I met with an old friend today online at Yahoo! Chat. He asked me what I am doing, while he has just figure out that I have already have my first daughter a week ago.
After some small talks, we were talking about building a new internet based project. But I declined his idea saying that ‘I can’t afford to invest into more projects at the moment, since the hospital charged us big time, we run out our savings!’ He said ‘hey man, a child is not an expense, it’s an investment!’ We exchange some words over that matter, but I think we disagree on some basic principals.
As far as I’m concern, the basic concept of investment is, to spend an amount of money and expect some for returns; while an expense is basically spending some money and that’s it. Spending money is also mean; you don’t even care if it generates some returns.
1st Scenario: Your Kid as an Investment
I give up a lot of money to make sure that my kid can study in favorite schools. I expect, by learning with the best lectures, he (or she) can make a good living. If he could make a good living, as an investor, I have the right to get some of his earnings as for my returns.
2nd Scenario: Your Kid as an expense
On this scenario, the mindset will be: my kid is making a good living, and I spend a lot of money out of it, and that’s great!
I think the 2nd scenario will suit me better. I think if my kid is an expense (cost) center, then I had burned the money for his growth. The money has gone, and the kid is making a good living out of it.
The 1st scenario will burnt me out. What if he can make a good living, and left me and my wife at the aged house? It means that the kid is not actually a returnable investment, and I’m a failed investor (not include a failed father!!).