you can be. Because we know how to build a portfolio. We know how to make it pay for part of our expenses. We can make work as flexible as we want to be. Then we can tap into all sorts of child care options that you wouldn't be able to tap into normally. So one of the examples is we actually wrote part of the book is in a co working space, slash, daycare. These things actually popped up after the pandemic. It became very popular because, you know, like different types of work people could actually work remotely. Whereas before it was seen as fringe instead of paying for it a whole year because childcare, I mean, they're not really going to let you, you know, drop in and out for one hour at a time. You're going to have to pay for like months in advance, you have to lock into a contract, you have to register all that stuff. This one, you just pay by the hour. So you just pay for exactly what you need when you need it. And Childcare costs around 10 to $15 per hour as a result. And we only need it for a small chunk of time to get our work done. And that was it. In addition to that, you can also, especially if you get into fire, you can take advantage of something called the babysitting co op, which means you pair with another family who has a child as well. And then you take turns taking care of each other's kids. And basically babysitting becomes free. And then there's apps that help you track who has spent this much time taking care of the kids. And just kind of like as a way to optimize and make it fair in terms of how much hours you've spent doing that. And then in addition to that, there's other nanny sharing options where you try to. Because you don't need every single day to be work. You don't need Monday to Friday. Maybe you only need Monday and Wednesday. Somebody else needs Tuesday and Thursday. You can split the cost of a nanny. And if you have a nanny that's willing to take care of multiple kids, then that also decreases the cost each time when they take care of two kids. So there's like a lot of ways to optimize it. If you have a flexible schedule that this USDA number does not reflect because all the. It's the average. So it's basically everybody does what everyone else is doing, which is, I need daycare from Monday to Friday, from 9 to 5, and it's going to be the very high cost because everybody's trying to do the exact same thing. And you have to sign in for a very long time. You can't just do it by hour. You can't do it part time. It's all in.

C (22:21)

Yeah, that USA number is often quoted by people in the fire community because they go, okay, well, if a kid costs $300,000 or $350,000, I need to save up my five number plus another $350,000. That. That puts me way, like, I'm now way behind now. Right. So what we actually discovered is that even for people who are working 9 to 5, there are ways of reducing that number, reducing that cost drastically. But if you're planning on retiring or partially retiring with kids, and you have many more knobs to turn, because flexibility is your friend, flexibility is your unfair advantage because it means that you can take advantage of opportunities in the private market that are not really useful for everyone else. Everyone else for daycare. Let's talk about daycare. Everyone needs daycare from the same hours, Monday to Friday, 9 to 5. Those slots, it's the Hunger Games. Those are the ones that everybody is trying to crowd into. That's one segment of the market. The other segment of the daycare market are people that are like, you know, they have maybe like a daycare slot for like one or two days over here that's available maybe that you can have like. And you can cobble together something with like a babysitter, or you can cobble together something where you nanny, share with a friend. And all of a sudden you can drop the cost of that way, way down. And it becomes a lot easier for you because not everyone else competing for those slots because it's not useful to them. So your flexibility is your superpower, and that's your unfair advantage when you're fi. And it means that. That raising a kid costs way less than whatever it does for everybody else.

B (23:42)

I gotta say, that also applies for the transportation category because of what we found out when we were traveling. So we still trav. We did not give it up. It's just a very different travel. We came back from Spain recently after living nomadically for three months with our son and we were able to hack business class flights. So that's another thing that as a five person, you have the flexibility of time. You can pick better flights than other people because your schedule is more open this weekend.

C (24:06)

Kids two. And he's been in two business class flights already, plus one in utero. So this kid is fancy.

A (24:14)

That's more than most people in their entire life.

C (24:15)

He's a fancy boy because. Yeah.

B (24:18)

So what happened was, so we came back from Dublin to Toronto on a business class flight and then I had to buy my son his own business class seat because he was over the age of two. So each of us had our. We were all sitting in business class seats. Bryce was wearing this sweatshirt that had the logo on the back that said the Haven.

C (24:35)

I didn't know this. The Haven is like a high end wellness retreat that's in Vancouver. People go there and do like seaweed detoxes and this kind of stuff. So it's really expensive. Somebody saw that sweatshirt and they thought, oh, hey, you've been to Haven. What course did you go to? Did you do think. Did you take this guru's class? This guru's class? And I'm like, I got this from the Salvation Army. And then we're seeing. I was a goodwill person and we're sitting in business class and they were like, okay, yeah.

B (24:57)

I could see the eyes of like every single person passing us going into economy going like, who are these people? They're wearing thrift store clothes and yet they're two year old has his own business class seat. How is this possible? I think we paid 500 bucks for three seats for just the taxes. And they would have cost 15 grand if you actually paid with cash.

A (25:16)

Yeah.

B (25:16)

So that's another thing that you can optimize on is getting the way better travel experiences and transportation experiences if you know how to optimize.

A (25:25)

Yeah. Flexibility, miles and points. And certainly they go hand in hand. Housing is the one that has always bedeviled me. I mean, I guess I understand in theory, maybe, maybe, maybe you might need a bigger space, depending on what your current space is. But this whole like, it costs $5,000 to house a child. I'm like, are they getting their own apartment? What are we, like, what are we talking about here? This doesn't exactly like they're just moving into the same place you already live in. Especially a newborn. I can't imagine a scenario where you need a larger place for a newborn. Where does this number come from? And is it real in your eyes?

B (26:00)

I think it's a lot of obsession with needing to buy. We are actually the only family we know that still rents.

C (26:06)

Yeah.

B (26:06)

I think everybody has bought at this point.

C (26:08)

Matt Fiente has bought. JL Collins bought like everybody.

A (26:12)

You guys did, you know, I'm renting now.

C (26:14)

Oh, okay, okay, okay, okay.

B (26:16)

So we're not the only ones. Oh, yay, one of us.

C (26:19)

Yay, one of us.

A (26:21)

Yeah. I don't think I'll ever own a home ever again. I feel like once you start renting, it is, it's hard to fathom going back. It's just such a wonderful, carefree existence. And as we know and as you guys have talked about for so many years, it's not like owning a home is a great financial decision. In most cases, it's an albatross. And I mean, this is, it's wonderful.

B (26:43)

Yeah, it's definitely a lifestyle choice. And for some people, if they're consciously making that choice, you know, hats off to you. Good for you. Society really puts a lot of pressure on home ownership. And when you're a parent, it's even stronger because now it's not just like, oh, you're making bad financial choices, you're making bad financial Choices and causing instability for your child. One of the reasons why we were able to bring down that housing cost so much lower than the USDA cost is because for the first two years of his life, we just continued living in the one bedroom apartment that we were renting because he doesn't take up any space. Like he's literally just a potato. I just carry him everywhere and he just sits in his used Baby Bjorn. There's no extra space. I didn't even notice, I barely noticed. And the furniture that I bought, the crib and all that stuff still fits in that apartment. So we did not increase our cost of living, which is a lot of the reason why it drives up that USDA housing price. Because as soon as people get pregnant, they go and buy a house. Because that's the societal pressure again. It's like, do you want to be a good parent? You need to give them stability. You need to worry about your finances and their finances. And then that pressure becomes immense. What we did realize when he turned 2 is that you do need more space because he starts breaking things and he starts running around. And then we started to notice that the apartment is getting smaller and it feels a bit more cramped. And then that's when we gave up the apartment. And then we decided to travel to Spain and then upgrade our space a little bit more. And then eventually we upgrade into a two bedroom or a three bedroom. But it's still not nearly the amount of money that the USDA number says.

C (28:11)

It's just the finances of buying. First of all, if you buy when you get pregnant, you're buying for space and you're not fully utilizing it for the entire time right away. And the second thing is most of the people buy a house on a mortgage, which by definition is, I can't afford it now. I'm going to pay for this over a long period of time. The space that I don't need and I'm going to pay for the privilege and this kind of stuff. When you rent, you can upgrade your space as you need it rather than all at once at the beginning and therefore are paying for it for the entire 20, 25 years. By doing that, you can ramp your spending up only as you need it. So you're only paying for space you're actually utilizing at that time.

A (28:46)

Yeah, I certainly understand that. I think the one counterpoint that I've always given, and maybe I'm trying to come up with some kind of rationalization for my own choices, but we did own a home for a number of years it was about continuity of school district for my girls. And I think like you said, owning a home is a lifestyle choice. And none of the three of us are telling anybody out there, we're not telling you to do anything, frankly, you live your life, do your thing, but you have to make choices. Obviously, owning a home is a lifestyle choice and that's what you decide, so be it. But yeah, in my case it was. That was at least how I tried to rationalize it was, okay, we're in the same school district, we want them to go through the feeder went from elementary to middle to high school and all the same kids stayed, stayed the same. That made some sense. But then I can make the counter argument to that, that counterpoint which is, well, there are homes for rent in this school district. And as the kids get older, the school districts actually get larger because the middle school draws from a larger boundary, the high school draws from an even larger boundary. So you actually have more flexibility, not less. It's interesting how we can try to rationalize all these decisions, but at the end of the day, they are lifestyle choices. And like you said, when you're buying something that is just simply larger than what you need now, you're buying for the future a four bedroom house and it's just two of you, like we did, that's significantly suboptimal and wasteful for a long period of time.

C (30:13)

Yeah, you're paying for space you're not using.

B (30:15)

I totally get the school district thing. That is definitely something that you need to consider. What I've seen, because we're renting in a place with a good school district and we can rent in there for a really long time as well. It's more about strategic renting. Because a lot of people talk about homeownership, nobody really wants to talk about renting, so nobody really talks about how to rent strategically.

C (30:31)

Yeah, being a renter is a skill and you get better at it over time. It's just that, just like finding a house to buy is also a skill if you keep doing it enough instead

B (30:40)

of looking at, okay, does this place have good views? What are the granite countertops like? Oh, it looks pretty. We don't care about any of that. Number one criteria for renting a place is what is the ownership structure. What that means is, is this owned by individual landlord? Is it a condo? Is it a house? Is it a built for purpose rental apartment? And we only care about the last one. So we only care about the type of place in which it is built specifically for renting. And it's an entire apartment. And again, you can be really strategic about what type of apartment too, so that it's very unlikely that you'll have that instability for school in which they'll sell the place and then you'll have to go find a new home, which is really bad for your kids. Number one criteria for us is is this a built for rent for purpose apartment? And that's the only type we will look at. And it is much harder because then you're actually ruling out all the condos, you're ruling out all the houses that you could be renting. If you're strategic about it, you can still pick a really good apartment and you don't run into that risk of the landlord selling and then kicking you out because they'll have to sell the entire building.

A (31:45)

That is absolutely brilliant. And right. The only downside is, which is not really a downside, this is just how how life works is, you know, you're going to get an increase in rent every single year. Sometimes if you rent from a particular homeowner, they might not increase the rent. Yada, yada yada. And like you kind of skate by in this case, okay, this is a financial transaction we need to take. And you two have stood on a hilltop and screamed this for so long. We need to take the emotion out of this home ownership. It's the Canadian dream or the American dream or whatever. And just look at this. Where I'm living, this is a financial transaction and I need to live somewhere and I'm paying a certain amount and in this case I'm paying a certain amount. You might even be paying a small premium potentially to live in a place that is the structure where these are rentals. And two years from now they're going to be rentals and 12 years from now they're going to be rentals. I think about the place that I'm in. We're renting from the homeowner at the end of our contract, which is in September at the one year mark, they could decide to sell it very easily. And I know that every single year. So I am taking a risk unquestionably that this is a one year thing or it might be a two year thing when I ideally would like to live here at minimum five years. If this was a rental place, well, that's a no brainer. So that is all you to look for is this for longer term rentals or just like how do you think about that?

C (33:10)

Well, it depends on, I mean like when you're just Like, I'm going to live in the city. When we were, it was just the two of us and it was easy for us to move. We didn't care about any of this kind of stuff. We lose the place in a year, we'll pack everything up into our backpack, and then we'll be off to Singapore. If you're looking for. If you're looking for something and you care about stability, that has to affect the strategy of the place that you're looking for. And most renters don't think about that, because most renters, they rent when they're at the beginning of their working lives. It's usually meant to be like a temporary place. And then when they have a family, they settle down and they buy. Finding good rentals and knowing how to play with the market is just like any other skill. The more you do it, the better you are at it. Being a good renter. It's a game, right? It's a game, and if you know how to play it, you can figure out how to win or at least find a better deal for yourself or recognize a really good deal when you find one. And it's just like any other skill. And that's what we do.

A (33:59)

So two of the other costs here are, interestingly, in this usda and then the hour costs, right, Your version, which are clothing and miscellaneous. And we talked about this the first 20 minutes of the episode. Here you're talking, it looks like $2,200 a year combined for these, but there's also no negative amount for amount recouped when sold. I suspect, like, I suspect many of these things in those two categories are going to be wiped down to almost zero. So, I mean, you've got, in your case of these seven categories, housing so far has been zero. It sounds like the housing costs might go up a little bit. Clothing and miscellaneous, I suspect, will net to close to zero.

C (34:39)

Yes.

A (34:40)

Not zero upon sale of all these things. Since you were so nice and strategic with all of it and then daycare and such and all those. That, to me, was one of the most interesting chapters of the book. So hacking childcare, you called it. I think a lot of people from the FI community are going to get a lot of value out of that particular chapter. It's just anytime you open up the aperture for what are my possibilities. I think you two having dived into this with your unique brains and your unique view on. On life, I think that's going to help people. Because a lot of these things, I just simply, I personally wouldn't have known any of them existed. And I think for most people it's always like, what's the scare category? In our real five world, the scare category is health care and health insurance.

C (35:23)

Right.

A (35:23)

I think for at least as I see it for children, the scare category is how the heck do I do this childcare thing? Especially if we're going to both continue to work and if you're not, if one of the couple is going to stay home, there's a huge opportunity cost to that also, like, then I could at least understand the $300,000 cost of a kid. If it's opportunity costs of lost salary, that's a totally different ball game. But that is a very long way of saying, like, I really think that hacking childcare is going to be massive. And are there any other quick takeaways? I know even like that co op you mentioned with something cool like, are there anything that's jumped out to you that's like, oh, wow, that was fun. And I just wouldn't have known that.

B (36:05)

I think the geographic arbitrage thing applies for parenting as well. That completely blew my mind. We actually ended up world schooling our kid inadvertently. We weren't because we don't need childcare at all. We just because we don't need to work. That's one advantage of five people. But we were in Spain and he started following these like Spanish kids around that were like wearing uniforms and I was like, oh, does he want to be part of a school? So I asked him, like, do you want to try going to school? He said yes. We thought this would go nowhere. We're like, can we just email a handful of daycares in Spain and see if any of them will get back to us? Probably not, but let's try. Bryce emailed five of them and then one of them did get back to us and say yes. And we were only there a month or two, so they would have to take us short term. And then another thing that surprised me was the cost. So in the States, the average cost per day of daycare is US$70 per day. Then you probably have to sign on for an entire year. I don't think they're going to be okay with you just come in for a month. Like, they're probably going to like, you have to give us two months notice. Are you going to withdraw and you have to pay all this deposit, whatever. They didn't ask us for a single deposit. The cost was €30 a day, which is 36 USD. So that's half the average cost. In the US to put them in a daycare in Spain. And it was very flexible because they said you're here for a month, that's totally fine. We will work out the cost for what it needs to be for you guys. And so we world schooled him for the time that we were in Spain. He actually learned some Spanish. So instead of saying all done when he's done eating, he says estudo.

A (37:33)

At two years old, that's all.

C (37:34)

He can speak Mandarin, some English and then some Spanish too and a little bit of Russian for some reason.

A (37:39)

So it's like, yeah, I'm not touching with a ten foot pole breath.

C (37:43)

The amount of travel that we did and different type of daycares that we put him into, he just started learning like all these different languages. That was a whole other advantage of

B (37:51)

I was expecting and that was so little effort. Like if we spoke Spanish and we were more optimizing about it, we could probably find a way cheaper daycare that was just like blasting out a handful of people and just taking the first one that said yes. In addition to that, we found another resource that was super useful. It's called Dr. Sa, which is an online doctor platform. It works in most of Europe and it works in many parts of Asia as well. So you pay each time you use it to talk to a doctor. It's not very expensive. It's like €30. So like US$36 to talk to a doctor. They give you a prescription that you can use in any pharmacy in that country. The prescription is super cheap. So for example, our kid had hand, mouth and foot disease while we were traveling. That happens like sometimes you get sick and then we're like, okay, we need to talk to a doctor. It costs $36 to talk to the doctor and the prescription was $10. It was so easy. Like as a parent I was like, oh my God, how am I going to find a clinic in Spain? I don't speak Spanish very well. I'm going to have to go line up and wait to see a doctor. And I was just very stressed out. But then once we found this, it was just the same day got the prescription because he was had a lot of stomach issues and then it fixed his problem in a week. And we only spent what, 20 minutes that day talking to the doctor.

C (39:01)

To our surprise, we discovered that Geo Arbitrage made fire a lot easier six or seven years ago when he was vast. Talk to you now we're finding Geo Arbitrage makes parenting and daycare easier too. If you have that ability to make your job flexible, or if you're a partial phi or whatever, you can start traveling, and it'll actually solve a bunch of both the problems. Raising a kid inside the US Is quite expensive because you're paying to work a lot of the times. But when you start traveling, that flexibility becomes your superpower and your unfair advantage. And then you can find all these different opportunities all around the world in which you can. Like, they have kids too. In many cases, it'll be far cheaper than doing it inside the US I

B (39:36)

have to say, it's very different from geographic arbitrage as a couple, though you do have to stay much longer periods. Like, we don't travel faster than a month at a time. And also very strategic about where you go, because we discover that places we used to love as a couple, like Switzerland, for example, doesn't work very well as a family. What happens is you go back and you're like, oh, my God, all these hikes that I could do. You are not doing any of those hikes. You can't do any of those. You're more into museums. You're more into going to parks. You need playgrounds. We're obsessed with playgrounds now. We're like, where's the playground? Where's the nearest playground? And then we discovered that Barcelona, which was a place that we didn't like that much as a couple because they didn't like us, because they were like, oh, tourists, get out of here. There's just too many of you. Just go home. They were very nice to us as a family, and I didn't realize how family friendly Barcelona was. There was just playgrounds everywhere. You go to the Sagrada Familia, and there's three playgrounds within a stone's throw distance. People on the subway are so nice to you. Like, they were all joking with our kid and playing with him, and he

C (40:37)

communicated with him in Spanish, too, which is so weird. Weird for an Asian kid. So he'll be like, hola. And they're like, oh, my God, that's adorable.

B (40:44)

Yeah. So just like, it's a different form of travel. You definitely have to reset your expectations, but it doesn't mean you can't ever travel again. And geographic arbitrage surprised us in that there were cost savings with that as well with a family, because.

A (40:58)

What was the name? Dr. Sa. Can you spell that?

C (41:00)

D O, C, T, O, R, S A SA Okay. It's a telehealth service that operates all around Europe and many, many different countries. When you're traveling. So that resource became really useful when we were traveling.

A (41:11)

Okay, so Dr. Sa, I like that. I know I'm bouncing all over the place, but it's so interesting thinking back. And again, the beauty of chatting with you guys and you living this now is it opens the aperture A. But B, it brings me back to, like, man, I remember when my kids were born and I forget exactly. It was like there was the bouncer and the swing and then there was some third thing. It was like some rumbler rocker or something. You never knew which one your kid was actually gonna like. Every kid was different. When you have this infant, as you guys of course know, you just want them to sleep. You would pay an unbelievable amount of money for them to just sleep. So we bought all three of these things, and almost invariably each of the kids, each of my two girls only liked one of them. In the case of what you're talking about with this, buying these gently used after the depreciation curve and then selling it back, it's like, oh, well, I can actually do that. I can test all of these things. I remember the Baby Bjorn as the carrier that you put on your back or on your. On your chest, I think it was.

C (42:10)

Yeah, yeah.

A (42:10)

What if they didn't like that one? Then there's the over the shoulder, whatever it is. The harness or the.

C (42:16)

I forget.

A (42:16)

Exactly. You can test all these things. And that again, is a fun way to do this as opposed to saying, oh, man, this is so expensive. You could look at it as, wow, by being a little bit smarter. I get to buy these things used. I'm going to basically resell them for almost. There's a little bit of hassle, obviously, just a tiny amount. I can sell them for almost the exact same amount. And I can actually find what my particular kid really likes and makes their life easier. And most importantly, in this case, makes our lives easier, right?

C (42:44)

Yeah, for sure.

B (42:45)

And then you can tap into name brand things that before you're like, okay, I can't afford this name brand thing. It's like, well, other people will want this name brand thing. And then you'll get a better experience for less. So why not test it out?

C (42:56)

Yeah. Taking your kid to a toy store where everything's in a box, it's like everything that you buy is a guess. You're guessing that he's gonna like the dinosaur toy, but you have no idea. Right? But again, if you buy stuff used, it really does just take the pressure off of it. There's always that dynamic of, like, if you Buy something really expensive for your kid, and then you just play with the box. You're kind of annoyed at them because you're like, hey, this thing was like X number of dollars. But if you buy stuff used, it actually not only is it a good financial decision, and it's good for the environment as well, because you're not actually, like, you're just reusing existing stuff that's already been manufactured. But it's an emotional hack as well, because you just got. Well, he doesn't like it. Oh, well, back to the secondary market you go. It's. It's one less thing to be stressed about. And that's always a good thing when you're a parent.

B (43:37)

One of our favorite things to do is take him to the thrift store, because then all the toys are already out. They're not in boxes. We don't know what he's going to like. So he gravitates towards certain toys, and it's secondhand, so we can buy it and sell it later, and it's all pretty much free. And it also tells us which stage in life he is so that he likes that particular toy. So then later on, we know to go down that category and not waste time.

A (44:00)

Hey, you guys talked about something more broadly fi. The idea of money trees.

C (44:05)

Yes.

A (44:06)

I just thought this was a really interesting rethink on, like, almost how to explain Phi. Instead of the five being this one monolithic, you have this number. You reimagined it again. You're writing a book for parents.

C (44:19)

Right.

A (44:19)

So you're talking about, okay, it costs $500 per year for diapers. I'm making these numbers up, of course. So therefore, to have a money tree that would pay for $500 a year, you take 500 and multiply by 25. Well, most people listening are saying, oh, wow, that sounds a lot like my phi number.

C (44:38)

Yeah.

A (44:39)

But actually broken down into a granular level, like, I think this can apply for five people far outside of just baby items. I'd love for you to give a little more flavor on the idea of the money tree.

C (44:49)

Sure, yeah, yeah, yeah. I mean, like, fire is a big task that, at the end of the day, requires years of consistent effort and consistent lifestyle changes towards a goal. And then when you get to the end of it, you're like, huzzah. But the thing is, that becomes very inaccessible to a lot of people that are new parents. Like, the last thing that you want to do for a parent is to give them more homework. Right. What we wanted to do here is take the concepts of fire and then apply them on much smaller, bite sized goals. Whether I'm not trying to convince this person, hey, you need to start opening up 401k now so that you can retire in 10, 15 years. They're like, yeah, that's cool, but it's 2am and my baby's crying and I haven't slept. Like, what? Like, what are you going to do for me now? It has to be more smaller attainable goals. And the idea behind the money tree is, first of all, it's an interesting image. Like, it's something that you can picture. It's a money tree that grows money. Right, but instead of growing money, what if it grows, like you mentioned diapers? Diapers is a cost that every parent has to deal with. Unless you're one of the people that are using the cloth diapers that you have to wash yourself, which, ew, gross. Ick. Not into it.

B (45:49)

If you're into it, do your thing.

C (45:52)

Yeah, weirdo. Anyway, so let's just take both.

A (45:54)

I'm gonna get hate mails now. Thank you.

C (45:57)

It's okay, you can direct them to me.

A (45:59)

Direct them to millennial-revolution.com.

C (46:02)

yeah, Eddie, there's no such thing as bad publicity. So if you just want to take the cost of diapers and the diapers are like maybe $40 a month for disposable diapers on average, and then you expend that out to a year, that's going to be $480. How do we just retire that part of your life so that you never have to worry about diapers anymore? And then so we kind of run through the math on how to do that. Multiply by 25. That's the 4% rule. That's a 4% rule. That it's an idea that came from the fire community and this idea that it came from retirement planning, but we're just going to apply it to this little island of their life and let's just see how we can make diapers self sustaining. And the point of that is to make it seem attainable. It's like, oh, okay, if I can just take care of making passive income just to pay for my diapers. That seems like something I could potentially do during a nap or potentially do when I'm like sitting and reading a book or something like that. What it does is it kind of introduces parents to some of the five concepts without it seem so scary. You want to make this addictive. Like, you want to make it go, hey, I managed to pull this Off. What else can I do? And the cool thing about that is by learning how to make your diaper tree and by learning how to manage your little small micro portfolio just to take care of this thing, you're basically causing them to gain the skills that it will require to then tackle something bigger. Like, okay, now we've taken care of diapers, now let's see if we can take care of toys. How do I make clothes self sustaining? How do I make this self sustaining? Maybe I'll do something more ambitious. Maybe I'll make gas prices self sustaining. And then all of a sudden you have all these different money trees and you have all these different orchards that are pacifizing parts of your life. You're basically mini retiring parts of your life. And the more you do it, the easier your life gets, because those are costs that you don't need to think about anymore.

A (47:31)

Yeah, I like this. This could also, like I said, we could expand this a little larger just to fi our entire lives. It could be a checkpoint of phi. Hey, I have now made a money tree for my cost of living, my actual housing. I don't want to say mortgage, because the three of us are going to recoil in horror, but where we live or our cell phone or whatever it may be, it's kind of a cutesy take on like, hey, you know, Lean fi is another example. Hey, this is my actual core expenses. People are always looking for progress checkpoints. And I think that's what's fun about the money tree. Yeah, the picture that we've always used is the perpetual money making machine we had many years ago. We had a guy named Joel. He had a site called Fi180. I don't know if it still exists or not, but yeah, he came up with that perpetual money making machine. And that's in essence what this money tree is.

C (48:20)

Yeah, we kind of like slipstreaming like fi content into like tired parents brains a little bit. And the association that we wanted to create is that, hey, if you learn this stuff, if you learn these skills, it makes your life slightly easier. Like, you know, like you like to say, if you make your life 1% easier with like every one of these strategies. Hey, if you stack up a whole bunch of these things, all of a sudden it becomes like a really big change. And it's a change for the positive because we want to make parents life easier, not harder.

A (48:45)

Bryce, that seems like the absolute perfect place to land the plane here on this episode. I want to go back to that. Your child deserves the best. We can say that. And we can also do it smarter. And I think that's what we in the FI community love doing. How can we look at a problem a little bit differently, do it a little bit smarter? And I think you guys have just nailed it with this book. So the book is Parent Like a Millionaire without being one. This is great for people not in the Phi community, but it very clearly is wonderful for people in the Phi community. I think there's so much here. Of course, there's no way in an hour long episode we can go through a multiple hundred page book, but you've got a little bit of everything. Can, can you give just a flavor of other categories that people might expect from wills and such to wherever else you think somebody who's listening from the FI community might say, okay, I've got to grab that book.

B (49:38)

Yeah. We also talk about how to make the stock market pay for college. You don't really have to do a lot of the heavy lifting. You can make your money, do a lot of the heavy lifting. And we also talk about insurance. That's life insurance. One of the things we didn't have to worry about as a child free couple, but now we have to think about it. How to save money on life insurance, wills. That's another thing didn't have to think about as a child free couple. What is the the best way? How much do you need to spend on wills and why do you need a will? Any other categories that you can think about?

C (50:07)

Oh, like there's the travel stuff, the schooling stuff, the tax stuff. There's.

B (50:10)

Okay.

C (50:11)

There's just so, so many.

A (50:13)

I think we're gonna have to do around two at some point in the not too distant future also because. Right. College and all these things. There's so much. There's so, so much. This was just a wet the appetite. I read the book. I love it. I think it's fantastic. And you guys are the best. I can't believe it's been seven years since you've been on the show.

C (50:29)

Yeah. This is so much fun talking to you again.

B (50:31)

So great to catch up.

A (50:32)

Indeed. Indeed. So millennial-revolution.com wonderful website. Send Bryce any hate mail for any particular things, but absolutely wonderful website. And your book Quit Like a Millionaire and now Parent Like a Millionaire. Christine Bryce, thanks for being here.

C (50:48)

Thanks for having us.