Tuesday, December 4, 2012

Cost of a KID - Project 7 - CC Manual


A million Dirham Investment  !!!!!!!! Without even realizing it ???
Imagine having to spend a whopping million dirhams.
But …. Who could invest such an amount without some inkling of it happening ????
TMOD, Fellow members and Distinguished Guest – Good Evening.
Today in this room I can see 4 sets of individuals :
1.     Married with Older kids … Congratulations … you are our role model.
2.     Married with younger kids
3.     Married and planning to be parent
4.     Happy.
Today my speech is dedicated to all of us.
 Don’t you think its so funny how creating a kid is FREE, yet the upkeep is anything but.
Children are priceless … however raising them is probably the most expensive thing  you ‘ll ever do.
 Every new born child is a bundle of joy. You all agree … isn’t it ???
If it is your 1st , its one of life’s experience s, a true roller coaster of emotions. If its second , it’s a sibling and will be easier due to the experience with the first. ….The third is ……… well enough .. You can see where I am going.  I can see few smile on the face.
let me share a true incident. I  called an expat client of mine who happens to have 3 wife and 12 kids. I called him and he seems to be in tension. When I asked him he said … yesterday evening he went to a park and when he came back at 11:00 PM, we came to know that instead of 12 kids I got 13 kids and he didn’t know whose kids is this. So he has to sort out this mess.
Children are an EVENT.
The cost of bringing up a child in the UAE is possibly at an all-time high. According to recent calculation parents in the UAE will need to spend around Dh 1.2 million on an average to raise a child up to the age of 18.
Lets go into the breakup of this amount to understand this in more detail.
Education                                 :           Dhs 400000 – 33%
Childcare / Baby sitting            :           Dhs 300000 – 25%
Toys / Hobbies/ Leisure           :           Dhs 200000 – 12%
Clothing & Birthday Party          :           Dhs 150000 – 10%
Vacation / Pocket Money           :           Dhs 150000 – 10%

According to the survey conducted … the expenses of a husband wife family have a direct relationship with their income and standard of living.
       Income < USD 60000   
                                    Expenses USD 8500 – USD 10000
       Income  between USD 60000 – USD 100000               
Expenses USD 12000 – USD14000
       Income > USD 100000
                                    Expenses USD 20000 – USD 24000


Even the cost of raising a child in Canada  and UK is between $170,000 to $250,000  and £ 200,000 ( Dhs 1.2 million ) and that’s just to get them to the age of major.
We need not to be a rocket scientist to understand that this cost will keep on increasing due to inflation.
So now we’ve calculated the cost of raising a child from birth to age 18  is more than a million dirham and that does not even touch higher education.
However if you break it down it perhaps its not so bad. AED 63300 a year, AED 5300 a month, AED 1320 a week and AED 188 a day. Under 8 dirham’s a hour.
So if you’re thinking that the best Financial advise says “ Don’t have children if you want to be rich.”
No …. That’s absolutely wrong.
Then lets consider what you actually get for your money. You get someone to laugh yourself silly with no matter what the boss said or how your stock performed that day . A partner for blowing bubbles, flying kites,, building castles. You get to witness the first step, first word, first day of school….and a long list to be cherished through out your life.
Above all you get another branch added to your family tree.
Over to you TMOD.

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