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11/01/2012

Having children is a bad economic proposition



When one looks from the angle of profit and loss or the yield of an investment, having babies is a bad gamble. Statistically, only the top 20% of a cohort would be making decent returns in terms of profit. Maybe 30% will break even and the rest outright losses.

Let me show some numbers. Bringing up a child will easily cost between $500k to a million or more. Giving an expectation of 5% per annum return and a productive life of 30 years, the return should be 150% plus cost. A million dollar upbringing cost would need a return of $2.5m and a $500k cost will need a $1.25m return. To earn $2.5m a Sinkie must bring in an average of $83k pa for 30 years. How many average Sinkies could earn this amount? For a return of $1.25m the average income should be $42k. This is likely to be the bulk of the average Sinkie’s income.

Put the money in properties, a $500k investment over 30 years is likely to give a return of 10 or 20 times, capital gain and rental income. This means between $5m to $10m in the Singapore context. Why would people want to indulge in the precarious and risky venture of child bearing for so little return and so many angsts?

Bringing up a child can be a bad dream, some a nightmare, and worst, could be a life time of hellish experience. To make things more disgusting, you have a govt lusting at every child as a digit to contribute to economic growth, to pay for someone’s sports car or multi million properties, and to defend and die for dunno what.

When everyone is looking at child bearing from the economic point of view, it just does not make sense to bring up a child. It is too costly, and to most parents, a losing proposition. Many would have to write it off as bad debt or capex to be depreciated over 30 years if lucky, or a lifetime of cost incurring negative asset. Does anyone look at a child as a new life, to be cared for, to be loved, to be provided for, to live life and to enjoy life, instead of becoming any inanimate cog in the economy?

15 comments:

Anonymous said...

RB, there are something in life you cannot measure in terms of money. It is sad if anyone trying to do what you proposed. I know you don't.

I am not sure if our government actually used us against economic returns. Sadly, it seems this is what actually happened. Once your value is down to zero, you die your own business. Ask any of the old people with no family and jobs.

Anonymous said...

Perhaps adopting a grown up teenager with good academic results might be better off than creating one where you need to be good parents. Funny, this sounds like what the government is doing, importing an instant family, cut and paste, and ignore the "lousy" biological children. But we all watch movies and know what happens to step chid/parent relationships.

Anonymous said...

Does anyone look at a child as a new life, to be cared for, to be loved, to be provided for, to live life and to enjoy life, instead of becoming any inanimate cog in the economy?

As long as we have a Pro Alien Party government, we cannot afford to "enjoy" our lives as human being.

If we open up our minds and do similar economic calculations with our votes, you will come to the inescapable conclusion;
It makes good economic sense to vote Opposition.

Anonymous said...

9.18am, unfortunately 60% do not agree with u mah

Anonymous said...

Whichever sinkies make themselves parents in Sin create burdens for themselves.

Be warned.

agongkia said...

How can one compare the value of property to a child who can bring happiness?One cannot bring along the fortune he made when he kick the bucket.But with children ,I can continue with my surname for generations.Are you saying that those who are rich and wealthy can have their clan where poor peasant like me should not having descendants?
Do you know that my greatest wish in life is to see many children and grandchildren sending me off on my last journey?
See those rich people with million properties but no one to send them off.You think that's meaningful?Our parent produce us and we should continue to produce.Wife cannot produce,must try getting mistress to produce.Surrogate or whatever,just produce.Dun be brainwash and think children are burden.
One will be cheating himself and fall into the trap if one fail to produce.
Children are our hope.No money or roof never mind.Must have many children.
Anyone thinking of abortion after seeing articles that discourage production,please produce and give to me.

Anonymous said...

If it cost about $500k to bring up a child to a working adult ...

How much will it cost 3rd world parents for them to Raise a child and export them to Singapore?

$50K or $100K?

Compare the investment and you get the idea ....

Our own have to slog all their life to pay back the $500K to our parents and most will make a lost

while FTs just have to work 5 years to return the investments to their parents ...

Bengster

Anonymous said...

Hi RB,

I think you should expand your article on how Singapore parents are actually subsidizing the FTs

While we give our off springs a $500K living std and education

and then we find out our off spring have to fight it out with S100K imports ....

It seems like economical war and dumping and flooding other countries markets .... killing its local industries

Bengster

Chua Chin Leng aka redbean said...

Hi Bengster, your wish is my command. I have just posted a follow up to this post: )

Chua Chin Leng aka redbean said...

Agongkia is the perfect Confucian man. 传宗介代。I am not too sure if the Chinese characters are correct, but it means produce to carry on the family name.

Anonymous said...

Hi RB,

Thank you ! for speaking and blogging for the voiceless

Bengster

Matilah_Singapura said...

> "Having children is a bad economic proposition"<

Losers shouldn't breed more losers

patriot said...

Agongkia can only understand the situation if and when he has to brong up children locally. Of course members of his family and neighbours most probably produced like hamsters. Same with anyone before the Seventies when we were living in the villages with large compounds and plenty of helps from all the people around.
Free deliveries of babies by experienced neighbours, almost free pre and post natal checkup and review and medical services at home and maternity clinic, hospital and outpatient clinic. Where got problem to produce a dozen and more?

When Chin Leng put it at $500k to a million dollars to bring up a kid to ondependent of him/herself, me thinks he is being very conservative.

Another area me likes to add is that most of the young today tends to consider their old parents as burdens themselves. They have no qualm to worship their divine father, even givimg more in tithes than giving their parents.

Unless Agongkia understand the situation he will continue to make his dreams.

不见棺材, 不流 泪。

patriot

Anonymous said...

For the average Singaporean, you need to decide whether to spend the money to raise a child or to set it aside earning interest for retirement. So purely on economic value alone like how our pragmatic government always thinks, the choice is clear.

If the government truly want to increase TFR, then they should start to value the citizens as an asset and not a liability. Create jobs for citizens and not foreigners and have a more comprehensive social system in place and the TFR will increase.

Anonymous said...

Umm zai si !