If you’ve gotten this far in the article, you’ve probably guessed that it was an April Fools’ joke. In fact, the first letter of each paragraph spells out “April Fools Day Joke.” However, the story about the doctor presenting the black market offer is 100% true. To this day, we don’t know if it was his (bad) joke, a test, or something else. Also, the part about spending $250,000 on tuition for two kids through the 8th grade is also true.
A lot of personal finance “gurus” talk about whether kids are expensive. Almost anyway you slice it up, they are. The rare cases I’ve seen when they aren’t expensive is when a family is already financially independent, so a member isn’t working anyway.
Personal experts agree that for almost everyone, if there isn’t a large direct cost, there’s a large indirect cost. For example, adults have to make sacrifices at work to be there when kids need care. Those sacrifices often come due during performance interviews that determine promotions and/or raises.
Relating it our own experience, kids are expensive. The oldest only eats “prime rib” (his name for any premium steak). I’m to blame for some of the expense because I have a not-so-modest STEM toy addiction. Our biggest expense though is the $250,000 that it will cost to get the two kids through 8th at their private school – and that represents a 50% discount.
If we’re spending all this money, we’re going to have to figure out a way to quantify this investment in our month net worth statements.
Luckily, I have an idea.
Calculating the Value of Your Kids
First, we clearly made a pair of terrible decisions. How can we turn this around? How do we get a return on this investment?
One of the most obvious ways to calculate the value of your kids is to use their value on the black market.
Of course, this wasn’t my idea. It was actually our doctor’s idea. I don’t know if he jokes with everyone this way, but when our first was born, he said that we can get $250,000 on the black market.
Like it or not, I’m going to take his word because I don’t want my Google searches to put me on some kind of list.
Does that mean we can get $250,000 for each of our kids today. No, we’re going to make some adjustments to that.
Almost all buyers are going to want babies more, that’s more time to bond and mold them. Our 6 and 7 year olds may be too attached to us now. They probably wouldn’t latch on to the new family too easily. (Note the use of “probably” – there’s some room for doubt.) However, at 6 and 7 they are potty trained and can get dressed and make their own breakfast. That should count for a lot.
You could also guess that, having invested in their education thus far, they may be able to command some kind of premium on the market. To maximize their value, we’d probably have to get some IQ and neuropsychological testing done. I’m comfortable that would boost their value. We can do some physical testing as well, but neither father nor their mother are considered athletes. I feel like these kinds of tests are either all good (Olympic Athlete), all bad (serious medical condition), or a non-factor (the vast majority).
Just trying balance the two factors is difficult. I think the value of having a fresh baby may be worth more. I have nothing concrete to base this off of. Maybe because puppies are at a premium and older dogs are less likely to get adopted.
One way of balancing those two factors is to split it in the middle – the value, not the kids. (This isn’t a King Solomon story.) If our doctor’s appraisal was on the level, I would guess we could probably still get $200,000 for each child.
Kids aren’t typically viewed as an asset. As my old physics teacher might say, have much more potential earnings than kinetic earnings. Hmmm, maybe he used a different “E” word there.
“E”-words aside, I’m going to have to go with the personal finance experts on this one. It pains me to have to agree with them, but it doesn’t make much sense to include some theoretical (and illegal) value of your kids in your net worth.
Important Disclosure
There are a lot of articles asking brands not to do April Fools this year due to COVID-19. First, I’ve never considered this blog much of a brand. It’s just one guy typing. I don’t sell a product. I don’t do anything that any traditional business would consider marketing.
Beyond that though, I feel that we need humor more than ever. Obviously COVID-19 is terrible and should be taken seriously. Social distancing is difficult – humor can make it easier. Let’s not COVID-19 ruin all the fun in the world.
Also, I had drafted this idea in late 2019. It was literally the only article I had planned for 2020. It wasn’t created in the time of the COVID-19 being what it is today… and it certainly isn’t related to COVID-19 in any way.
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