The Business of Babies
Gerber Kawasaki Wealth & Investment Management
A New Generation of Financial Advisors
The high cost of having a baby rarely enters anyone's mind when living the single life. If you know that you want to start a family at some point in the future, it is critical to know all of the costs involved in that decision. Becoming a parent is one of the most magical experiences of life. If you are blissfully ignorant about the expenses associated with pregnancy and child rearing, your pleasure might be shattered by the reality of the costs. Depending on your values and your interpretation of what is necessary or desired, it is expensive to have a child. The "baby industry" has become big business. Everything for the baby has become necessary, and the costs have subsequently skyrocketed. My professional advice is to save and invest as much money as possible while you are single and childless.
At Gerber Kawasaki, we like to educate our clients about the realistic costs of their life choices when we prepare their financial plans. It is amazing to observe the growth industries around life events - marriage, babies, honeymoons, education, graduations, and birthday parties. Marriage and children undeniably rank high on the list of expensive life events. The baby expenses start early. While most people have healthy babies and easy pregnancies, not every couple can easily conceive a baby and not every baby is healthy. The first and most consistent cost associated with a baby are medical costs. Before deciding to have a child it is wise to understand the expenses involved so that none of the pleasure of pregnancy, birth or adoption is marred by unknown expenses.
It is important to know if your health policy covers pregnancy costs. You should review your health plan and switch to a plan that covers pregnancy before you decide to have a child. This can save you $10,000 or more. You should be prepared for the additional costs of becoming a parent if there is a fertility problem. An unexpected cost, but one that is common today, is the cost of educating couples about pregnancy, childbirth and parenthood. Somehow we got through 6000 years of modern history without taking classes about babies, but it is now a requirement to have videos, books and instruction that easily cost $500 - $1,000.
There is an entire industry devoted to equipment designed to protect a baby. Depending on your assets and inclination, parents need everything from a new car, ideally some kind of SUV, baby furniture, strollers built like mini-tanks, baby seats, high chairs and a baby-proof home. Additionally, there is a good chance the apartment or condo that you now live in will be too small and you will want more space for the new baby. If you bought a home at the beach while single, there is a chance that the surf and sand will morph into a house in the suburbs near good schools.
And then there is the cost of help to keep the family happy. If parents, siblings and spouses aren't available, nannies, baby sitters, and day care expenses will quickly add up. Stay-at-home moms and dads want as much help as working moms and dads - the issue is affordability. The birth of a child may also require planning for private school travel sports, music classes, colleges, and grad school.
If you build a financial plan, save money and invest wisely when you are single, you will welcome your baby with joy, knowing that you can provide the financial security to pay for the lifestyle you have planned for your family. There are few things as exciting as welcoming a child into your life. Whether you're single, engaged or married, plan now for the future. Gerber Kawasaki can help you.
Ross Gerber
Gerber Kawasaki Wealth Management
2716 Ocean Park Blvd #2020
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Santa Monica, CA 90405
310-399-6397
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This material contains forward looking statements and projections. There are no guarantees that these results will be achieved. Investing involves risk including potential loss of principal.
“Gerber Kawasaki Wealth & Investment Management is an investment advisor located in California. Gerber Kawasaki Wealth & Investment Management is registered with the Securities and Exchange Commission (SEC). Registration of an investment advisor does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Gerber Kawasaki only transacts business in states in which it is properly registered or is excluded or exempted from registration. A copy of Gerber Kawasaki Wealth & Investment Management 's current written disclosure brochure filed with the SEC which discusses, among other things, Gerber Kawasaki Wealth & Investment Management's business practices, services and fees, is available through the SEC's website at:
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Ross Gerber is a Financial Advisor of Santa Monica, California-based Gerber Kawasaki Inc., an SEC-registered investment firm with approximately ~$2.3B billion in assets under management as of 09/30/23. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which course of action may be appropriate for you, consult your financial advisor. No strategy assures success or protects against loss. Readers shouldn't buy any investment without doing their research to determine if the investments are suitable for their situation. “All investments involve risk and one should consult a financial advisor before making any investments. Past performance is not indicative of future results.””