Finance Friday: Chasing FIRE by 35 WHILE Supporting Extra Family Members

26:01Distilled and bottled by Fifth Generation Inc. Austin, Texas. 40 % alcohol by volume. Save it responsibly. Let's jump back in with Sarah. Okay. And then the timing consideration, it seems like you have a question around, should you sell it now or should you sell it in the spring or summer when it's peak season for sales? Right. Can you walk us through your thoughts there? Yeah, so I have all my tenants are essentially moving out within the winter timeframe. So really, the timing works great if I put on the market, like come February. But I know that's not the hottest time of year for houses to go on the market.

26:35I know spring and summer is a really popular time. So given both of your experience with real estate, I just wanted to get your opinion on whether, you know, maybe I should keep it for a few more months as a short term rental and then sell it. Or if you think, you know, it just doesn't make sense to hold on to it any longer. Oh, all right. Let's think about this. So to frame the answer to the question, you're saying there's a seasonal ebb and flow to housing prices. which you want to hit at peak, right? Your tenant will vacate the property in January, January, February. And so you're either going to have to get a new tenant at that point and sign them to another lease and sell it as a rental property, or you're going to have to sit on, you're going to get no rental help and you're going to shell out the entirety of this$4 ,300 mortgage payment plus any expenses and upkeep every month until you sell it.

27:34That's the dilemma that you're facing, right? Correct. So Mindy, you're the big time agent here. What is the seasonal peak to trowel for housing prices on an annual basis? Well, Scott, that entirely depends on whatever market this property is located in. What state is this property located in? It's in Maryland. Maryland. Okay. So we have winter to contend with and Maryland is high taxes, right? It is. Especially this county that this property is in, it has higher taxes than some of its neighboring counties. Nice. Well, that's awesome. So I would reach out to an agent in your area and say, ask them, what is the ideal time to get my house on the market?

28:22Now, you said that your tenants are leaving over the winter. They might not treat it totally perfect. And you might have some repairs that you'll need to do in order to make this saleable. You're not necessarily focusing on just investors. You're focusing on anybody who wants to buy the house, right? Yeah. Yeah. So this could be an owner-occupied property, in which case you want it to look amazing. All right. So I just pulled this up though while we were talking. Redfin, this is Redfin's data. This is median sales price by month, every month for the last couple of years. If we look at January 2023, median home price was$382 ,000.

29:05By June, the peak, it was$425 ,000. So that's a$40 ,000,$35 ,000 spread,$38 ,000 spread, something like that. But last year, January 2024, the housing prices were$402 ,000. And by June, they had gone up to$442 ,000. That's a 10 % increase. The 2022 peak of trial was$377 ,000 to, and let's use June again,$428 ,000. So you've got a$50 ,000 spread on a US national basis. You said you're in Maryland. Do we know what part of Maryland? Heightsville. Okay. Not big enough. here. Let's do, um, let's do, maybe there's like a DC Metro. This is too, this is too noisy. This is not helpful, um, on this, but I think, I think that that would be a, let's try Maryland state.

29:58Let's just do the whole state of Maryland. Go from there. So, okay. We got, we got a little bit better, more helpful stuff here, right? So January, we've got a, a three 56 and we've got a 420 peak in June. We've got a 361 medium price point and we've got a 432. So Maryland is even more extreme than the nation is what this is telling us, 388 versus 453. But that data says you could lose. You'll definitely lose the rent on a rental basis if you have it vacant waiting until June, but that June is when the prices will peak. And so you probably want to go under contract in April or May if this year performs anything like it has the last three years in Maryland.

30:46Is that helpful? Yeah, no, that's really helpful. I hadn't thought to look at that price chart like that, Scott. So no, that's really good to know. I did not think three months would make that huge of a difference. Me neither. That was really surprising to me. I I would have been like, eh, there's no big difference. Let's prove it out right here. Nope, that is completely wrong. The data shows that there's an enormous difference in median sales price depending on time of year. And you should probably talk to a couple of agents to confirm that. Do note that the agents, while they are, obviously, they're supposed to be fiduciary to you.

31:20There is a heavy incentive to sell now. No time like the present for that. So that advice will probably lean towards a faster and quicker sale than wait six months, come back in six months. And then I'll earn my commission from you. But that doesn't mean you shouldn't also talk to those agents and get their opinion on the seasonal curve of the market. So if you hold the property, you are paying$17 ,000 in mortgage payments with nothing coming in. Is there any way to extend the tenants for a couple of months to help mitigate some of that? Yeah, so I actually have one tenant who wanted to stay six more months, but I just converted her lease to month to month because I just didn't want to commit and put myself into lock myself into that timeframe.

32:03So I do have one tenant who wants to stay longer. It just she pays the smallest rent, though, because she has the smallest room in the house. So it doesn't help as much. And then the other two rooms are now vacant. So I would have to fill those if I wanted to keep it for a little bit longer. Yeah. So there's several issues at play here. You've got a rent by the room situation. You want to sell it. It sounds like you want to sell it. It is my experience as a real estate agent that tenants don't care how fast you sell your property. And why would they? They don't have any skin in the game. They're actually going to lose their housing if you are selling it.

32:44So trying to schedule showings with tenants can be kind of tricky. They definitely don't keep it in showing condition and pristine. And tenant-occupied properties typically look kind of dumpy when an agent goes to show them to their buyers. So I would suggest making a decision to sell, having your tenants out by XYZ date, refreshing the property to however much it needs and then listing it. And that could take from now. Have you been in the property? That could take from now until February or March, and then you are on the market in time to capture that June closing date. Yeah, I have been to the property.

33:29I can't not stay away even if I wanted to because there's always something that's going on there. um so yeah no no that that's really helpful i think looking at the pricing chart and just your suggestions mindy i think that gives me um a lot to think about so i'll definitely go back to the drawing board and um try to map out the pros and cons there and just see what the optimal time would be i think that you have a really good framework here to think about it i'll be really interested to what what you do there one would wonder if there's a deal to be made with the saying, hey, can you stick around for three more months, give you a really good bargain on that or whatever, so that they are defraying some of those expenses, fill it up to the best of your ability for that period of time, just to offset it.

34:15Even a loss, even though a really good deal to somebody that's still a loss for you is better than losing all of the economic yield to vacancy in that interim period, and then you have maybe selling it in the summer. If your further research which corroborates our initial instinct here from the data. Sarah, one other question that you had was, in terms of family planning, how should I budget for supporting two generations of family members? I think this is a really interesting question. And I don't think there's an easy answer for, well, I mean, there's a super easy answer for this. That's just a line item in your budget.

34:54But there's not a real easy way to do it. Oh, just don't is not the answer for you or your mother or your brother, or it sounds like your partner either. So that just needs to be a line item. So are you spending on average$5 ,000 a month supporting them? Then that gets added to your monthly budget. Is your partner spending 5 ,000 for his supporting his parents? Then that just gets added to his budget or combining them all together. I'm wondering if there is some sort of alternative housing situation that might make this a little bit easier. Perhaps you could buy a duplex or a triplex and you and your partner live in one unit, your mother and brother live in another unit, your partner's parents live in another unit, and then you're all right there.

35:50Your mother can help take care of his parents if they need something and you're not around or vice versa. Maybe his parents can help with your brother, depending on how old he is. And, you know, he needs a babysitter. Is there any opportunity to build anything in on your property? Or can you start start just like peeking at triplexes? Yeah, so I have looked because I think I was looking at duplexes when I was well, when me and my partner were trying to figure out like where to move, right? Because we had two options. we could have moved into my house or I could move in with him. But I kind of lost that battle.

36:29So I'm here. But yeah, so I have looked into that. But unfortunately, around this area, I feel like duplexes and triplexes are not very common. It's a lot of like townhomes and single family residences. I don't see a lot of duplexes. And maybe I'm not looking in the right area. But I I feel like within kind of like the DMV area, there's not that many. I feel like you've got to go out into like the little bit of like outside of like the city, like DC metropolitan area to see those. But maybe I'm just not looking in the right area and I need to, you know, ask an agent, a real estate agent or something.

37:08I'm going to push back a little bit playfully with Mindy's advice here because, you know, like, yes, there's an economic advantage to moving in with that, but that may not be what you want to do with your life at this point in time, and you may be more comfortable with just a number that is needed to fund, to provide the support that you want to provide. What is the amount of money that is needed to ensure the quality of life that you want to provide for your mother and brother? My number, like my personal number, not combined with my partner, just my expenses. I think I'm at around like 1 million, a pretty even number just because like, you know, the expenses aren't too much.

37:52How much do you need to provide? What do you, what is the monthly budget or allowance or what, or, or, or funding that your mother and brother require to live their life? If I do a quick math, I think around like 4 ,000 a month, $4 ,000 a month should be sufficient. And do you provide all of that? I do. Yeah. Is there any income that your mother can contribute to the situation whatsoever? Yeah. So she actually did start working part-time again. Unfortunately, it's just a little bit more challenging for her because she doesn't drive. So it's just hard to get to a place where, you know, you can work that's metro or like bus, public transportation accessible.

38:37Um, so she is, she just start working part-time. Um, and it actually kind of did reduce the, my monthly expenses because now that I'm not aside, I'm only really just providing for the essentials. Now I'm not paying for like the extra wants and things in like additional shopping and things like that anymore. So that actually did help great a bit, which kind of, um, which reduced the monthly number down. Okay. And right now that has stopped. So you're forced to plan on$4 ,000 a month in cash outlays, in whatever various formats, the mortgage payment, utilities, whatever, or direct cash payments to your mother to fund her and your brother's life.

39:23Is that right? That's right. So I think that's a conversation here. I think that's the first one is, hey, there are other ways, you know, there are multiple ways to make this work. There's public transit, there's moving to a place that is more proximate to jobs, and there's remote work opportunities. And I think that having that discussion around there, like I wonder if at this point it's worth kind of maybe having a harder conversation around, hey, I'm going to continue contributing around here. But I would feel better if you are working 32 hours a week or some number that is reasonable here.

40:03And even 32 hours a week at 15 bucks an hour goes a huge way to doing this. And I think I think that's a from an outside observer standpoint, something that needs to be discussed. Push back. Tell me tell me if I'm on the right. If I'm if I'm pushing inappropriately or going in the wrong direction with with that, that reaction response. No, that's that's a valid answer. No, I think that's a valid point. I probably do need to have that tough conversation with my mom. um i think part of it feels like part of it is like i just feel guilty right like she gave up her whole life so she can come to the u.s and i can have a better education and i can have a better job so it feels a little bit like i'm being ungrateful to be like oh you need to work more so i can pay less out of my paycheck to help your lifestyle perfect well that's exactly the kind of pushback I was hoping for with that.

41:06I'm stating that you're coming on the Bigger Pockets Money podcast, asking us how to improve your financial position. That is the most obvious thing that I can come back with is to say like, well,$4 ,000 a month in direct subsidies to your mother and brother is a very big item that we have to kind of cover here. And I think that that's a really wonderful, wonderful mindset to have in the place here. I would then challenge and kind of say, could I counter with, is there a conversation that can be had and saying, hey, what is a reasonable number here? Do you think that you can generate$250 a week, mom, or$500 a week?

41:41I'm still going to provide several thousand dollars a month in support here, but could you offset, could you commit to offsetting some percentage of that? Here are the various options. Like, what do you think is a reasonable number that you could arrive that if that conversation were to happen? Yeah, I think I haven't had that conversation, but I think I could. I think I've just kind of operated under that mentality like, hey, I can help out and cover everything so you don't have to worry so much. Right. So I'll do that because I can. And my partner is great because he doesn't ask me to pay for anything for his home.

42:18Right. He just kind of covers everything and he doesn't ask me to cover anything. So I've just kind of continued making all the payments. And, you know, I do make a pretty great salary. So I haven't really like felt the need to go back. But it is something, you know, that I have been thinking about, right? Because if I do want to retire by 35, I definitely do need to, you know, probably cut away at some of like, the expenses so I can get there. But yeah, you're Right. That is a conversation I do need to have at some point. I think right now I just haven't. And I think part of it, like I just feel guilty.

42:55And part of it is like, has just been, you know, I have the resources and the means to do it. So I've just been doing it. I think you just need a number to plan around. And if that number is $3 ,200,$3 ,500 a month or whatever, that's 40 grand a year. That's a million dollars in your asset base that you're going to need to cover before you even get to any of your expenses. And so that's one of the biggest observations I'd have coming in immediately to your financial situation is that has to be covered to some degree. And that's wonderful that you're doing that. And I'd wonder if there's some contribution that can be made from your mom if she's able to work and in good health and those kinds of things to do that because you're being very generous.

43:42But it's also a cultural difference. This is not something that people born in America, I don't want to say Americans because Sarah is also an American, but people who are born here, I don't have the cultural and societal obligation to support my parents at all. And I would, but they, you know, it's, I'm totally butchering this and I'm okay with that because I want people to know that I understand that there is, there's different obligations that Sarah feels than what we feel. But also, you know, I would, I would postulate that your, you know, your culture has you working till 65, right? They don't do this early retirement garbage, right?

44:34Yeah, no. Retirement doesn't exist. It's not a concept, right? Between my culture and my fiance's culture, it's like they work till they can work, right? There's not a set retirement number. They're not contributing to a 401k that lets them take contributions at like 59 and a half or whatever the age that they had set. They don't have a set age. They're just going to work till they can work. I think you're being very generous in supporting your mom and your brother. That's wonderful. And it doesn't appear to me right now, based on our conversation, that there is a really good reason why your mom can't work to produce some income to offset the situation.

45:18that's a conversation between you and your mom, probably not maybe an uncomfortable or unpleasant one, but you're coming on bigger pockets money asking for how do I move towards financial independence faster? And I'm telling you that more so than the timing of your rental property, this conversation is, is the number one thing you're going to do in the next year that will challenge that. And a couple of other things to think about here is if your mom is not working, she's not paying into social security. And so she won't receive social security. And so that's another issue for you to consider as you go through this around there is like, there's a conversation we had is, you know, that, that, that needs to start happening here.

45:58If she's going to be nearing retirement age in the next couple of years, you know, there's nothing, there's not being any income coming from that to defray this. And this, this situation could continue to be something that you are responsible for, for many, many years here. So if you're asking, hey, can I retire at 35? The answer is no, you cannot retire at 35 with your current situation. If you have to assume a three to$4 ,000 monthly cash outlay to pay for your mother's housing and living expenses on that period of time. If you want to fund your current lifestyle expenses of 5 ,500 in seven years, you got an excellent shot at doing that, uh, excluding those cash outlays.

46:45So is that, is that, I'm not being, I'm not being, um, I'm not holding back very well, uh, on, on, on stating the reality of the situation, but hopefully it's, hopefully it's just putting it out there for a discussion that is, that is useful for you to react to any, any, anything you'd react to on that? Yeah, no, you're, you're right. I think, um, And this is going to like if I continue to support my family, this is going to be an expense. I'm going to have to like carry on my balance sheet, like you said, Mindy, from here to into perpetuity. But I was kind of, you know, being optimistic and hoping, you know, when my brother is of age, he can kind of contribute to he's 12 right now, so he can't work.

47:27but I'm hoping maybe in like um five or six years maybe he can pull a little bit away but yeah you're right I mean I think my mom does kind of help out a little bit like I said she started working uh part-time this year so she is helping like buying the groceries and like all that like additional extraneous stuff that's not like an essential um so like I said that really helped um but yeah no you're absolutely right Scott like if you look at it from a pure numbers perspective it is something I would have to either account for into my timeline and my number or, you know, have that difficult conversation so I can chip away at it a little bit and reduce that.

48:07I would just also posit that, you know, like you have the means and you have the income generation and you seem to be very grateful and credit your mom with enabling some of the things that have gotten you to be as successful as you are to this point. And I think there's validity to that. and I don't think that it's, hey, you're on your own. Your mindset doesn't seem to be, hey, you're on your own. Go figure it out. I'm done here. Again, I just think there's a conversation around, hey, is there some acceptable thing we could do here that would be pleasant for you and doing something? And your brother's now 12, so I'm assuming he's in school all day and able to take care of himself.

48:43So it's not like that's there. And another piece to this that I would just kind of conjecture is like, let's say 10 years go by, your brother's 22 and starting off in the workforce here, entry-level job, that's going to be a hard conversation to say kick in equivalently. There's going to be some pro rata percentage because your income power is going to be whatever it's going to be in 10 years. And he'll be at the very beginning of it. So that day that you're hoping for in terms of support may be a long ways off here if the issue is not addressed sooner rather than later in some way that is loving and respectful and productive.

49:20Yeah, you're right. Yeah. And there's no guarantee that he could even contribute, right? Because if he takes a job across the country, like, well, that's just a little bit unrealistic to expect him to help out. He can still send money. You can mail a check. That's true. Venmo exists. I don't think Gen Z will ever mail a check. I think many of them will go through. We'll see. He's Gen A. He's not even Gen Z. We're past Gen Z. Yeah. Okay. Well, you know what? He could still mail a check or Venmo or wire transfer, PayPal. There's lots of ways to send money to somebody. Once you've had the conversation around this or kind of figured out what that number ought to be, then I think the rest of it from a financial planning standpoint becomes very simple, right?

50:05It's just, here's a lineup under your budget that is for housing, the payments you are making on your mother's behalf. And here are the cash payments directly to your mother on top of this. And that becomes very simple. And the pool of capital that you're using to do that, I don't think really matters quite as much. It'd be wonderful to think about, oh, here's an asset base that just does that. But I don't think you're there yet from a portfolio perspective to do that. And I think I would just put it as a line item in your monthly budget for now and not think about taking the equity from a rental property and using it to fund that.

50:38I think you just think about your asset base as one pool. And we can talk about that next. Okay. Yeah, that makes sense. Okay. So that was a hard conversation, but hopefully an important one there. What's next? What would you like to talk about next year? I guess my question is, is there anything else on my expenses and my finances that you can see where maybe there's areas of improvement or Or maybe some things I'm not doing that I should be doing that you can see or can think of. I would say that I would like to see you and your partner have a discussion about how your finances are going to work moving forward.

51:19Let's just assume that we keep these three houses, your house and his house. I'm sorry, the two houses, your mother's house and his house. and his payment, or what are all of the expenses that are out there right now? Can anything be reduced easily? In your numbers that you shared with us, your expenses all end in zero. And you said you like round numbers and that's awesome, but I wanna make sure that you truly are spending this much on each and every category. The category I'm gonna call out is the restaurants category. That seems a little high to me. And I don't see any. Oh, I see. Yeah. So I see$200 in groceries and$2 ,000 in restaurants.

52:10I see something you can cut. Yeah, so my the eating out has definitely gone up this year a bit. And I think part of that is twofold. One, you know, ever since I got engaged, and I felt like, okay, like, I truly have a partner, like a life partner to do things with and to kind of help take the offloads. I've kind of like, you know, loosened the purse strings a little bit. I'm not super like, I'm saving. I mean, I just have a set amount that I save and it's like a direct deposit to my savings account. I have like my 401k contributions and everything. So all that's taken care of. And so I don't really track my budget like line item by line item.

52:54It's kind of more like, OK, as long as I'm saving as the amount that I'm comfortable with and that's taken care of, I'm kind of OK with spending the remaining amount. But you're right, Mindy, that that is pretty high. and the second part you might you might laugh at this but it's also so ever since I moved into my partner's home they're you know they have a they're a different culture than myself and they have a different cuisine and they cook a lot of things I don't eat so that's part of the problem and so as a result I think my partner and I have just gotten into a really bad habit of just going out to eat a lot because I, one, I don't really have too much of like a kitchen space to cook at home.

53:40But, and then, you know, like when his parents do cook and stuff, a lot of the cuisine, I don't eat. So that kind of is a challenge there. But yeah, I mean, it's not, it's not a major issue, right? It's like a minor thing. And it's something I could fix. And I just haven't, I've just taken the easy route and just have been relying on Uber Eats and just going out to eat. I would say my biggest reaction to this is that I don't think that the numbers you provided us, Sarah, are as helpful as they need to be in terms of understanding your overall spending and the cash coming in and out of your life.

54:19Because we just said that there's – so when we look at your expenses, you said$5 ,475 per month in expenses. And the first line in there is$1 ,900 for a mortgage payment. But that mortgage payment is for your mom's house, right? And then we have the next item there is going to be$2 ,000 for restaurants, which, you know, we just talked about that one. That is the thing that stands out. Okay, everything else is$1 ,500 around there. And I don't know if that – we know from our earlier part of our conversation that that's not true because we know that there's several hundred to maybe a thousand dollars a month in net negative cashflow from your rental property.

55:02That's not showing up on this, um, that we can get rid of once we sell the property on a future basis. So I think, I think that there's, I think that Mindy's spot on with her statement of, Hey, there's a conversation that needs to happen here in a more kind of formal combination of finances. Or, uh, when do you, when do you get married? Um, we haven't figured that out because we have all this other stuff that we need to figure out. Um, totally makes sense with that. But yeah, once you get, once you get married or whatever, whatever, whatever, at whatever point in the future between now or, and, and, and, and your marriage, um, um, or your wedding, sorry.

55:39Uh, that would be, you know, or after that would be a good time to have that conversation and really get more prescriptive on these and turn these from estimates that are rounded to the nearest hundred to actuals for the last 12 months for the household, I think you'll have a more realistic view on that. I bet you that number is going to climb to$12 ,000 per month or somewhere in that ballpark when you consider the mortgage payment for the house that you are both living in right now, the expenses you list tier, additional cash that goes to your mother and brother, and then negative cash flow from your property.

56:18I'm making that up, but that would be my guess is that it will be a plus or minus 10 % of$12 ,000 a month, which is great. It sounds like a big number, but it's great in the context of a$270 ,000 a year household income environment. You should be able to save$50 ,000,$60 ,000, $70 ,000 a year on that and invest it, but that will give you the starting point for one of the two big numbers that I'm always looking for. What is the annual accumulation of cash that you're going to be able to put to work in some kind of investment? I'm betting your household, for your household, that'll be$50 ,000,$60 ,000 a year right now.

56:53And then the second is what do you currently have, which is$600 ,000 in net worth right now. And how are we going to invest that? And your investment allocation there is perfectly reasonable. 401k, a little bit of cash, and the two properties that we talked about? Yeah, I could probably get a little bit more granular on the numbers. I think sometimes, like I said, I think I bid off a little bit more than I can chew with the rental property and then having another property, which is no longer my, I guess, primary residence. So I'm not there to upkeep and deal with everything that happens there.

57:33So I think as of recent, just going through every single number has honestly become a little bit overwhelming for me. And so I've kind of taken this method of like, OK, as long as I have a set percentage that I'm saving and that's good and we're not touching that, then whatever is left is like we could spend on, you know, bills and things that come up. And you're right, like and things do come up a lot and that's not accounted for. So you're probably right. It is probably going to be a 10 % increase. Like my mom needed dental crowns and that was like$3 ,000 that wasn't, you know, accounted for.

58:11So those kinds of things, you know, they come up and sometimes I'm not super diligent about entering them into the budget. But you're right. I probably do need to formalize that a little bit more and have that and involve my partner into it more. because right now I've just kind of taken the lead on a lot of the stuff, especially when it comes to our finances. Awesome. Well, look, none of that takes away from the fact that you are rocking it. You're crushing it. You have a several hundred thousand dollar net worth. You make a great income. You're 28. You're going to be a millionaire before you know it on all these fronts.

58:45So congratulations on all the success so far. And to recap, we got three homework assignments for you. One is figure out what you're going to do with that rental property. and sounds like we're probably going to sell it. Do you sell it now or wait till June? You should run that math, talk to some agents and figure out the timing there. That's a$50 ,000,$60 ,000 potential decision. So that's one to take seriously and think about how to mitigate the issues there. Then you have a 10 to$15 ,000 conversation to have with your mom about what are reasonable items here and there. And that all comes from a position of extraordinary generosity on your behalf on there.

59:28And hopefully there can be a productive conversation just as, okay, here's what the number ought to be, or here's at least what your mom can contribute and what's reasonable and what you can both agree to there. And then the third one would be to formally combine the finances and upgrade the sophistication with which you present your household spending with your fiancé, how you think about combining your net worth. and the investment approach that you guys want to take as a couple going forward. And that will be a big, big body of work as well. That will not take 30 minutes. That will be all of a Saturday or maybe two or three Saturdays to fully kind of refine and finalize there.

1:00:08So does that sound good? That all sounds good. One final thing I did want to ask in terms of, I guess, continuing kind of on the family planning. In terms of kids, do you think that's something where we need to include as an expense, like if we did have kids in the future, like that we're looking at like twice as like expenses that we need to spend? Or you think it'll just be kind of like a marginal increase in our spending, which I'm assuming it's not the latter, but you both tell me like how much of a change you think that will bring on in terms of the finances. Okay. Let's forget about diapers, food, entertainment, life, anything, all the stuff you got to get for the kids.

1:00:58Let's just think about health insurance and daycare, right? So daycare is going to cost you 400 bucks a week, probably closer to 550 in the kind of DC-ish area that I think you're in around there a week. So that's going to be kind of in that$25 ,000-ish,$26 ,000 a year range per kid. That expense goes to zero if you stay home with the kid and do not have a babysitter, for example. Or for example, if you have a grandma nearby who might be able to help offset that cost pending a conversation that you might have about financial arrangements between the family and those types of things. So that's one.

1:01:48And maybe that's an answer to the question there, if you're thinking about family planning, right? You're jelling out a lot of money here to make sure that your mother doesn't have to work. Can she watch kiddo while you're working as part of that? That's probably something reasonable, reasonable conversation to have there. Maybe that's even the preferred outcome for everybody. Um, and then the second, uh, component is going to be health insurance. Um, health insurance will probably cost you, I'm making this up. So let's go, let's go research it after this, but I want to say like somewhere in the 500 incremental per month in premiums range on top of your family plan, um, in there.

1:02:27And that gets much easier If one of the spouses is working in that period or it becomes much more, you know, if one of the spouses is working, then the employer presumably will cover most of or all of the premium for the health insurance for the family, right? 70, 80, 90, 100%, whatever your employer offers on that front. So if that is not there, you're looking at probably close to$1 ,500 plus, somewhere in that ballpark, in health insurance premium for the family. So those two things make it – if you just combine the daycare and the health insurance premium, that's$40 ,000 a year, which is another million on your asset base.

1:03:11But why would you fire – then the question naturally becomes, why would you fire and put your kid in daycare full time? So that is, I think, a concept that I think a lot of folks with families probably struggle with when they're thinking about how do you plan around all of that from a FIRE perspective on there. So I don't have a better answer than posing those questions right now, but hopefully that was at least a little bit helpful. No, that is helpful. I knew the cost of the daycare. I knew that was astronomical in one of the biggest expenses, but I actually didn't think about the health insurance, right?

1:03:47Like kids need to go see a doctor every like three, six months when they're really young. So yeah, no, that's really helpful to think about. And I'm sure some listeners will correct me with those numbers, but I would say I would plan on at least that amount for the kiddo for health insurance incrementally. Thank you. And please give my thanks to Mindy. This has been really great. I really enjoyed our conversation and you guys both gave me a lot to think about. And again, it was such a privilege to be on here and get advice from you both. Really appreciate it. Awesome. Thank you for listening. Thank you for coming on the show and sharing your awesome, awesome, tough questions that you had here.

1:04:25So really appreciate it. And congratulations on your success. All right. We were super excited to record this episode with Sarah because we haven't covered this topic before. And we know that there are lots of people in a similar situation. We hope you found this episode helpful. And that wraps up this episode of the BiggerPocketsMoney podcast. He is Scott Trench and I am Mindy Jensen saying, get on the train, Candy Cane.