My longtime boyfriend and I, both 45, finally had our first child last year after years of trying.
Given our age and some other factors, he will likely be our only child. He is the light of my life, and I realize that since I only have one chance to experience these magical early years with Him, I hate that I'm doing it while also working full time, depriving me of precious little. The time I spent with him when I was a little kid.
I am the primary breadwinner in our family, earning about $150,000 a year in an intensive job. My friend has been out of work for over a year after his failed attempt to switch industries, and he probably won't get a new job for a little while longer while he recalibrates what's next.
Although I am very successful in my career, the birth of my son reinforced for me that I hate working 9 to 5, and that is not what I want to do for the next 20 years. I would like to be self-employed, with a flexible schedule that allows me to spend more time with my son every day.
Passive income streams
Since its birth, I've been looking for ways to do this as well as build some other passive income streams. In an ideal world, I would start these and get them moving so I can quit my job in the next seven to eight months.
My main worry is that I'm terrified that, no matter what I collect, I won't match my current income with the new plan. While I hope my friend also gets a new job during that time period, I'm thinking conservatively and only counting one income (mine) in this plan.
Before we had our son, we were in a great financial position – all our housing costs were less than 30% of my salary and I was maxing out my 401(k). However, with the costs of child care and lack of income, we now essentially live paycheck to paycheck. If you can achieve this new dream of self-employment, some costs will go down (childcare), but others will go up.
Six-figure trust fund
There is one catch, though. I have a trust fund worth a very high six figures. I rarely touch it: I view it mainly as a huge emergency savings fund in case the economy bottoms out like it did in 2008.
But one day, as I was struggling to come up with numbers for this new life plan, it occurred to me that I could draw from the confidence to supplement any deficiency. In four to five years when my son is in school, if my self-employment doesn't work out, I can always go back into the traditional workforce.
But this plan scares me, simply because I viewed my trust fund as my safety net, and I would deplete it. Is this a good idea? Crazy idea? What else should I think about?
For context, it's not my only source of investments: I currently have about $395,000 in my 401(k) and Roth IRA, a $10,000 investment account, and about $80,000 in company stock, with more shares vesting over the course of time remaining (potential) in the company.
I have an emergency cash fund in a high-yield savings account, but I had to withdraw from it recently, so it doesn't even cover three months of expenses right now. Should I go for it? I can always make money, but this time with my son I will never get it back.
Time is fleeting
“Wait until your friend finds a job before making any move.”
Market watch illustration
Dear, time is fleeting
First, a warning: there is no magic solution.
Of course, in an ideal world we should all feel fulfilled by our jobs, our partners, and our lives, but our recklessness will keep us looking for more ways to find that magic elixir. Happiness is an inside job. When you change one thing in your life, you may realize that there is something else you need to fix, and then something else, like a house that always needs repairs, doesn't quite fit your needs. One of my favorite pieces of advice: “Listen to your body because your mind lies through its teeth.” Don't act from a place of fear, anger, or ego. Listen to how you feel.
If your trust fund can buy anything, it means peace of mind for the future. I agree that it should be used to help you maintain a semblance of contentment in the here and now. There's no point in having a six-figure trust fund with high numbers if you – like your precious Chinese tea collection – won't tap into it during the most important times in your life. If you want to spend the next two years with your son, instead of paying for child care, you can do so. Major warning: Wait until your friend finds a job before making any moves.
Millions of parents are in your boat. Weekly day care for children in the United States now costs $284 per week, a 54% increase from the previous decade, according to Care.com. If you can save that money and withdraw from your trust fund over the next two years, for example, that basically fulfills part of its purpose. You don't say what occupation you're in, but it's clear that women who take time out of their careers to raise their children miss out on advancement opportunities, and when they return to the workforce, their wages tend to fall behind those of their peers.
MarketWatch recently built a tool that uses Department of Labor data to show the average cost of child care by county and how it compares to your income. As MarketWatch reported when launching the tool: The average cost of congregate infant care in Queens County, New York, was $23,635 in 2022. A family would need to make at least $337,647 per year for this to represent 7% of their income. . The median annual income for families in Queens in 2020 was $81,193, so they would need to spend roughly 26% of their income on child care.
In the meantime, ask your employer if you can work remotely two days a week and/or see if you can transition to a part-time schedule. Maybe you can keep your job and spend more time with your son, too. It may not be an all-or-nothing scenario. If you decide to quit your job right now, and you're working in a career that you can easily return to if your business idea doesn't work out, and your friend finds work, you'll be in a safer position to take a career break. Lots of “ifs”. But you're right. You won't get this time again.
Talk to a financial advisor and therapist because it is always a bad idea to make a financial decision based on emotion. Of course, we should have control over our own lives, but bringing in help from a third party can bring us a new, independent perspective. Sometimes, we often think: “If I could only change this thing, I would be happy.” But often our minds and emotions play tricks on us. What you don't want to happen is to go through a year, feel exhausted from full-time childcare, and wonder why you gave up a $150,000 job.
Give yourself some time to get used to having this new person in your life, and see how things go over the next six months.
More from Quentin Futrell:
My father has dementia and he “forgave” my brother's $200,000 loan. The notary at the nursing home said he was of sound mind. What can we do?
My husband bought our house by inheritance. I signed a demand to resign. He said I could live there after he died, but he changed his mind. What now?
Low-paying jobs are economics' way of saying you should get a better job: You've decided to stop tipping, except in restaurants. Am I wrong?
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