Can you have kids and invest?

B

Bantam Roosta

Any comments from people that have started a family and still managed to invest would be great.

I have 1 investment peoperty and would like more but my wife and I also intend on starting a family at the end of 2006. My wife will be off work for a minimum of 1 year and if she goes back to work it will be part-time at most. We also intend on having 3-4 kids in total (approx 2 year spacings if things go our way).

We are currently saving my wifes wage and living only off mine so we can get used to living on one wage, so we have quite a bit of money being saved(currently goes into our offset a/c).

Due to the savings we are building up, a deposit will be no worry but I am concerned about cash flow on one wage only.

What have other people done in situations similar to mine? I am currently only interested in residential property.

Thanks,

BR
 
While I haven't got a family, I've got a very sick girlfriend and a separated mother whom I've been supporting for the last year.

My answer to your question would be 'yes'. The trick would be now that you've already got the hardest one (the 1st!) is to let time work it's magic and let it duplicate itself (with no $ input from you). Sure, it will be slower, but it'll happen. The time in between you'll be able to get really familar with all aspects of property investing such as trusts, actually experiencing more cycles, finance and the like (if you haven't done so already).

Luckily for me I got to number 3 when my life circumstances changed.
 
Other option is if your savings are going well is your could save up an enough to cover you through those first few years of negative cashflow. What sort of LVR are you going for? If it's 80% maybe consider 90% (or even 100% with STG) and placing what you don't put towards the deposit into a kitty to fund your neg CF.
 
Having kids does hit your cash flow a lot, at least that's what I found. I've got 2 now and we seem to be chewing through the cash at a much fast rate than pre-kids (like 50++% more). It's not just clothes, nappies, food, that's peanuts. What hurts is prams, new digital camera, video camera, medical costs, child care/nannie, bigger car, extra insurances (as the impact of being sick is much greater), new wills, holidays much more expensive ……. even perhaps a bigger house??

… that reminds me, I really need to do a budget …..

Anyway, it all comes down cash flow, servicability.

My advice is to get LOCs in place against your PPOR now, before your wife has kids and leaves work.

Then once you have a kiddie, access your cash flow & servicability at that point. Once you have that you can then best determine what investment strategy to take, eg, whether you go for a -CF, neutral CF or +CF property.

Worst case if you find CF is tight and you don't like +CF property (I don't), you could easily get a neutrally to slightly positively geared blue chip share portfolio.
 
We had one IP (bought 2000) when we started our family and purchased a second while I was pregnant. We then bought a house at auction when our son was about 6 months old. Definitely can be done, even though our investments are all classified as "cheapies" as we are in a regional town. Rentals are also strong here.
I had 5 months off work and returned half time for second semester teaching. After that, I went back full time, but this was entirely my choice.
Remember, you might have to be careful with your money for a little while but if we werent investing our money, we would be wasting it anyway!
I say go for it!!

Good luck
Alanna
 
I agree also with mdk about line of credit, if you are comfortable with that form of credit. We also made sure that we had finance organised, and from memory I think perhaps I forgot to mention to the bank that I was pregnant....
 
Kids

We had 1 IP before we had kids.

First kid come along, our income halved and our expenses increased :eek: My wife siad when our first got to 6 months old, she would go back to work. Its 7 years later and 3 more kids and no, you guessed it, she never went back to work.

Our kids are our best investment.....a bad debt :p

We have now stopped populating the world, full steam ahead into investing, so we can secure our future :D

GG
 
Have 1 kid, still investing.

It boils down to: You will achieve WHATEVER you allow yourself to believe .. what you set your mind to. Nothing more, nothing less. We all know this, but few choose to accept and face it.

If you want it bad enough you will get it. It may not be easy tho. Or you may enjoy it so much its a sinch. If you love what you do it aint a job.

probably not the answer you are looking for, but its the truth.

Oh yeah, kids obviously hurt the cashflow - they arent exactly a cashflow +ve deal - dont pay rent, no depreciation, only a few tax incentives, govt bonus etc ;) Shop smart. Buy books, but use toy library for toys (MASSIVE savings here). Clothes can be bought cheap if you look. Food is cheap - cook it yourself. Nappies dont have to break the bank, shop around. You get the gist. If you go looking you will find its actually not that bad, i dont know what people go on about . oh yeah - their kids wear pumpkinpatch and oshkosh. well - so does ours sometimes, but we never pay more than about 30% of retail for her clothes. 'we' actually means my wife. in fact she never really pays more than about 50% for ANYTHING retail. but thats another story. i'm still trying to get her to do our IP negotiations.

T.
 
Thanks for the support so far people, keep it coming.

My LVR is already quite high on my first property (90%) so for my second one I was hoping to keep it down to around 80% if possible.

My current line of thinking is a very conservative view. If I just keep the savings in my offset a/c that will help reduce my current loan quite a bit and I am not increasing my risk. This way I will be increasing my equity quicker as well as still having an increasing deposit (at a much slower rate after we lose one wage).

Obviously the negative to this is that I will still only have 1 property. I keep thinking of it as a '1 more and I will have double the amount of property' mentality. I think for the short term safe is best until I know exactly what having an extra body around will do to me (Financial and Mental). I think the old adage that 'it doesn't matter how much you prepare for children you will never be prepared enough' is probably quite true and I should perhaps wait out.

BR
 
When we had kids our lifestyle actually changed so much that we were saving about the same amount of money!

We had cut back to one car, went out rarely, holidays changed etc etc.

Plenty of people do it - is just a mindset you need to change!

All the best,
 
Simon said:
When we had kids our lifestyle actually changed so much that we were saving about the same amount of money!
Click to expand...
Kids do put a dent into social life and reduce resturant bills. On the other hand, being a parent can be a bit draining, bit frustrating, so alcohol consumption may increase :p
 
We had kids for many years before we started into IPs.

Our oldest (child, not IP) will turn 16 in two days time.

Just talking financially- we have much bigger expectations now than many years ago. I talk to people who have a far smaller income, and far smaller kids, and they are really enjoying the lifestyle. We're struggling to some extent.

We want our girls to go to a private school. They've both seen the worst side of government schools, and we don't want them to go through that crap any more. We're very tight about other "essentials" which their contempories have- but a suddent change in income levels has proved difficult to cope with.

And, if you want to run a tight ship financially- don't marry somebody from overseas. It costs. Not only when you partner goes home- with the kids of course- there's also rellies who come over. (Mind you, I really wouldn't have it any other way- I have a beautiful partner. And she's not standing over me :D)

Having said all of that- all our investing has been done with children in tow. There's been big drags in resources. When things have gone pear shaped, we've had to change their schools, to their detriment. But we've all come through, and they are back getting the education we would like them to have.

We struggled through the single income stuff, child care expenses and the like, well before we started on the IP journey. Maybe that's helped us financially- or maybe not.

Certainly the struggle has helped us personally, and we are the better for it.
 
kids

hi Bantam Roosta
we have for eldest 18 next 16
if anything it has increased our investing both boys aree forming a investing company and starting in there own right the 16 has been to the last somersoft meeting and goes to investing meeting.
cash flow is cash flow you just have to have the right system or approach.
we invest in parrallels one posi, one neg investment neutrals.
 
I'm in a similar situation... well not really i don't have kids hehe but I plan to travel and work overseas so I don't want to be tied down by a mortgage + watch my cashflow very carefully

What worked for me was to target properties that pay really good rents. From my own reseach I do accept that high rental properties generally have less capital growth but I'm prepared to accept this to get into the property market and to learn about. I ended up researching a bit and ended up buy a studio apartment in Sydney.

I'm happy with the return, I only have to pay $40 a week out of my own pocket and am looking to purchase my second one.

There is one catch with studios though, you generally need a 20% deposit. I'm not a financing expert but my broker is pretty good and I know you can get up to 90% with LMI with some lenders. A forumite broker can prob. give you more details.

Hope this helps!
 
BR,

There has been allot of good advice so far so take it all in.

My advice is to do your sums on your wife not going back to work, you may find (like us) that it is not worth her going back by the time you pay for child caring, and lose the single income family benefit.

We found ourselves doing it fairly hard financially. I was having to work 6-7 days a week to pay the bills. So we had allot of stress with the new baby, bills piling up, and me never being home. If you and your wife do not have a rock solid relationship you may have problems if you over commit yourselves like my wife and I did.

Basically go for it, buy another IP just make sure it doesnt cost you much per week.
You can also sell if things do get to tough. (not ideal though)

Cheers.
 
Family OK

Bantam,

We never had investments before we had a family. So the answer to your question is yes, you can have a family and invest.

Of course you may need to reasses your priorities. We moved to Western Sydney so that we could continue to invest. It would be great to have a nice new house to show off, but for us it's more important to do the after school activities with the kids while still being able to retire early.

Regards

Andrew
 
i bought ip's five and six in one day while 7 months pregnant. number seven was with a two month old in tow (i remember breastfeeding in the ip driveway). number eight was at auction, sent hubby round the block with a five month old while i did the bidding and changed a poopy nappy on the new ip floor between signing contracts. all those purchases are positively geared (but not high cg) so they pay for my negatively geared high cg properties.

simple answer - yes it is possible, and if your wife likes property it can become her profitable stay-at-home employment (only takes a few hours a week not counting time spent on this website!) which might alleviate her needing to go back to outside employment.

also stops me from shopping for bad debt and gives great self satisfaction.
 
When we started investing we had 2 very young children and were on only one (very small) income. The first purchases were all CF+ and the capital growth on them gave equity to buy the next.

We now have a significant portfolio, the children are teenagers & we have a mix of CF+ and CF-. We are still only on one income although it is somewhat larger than it was when we started out.

I consider it my job to search for the next deal, do the bookwork & talk to agents. In fact in all the time we have been investing, the time I have spent at home has made us more money than all the hours hubby spends at work. :D
 
some advice . . .

If you want to have a family, don't hang around for too long.

From my days running an IVF lab, everday we saw many, many successful people in their 30s trying to have kids with no luck. Many became so obsessed & desperate to have the greatest asset of all - kids - that they would have traded away their lifestyles, cars, houses away in an instant.

There is no time limit for investing - there is for having kids, more so if you're female.

Ian
 
You must log in or register to reply here.

Similar threads

B
Buy Investment Properties & Rent The House You Live In
Replies
10
Views
2K
bmurthy
B
T
New Investor
Replies
8
Views
2K
TFE
T
T
Beginner's Advice
Replies
4
Views
2K
Hanison
H
D
What would you do in my shoes?
Replies
14
Views
3K
datto
datto
S
Newbie Here - looking for Advice
Replies
10
Views
3K
smokyjoe
S
Back
Top