My family’s been wanting a dog for a long time. We’ve been visiting the dog rescue events around us for months looking for the dog that felt right.
We knew Moo Shu was the one as soon as we saw her. So we filled out the application on the spot and Moo Shu came home with us this past weekend.
She’s going to cost me at least $196,799.
I’m an optimizer by nature and a financial advisor by vocation. I think about everything in terms of time value and opportunity costs.
My first instinct is to quantify decisions to understand their impact on our finances.
One of the first things I looked up was “How much does a Border Collie eat”? The median answer? About $80 worth of dog food per month. For 15 years.
We like to travel as a family so the next thing on the list was, “How much is pet sitting per day”? A lot.
On and on it went as I pulled together my cost model.
The total out of pocket costs added up to tens of thousands on my spreadsheet over the years. But the real punch in the financial gut was the time value of those costs. If all those costs had instead been invested along the way in a diversified portfolio earning 8.0% a year? The number in 15 years ends up just shy of $200,000.
Ouch.
What would I like to do with $200,000 in 15 years? A dark green Porsche would be nice to drive around in with Sheila once the kids are out of the house.
It’s taken me years to get past what the numbers on a spreadsheet mean. Getting married and having kids has allowed me to see life in more than just financial terms and to stop delaying the things that add texture to living.
As I wrote about in the time value of life, opportunity costs don’t just apply to money. It also applies to life experiences that are forgone in pursuit of said money.
So what was Moo Shu’s true opportunity cost?
I would have missed seeing the biggest smile ever on Sheila and Remy’s faces the first time they hugged Moo Shu.
I wouldn’t have the next 15 years of Moo Shu resting her head on my lap while Sheila and I re-watch Friday Night Lights or Schitt’s Creek year after year.
BTW, if you’re wondering about Moo Shu’s name, we wanted to call her Moo because she’s patterned like a dairy cow. But that felt too short so we did a play on words and named her after the dragon in Mulan.
If you liked this piece, check out:
- The Time Value of Your Life: a longer piece about understanding the true tradeoffs being made between money, time, and living
- The Four Money Personalities I See in High Earners
Nathan
Founder & Lead Advisor
[email protected]
The Tradeoff
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Kangpan & Co. is a flat-fee financial advisory firm specializing in helping mid-career professionals navigate the career, family, and financial tradeoffs that come with this stage of life. This content is for educational purposes only and is not financial, legal, or tax advice. Consult a licensed advisor for help with your individual situation. Employees and clients of Kangpan & Co. may hold positions discussed in our content. Past performance is no guarantee of future results.