MONEY First-Time Dad

Why Work-Life Balance Is Just As Impossible for Dads

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This mug is what I'm missing out on when I'm working late.

We're struggling with the same issues working moms face, says MONEY reporter and first-time dad Taylor Tepper.

Sometimes I feel like a bad dad.

Doubts over my parental savvy often correlate with how long I’m at the office. When I call to tell Mrs. Tepper that I’ll be here until 7:30 p.m. working on a magazine feature—and won’t be home to put our son Luke to bed—the soft disappointment in her voice stays with me like a faint ember.

The same guilty feelings apply to my job, too.

I’m 28 and now is the time to work long hours, take on more responsibility and show my bosses just how willing I am to immolate myself for the greater good. Every time I leave the building at 5:30 p.m., a part of me thinks I’m sacrificing future promotions, raises and glory.

What it means to be an American father, and the responsibilities therein, have changed radically in the last few decades. In 1975, 45% of families consisted of a male breadwinner and a stay-at-home mom; today 31% do. And now, men are taking on more chores and spending more time with their children than their dads spent with them.

But this blending of gender roles has done much to confuse the male mind. We want to spend more time with the kids and earn accolades on the job; we want to attend the soccer game and become senior management; we want to be Bill Cosby and Steve Jobs.

Many of us feel—just as working moms do—that we’re succeeding at neither.

The Research Backs Me Up on This

According Boston College’s Center for Work & Family, 86% of dads agreed or strongly agreed that “my children are the number one priority in my life.”

That’s well and good.

At the same time, though, more than three in four fathers wished to advance to a position with greater responsibilities and three in five demonstrated a strong desire to reach senior management.

Half of working dads say they find it very or somewhat difficult to balance the responsibilities of work and family, according to Pew.

And on the whole, we don’t feel like we’re living up to the dad role either. Almost eight in 10 dads want to spend more time with their children on an average workday, and one in two say they spend too little time with their kids. (Only 23% of mothers feel that way.) From first-hand experience, there is nothing quite as enervating as coming home from work to an already-sleeping son.

In Boston College’s research, you also see dads grappling with perceptions of what they want and the reality of how things are.

While today’s fathers also recognize that parenting is a two-person job—65% say they believe that partners should take care of a child evenly—only one in three say that they actually split the work in half. Women typically spend more than three times as many hours per week solely looking after the child than men.

Even on weekends, men fail to live up to their ideal. On Saturdays and Sundays, moms spend 1.2 more hours on housework and childcare than dads do. When it comes to time spent on leisure activities, dads out-loaf moms by an hour.

While Mrs. Tepper and I have something of a modern marriage—split chores, female breadwinner—she almost certainly watches Luke more on the weekends, especially when sports are on.

In spite of my few hours more on the couch, however, I’d still argue that achieving and maintaining true work-life balance is impossible. You can’t achieve these competing goals—working at the top of my game, being the best dad and husband ever, and getting in a few NBA games to recharge my own engine—within a finite number of hours in the day.

So, What Is a Modern Dad to Do?

I put that question to Sara Sutton Fell, the CEO of FlexJobs.com, a job search site focusing on companies that allow for flexible schedules and telecommuting. Her advice: to think of work-life balance as more of a journey than a destination.

“As a working parent with two young sons, I believe that work-life balance is often mistaken as an end-point that we reach eventually,” she says. “In my experience, it’s more of a balancing act—shifting your weight back and forth between your various responsibilities.”

Some days you’re going have to work long hours at the office to close out a project or meet a deadline, in other words; and some days you’re going to work from home to take your kid to the doctor.

Try to find an employer that will embrace that flexibility, Fell says.

This makes sense.

But we’ve also got to try to overcome our own guilt. That means accepting our limitations as parents and workers and people, and setting realistic expectations for ourselves.

It’s difficult to remember, but today’s dads spend more time with their kids than their fathers spent with them by a factor of three. Today’s fathers are by and large more engaged in their kids’ lives than previous generations. So we’re definitely doing better, if not up to the standards we’d hold for ourselves.

When I’m stuck in the office until dark, maintaining that perspective is difficult. But I try to remember that the next morning I’ll be there when Luke wakes up, and with any luck, arrive home in time to help his mom put him to sleep.

And if not, there’s always tomorrow.

Taylor Tepper is a reporter at Money. His column on being a new dad, a millennial, and (pretty) broke appears weekly. More First-Time Dad:

MONEY The Economy

Why the Fed Should Stop Talking About Raising Interest Rates

Some central bankers have called for raising rates sooner rather than later. Recent economic data — and the huge stock market sell-off — should dampen those calls.

There have been two presidential inaugurations and six Super Bowl champions since interest rates were effectively lowered to 0%. Recently, some Federal Reserve officials have said they expect to raise rates by the middle of next year thanks to a decently expanding economy and stronger job growth.

Some central bankers, though, think the middle of 2015 is too late and have been pushing to increase borrowing costs sooner. Esther George, President of the Kansas City Fed, said as much in a speech earlier this month, and two members of the Federal Open Market Committee voted bristled against easy monetary policy in their most recent meeting.

But with developed economies around the world showing dismal growth and less-than-stellar economic metrics here at home — punctuated by a rapidly declining stock prices (the stock market is, after all, a reflection of the market’s forecast for the economy six to nine months down the road) — it might be time for these inflation hawks to quiet down.

“Until we see wages expanding faster than the rate of inflation, and significantly so, we won’t see much in the way of inflation pressure,” says Mike Schenk, Vice President of Economics & Statistics for the Credit Union National Association. “Why raise rates if you don’t have inflation?”

Inflation Hawks

Dallas Fed President Richard Fisher voted against the most recent monetary action policy, according to minutes of the meeting, due to, among other factors, the “continued strength of the real economy” and “the improved outlook for labor utilization.”

Earlier this month, Philadelphia Fed President Charles Plosser said that he’s “not too concerned” about inflation growth below the Fed’s 2% target and joined Fisher in voting against the Fed policy because he disagreed with the guidance that said rates will stay at zero for “a considerable time after” the Fed ends its unconventional bond-buying program later this month.

George, meanwhile in a speech earlier this month, said Fed officials should begin talking seriously about raising rates since “starting this process sooner rather than later is important. If we continue to wait — if we continue to wait to see full employment, to see inflation running beyond the 2% target — then we risk having to move faster and steeper with interest rates in a way that is destabilizing to the economy in the long term,” according to the Wall Street Journal.

Jobs

The jobs environment has been improving in recent months. The economy added almost 250,000 jobs in September and the unemployment number fell to a post-recession low of 5.9%. But the unemployment number doesn’t tell the whole story.

If you look at another metric that takes into account workers who only recently gave up looking for a job and part-time employees who want to work 40 hours a week, the situation is much worse. Before the recession, this broader unemployment rate sat at around 8%. It’s now at almost 12%. There are still about three million workers who’ve been unemployed for longer than 27 weeks, up from around 1.3 million at the end of 2007.

Inflation

Right now, and for some time, there has been very little inflation. Prices grew 1.7% over the past year in August, per the Bureau of Labor Statistics’s Consumer Price Index. Even the Fed’s preferred inflation tracker, the PCE deflator, showed prices gain 1.5% compared to 12 months ago.

Wage growth is likewise stalled. Taking into account wages and benefits, workers have only seen a 1.8% raise. It’s just difficult to have inflation in a low interest rate environment without wage growth.

St. Louis Fed President James Bullard recently said that the Fed should consider postponing the end of its bond-buying program. “Inflation expectations are declining in the U.S.,” he said in an interview yesterday with Bloomberg News. “That’s an important consideration for a central bank. And for that reason I think that a logical policy response at this juncture may be to delay the end of the QE.”

Europe

European economic woes aren’t helping. Germany, Europe’s largest economy, recently cut it’s growth forecast, now only expects to grow by 1.2% in 2014 and 2015. Sweden and Spain saw prices actually decline in August, and now there’s fear that the euro zone will endure a so-called triple-dip recession. The relative prowess of the American economy compared to Europe’s has strengthened the U.S. dollar, thus making our exports less competitive.

Look, the U.S. economy isn’t about to go off a cliff. Not only did we see growth of 4.6% last quarter, but employers are adding jobs at a decent clip and the number of workers filing first-time jobless claims fell to the lowest level since 2000, per the Labor Department.

But with low inflation and European struggles to achieve anything close to robust growth, raising interest rates anytime soon doesn’t appear likely.

MONEY stocks

October Can Be Frightful for Stocks. But It Can Also Be Fruitful.

THE DARK KNIGHT RISES, Tom Hardy, 2012.
Ron Phillips—Warner Bros/Courtesy Everett Collection

By reputation, October is the scariest month on Wall Street. In reality, this month tends to be either very good or bad for the market. Which one will it be this time around?

This story was updated on Oct. 15, 2014

Is the Ghost of October Past haunting Wall Street again?

By reputation, October is the market’s scariest month. Six years ago, October witnessed several knee-buckling plunges during the financial crisis — an 8% drop on the 9th, an even-bigger 9% fall on the 15th, followed by a 6% slide on the 22nd.

Go back further, to the Asian currency crisis, and the Dow plunged 554 points on Oct. 27, 1997. Go back further still, and there was Black Monday, when the S&P 500 fell 20% on Oct. 19, 1987. And don’t forget that the stock market crash that set off the Great Depression will commemorate its 85th birthday at the end of this month.

At first blush, this October seems to be trying to join this list.

On the last day of September, the Dow Jones industrial average had climbed as high as 17,145. Two weeks later, the benchmark index was more than than 800 points lower, thanks in part to fears over the slowing global economy, escalating Mideast violence, continuing Russian conflict, and quite possibly the spreading Ebola virus.

Yet October gets a bad rep, and some market observers think this could be a buying opportunity.

While October may be pockmarked with a minefield of securities devastation, history is also filled with examples of strong Octobers for the S&P 500, according to the Stock Trader’s Almanac. Among them: 1966 (up 5%), 1974 (16%), 1998 (8%), 2002 (9%), and 2011 (11%).

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Plus, when you average out historical performance, this autumnal month isn’t so shabby.

In fact, if you look at each month’s returns from 1988 to last September, October turns out to the third best-performer on average, behind December and April. The S&P 500 has gained at least 3.8% in three of the last four Octobers, according to data from Morningstar.

Liz Ann Sonders, chief investment strategist for Charles Schwab, noted that while some investors might be taking profits after a sustained run up for stocks, “we don’t see anything that indicates a more sustained downturn is in store.”

In a note published online, she added:

“We are entering a traditionally positive period seasonally for stocks. According to ISI Research, since 1950, December and November have been the highest returning months of the year, on average. Additionally, according to Strategas Research Group — also since 1950, in midterm election years — October has been the best performing month, followed by November and December. The recent selling we’ve seen could just be setting up for a nice year-end run.”

So is Sonders right? Will this October turn out to be a treat for Wall Street? Or will it just be one big trick?

MONEY Jobs

Why Low Job and Wage Growth is Worse Than Rising Inflation

Hot air balloons floating higher and higher
Jon Larson—Getty Images

As the economy picks up steam, and employers add more workers, investors say that inflation is their biggest impediment to saving. Here’s why they’re wrong.

As the economy added another 248,000 jobs in September, pushing the unemployment rate to a post-recession low of 5.9%, investors are feeling more confident.

In fact, investors are more optimistic than they’ve been since the recession, per a recent Wells Fargo/Gallup survey which measured the mood of those with more than $10,000 in investable assets. Of course the so-called Investor and Retirement Optimism Index is still only at around half the levels of the 12-year average before the 2008 recession. Investors may be more sanguine than three months ago, but that doesn’t mean they think the economy is going gangbusters.

Nevertheless, there was one particularly interesting data point in the survey: “Half of investors (51%) think the pressure on American families’ ability to save is due to rising prices caused by inflation.” Meanwhile only 37% said the pressure was inflicted by stagnant wage growth.

Which is strange.

What inflation?

If you look at the Federal Reserve’s preferred measure of core inflation (which strips out volatile energy and food prices), prices have risen around or below the Fed’s stated 2%-target since the recession.

The Consumer Price Index, a gauge of inflation released by the Labor Department, actually fell on a monthly basis in August for the first time in more than a year, and only grew at an annual rate of 1.7% since this time last year.

Proclamations of rising inflation ever since the Federal Reserve started buying bonds and lowering interest rates in response to the recession have yet to materialize. And those advanced economies that did raise interest rates a few years ago (like Sweden), have come close to deflation.

Meanwhile wages aren’t growing at all. Average hourly earnings in August rose 2.1% versus the same period last year, and the growth rate has been stuck at around 2% since the recovery. The same is true for the employment cost index, which measures fringe benefits in addition to salaries. Ten years ago the index increased by 3.8%.

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St. Louis Federal Reserve

 

While the unemployment rate has fallen considerably this year, other gauges of jobs are still troubling. Long-term unemployment has tumbled since its post-recession peak in 2010, but there are still almost 3 million people who’ve been unemployed for 27 weeks or longer. If you include workers who’ve recently stopped looking for a job and those working part-time when they’d rather be full time, the unemployment rate is 12%, more than four percentage points above the pre-recession level.

The Fed has implemented an easy monetary policy in order to attack this problem. “The Fed is keeping interest rates low as long as they can and maintaining very loose policy in support of jobs,” says USAA Investments’s chief investment officer Bernie Williams. “They will only tighten up with great reluctance.”

Pick your poison: stronger wages or rising inflation?

In a battle between pushing wages higher and the risk of inflation, the Fed is willing to err on the side of rising wages, says Williams.

BMO senior investment strategist Brent Schutte agrees. “As a society, you decide what is good. Economics is a choice between two things. We’ve clearly decided that higher inflation and rising wages is a good thing.”

Despite years of effort, though, the Fed hasn’t been able to bring back rising wages.

If you’re still unconvinced that a lack of salary increase and slack in the labor market should be more of a concern to your finances than the threat of inflation, check out new research by former Bank of England member David Blanchflower.

Along with three other co-writers, Blanchflower recently published a study titled, “The Happiness Trade-Off between Unemployment and Inflation.”

The researchers found that unemployment actually has a more pernicious effect on happiness than inflation. “Our estimates with European data imply that a 1 percentage point increase in the unemployment rate lowers well-being by more than five times as much as a 1 percentage point increase in the inflation rate.”

In an interview with the Wall Street Journal, Blanchflower said, “Unemployment hurts more than inflation does.”

As the economy gently improves, and people start going back to work, the hope is that wages will start to rise. Inflation might then rise above the Fed’s 2% target, and Yellen and Co. may raise rates in effort to cool off the economy. But we’re not there yet. And investors, for the sake of their wallets and psychology, would do well to remember that.

MONEY credit cards

The Easy Way to Get 5% Cash Back on Everything You Buy

Handing cash back
Jamie Grill—Getty Images

Maximizing credit card rewards requires you to be tactical, but the payoff is well worth the effort.

More than half of cash back credit cards return just 1%, according to CreditCards.com. But you can do better—a lot better, in fact.

Being strategic about which credit cards you choose and how you use them can have significant payoff, we discovered while making picks for Money’s 2014 Best Credit Cards.

No one card will give you back 5% on everything you buy, but you can earn about that much on average if you, ahem… play your cards right.

1. Start with the right base

Groceries are one of American consumers’ biggest expenses, and they’re the only category where you can get 6% cash back—with the right card. That card is the American Express Blue Cash Preferred, which comes with a $75 fee and a $150 sign-up bonus. The Preferred also offers 3% on gas, so it should be used at the pump unless you can do better with any of the cards in the next section.

2. Add some flair

The Discover It, Chase Freedom, and U.S. Bank Cash Plus all have two things in common: They pay 5% on select rotating categories and they have no an­nual fees. So collect all three, and deploy them on which­ ever categories are highlighted at any given time. You can see below the benefit of adding them to your rotation.

The categories that pay 5% are predetermined on the It and the Freedom. But the Cash Plus lets you choose your own from a list of 12; so just make sure on that card to select your biggest expenses after groceries that aren’t covered by the other two cards’ rotating categories.

3. Have a “plan B” card

The cards above pay 1% on most other purchases. So don’t use them for your et cetera shopping. For those purchases, use the Citi Double Cash or Fidelity Investment Rewards American Express, which earn 2% on everything.

4. Use online malls

To get you to use your cards for online shopping, many card companies have created portals that give you access to your favorite stores for additional rewards. For instance, ShopDiscover was recently offering 5% cash back at Enterprise Rent-A-Car, while you could receive 5% back from Bloomingdale’s on Chase Freedom’s Cash Back Boost. That’s in addition to whatever you’d earn for those purchases normally.

5. Hire an assistant

The It and Freedom’s 5% categories rotate every three months, and you have to opt in to enjoy the discounts. Signing up involves only a click, but you have to remember to do so. Plus, with the U.S. Bank Cash Plus, the 5% cash-back category options can change. All this requires you to stay vigilant. Download the Wallaby mobile app to help you remember which cards to use when, and set up a Google calendar alert every quarter so you remember to sign up for the rewards in the first place.

MONEY

3 Stupidly Simple Ways to Make Sure You Never Ever Pay ATM Fees

Bankrate ATM fees
Image Source—Getty Images

A new Bankrate report shows that the cost of using an out-of-network ATM is growing. Here's how to avoid those charges completely.

Using an ATM that’s not run by your bank will now cost you about as much as a latte at Starbucks.

Consumers now fork over, on average, $4.35 per transaction on out-of-network ATMs, according to Bankrate.com’s just-released 17th annual checking survey. That’s a 5% jump over last year and a 23% increase over the past five years.

“ATM fees have been going up for a long time,” says Bankrate’s chief financial analyst Greg McBride. “It’s low hanging fruit for the banks.”

The fee you pay for these types of transactions comes from two sources: The ATM owner charges you a surcharge for using the machine, and your bank charges you for going out of network. The former fee advanced 7% to $2.77, while the latter climbed 3% to $1.58.

Together these costs add up to a decent chunk of change: One trip to a non-sanctioned ATM a month costs more than $50 a year.

For consumers, this is a completely unnecessary outlay, however.

“There are steps people can take to avoid ATM fees, regardless of how long they keep rising,” says McBride. “Plenty of people out there not paying fees at all.”

1. Have a Treasure Map in Hand

Download your bank’s mobile app, if you haven’t already. Chances are it contains a feature that lets you see nearby branch or ATMs that won’t charge a fee.

Make a habit of checking before you stick your card into somebody else’s ATM—there may be a cheaper option closer than you think.

2. Get Cash Where You Buy Your Groceries

Many stores—including pharmacies and supermarkets—allow you get cash back at the point of sale. If you’re getting something, why not also make a habit of getting cash on these trips, since this basically functions as a free ATM withdrawal.

3. Go with a Bank that Won’t Punish You

Not the type to remember to use your bank’s ATM? You might want to trade in your brick-and-mortar bank for an online one. Ally and Schwab do not charge you to use another bank’s ATM (since these institutions don’t have their own) and they will reimburse you for any ATM fees.

And since digital financial institutions don’t service branches, fees tend to be lower and you can even receive interest on your checking account. Ally currently offers 0.10% on balances under $15,000. In a way, you could say they’re paying you to use another bank’s ATM.

MONEY portfolio strategy

Why Rats, Cats, and Monkeys are Smarter than Investors

Ms. Kleinworth goes short in the Treasury Bond market.
Ms. Kleinworth goes short in the Treasury Bond market. Nora Friedel—RatTraders.com

A performance artist in Austria piles on to the case against "active management" by finding yet another animal that seems to invest better than humans.

An Austrian performance artist claims to be breeding and training rats to be able to beat the investment returns of highly educated and paid professional investors.

The artist, Michael Marcovici, says he trained the rodents to trade in foreign exchange and commodities. He did so by converting market information into sounds and rewarded the rats with food when they predicted price movements correctly and inflicted a small electric shock when they didn’t. (If only hedge fund managers could be compensated in similar fashion.) The rats are placed in a Skinner Box with a speaker, red and green lights, a food dispenser and an electrical floor to deliver the shock.

Marcovici says rats can be trained in three months, are able to learn any segment of the market and “outperform most human traders.” This may seem like an outlandish claim, but this kind of thing isn’t altogether new.

UK’s The Observer held a challenge in 2012 between a “a ginger feline called Orlando,” a pack of schoolchildren and a few wealth and fund managers to see which could produce the biggest returns over the course of the year.

The cat won.

Long before Orlando’s victory, Princeton economist Burton Malkiel wrote that “a blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts,” in his book “A Random Walk Down Wall Street.”

Add this to the overwhelming evidence that largely unmanaged index funds — that simply buy and hold all the securities in a market — often outperform professional stock pickers.

Just this month S&P Dow Jones Indices Versus Active funds scorecard for the first six months of the year, which showed that 60% of actively managed domestic large cap funds underperformed their benchmarks.

That’s in addition to 58% of domestic mid-cap and 73% of small cap funds losing out. If you extend the record out five years, more than “70% of domestic equity managers across all capitalization and style categories failed to deliver higher returns than their respective benchmarks.”

What does this mean for your portfolio? As Morningstar.com’s John Rekenthaler noted in a recent article, active funds may not have much of a future.

Passively managed mutual funds and exchange-traded funds, Rekenthaler points out, enjoyed 68% of the net sales for U.S. ETFs and mutual funds over the past year. That leaves 32% for active funds. Meanwhile, target-date funds account for $30 billion of the $134 billion in inflows for active funds over the past 12 months. Even on this front, passive target date funds sales are growing.

In fact, the only real growth area for actively managed funds are in so-called alternatives that invest in things like currencies and that charge annual fees of close to 2% of assets. That’s a lot of cheese.

You’re generally better off staying clear of professional security pickers.

No, this doesn’t mean you should find a rat, cat, or monkey to manage your 401(k). Instead, go the passive index route and select three basic building block funds from our MONEY 50 selection (like say Vanguard Total Bond Market Index, Schwab Total Stock Market Index and Vanguard Total International Stock Index) and you can achieve basic diversification at a price that won’t make you as poor as a church mouse.

MONEY First-Time Dad

Why I’m a Millennial Parenting Cliché

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Luke Tepper

More proof that I’m just like everyone else my age — and you probably are too.

Mrs. Tepper and I like to play a game from time to time that I imagine captivates most new parents. It’s called, “What Will My Child Be Like?”

Our clairvoyant visions alter slightly whenever we play, but recent examples include: a painter, a guitarist, and an astrophysicist (in the Neil deGrasse Tyson mold.)

In short: a creative type. That seven-month-old Luke currently has an imagination consumed by putting any and all things (especially wires and stroller wheels) as far into his mouth as possible doesn’t really matter. Right now, in these glorious months when he can’t tell us what he wants, we are free to speculate on what kind of person he might become. Of course our projections say more about ourselves than him.

Parents everywhere — no matter race, religion, education or age — place greater importance on teaching responsibility and hard work to their children than any other values, per a recent Pew Research Center survey. But when you peer into the data and look at less obviously appealing characteristics, you see just how similar your values are to other people like you.

Take creativity. As shown above, my wife and I care about creativity. Well so do most millennials, per Pew. In fact 78% of parents aged 18-to-29 believe creativity is an important characteristic to instill, six percentage points higher than parents aged 30-to-64. More than one-in-six of people in my age bracket view creativity as one of the most important traits to teach their child.

Religious faith also highlights how similar the Teppers are to other millennials. We spend our Fridays, Saturdays, and Sundays immersed in all sorts of activities – from laundry to playtime at the park to consuming Korean barbeque. Of all the locales in Brooklyn that you might find us on a weekend, a church, synagogue, or mosque doesn’t make the list. Only four-in-10 millennials believe religious faith is a value especially important to teach children, 15 percentage points lower than parents between 30-to-64, and 25 points below parents older than 65.

The survey also distinguishes respondents by education – from college graduates to those who have some college education to people who have a high school diploma or less. Everyone values responsibility, independence, hard work, and good manners. College graduates, though, de-emphasize obedience and prioritize curiosity, persistence, and empathy. (Although all three groups rate helping others as important.)

I don’t know why parents of a certain race, age, educational achievement, or religion view one character trait as more important than another. Everyone, it seems, values good ol’ fashioned American hard work and responsibility. Why a secular, college-educated millennial, though, weighs persistence more heavily than obedience is better answered by social scientists.

What I do know is that the value I assign to these traits illuminates some parental wish fulfillment. Often I yearn for the ability to play Chopin or explain black holes with dexterity and wit. I think I’d be a better person if I were only a bit more curious or empathetic for my neighbors. I can, sort-of, right that wrong with Luke.

But this is a fool’s errand. I know I haven’t been in charge for long, but how do you teach your kid creativity? What does that even mean? What would that look like?

Parents simply have less control over the people our children become than we like to think as Judith Harris argued in her book, The Nurture Assumption.

As Malcolm Gladwell wrote in a New Yorker review of Harris in 1998:

If adolescents didn’t want to be like adults, it was because they wanted to be like other adolescents. Children were identifying with and learning from other children, and Harris realized that once you granted that fact all the conventional wisdom about parents and family and child-rearing started to unravel.

I think parents often fail to remember how little influence their parents actually had on their development. And so as soon as we become parents we imagine all the great things our child will become with only a slight nudge or word of encouragement from mom and dad. If we “teach” creativity, then he will become creative.

There’s a reason that I chose to believe the fantasy. This indulgence in harmless fan fiction shields me from the terrifying reality that before long my seven-month-old infant will be 17 and too big for my arms.

Taylor Tepper is a reporter at Money. His column on being a new dad, a millennial, and (pretty) broke appears weekly. More First-Time Dad:

MONEY The Economy

China is Slowing. What If Its Housing Bubble Bursts?

Even if the real estate market in the world's second-biggest economy were to collapse, the repercussions may not be bad as you think.

While global investors covet China’s growth — as evidenced by the buzz surrounding Alibaba’s IPO — the Chinese economy is actually slowing down.

In 2013, the world’s second largest economy grew at an annual rate of 7.7%. By 2015, according to a recent report by the Organization for Economic Co-Operation and Development, that will drop to 7.3%. Meanwhile, the U.S. economy’s growth rate is projected to increase by almost one percentage point.

What’s going on? Well, China’s industrial production gains in August slowed to their lowest level since 2008 and retail sales growth declined by a few percentage points year-over-year.

Perhaps most important, the nation’s newly built home prices only grew by 2.5% in July, after surging by 10% at the beginning of the year.

The notion of a housing crisis in an economy more than three times the size of France brings back flashbacks of 2008 and probably a few chills down every investor’s spine.

“A property price crash in the world’s second largest economy would have global implications,” says Wells Fargo Securities economist Jay Bryson.

But those global implications wouldn’t be as worrisome as the U.S. housing collapse six years ago, per Bryson. Here’s why.

The Worst Case

To play out this thought experiment you have to assume that at some point in the near future China’s home prices will experience a decline on the order of what the U.S. experienced over the past decade. (Bryson played out this scenario in a recent report.)

Currently, residential investment makes up a pretty decent portion of the Chinese economy – about 10% of nominal GDP. To put that in context, that ratio was closer to 6% for the U.S. in 2006.

So housing is a big deal in China. If they experienced a value decline like we did, Bryson estimates that would lop off about one percentage point of growth. But the pain wouldn’t stop there.

A collapse in housing prices would result in fewer construction jobs – estimated at around 60 million people in urban China. Jobless workers would spend less, which means that those goods and services the now-unemployed construction workers would normally purchase would not get bought.

If out-of-work construction workers reduce their spending on food and entertainment, the businesses that produce that food and entertainment will make less money and then some of their workers may face unemployment too. Since my spending is your income, lower spending means people have less money in their paychecks, and the nation’s GDP suffers.

Moreover, if housing goes in the tank, banks will see losses, which means they’ll tighten credit, resulting in fewer loans for people to start businesses.

Let’s not forget the actual homeowners. If home prices fall, homeowners’ equity declines as well. (See: Sell, Short). And when people’s chief asset is suddenly worth a lot less, they’re not going to spend as much on other, discretionary items. “Although the lack of data makes it impossible to quantify the wealth effect in China, researchers have found that there is a statistically significant direct relationship in the United States between changes in wealth and changes in consumer spending,” per Bryson’s report.

Lower demand from China means that countries which sell goods to China (think Chile and Australia) will sell less stuff. As corporate profits are squeezed, a global bear market may result.

“Although China may not be as important to global economic growth as the United States, the global economy clearly would not be immune to a major property market downturn in China,” says Bryson.

The Not-So-Bad Case

Freaked out? Breathe deep and take solace in the fact that despite this potentially harrowing dénouement, the world probably wouldn’t endure another global financial crisis. And that’s thanks to responsible Chinese borrowers.

Chinese households usually have to put a lot more money down – 30% on their first home, up to 60% for an individual’s second – than Americans. So if prices were to decline substantially, Chinese homeowners would be in a much better position than Americans back in 2007 to deal with the crisis. For example, household debt-to-disposable income has grown substantially in China since 2007, but it’s still about one-third the size of U.S. households back in 2007.

The world will also feel less of a pinch. When mortgages started going bad in the U.S., foreign financial institutions lost close to $750 billion of the more than $2 trillion in write-downs resulting from the crash. That was because foreign banks owned a lot of U.S. mortgage-backed securities. Not so here. “Chinese mortgages are generally held by Chinese financial institutions in the form of whole mortgages.” So if prices were to drop, Chinese banks would suffer while U.S. one’s most likely wouldn’t.

Lastly, the Chinese government wouldn’t sit on its hands while its economy came crashing down. Beijing’s debt-to-GDP ratio is around 15%, so it has a lot of room to recapitalize its banks if needed.

So what’s an investor to do?

“I don’t lose sleep at night worrying about China, nor should other people,” says Bryson. “But they may want to keep an eye on it.”

MONEY First-Time Dad

Why Millennials Should Have Kids—and Soon

Luke Tepper
Yes, he costs a ton, but he's worth it.

There are plenty of financial and lifestyle reasons to not have a child, but there are also costs to delaying or forgoing, notes MONEY reporter and first-time dad Taylor Tepper.

I finally realized that I’m no longer in charge of my own life a few of weeks ago.

It was a Tuesday at 9:45 p.m. I had arrived home from work at 7:30, just as my wife was putting our son to sleep.

I cooked dinner for the two of us. We ate together on our small dining room table and then spent the rest of the night preparing for tomorrow. Mrs. Tepper collected Luke’s toys and straightened up around the house while I programmed the coffee maker and started to load the dishwasher… only to discover that we were out of soap. Sigh.

I jabbed my feet into my slippers. The dishes needed to be washed, so I found myself headed outside in my pajamas.

As I plodded to my neighborhood grocery store, it dawned on me that I wasn’t running this chore because I wanted to, but because our delicate family ecosystem demanded that the dishes get washed at night. Otherwise, the milk bottles and containers wouldn’t be ready by the morning, meaning my wife wouldn’t be able to pump at work and my son wouldn’t be able to eat.

This two-hour spell of cleaning, organizing, and readying felt like the actualization of a Millennial nightmare.

I had handed over the keys to my liberty to an infant. Before Luke was born, I could sleep all morning, grab a pint whenever I wanted or fly around the country to visit friends. I could quit my job, write a novel, start an artisanal pickled beet company or simply toss a Frisbee in the park all day.

Those days are over. Full stop. But the real question is: Would I ever want them back?

The opportunity cost of having kids

Most people of my generation aren’t like me. In fact, just over one-in-four Millennials tied the knot between the ages of 18 to 32, according to Pew Research Center. That’s 10 percentage points lower than Gen Xers at a similar point in their lives in 1997 and more than 20 points below Baby Boomers in 1980.

Further, research by Wharton School of University of Pennsylvania’s Stewart Friedman seems to indicate that the majority of my peers aren’t interested in kids. Friedman’s study looked at the views Generation Xers had toward bearing children as they graduated college in 1992 and Millennials in 2012. Almost eight in 10 Gen Xers said they planned to reproduce, Friedman found, compared to only 42% of Millennials.

Parenthood comes with a price that Millennials may not be eager to pay. According to the most recent numbers from the U.S. Department of Agriculture, it will cost middle-income moms and dads an average $245,340 to raise one child up to age 18—a stunningly large figure for those who are already burdened by student debt and who graduated into a nasty Recession.

It doesn’t help that America is one of two countries without any kind of paid maternity leave and childcare is very expensive.

Another factor that might dissuade Y women: Mothers who alter their career paths to care for their children can lose out on a lot of potential income. Economist Bryan Caplan pegs the opportunity cost as high as $1 million.

And, of course, there are the non-financial opportunity costs of bearing children: less freedom, less time, and less sanity.

The payoff of having kids early

I understand all of this. I’m living it. My wife and I spend the vast amount of our weekends doing the laundry, sweeping, mopping, shopping and organizing. We schlep and push and haul all day long. Not to mention the $1,600 a month we’re giving to someone else to care for our child. We could have put that money toward a dream vacation, a starter home… or alcohol.

But conceiving a family in your 20s comes with certain advantages. For instance when Luke leaves the nest, my wife and I will be in our mid-40’s and just entering our peak earning years. That means while he’s off at college, we can power save to boost our retirement portfolio.

Plus, you’re more likely to have flexibility at work in your 20s, since you probably have a more junior position with less responsibility. The higher up you get on the food chain, the tougher it is to leave early to go to a parent-teacher conference or soccer game (or so my older colleagues tell me).

There’s also the fact that your ability to actually conceive children decreases as you age, per the Mayo Clinic, while the risks of complication—from C-sections to pregnancy loss—increase in your mid-to-late 30’s. And complications typically mean more money for health expenses.

Look, there are many reasons not to have a child. You may simply not want one—and that’s fine.

But to dismiss the idea of raising a child, or raising him now as opposed to ten years in the future, because you haven’t yet traveled the world or written that magnum opus slightly misses the point of it all. When you raise a child, especially with someone you’ve committed your life to, your self-interest becomes tied up in theirs.

To put it another way, what a lot of people don’t think about is that there’s an opportunity cost to deciding not to have a child: You don’t get to experience the sublime joy of yielding your wants and desires for the happiness of the people you love.

Taylor Tepper is a reporter at Money. His column on being a new dad, a millennial, and (pretty) broke appears weekly. More First-Time Dad:

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