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Around the Internet => Antimustachian Wall of Shame and Comedy => Topic started by: khizr on December 26, 2015, 08:29:02 AM

Title: Guardian article on even the rich living paycheck to paycheck...
Post by: khizr on December 26, 2015, 08:29:02 AM
"Private schools, divorce and basic necessities – about 25% of people making six-figure salaries say they are struggling"

Scary read :(
http://www.theguardian.com/business/2015/dec/25/wealthy-americans-living-paycheck-to-paycheck-income-paying-bills?CMP=fb_gu
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: MgoSam on December 26, 2015, 09:32:44 AM
It seems to me that a very common factor in people making $250k annually and barely hanging on is that their kids go to private school. As someone without kids, nor any desire to ever have kids, I don't understand what's so freakin' great about private schools. I grew up in an affluent neighborhood, one that my parents picked largely for it's schools, and went to public high school, which is an amazing school.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: mm1970 on December 26, 2015, 10:40:34 AM
It seems to me that a very common factor in people making $250k annually and barely hanging on is that their kids go to private school. As someone without kids, nor any desire to ever have kids, I don't understand what's so freakin' great about private schools. I grew up in an affluent neighborhood, one that my parents picked largely for it's schools, and went to public high school, which is an amazing school.
And it definitely trickles down.

I live in an area where schools - you know, aren't terribly great.  It's California.  The difference between a "good" public school and a "bad" public school comes down to 2 things: 1. Money and 2. English proficiency.

Without a doubt, the "best" schools in the district have a high % of English Origin students and a lot of money (to throw at the "problem" kids who don't speak English).  When you can raise $120k in a month and spend it to bring the 15% of English learners up to speed, your kids operate at a higher level.

In contrast, there are schools where 95% of students are poor and English learners.

Then there are the schools in the middle, which struggle to serve two very different groups on very little money.

So, private schools let you "escape" from that, and the unwashed masses - so to speak.  In my town, most private schools give need-based scholarships.  So if you are poor-to-middle class in income, it can be affordable.

But for everyone else, you are looking at $15k per year, and that does not include after school care or summer camp.  That's fine for people who get a discount for working at the school, or who get scholarships, or are rolling in dough.  But then the regular joes and middle class feel like they  "need" private school.  I've seen many FB posts about people in MLMs SO HAPPY to be making enough money to send their kids to private school (not to mix two of our favorite topics ... ha!)

For sure it can really give your kids a leg up.  But every time I price it (out of curiosity, and also because I'm shopping for a preschool), it makes me cringe.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: dcheesi on December 26, 2015, 10:56:47 AM
Yeah, apparently it varies a lot. The public schools in Virginia are good as long as you pick the right school district to live in. But my friend is moving to Indianapolis with a new baby, and he says the public schools out there are so uniformly dismal that private school is the only real option if you care about your kids' education.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: nobodyspecial on December 26, 2015, 01:09:30 PM
But for everyone else, you are looking at $15k per year, and that does not include after school care or summer camp.
Here there is a much more economical solution - you just pay $1M more for a house in a "good school" area. Or more commonly you rent an apartment in a good school area where you have the paperwork mailed to.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: MgoSam on December 26, 2015, 01:23:51 PM
I live in an area where schools - you know, aren't terribly great.  It's California.  The difference between a "good" public school and a "bad" public school comes down to 2 things: 1. Money and 2. English proficiency.


Yeah, I guess that makes more sense in California or any where there are sizable populations of children without English proficiency. I'm spoiled here in Minnesota as real estate prices aren't as insane as they are in California, but most of the school districts here are amazing.

When I was looking at houses, my Realtor kept harping on about good school districts and I kept looking at her and saying, "Every house I've picked is in a good school district," just because it wasn't the MV school district, doesn't mean it isn't great, the Roseville and Edina and Eden Prarie and Blaine districts are all good. So I guess I'm spoiled in that this isn't a big deal here in Minnesota, there are bad schools but they are mostly in districts where I wouldn't have been picking a house to live in anyways.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: syednaeemul on December 26, 2015, 05:01:26 PM
Note: I was a private school kid, 1st in Malaysia because the public schools would mean studying in Malay, and 2nd in New Zealand because I had a full scholarship awarded.

Here in Australia and New Zealand, private school is not just an education thing, but is also a networking tool for the kids' parents. If you're an attorney / accountant looking for high net worth individuals, you can probably find them spending $20k+ per child in these schools. If $20k of school fees can help you make the connections to high-powered senior executives, it may be a decent return on investment (but can't be considered a business expense!).

Education-wise, since private schools have smaller class sizes you get low student:teacher ratios (something that even universities proudly advertise). The increased focus does help with learning, but one weakness it builds is it doesn't give you a place where you have to fight for yourself (I think that's the biggest thing I missed due to not going to a public school).
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: gimp on December 26, 2015, 08:35:56 PM
$250k a year + private school shouldn't cause people to go paycheck to paycheck.

Even in CA, $250k a year ... let's do some math. Married filing jointly, maximum 401k contributions. Two kids, each going to private school. Let's say that's $30k a year cash (which is on the far upper end of private school costs in the bay area - source (http://www.bizjournals.com/sanfrancisco/blog/2014/05/top-25-private-schools-in-the-bay-area.html).)

http://www.taxformcalculator.com/ tells me that after $36k of 401k contributions, take-home pay is $145.5k for the family. After private schools, that's still $85.5k. That includes federal and state taxes.

The only problem is that a house in the same area - well, a 30-year mortgage for $1.5m at today's 3.9% is 7k a month, which is a cool $84k a year. Yeah, that'd be paycheck to paycheck, eh?

I'm a pretty big believer in education... so if I had to make the choice, I'd go for a smaller house. I'd also not bother with private school until teenage years, because it tends to be fairly useless for little kids, unless you really don't want them hanging out with The Poors. And of course, there are plenty of decent private schools even here for closer to half the price. All of that would give a lot more breathing room.

Really though, shit like this is why people think that $250k in the bay area ain't much. It ain't much if you want everything that other people seem to have: nice house, nice cars, private schools, vacations, stuff, travel. You gotta pick. And save when you don't yet have those things. And go for slightly cheaper versions of those things. As soon as you go just slightly less nice, prices fall rapidly.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: Vanguards and Lentils on December 26, 2015, 08:59:13 PM
The comments on this article are like the funniest bits of this forum!
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: Rob_S on December 27, 2015, 03:58:04 AM
Here in Australia and New Zealand, private school is not just an education thing, but is also a networking tool for the kids' parents. If you're an attorney / accountant looking for high net worth individuals, you can probably find them spending $20k+ per child in these schools. If $20k of school fees can help you make the connections to high-powered senior executives, it may be a decent return on investment (but can't be considered a business expense!).

Education-wise, since private schools have smaller class sizes you get low student:teacher ratios (something that even universities proudly advertise). The increased focus does help with learning, but one weakness it builds is it doesn't give you a place where you have to fight for yourself (I think that's the biggest thing I missed due to not going to a public school).

I don't agree. I was a teacher and I know for my son I am seriously considering selling the current home and renting in a good school zone for the next 12 years. A school in the outer western suburbs with a high numbers of refugees and non english speakers verse a public school in Carlton... yeah there's a big difference. We aren't that different to the US or the UK.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: Suncoast on December 27, 2015, 04:50:58 AM
Yeah, apparently it varies a lot. The public schools in Virginia are good as long as you pick the right school district to live in. But my friend is moving to Indianapolis with a new baby, and he says the public schools out there are so uniformly dismal that private school is the only real option if you care about your kids' education.

Inner city Indianapolis, sure. I would avoid IPS. But some of the other townships within the city are decent, and the towns / suburbs surrounding Indianapolis have mostly great schools. I think your friend got some bad advice, you might want to let him know.

+1 I lived in a suburb of Indy and found the schools to be among the best I've seen anywhere (and I've lived in several states).
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: astvilla on December 27, 2015, 07:36:23 AM
Or more commonly you rent an apartment in a good school area where you have the paperwork mailed to.

Isn't this part somewhat illegal?  In my township, it's illegal and a crime to use a mailing address in a good school district and actual resident address outside the school district/township.  Because you are avoiding paying the property tax dollars (higher generally cause you're trying to get your kid in that public school) by living somewhere else.

I remember on the school TV, the district offered $500 awards if we caught people who pretended to live in the town just to send their kids to our school without actually living in the town and paying the higher property taxes/values.

Unless you mean renting an apartment and actually living there, as opposed to renting it just for mailing paperwork.

I can't really remember where the legal boundary is or how those people fooled the BOE/township...renting an apartment is a way of putting $$ into the township but it isn't really "honest" in a traditional sense.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: nobodyspecial on December 27, 2015, 08:27:15 AM
Or more commonly you rent an apartment in a good school area where you have the paperwork mailed to.

Isn't this part somewhat illegal?  In my township, it's illegal and a crime to use a mailing address in a good school district and actual resident address outside the school district/township.
Yes but fortunately we have anti-terrorism laws to deal with these threats to national security http://www.dailymail.co.uk/news/article-562409/How-town-hall-snoopers-hijack-anti-terror-powers-crack-dog-fouling.html

Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: Eric222 on December 27, 2015, 08:33:33 AM
But for everyone else, you are looking at $15k per year, and that does not include after school care or summer camp.
Here there is a much more economical solution - you just pay $1M more for a house in a "good school" area. Or more commonly you rent an apartment in a good school area where you have the paperwork mailed to.
Or, you have a plan like mine - stay where I'm at where is the public elementary school you managed to get your kids in is good - then rent and live in the suburb that happens to be really close to work but is insanely expensive.  The public school there is great.

Who needs to own a house, renting is certainly the cheaper option around here no matter what...  As an aside, the town has bike lanes everywhere and an amazing library.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: arebelspy on December 27, 2015, 09:28:56 AM

But for everyone else, you are looking at $15k per year, and that does not include after school care or summer camp.
Here there is a much more economical solution - you just pay $1M more for a house in a "good school" area. Or more commonly you rent an apartment in a good school area where you have the paperwork mailed to.
Or, you have a plan like mine - stay where I'm at where is the public elementary school you managed to get your kids in is good - then rent and live in the suburb that happens to be really close to work but is insanely expensive.  The public school there is great.

Who needs to own a house, renting is certainly the cheaper option around here no matter what...  As an aside, the town has bike lanes everywhere and an amazing library.

People worry about being uprooted if their landlord asks them to move.

Some of my friends in San Digeo just got a notice on the 22nd that the landlord's son and daughter in law will be moving in, so they have a month to find a new place.

If you're good tenants, it's not necessarily likely, so it's a risk you may want to take, but it is there.  And it is a risk with any rental, true, but seems a bit more likely in a nice area with nice schools (and also more disruptive in that case, as you need to find another house within that school's region).

I agree with you, renting is the way to go in that circumstance, most likely, but that is a factor to consider.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: mm1970 on December 27, 2015, 10:48:34 AM
But for everyone else, you are looking at $15k per year, and that does not include after school care or summer camp.
Here there is a much more economical solution - you just pay $1M more for a house in a "good school" area. Or more commonly you rent an apartment in a good school area where you have the paperwork mailed to.
Ha ha that's true here too.  My friends bought a house in a better school district the same time we bought our house, and it was $150,000 more than ours. Which, you know, would pay for 10 years of private school.  Maybe it was worth the price when you consider they have two kids.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: mm1970 on December 27, 2015, 10:54:26 AM
Quote
Really though, shit like this is why people think that $250k in the bay area ain't much. It ain't much if you want everything that other people seem to have: nice house, nice cars, private schools, vacations, stuff, travel. You gotta pick. And save when you don't yet have those things. And go for slightly cheaper versions of those things. As soon as you go just slightly less nice, prices fall rapidly.

This is great.  I live in Santa Barbara, and I've been saying the same thing for years.  Here, you gotta pick.  If you are a 2-career couple, you can probably afford a house (or a condo). But you can't have that AND a new minivan and a new pickup truck.  You can't have that AND eat out 5 times a week.  You can't have that AND private school, 2x a year trips to Europe / Hawaii, and an RV.

Although the "slightly less nice" thing doesn't seem to apply here.  At least in housing.  When we bought our house, it was a stretch at almost $800k for an 1100 sf house with one bathroom and no garage.  My CEO was building a new house the size of our lot, and said "wow, for only $150k more you could have bought the house I'm selling, better school district, and 2x bigger!"  Then, like now, there was a lot of "compression" in the housing market by square footage.  It was so hard to get in, the low end crept up but the "mid-size" houses were cheaper per square foot. Because when you are stretching for $800k, where does the extra $150k come from?
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: LiveLean on December 27, 2015, 06:16:10 PM
At a certain point, what more are you getting for $35,000-$50,000 a year of private, non-boarding high school?

I grew up in the DC area and went to a highly-regarded private high school for the now-amazingly low figure of $2,500/annually. There were schools at the time that were $10,000 a year. I graduated in 1987.

My school today is $12,500 a year and, yes, those $10K schools are $50,000 schools. At a certain point, parents are just paying to hang with a certain crowd. It's usually not even about the kid.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: nobodyspecial on December 27, 2015, 06:18:50 PM
At a certain point, what more are you getting for $35,000-$50,000 a year of private, non-boarding high school?
Automatic entrance to an IVY league school, and then either a cabinet post or a lucrative contract providing services to your freinds who got the cabinet post.

Of course in a purely meritocratic society like America which has thrown off the feudal shackles of aristocracy and monarchy this probably isn't a factor.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: steviesterno on December 28, 2015, 07:19:14 AM
we actually made the decision to buy a house in the area we did because of the schools, a number of years before our kiddo is going to even go to one. in our area (Dallas) the school districts are crazy different. One side of the road you're in one of the worst in the nation, the other side of the street you're in the best. House prices were about 30k difference for a smaller house like we wanted. so that works out to be way cheaper than a few years of private school.

it also helps when you go to sell, too. so sure, we paid extra to get into the area, but by all accounts we'll get it back when we leave.

rents were absolutely exploding in our area. so by buying a house, we actually doubled our square footage, and after insurance and everything we're spending 100 a month LESS than an apartment, not including tax savings. since we bought 10/14 the house has gone up probably $30,000 in value, so you can think we've increased our NW or we've been living for free the last year.

it helps that our market isn't as crazy as the bay area or NYC, but if we see crazy growth like they did we'll be even better off. and if it doesn't go nuts? we're still living less expensively than we would in an apartment
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: WGH on December 28, 2015, 03:12:50 PM
Yeah, apparently it varies a lot. The public schools in Virginia are good as long as you pick the right school district to live in. But my friend is moving to Indianapolis with a new baby, and he says the public schools out there are so uniformly dismal that private school is the only real option if you care about your kids' education.

Same situation where I live. All the public schools in pretty much the entire state of NM are garbage. We moved to a suburb that we are praying the elementary school that just received an A rating from the state's report card will be sufficient until we can begin paying for private school tuition for 6-12th. I REALLY don't want to fork over $25k a year but we are prepared to do it because we know how crappy the public schools are here.

I went to a blue ribbon public school growing up and I believe it made a world of difference. No blue ribbon schools within 200 miles of me...
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: Making Cookies on December 28, 2015, 07:47:25 PM
Could be worse - all the private schools in my town (that I'm aware of) are run by churches so if your religious ideals don't match or you aren't religious at all - the choices are few.

FWIW if we could get rid of common core in public schools here we'd be a long way ahead of where we are now. Too much teaching to the test, too little spent on topics (skipping around too much). We spend a fair amount of our evenings reinforcing what didn't soak in at school.

Topics include personal finance per this forum, math/calc/algerbra, English (grammar, lit), and science. Not all three each night though. Not everyone learns the same way so some people have to study more, get tutored, etc.

On the topic of low income schools - our's is not - but I think there is still a fair amount of babysitting required for a few of the kids in my oldest child's classes.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: TheGrimSqueaker on December 28, 2015, 07:52:48 PM
Yeah, apparently it varies a lot. The public schools in Virginia are good as long as you pick the right school district to live in. But my friend is moving to Indianapolis with a new baby, and he says the public schools out there are so uniformly dismal that private school is the only real option if you care about your kids' education.

Same situation where I live. All the public schools in pretty much the entire state of NM are garbage. We moved to a suburb that we are praying the elementary school that just received an A rating from the state's report card will be sufficient until we can begin paying for private school tuition for 6-12th. I REALLY don't want to fork over $25k a year but we are prepared to do it because we know how crappy the public schools are here.

I went to a blue ribbon public school growing up and I believe it made a world of difference. No blue ribbon schools within 200 miles of me...

Some of them are awful, but others are what you make of them. Being able to expel students who actively disrupt classes or who interfere with other students' education would be a great first step, but it's not going to happen because we live in a state where it's socially acceptable to be pig-ignorant.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: nobodyspecial on December 28, 2015, 07:57:23 PM
the school districts are crazy different. One side of the road you're in one of the worst in the nation, the other side of the street you're in the best.
If you had a sufficiently disruptive kid there is a real arbitrage opportunity there.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: Squirrel away on December 29, 2015, 01:36:13 AM
Lol. I'm giggling at some of the comments at the bottom.:D
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: mm1970 on December 29, 2015, 10:25:49 AM
Could be worse - all the private schools in my town (that I'm aware of) are run by churches so if your religious ideals don't match or you aren't religious at all - the choices are few.

FWIW if we could get rid of common core in public schools here we'd be a long way ahead of where we are now. Too much teaching to the test, too little spent on topics (skipping around too much). We spend a fair amount of our evenings reinforcing what didn't soak in at school.

Topics include personal finance per this forum, math/calc/algerbra, English (grammar, lit), and science. Not all three each night though. Not everyone learns the same way so some people have to study more, get tutored, etc.

On the topic of low income schools - our's is not - but I think there is still a fair amount of babysitting required for a few of the kids in my oldest child's classes.
That's interesting -

My older son is in 4th grade, and I have to say that I really like the Common Core changes, compared to when I was in school.

As far as "teaching to the test", I don't see that it has changed from pre-common core to now - they were teaching to the test before.  It's worse now, sure, because we are all under the gun of "if you don't improve you are fired!!"  (Mostly the principals.)

I am very good at memorization, but it's always been harder for me to absorb and learn things organically. Repetition is my thing.  I have found that Common Core teaches more methods than memorization.  I don't remember 2nd grade math right now, but when I was helping my son (and learning it myself), I was shocked at the kind of math that I could do in my head - that I couldn't do before.  (And I'm an engineer.)

Of course my son learns more like me, so he struggles sometimes - he wants to just "know the answer" and is not very happy about having to explain something that he "just knows".

Anyway, my point is teaching to the test and common core are two different things.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: arebelspy on December 29, 2015, 10:34:50 AM
Common core got a bad rap due to misinformation.  It's actually amazing.  It's the curriculum people have a problem with, not common core, they just don't know the difference.

Also, teaching to the test is a GOOD thing.  As long as the test is good.

What it means is you're teaching what they should know.

If it's a junk test, and you're just teaching how to pass that one test, obviously that's bad.  But if you're teaching based on the types of questions the test will be asking, and it's a good test based on the standards, that's good teaching.

Better than when teachers teach with no end goal in mind, but just teach random stuff, and the kids can't pass any test cause they weren't taught what they needed to learn.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: merula on December 29, 2015, 10:52:07 AM
+1 to the defense of Common Core. Yes, it'd be great if all teachers everywhere were above average and all school districts everywhere cared about developing rigorous curricula that taught children everything they need to know to be productive members of society. Unfortunately, that's not the case and never has been.

My grandma was a teacher and started in a one-room schoolhouse. She hated administration because she didn't like someone who had never set foot in a classroom telling her how to do her job. I sympathize with that view, but how do you let experienced, passionate teachers do what they do best and yet step in for those who don't care about anything but tenure? I've had both as a student and I gotta say, it's really hard to tell the difference from the outside when the latter knows exactly how to game the system.

I'm happy to see Common Core enforcing the basics, and I see it as more of a burden on the bad teachers than the good.

But I also don't buy the whole "good school/bad school" thing. I went to a top-rated school in my state. It was top-rated because the kids scored well on tests and went to college. Both of those things happened because the vast majority of the kids had rich, educated parents who wouldn't accept anything else. The school wasn't great, they put any and all extra money into sports. The bathrooms ran out of TP at the end of the day.

Contrast that with the school a good friend went to. Inner-city, but her parents are wealthy and educated. She had an amazing experience and learned how to interact with a lot of different people early on. Her school had a ton of programs mine didn't, including both IB and AP. And we went to the same college. I'm planning to send my kids to this school.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: obstinate on December 30, 2015, 06:05:13 AM
Re: the private school question: to be financially efficient, you definitely have to pick one or the other of {private school, good neighborhood}. Otherwise, you're paying twice for a good education.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: Making Cookies on January 03, 2016, 09:30:00 AM
For math one initial roadblock for my son was that the teacher never issued textbooks. Students were instructed to hit up Google for examples to solve their homework. The methods used to solve work sheets were odd and illogical to me. Not enough repetition built into homework. They apparently try not to give homework but instead do it all in class b/c I suspect some of the students might not come from homes where the parents can help with homework. Leads to not enough repetition which is key to how my son learns. Working five or six problems is not enough.

I finally (nicely) demanded a textbook and a syllabus. He got a textbook but no syllabus.

We have found a few good math websites and paired with the textbook we've made progress but he still has a long way to go.

Don't get me wrong, I'm not blaming the teacher for everything - he has to make an effort too but overall - not impressed with how this teacher has designed her class.

- - - -

I thought the US Navy taught the best math classes I ever took. Very clear and concise. Lots of repetition.

mm1970 - I hear you. Am also an engineer. I want to see a clear method or methods to solving an equation when it is being taught. Am also improving my own math skills while working with my teen.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: Krnten on January 04, 2016, 06:56:44 PM
At a certain point, what more are you getting for $35,000-$50,000 a year of private, non-boarding high school?
Automatic entrance to an IVY league school, and then either a cabinet post or a lucrative contract providing services to your freinds who got the cabinet post.

Of course in a purely meritocratic society like America which has thrown off the feudal shackles of aristocracy and monarchy this probably isn't a factor.
  Of the small handful of people I know who fit into this category, one is a SAHM, another is a mildly successful fashion blogger, one is unemployed but looking for work, one spent a LOT of $ on law school but is now a software engineer (his original field).  They have the same kinds of jobs that my non-exclusive-prep-school friends do.  Most of them did go to ivy/ivy type schools.  But I just don't see it mattering much in the long run.  Maybe I'll feel differently when my kids go to school but my current belief is that the school experience matters FAR FAR less than a kid's home life experience.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: MacBury on January 04, 2016, 08:10:06 PM
Here in London I estimate the total present value to send one child to private school 5-18 is £300k of after tax money.

That is how much you'd have to pay me today to take the school fee liability off your hands.

Just school fees nothing else.

Sent from my SM-N910C using Tapatalk

Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: Homey The Clown on January 04, 2016, 10:25:34 PM
We are paying for private elementary school. Kids are natural scientists. They observe, make hypotheses, test them, and draw conclusions. They do this without us telling them. They do it in both "hard" and "social" sciences. They do this throughout their younger years. Then we put them in school and instead of them discovering things, the teachers tell them. They have to take tests that are not diagnostic, but rather grade them, their teachers, and their schools. Kids take joy in learning, but if I were designing a system to get rid of that joy, it would look a lot like the public education system in the US. Students need to move around their classrooms, the classrooms shouldn't be rows of desks, the kids should be outside exploring nature, they should ask hard questions and expect to have to figure out many of the answers themselves. Our kids go to a school that does all that. In our explorations of the public options in our area, we didn't find that type of learning to be common in the classrooms. You might find teachers who are individual exceptions, but I want my kids in a school where that type of learning is the mission of the school.
Title: Guardian article on even the rich living paycheck to paycheck...
Post by: Lizzy B. on January 05, 2016, 07:45:16 AM

But I also don't buy the whole "good school/bad school" thing. I went to a top-rated school in my state. It was top-rated because the kids scored well on tests and went to college. Both of those things happened because the vast majority of the kids had rich, educated parents who wouldn't accept anything else. The school wasn't great, they put any and all extra money into sports. The bathrooms ran out of TP at the end of the day.

Contrast that with the school a good friend went to. Inner-city, but her parents are wealthy and educated. She had an amazing experience and learned how to interact with a lot of different people early on. Her school had a ton of programs mine didn't, including both IB and AP. And we went to the same college. I'm planning to send my kids to this school.

I think Merula really made a good point about how the metrics used to define “good” and “bad” schools are pretty arbitrary.  I think what matters is not so much the school’s rating (or perceived rating, which could be very different) but the level of opportunities and teacher engagement.  That’s a whole lot tougher to gauge, but really makes the difference.  For example, my high school, while offering great math and English AP/honors classes, didn’t offer any AP science programs.  To make up for this, several of the science teachers gave alternate and additional assignments to the interested students to challenge them.  One even stayed late with us for several weeks to give us access to the labs and to help us get together a science fair project (which was completely optional at that grade level).  In middle school, a few of us were interested in fencing, and our PE teacher let us come in during lunch once a week to mess around with the fencing equipment.  She saw that we weren’t super into the competitive team sports that she covered in class and wanted to make sure we felt engaged with her subject.  That’s the kind of attention that really made a difference to me and to my peers, but which probably wouldn’t have shown up in school ratings.


Same situation where I live. All the public schools in pretty much the entire state of NM are garbage. We moved to a suburb that we are praying the elementary school that just received an A rating from the state's report card will be sufficient until we can begin paying for private school tuition for 6-12th. I REALLY don't want to fork over $25k a year but we are prepared to do it because we know how crappy the public schools are here.

I went to a blue ribbon public school growing up and I believe it made a world of difference. No blue ribbon schools within 200 miles of me...


For what it’s worth, I went to public schools in NM.  Granted, we were in ABQ, not in rural NM. The schools weren’t highly rated, and my parents were cautioned by wealthier friends that the high school in particular had a bad reputation and that they should put me in the prestigious private school if they cared about my education.

Good teachers, good programs, and people who care about kids can be found anywhere.  If those things are missing, by all means look elsewhere, but I think it’s easy to dismiss the public schools too hastily by not seriously looking at the opportunities that are available.

Edited to fix quoting issues. Apparently my teachers weren't so helpful preparing me to deal with multiple nested quotes in Tapatalk. :-)
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: Apples on January 05, 2016, 01:09:34 PM
Yeah, apparently it varies a lot. The public schools in Virginia are good as long as you pick the right school district to live in. But my friend is moving to Indianapolis with a new baby, and he says the public schools out there are so uniformly dismal that private school is the only real option if you care about your kids' education.

Same situation where I live. All the public schools in pretty much the entire state of NM are garbage. We moved to a suburb that we are praying the elementary school that just received an A rating from the state's report card will be sufficient until we can begin paying for private school tuition for 6-12th. I REALLY don't want to fork over $25k a year but we are prepared to do it because we know how crappy the public schools are here.

I went to a blue ribbon public school growing up and I believe it made a world of difference. No blue ribbon schools within 200 miles of me...

I had a roommate in college that went to a blue ribbon public school, was decently high on the Top 100 High Schools list that some publication puts out.  I attended a public school in rural PA where 1/3 of students have free or reduced lunches, 10-20% are ESL, and we have a thriving Tech Ed program because that's the kind of population that lives here.  We were "adequate" on the No Child Left Behind ratings, but sometimes just barely, and not all grades in every subject every year.  I did better than this roommate in college.  I had higher SAT scores to get in.  I had taken the only two A.P. classes my high school offered.  She had almost had enough credits to skip Freshman year, and over 90% of her graduating class went to a 4 year college.  40% of mine went to a 2-year or 4-year school.  And she was a smart girl, not someone wasting her great h.s. education.  If you as a parent teach your child to value education (or at least to value that good grades can get you into a good school to study what you want), then a lot of non-blue ribbon schools are great for kids.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: StetsTerhune on January 05, 2016, 01:37:42 PM
If you as a parent teach your child to value education (or at least to value that good grades can get you into a good school to study what you want), then a lot of non-blue ribbon schools are great for kids.

Yes. A thousand times yes.

I'm genuinely surprised to see the people on this forum defending private schools this much. This all seems completely opposed to everything this forum stands for.

Yes, there's such a thing as a terrible school, don't get me wrong, it's just that probably no one who's on this forum is living in an area that their children would go to one. Unless the school is actively, truly, terrible, a child in a good home that values education is going to be fine. Hell, I've even heard the argument that for a lot of kids going to a mediocre school where they can gain confidence by being a "smart kid" is better than being below average at an elite school.

As for this sample size of one, I went to grade school and high school at places that I'm sure people here would classify as "Garbage." Well it was good enough to get me into an ivy league school. I'm not saying I'm a typical case, but you don't "need" a great school. In terms of the actual education, I guarantee you could spend 30 minutes a night with your kid and teach him more than he learned in school that day at any school in america.Maybe this stops being true in late high school, but maybe not.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: jengod on January 05, 2016, 02:16:49 PM
At a certain point, what more are you getting for $35,000-$50,000 a year of private, non-boarding high school?
Automatic entrance to an IVY league school

FWIW, it may actually be a little harder to get into an Ivy from a competitive private high school because the competitive base is so much stronger and so you are less likely to accumulate the highest possible GPA, extracurricular status and sports team placements.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: jengod on January 05, 2016, 02:31:09 PM
If you as a parent teach your child to value education (or at least to value that good grades can get you into a good school to study what you want), then a lot of non-blue ribbon schools are great for kids.

Yes. A thousand times yes.

I'm genuinely surprised to see the people on this forum defending private schools this much. This all seems completely opposed to everything this forum stands for.

There's a lot of radical education theory that holds that virtually any standard school (whether ranked "good" or "bad") undermines the emotional and physical health of children. The factory model of child-as-widget is very hard to escape in almost North American public school setting, so parents seek alternatives, be they expensive "elite" private schools, less pricey parochial schools, Montessori, free democratic schools, home schools, et al. What I'm trying to say is that sending your kids to private school looks like classism, but you could also view it through a countercultural lens if you were interested in a somewhat more forgiving perspective.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: nereo on January 05, 2016, 02:48:59 PM
I'm having problems getting past the second paragraph...

Guy claims his ~$0.5MM paycheck barely covers living expenses and blames alimony and private-school tuition x2.
let's see how it breaks down...
$96k/yr alimony = $96k
private high school ($35k/year x 2 kids) = $75k
federal taxes (assumes all is taxable income) = $149k
state taxes (assume 11% - among the highest) = $55k

remaining post-tax income = $125k.
conclusion: he's burning through $10k/month not including alimony or tuition. 

Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: charis on January 05, 2016, 03:08:21 PM
Yes, there's such a thing as a terrible school, don't get me wrong, it's just that probably no one who's on this forum is living in an area that their children would go to one.

I guess by most accounts, I do.  We live in the worst district in the state (by standard measurements) - the average graduation rate after 4 years has been hovering around 43% for years.  I think all of the public high schools have metal detectors at this point.   However, we still have a few decent elementary options and one or two possible secondary options.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: MgoSam on January 05, 2016, 03:16:25 PM

conclusion: he's burning through $10k/month not including alimony or tuition.

Well a man's got to live.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: aasdfadsf on January 05, 2016, 08:55:29 PM
Someone beat me to it, but a common theme in these woes of the not-quite-rich-enough articles is that the numbers don't add up. Even after alimony, tuition, and taxes, the guy still has 2.5-times the median family income. And yet he spends every last bit of it.

I also loved how people who are spending $2600 a month on dining out aren't being "flashy", this is apparently a necessity. The excuse for this behavior is that they're extremely busy. If this were really the problem, they should be eating $5-10 per meal take-out, not sitting down for a 3-hour tasting menu.

Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: elaine amj on January 05, 2016, 09:29:13 PM
Note: I was a private school kid, 1st in Malaysia because the public schools would mean studying in Malay, and 2nd in New Zealand because I had a full scholarship awarded.

Here in Australia and New Zealand, private school is not just an education thing, but is also a networking tool for the kids' parents. If you're an attorney / accountant looking for high net worth individuals, you can probably find them spending $20k+ per child in these schools. If $20k of school fees can help you make the connections to high-powered senior executives, it may be a decent return on investment (but can't be considered a business expense!).

Education-wise, since private schools have smaller class sizes you get low student:teacher ratios (something that even universities proudly advertise). The increased focus does help with learning, but one weakness it builds is it doesn't give you a place where you have to fight for yourself (I think that's the biggest thing I missed due to not going to a public school).

Hello fellow Malaysian :)

I find the focus on the importance of private schools a little funny. I grew up in Malaysia and spent elementary in a fancy private school. It was fine - some good teachers, some bad teachers. I switched to the public system in high school.

Public high school was fine. Some good teachers, some bad teachers. Maybe more bad teachers? We still got a decent education overall. And we're talking public school in a 3rd world country - there were plenty of poor kids. And teaching there is a grossly underpaid profession - not well regarded at all.

I was educated well enough that even though I graduated high school with a B average, when I came to Canada for university, I had the highest marks in the school in my first year.

I guess I never saw the value of private school other than networking. Involved parents and the child's own personality makes more of a difference IMO.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: urbanista on January 05, 2016, 09:43:16 PM
I don't agree. I was a teacher and I know for my son I am seriously considering selling the current home and renting in a good school zone for the next 12 years. A school in the outer western suburbs with a high numbers of refugees and non english speakers verse a public school in Carlton... yeah there's a big difference. We aren't that different to the US or the UK.

What is the good school you are looking at ? :-)  We need to make the same decision next year. Looking at Rosanna/Viewbank. Apparently public schools are excellent there.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: StetsTerhune on January 06, 2016, 08:25:23 AM
There's a lot of radical education theory that holds that virtually any standard school (whether ranked "good" or "bad") undermines the emotional and physical health of children. The factory model of child-as-widget is very hard to escape in almost North American public school setting, so parents seek alternatives, be they expensive "elite" private schools, less pricey parochial schools, Montessori, free democratic schools, home schools, et al. What I'm trying to say is that sending your kids to private school looks like classism, but you could also view it through a countercultural lens if you were interested in a somewhat more forgiving perspective.

I'm actually very sympathetic to a lot of the radical education theories. I don't think that's what people are talking about though. I think people are talking about elite private schools that are actually more standard than public schools. Private schools that are "better" by making kids work harder in the standard school sense.

If someone had said they were paying for a Montessori school because their child thrives better in that environment, I have absolutely no problem with that. Instead people are talking like their kid has to go to a great elementary school so they can go to a great high school, so they can go to a great college, so they can get a good job, so they can pay for their own child to go to a great elementary school, and so on forever. People on this site seem to eschew consumerism for themselves, but the moment children are mentioned they revert to the exact same consumerist nonsense as the people in the article. Insisting that they give their children all the "advantages" in life, even as we know for ourselves that these "advantages" aren't worth the cost of admission.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: charis on January 06, 2016, 09:19:44 AM
I completely agree with choosing the best environment for one's child.  I can't understand, however, people who refuse to consider a specific environment out of hand.  Most of my friends move to the suburbs as a default, or go private, when they start having kids.  I mean, why stay in the worst district in the state when you can easily move 5 min to one of the best districts in the country.  I suppose it's a no brainer in their minds.   

In my mind, I feel my child and the district is much better served by not contributing to rampant socioeconomic and racial segregation.   
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: MacBury on January 06, 2016, 09:28:46 AM
I have two children to retire I need all three of following

1. £1000k house freehold close town
2. £1000k in savings (buys £40k income forever)
3. £1000k private school and university two kids


So £3mio net savings across lifetime. Take away 3. I need £2mio.

Simple as this really.


Sent from my SM-N910C using Tapatalk

Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: onlykelsey on January 06, 2016, 09:37:34 AM
Well a man's got to live.

+1.  I'm guilty of a bit of this myself, and am constantly reminding myself that NO, I actually don't need or deserve another dinner out on the town, just because my colleagues are doing it.

I think there is real merit to the idea of surrounding yourself with people who are slightly less wealthy than you, especially in your 20s.  It keeps lifestyle creep to a minimum.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: nereo on January 06, 2016, 10:01:29 AM
I have two children to retire I need all three of following

1. £1000k house freehold close town
2. £1000k in savings (buys £40k income forever)
3. £1000k private school and university two kids


So £3mio net savings across lifetime. Take away 3. I need £2mio.


Holy cow - you estimate that you need £1,000,000 ($1.46MM) for the education of two kids?  That blows me away - even the US Ivy-league schools list for $50k/year if you don't get a cent of aid.  Your two kids could both go to Harvard and you're still budgeting $1MM for their private schools?  I'm sure you can spend that much on just tuition, but... wow...
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: frugalnacho on January 06, 2016, 10:14:01 AM
I lived in a shitty school district and my parents were poor so I went to a shitty public school.  Because of that I was barely able to learn anything, barely able to attend college nearly free based on merit, and barely able to get a job as an engineer.  Now I am barely be able to live a happy and successful life and won't be able to retire until about 40, or maybe even 45.  Thanks mom and dad for ruining my life by not sending me to an over priced and elite private school.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: nereo on January 06, 2016, 10:16:12 AM
I lived in a shitty school district and my parents were poor so I went to a shitty public school.  Because of that I was barely able to learn anything, barely able to attend college nearly free based on merit, and barely able to get a job as an engineer.  Now I am barely be able to live a happy and successful life and won't be able to retire until about 40, or maybe even 45.  Thanks mom and dad for ruining my life by not sending me to an over priced and elite private school.
have you considered suing them?  I honestly don't know how you can put up with that level of oppression. 
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: charis on January 06, 2016, 10:17:36 AM
I have two children to retire I need all three of following

1. £1000k house freehold close town
2. £1000k in savings (buys £40k income forever)
3. £1000k private school and university two kids


So £3mio net savings across lifetime. Take away 3. I need £2mio.


Holy cow - you estimate that you need £1,000,000 ($1.46MM) for the education of two kids?  That blows me away - even the US Ivy-league schools list for $50k/year if you don't get a cent of aid.  Your two kids could both go to Harvard and you're still budgeting $1MM for their private schools?  I'm sure you can spend that much on just tuition, but... wow...

And for what? What are you hoping to achieve (or that your children will achieve) for an almost 1.4 million-dollar education?  I am truly curious.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: frugalnacho on January 06, 2016, 10:19:27 AM
I lived in a shitty school district and my parents were poor so I went to a shitty public school.  Because of that I was barely able to learn anything, barely able to attend college nearly free based on merit, and barely able to get a job as an engineer.  Now I am barely be able to live a happy and successful life and won't be able to retire until about 40, or maybe even 45.  Thanks mom and dad for ruining my life by not sending me to an over priced and elite private school.
have you considered suing them?  I honestly don't know how you can put up with that level of oppression.

I'm not networked with any lawyers unfortunately. Strike 2 mom and dad.   
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: nereo on January 06, 2016, 11:09:29 AM
I lived in a shitty school district and my parents were poor so I went to a shitty public school.  Because of that I was barely able to learn anything, barely able to attend college nearly free based on merit, and barely able to get a job as an engineer.  Now I am barely be able to live a happy and successful life and won't be able to retire until about 40, or maybe even 45.  Thanks mom and dad for ruining my life by not sending me to an over priced and elite private school.
have you considered suing them?  I honestly don't know how you can put up with that level of oppression.

I'm not networked with any lawyers unfortunately. Strike 2 mom and dad.   
seems like a case the ACLU should take up, pro-bono.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: MacBury on January 06, 2016, 11:55:00 AM
I have two children to retire I need all three of following

1. £1000k house freehold close town
2. £1000k in savings (buys £40k income forever)
3. £1000k private school and university two kids


So £3mio net savings across lifetime. Take away 3. I need £2mio.


Holy cow - you estimate that you need £1,000,000 ($1.46MM) for the education of two kids?  That blows me away - even the US Ivy-league schools list for $50k/year if you don't get a cent of aid.  Your two kids could both go to Harvard and you're still budgeting $1MM for their private schools?  I'm sure you can spend that much on just tuition, but... wow...

And for what? What are you hoping to achieve (or that your children will achieve) for an almost 1.4 million-dollar education?  I am truly curious.
That is how much it costs over here if you go private and pay for university for two kids £500k each.

School fees around £15k pa each grows at 5% inflation if you discount it back in today's at money at 3% equivalent of £500k or £1mio for two.

 

Sent from my SM-N910C using Tapatalk

Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: frugalnacho on January 06, 2016, 12:01:33 PM
I have two children to retire I need all three of following

1. £1000k house freehold close town
2. £1000k in savings (buys £40k income forever)
3. £1000k private school and university two kids


So £3mio net savings across lifetime. Take away 3. I need £2mio.


Holy cow - you estimate that you need £1,000,000 ($1.46MM) for the education of two kids?  That blows me away - even the US Ivy-league schools list for $50k/year if you don't get a cent of aid.  Your two kids could both go to Harvard and you're still budgeting $1MM for their private schools?  I'm sure you can spend that much on just tuition, but... wow...

And for what? What are you hoping to achieve (or that your children will achieve) for an almost 1.4 million-dollar education?  I am truly curious.
That is how much it costs over here if you go private and pay for university for two kids £500k each.

School fees around £15k pa each grows at 5% inflation if you discount it back in today's at money at 3% equivalent of £500k or £1mio for two.

 

Sent from my SM-N910C using Tapatalk

Why don't you move to a less ridiculous place then?
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: nereo on January 06, 2016, 12:11:24 PM
I have two children to retire I need all three of following

1. £1000k house freehold close town
2. £1000k in savings (buys £40k income forever)
3. £1000k private school and university two kids


So £3mio net savings across lifetime. Take away 3. I need £2mio.


Holy cow - you estimate that you need £1,000,000 ($1.46MM) for the education of two kids?  That blows me away - even the US Ivy-league schools list for $50k/year if you don't get a cent of aid.  Your two kids could both go to Harvard and you're still budgeting $1MM for their private schools?  I'm sure you can spend that much on just tuition, but... wow...

And for what? What are you hoping to achieve (or that your children will achieve) for an almost 1.4 million-dollar education?  I am truly curious.
That is how much it costs over here if you go private and pay for university for two kids £500k each.

School fees around £15k pa each grows at 5% inflation if you discount it back in today's at money at 3% equivalent of £500k or £1mio for two.

Where, exactly, is "here"?  I'm assuming the UK since you are using pounds sterling (£).  I cannot find a single university that charges £250k per child, even including rent.  Oxford and Cambridge are both estimated (https://www.lovemoney.com/news/26703/cheapest-most-expensive-universities-uk) to cost £50k (tuition, rent and fees included) total.  Spoken two two recent UK graduates who both think your estimates are bunk.

Similarly, £15k/yr x 2 adds is £30k/year.  You could sustain that for all 12 years of their education for £360k.  No idea why you'd calculate 5% inflation, only to discount it back 3%.  Either your discussing today's £ or at a future date; either way it's irrelevant.  Most prefer to talk about it in real-adjusted terms to avoid this kind of mathematical gymnastics.

Good news!  It looks like education is going to cost a scant fraction of what you think it will! 
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: MacBury on January 06, 2016, 12:15:37 PM
I have two children to retire I need all three of following

1. £1000k house freehold close town
2. £1000k in savings (buys £40k income forever)
3. £1000k private school and university two kids


So £3mio net savings across lifetime. Take away 3. I need £2mio.


Holy cow - you estimate that you need £1,000,000 ($1.46MM) for the education of two kids?  That blows me away - even the US Ivy-league schools list for $50k/year if you don't get a cent of aid.  Your two kids could both go to Harvard and you're still budgeting $1MM for their private schools?  I'm sure you can spend that much on just tuition, but... wow...

And for what? What are you hoping to achieve (or that your children will achieve) for an almost 1.4 million-dollar education?  I am truly curious.
That is how much it costs over here if you go private and pay for university for two kids £500k each.

School fees around £15k pa each grows at 5% inflation if you discount it back in today's at money at 3% equivalent of £500k or £1mio for two.

Where, exactly, is "here"?  I'm assuming the UK since you are using pounds sterling (£).  I cannot find a single university that charges £250k per child, even including rent.  Oxford and Cambridge are both estimated (https://www.lovemoney.com/news/26703/cheapest-most-expensive-universities-uk) to cost £50k (tuition, rent and fees included) total.  Spoken two two recent UK graduates who both think your estimates are bunk.

Similarly, £15k/yr x 2 adds is £30k/year.  You could sustain that for all 12 years of their education for £360k.  No idea why you'd calculate 5% inflation, only to discount it back 3%.  Either your discussing today's £ or at a future date; either way it's irrelevant.  Most prefer to talk about it in real-adjusted terms to avoid this kind of mathematical gymnastics.

Good news!  It looks like education is going to cost a scant fraction of what you think it will!
AgeChild One
4£15,000
5£15,750
6£16,538
7£17,364
8£18,233
9£19,144
10£20,101
11£21,107
12£22,162
13£23,270
14£24,433
15£25,655
16£26,938
17£28,285
18£29,699
University £62,368
University £65,486
University £68,761
University £72,199
University £75,809

That is without school trips uniforms food etc

Sent from my SM-N910C using Tapatalk

Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: MacBury on January 06, 2016, 12:22:47 PM
I have two children to retire I need all three of following

1. £1000k house freehold close town
2. £1000k in savings (buys £40k income forever)
3. £1000k private school and university two kids


So £3mio net savings across lifetime. Take away 3. I need £2mio.


Holy cow - you estimate that you need £1,000,000 ($1.46MM) for the education of two kids?  That blows me away - even the US Ivy-league schools list for $50k/year if you don't get a cent of aid.  Your two kids could both go to Harvard and you're still budgeting $1MM for their private schools?  I'm sure you can spend that much on just tuition, but... wow...

And for what? What are you hoping to achieve (or that your children will achieve) for an almost 1.4 million-dollar education?  I am truly curious.
That is how much it costs over here if you go private and pay for university for two kids £500k each.

School fees around £15k pa each grows at 5% inflation if you discount it back in today's at money at 3% equivalent of £500k or £1mio for two.

Where, exactly, is "here"?  I'm assuming the UK since you are using pounds sterling (£).  I cannot find a single university that charges £250k per child, even including rent.  Oxford and Cambridge are both estimated (https://www.lovemoney.com/news/26703/cheapest-most-expensive-universities-uk) to cost £50k (tuition, rent and fees included) total.  Spoken two two recent UK graduates who both think your estimates are bunk.

Similarly, £15k/yr x 2 adds is £30k/year.  You could sustain that for all 12 years of their education for £360k.  No idea why you'd calculate 5% inflation, only to discount it back 3%.  Either your discussing today's £ or at a future date; either way it's irrelevant.  Most prefer to talk about it in real-adjusted terms to avoid this kind of mathematical gymnastics.

Good news!  It looks like education is going to cost a scant fraction of what you think it will!
AgeChild One
4£15,000
5£15,750
6£16,538
7£17,364
8£18,233
9£19,144
10£20,101
11£21,107
12£22,162
13£23,270
14£24,433
15£25,655
16£26,938
17£28,285
18£29,699
University £62,368
University £65,486
University £68,761
University £72,199
University £75,809

That is without school trips uniforms food etc

Sent from my SM-N910C using Tapatalk
Education inflation has compounded at 5% minimum I have comprehensive  figures on this.

I can get around 1.5% on a ten year gilt.

Sent from my SM-N910C using Tapatalk

Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: charis on January 06, 2016, 12:24:34 PM
So your answer to my question is that is what private school costs where you live?  So there is only one private elementary school, one private secondary school, one private university, and no public schools in your area? 

I didn't realize that was possible, things in the UK are more dire than I would have ever expected.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: nereo on January 06, 2016, 12:25:15 PM

AgeChild One
4£15,000
5£15,750
6£16,538
7£17,364
8£18,233
9£19,144
10£20,101
11£21,107
12£22,162
13£23,270
14£24,433
15£25,655
16£26,938
17£28,285
18£29,699
University £62,368
University £65,486
University £68,761
University £72,199
University £75,809

That is without school trips uniforms food etc

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Ok - first mistake, you are including inflation (and a rather large amount of inflation) in your estimate.  When I say I'd like to have a 'stach of $800k for retirement plus a paid off home it's understood that the $800k is in 2016 dollars.  by 2046 that same account may have $1.9MM, but it's the exact same amount of money.  If you're trying to state that education is outpacing inflation by 5% (that is, educational costs - inflation = 5%) - that's not true.  the headline news stories all post the non-inflation adjusted increases. 

Second - you're including 5 years of university for each child - why? When will they stand on their own?

Third - your estimates for each year of college aren't that far off IF you're assuming 5% inflation - but that gets back to point #1... you're compounding inflation throughout your calculation.  If you treat it as real dollars I think you'll be pleasantly surprised by the results.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: MacBury on January 06, 2016, 12:25:44 PM
I have two children to retire I need all three of following

1. £1000k house freehold close town
2. £1000k in savings (buys £40k income forever)
3. £1000k private school and university two kids


So £3mio net savings across lifetime. Take away 3. I need £2mio.


Holy cow - you estimate that you need £1,000,000 ($1.46MM) for the education of two kids?  That blows me away - even the US Ivy-league schools list for $50k/year if you don't get a cent of aid.  Your two kids could both go to Harvard and you're still budgeting $1MM for their private schools?  I'm sure you can spend that much on just tuition, but... wow...

And for what? What are you hoping to achieve (or that your children will achieve) for an almost 1.4 million-dollar education?  I am truly curious.
That is how much it costs over here if you go private and pay for university for two kids £500k each.

School fees around £15k pa each grows at 5% inflation if you discount it back in today's at money at 3% equivalent of £500k or £1mio for two.

Where, exactly, is "here"?  I'm assuming the UK since you are using pounds sterling (£).  I cannot find a single university that charges £250k per child, even including rent.  Oxford and Cambridge are both estimated (https://www.lovemoney.com/news/26703/cheapest-most-expensive-universities-uk) to cost £50k (tuition, rent and fees included) total.  Spoken two two recent UK graduates who both think your estimates are bunk.

Similarly, £15k/yr x 2 adds is £30k/year.  You could sustain that for all 12 years of their education for £360k.  No idea why you'd calculate 5% inflation, only to discount it back 3%.  Either your discussing today's £ or at a future date; either way it's irrelevant.  Most prefer to talk about it in real-adjusted terms to avoid this kind of mathematical gymnastics.

Good news!  It looks like education is going to cost a scant fraction of what you think it will!
They'll be at university in 14 years trust me it won't be 50k.

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Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: MacBury on January 06, 2016, 12:29:47 PM

AgeChild One
4£15,000
5£15,750
6£16,538
7£17,364
8£18,233
9£19,144
10£20,101
11£21,107
12£22,162
13£23,270
14£24,433
15£25,655
16£26,938
17£28,285
18£29,699
University £62,368
University £65,486
University £68,761
University £72,199
University £75,809

That is without school trips uniforms food etc

Sent from my SM-N910C using Tapatalk

Ok - first mistake, you are including inflation (and a rather large amount of inflation) in your estimate.  When I say I'd like to have a 'stach of $800k for retirement plus a paid off home it's understood that the $800k is in 2016 dollars.  by 2046 that same account may have $1.9MM, but it's the exact same amount of money.  If you're trying to state that education is outpacing inflation by 5% (that is, educational costs - inflation = 5%) - that's not true.  the headline news stories all post the non-inflation adjusted increases. 

Second - you're including 5 years of university for each child - why? When will they stand on their own?

Third - your estimates for each year of college aren't that far off IF you're assuming 5% inflation - but that gets back to point #1... you're compounding inflation throughout your calculation.  If you treat it as real dollars I think you'll be pleasantly surprised by the results.
I'm a trained actuary these are in today's  £ do the maths.

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Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: nereo on January 06, 2016, 12:32:52 PM

They'll be at university in 14 years trust me it won't be 50k.

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But that's just it -  I don't trust [your numbers]. 
Quote
I'm a trained actuary these are in today's  £ do the maths.
Millions of Brits go to university every year and manage to spend a fraction of the £250k you are quoting.  If you are saying that inflation will mean that the £ price will be more in 2030 than it is in 2016 than I absolutely agree with you....but if you are claiming that the cost of education will increase 5%/year after inflation for the next 14 years I think that's crazy.  The percentage of people who could afford to attend a university at those rates would be miniscule - if that's what UK universities ultimately cost there are dozens of alternatives all over the globe.

Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: arebelspy on January 06, 2016, 12:33:34 PM
They'll be at university in 14 years trust me it won't be 50k.

I'm a trained actuary these are in today's  £ do the maths.

These two statements are contradictory.  If they're in today's dollars, then your first statement makes no sense (because who cares that it won't be 50k in 14 years, we're talking today's dollars), and if you're saying it won't be 50k in 14 years (because future dollars), than your second statement isn't true.

Are the numbers you posted, specifically these:
Quote
University £62,368
University £65,486
University £68,761
University £72,199
University £75,809

In 2015 dollars or 2029-2033 (or 2025-2029, not sure if your 14 years will be the end of their college career or beginning) dollars?
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: arebelspy on January 06, 2016, 12:34:30 PM
Actually, at this point it's probably not worth it.

Multiple people have tried to convince MacBury that it won't cost that much, and (s)he's convinced it will. 

Okay.

Good luck to you!  :)
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: MacBury on January 06, 2016, 12:38:08 PM

They'll be at university in 14 years trust me it won't be 50k.

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But that's just it -  I don't trust [your numbers]. 
Quote
I'm a trained actuary these are in today's  £ do the maths.
Millions of Brits go to university every year and manage to spend a fraction of the £250k you are quoting.  If you are saying that inflation will mean that the £ price will be more in 2030 than it is in 2016 than I absolutely agree with you....but if you are claiming that the cost of education will increase 5%/year after inflation for the next 14 years I think that's crazy.  The percentage of people who could afford to attend a university at those rates would be miniscule - if that's what UK universities ultimately cost there are dozens of alternatives all over the globe.
Well of I have several spreadsheets of private school fees actual paid fees for last 30 years through top private schools in London and I can 100% assure you they have compounded annually at minimum of 5%.

It is entirely prudent when making large financial commitments to assume this will be maintained in the future.

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Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: MacBury on January 06, 2016, 12:39:21 PM
They'll be at university in 14 years trust me it won't be 50k.

I'm a trained actuary these are in today's  £ do the maths.

These two statements are contradictory.  If they're in today's dollars, then your first statement makes no sense (because who cares that it won't be 50k in 14 years, we're talking today's dollars), and if you're saying it won't be 50k in 14 years (because future dollars), than your second statement isn't true.

Are the numbers you posted, specifically these:
Quote
University £62,368
University £65,486
University £68,761
University £72,199
University £75,809

In 2015 dollars or 2029-2033 (or 2025-2029, not sure if your 14 years will be the end of their college career or beginning) dollars?
This are in future  £ yes but my £500k is a discounted present value of the liability.

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Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: frugalnacho on January 06, 2016, 12:42:08 PM
Well of I have several spreadsheets of private school fees actual paid fees for last 30 years through top private schools in London and I can 100% assure you they have compounded annually at minimum of 5%.

It is entirely prudent when making large financial commitments to assume this will be maintained in the future.

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(https://i.imgur.com/uU392Pxh.jpg)
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: charis on January 06, 2016, 12:44:29 PM
Well of I have several spreadsheets of private school fees actual paid fees for last 30 years through top private schools in London and I can 100% assure you they have compounded annually at minimum of 5%.

It is entirely prudent when making large financial commitments to assume this will be maintained in the future.

I don't care about the math.  I'd like an answer to my previous question.  Is what are you expecting (your children) to achieve with 1.5 million dollar education?
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: nereo on January 06, 2016, 12:46:24 PM
This are in future  £ yes but my £500k is a discounted present value of the liability.

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Then you aren't talking about needing £1MM for the education of your two children, but something far less.

Meh, I'm with arebelspy on this one - you are free to believe what you would like to believe.  I was merely trying to show you that your needs may be a fraction of what you anticipate.  I say this as an encouragement, and as someone with family in the UK.

I would be interested in seeing 30 years of data showing real-adjusted annual increases of 5%/yr over 30 years. 
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: frugalnacho on January 06, 2016, 12:48:43 PM
Doesn't that seem unsustainable too?  I mean by those projections your kids will literally not be able to afford to send your grand kids to school because they won't earn enough in their lifetime to pay for an education because education costs outpace everything including incomes.  Except maybe healthcare, but that seems unsustainable too.

EDIT: I've seen the rise in education costs and experienced it first hand, and the only thing I could think about while experiencing it was that it was unsustainable and that some point you will no longer be able to recover the cost of the education.  I mean if an education was seriously $1M why would you even bother?
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: MacBury on January 06, 2016, 01:06:30 PM
Well of I have several spreadsheets of private school fees actual paid fees for last 30 years through top private schools in London and I can 100% assure you they have compounded annually at minimum of 5%.

It is entirely prudent when making large financial commitments to assume this will be maintained in the future.

I don't care about the math.  I'd like an answer to my previous question.  Is what are you expecting (your children) to achieve with 1.5 million dollar education?
This a retirement blog and you don't care about the math?

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Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: MacBury on January 06, 2016, 01:07:38 PM
Actually, at this point it's probably not worth it.

Multiple people have tried to convince MacBury that it won't cost that much, and (s)he's convinced it will. 

Okay.

Good luck to you!  :)
These are the discounted cashflows in today's £

-£15,000
-£15,441.18
-£15,895.33
-£16,362.84
-£16,844.10
-£17,339.51
-£17,849.50
-£18,374.48
-£18,914.91
-£19,471.23
-£20,043.91
-£20,633.44
-£21,240.31
-£21,865.02
-£22,508.11
-£46,340.23
-£47,703.18
-£49,106.21
-£50,550.51
-£52,037.29

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Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: MacBury on January 06, 2016, 01:11:51 PM
This are in future  £ yes but my £500k is a discounted present value of the liability.

Sent from my SM-N910C using Tapatalk
Then you aren't talking about needing £1MM for the education of your two children, but something far less.

Meh, I'm with arebelspy on this one - you are free to believe what you would like to believe.  I was merely trying to show you that your needs may be a fraction of what you anticipate.  I say this as an encouragement, and as someone with family in the UK.

I would be interested in seeing 30 years of data showing real-adjusted annual increases of 5%/yr over 30 years.
I'm working off actual PAID fees the implied compound rate is actually greater than 5% for top schools like Kings, St Pauls and Westminster. These fees having been going up faster than CPI inflation owing to demand from foreign students etc.

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Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: MacBury on January 06, 2016, 01:13:41 PM
This are in future  £ yes but my £500k is a discounted present value of the liability.

Sent from my SM-N910C using Tapatalk
Then you aren't talking about needing £1MM for the education of your two children, but something far less.

Meh, I'm with arebelspy on this one - you are free to believe what you would like to believe.  I was merely trying to show you that your needs may be a fraction of what you anticipate.  I say this as an encouragement, and as someone with family in the UK.

I would be interested in seeing 30 years of data showing real-adjusted annual increases of 5%/yr over 30 years.
I'm working off actual PAID fees the implied compound rate is actually greater than 5% for top schools like Kings, St Pauls and Westminster. These fees having been going up faster than CPI inflation owing to demand from foreign students etc.

Sent from my SM-N910C using Tapatalk
5% is a nominal number. Inflation averaged closer to 3% recently so real inflation of 2%++

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Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: MacBury on January 06, 2016, 01:19:13 PM
This are in future  £ yes but my £500k is a discounted present value of the liability.

Sent from my SM-N910C using Tapatalk
Then you aren't talking about needing £1MM for the education of your two children, but something far less.

Meh, I'm with arebelspy on this one - you are free to believe what you would like to believe.  I was merely trying to show you that your needs may be a fraction of what you anticipate.  I say this as an encouragement, and as someone with family in the UK.

I would be interested in seeing 30 years of data showing real-adjusted annual increases of 5%/yr over 30 years.
To be clear the £500k is in today's money.

If you would like a Google doc spreadsheet anyone I can share the calculations with you. Put your own numbers you'll see.

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Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: MacBury on January 06, 2016, 01:27:13 PM
Doesn't that seem unsustainable too?  I mean by those projections your kids will literally not be able to afford to send your grand kids to school because they won't earn enough in their lifetime to pay for an education because education costs outpace everything including incomes.  Except maybe healthcare, but that seems unsustainable too.

EDIT: I've seen the rise in education costs and experienced it first hand, and the only thing I could think about while experiencing it was that it was unsustainable and that some point you will no longer be able to recover the cost of the education.  I mean if an education was seriously $1M why would you even bother?
Yes you are right but 1mio is cost for two children.

What you have to remember is the real incomes of the top 1% have far outstripped inflation this is another big factor driving private school fees.

I think lot of people sign up to private education because they had it but it was much cheaper in real terms back then and tax deductible!

Now they put their retirements at risk to fund it.

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Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: arebelspy on January 06, 2016, 01:28:15 PM
Well of I have several spreadsheets of private school fees actual paid fees for last 30 years through top private schools in London and I can 100% assure you they have compounded annually at minimum of 5%.

It is entirely prudent when making large financial commitments to assume this will be maintained in the future.

I don't care about the math.  I'd like an answer to my previous question.  Is what are you expecting (your children) to achieve with 1.5 million dollar education?
This a retirement blog and you don't care about the math?

This blog is about way more than money.

Also, just forum etiquette notes: Tapatalk sigs are annoying. You can turn them off in settings.  And replying to yourself 6 times in a row is unnecessary.  Sometimes you forget something, and make a second post, but that's probably about the limit of typical, otherwise just edit your previous post to include the 6 things you forgot.  :)
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: cerat0n1a on January 06, 2016, 01:29:16 PM
You're talking about a handful of the most expensive schools in the world,  Macbury. Come and live in Cambridge; I know several kids at my local state school whose parents are multi-millionaires.

If you really believe that private school fees are going to compound at that rate for the next 20+ years, I'd be looking into opening one, particularly as they're charities and hence tax exempt (they can pay what they like to their owner^H^H^H trustees and headmaster...)

Student loans in the UK aren't a bad deal; you're much better off saving to pay the deposit on your kids' first house over paying their way though uni.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: MacBury on January 06, 2016, 01:41:28 PM
You're talking about a handful of the most expensive schools in the world,  Macbury. Come and live in Cambridge; I know several kids at my local state school whose parents are multi-millionaires.

If you really believe that private school fees are going to compound at that rate for the next 20+ years, I'd be looking into opening one, particularly as they're charities and hence tax exempt (they can pay what they like to their owner^H^H^H trustees and headmaster...)

Student loans in the UK aren't a bad deal; you're much better off saving to pay the deposit on your kids' first house over paying their way though uni.
Look some confusion here I send my children to local state school. Not for financial reasons but more on theory based on Malcolm Gladwell's studies.

Lot of people don't understand the size of liability they are signing up to in their 20s and 30s and this can have a HUGE impact on their retirement.

The top schools are closer to £20k in today's money and boarding  £35++ of after tax £ compounding at 5%. With rock bottom interest rates this is a brutal proposition.

This out of reach for the old middle class professionals I would suggest without huge sacrifice.

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Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: nereo on January 06, 2016, 02:23:18 PM
[
Lot of people don't understand the size of liability they are signing up to in their 20s and 30s and this can have a HUGE impact on their retirement.

The top schools are closer to £20k in today's money and boarding  £35++ of after tax £ compounding at 5%. With rock bottom interest rates this is a brutal proposition.

This out of reach for the old middle class professionals I would suggest without huge sacrifice.


I would argue that some vastly overestimate how much it costs to actually raise children.  £1MM (equivalent to $1.46MM USD currently) is enough to generate £40,000 ($58.5k) annually using a 4% WR.  This number would increase with inflation. That exceeds the median family income for both the US and the UK.  It's also enough to currently pay for two children to attend almost any top-tier private school.  Since you are planning on spending the entire sum over a 20 year period on education, a much higher WR could be used - even at 6% (£60k/year indexed to inflation) the historical odds of success are over 76%.

This is a blog where we spend a lot on optimizing expenses and aligning our spending with our values.  To that end you are going to be met with a lot of incredulous speculation when you start giving these very high numbers of education.  As has been pointed out, there are much, much cheaper options if the goal is to give your children a high-quality private school education.  It's akin to picking a luxury car and basing all of your calculations on the cost of transportation based solely on this vehicle.  You certainly can spend that much, but you don't have to

Education for our children can often be presented as a sacred cow, with the assumption that the amount we spend equates to the level of education we receive and ultimately the success and happiness of our children.  To be sure some costly private schools can be demonstratively better than some public education systems.  But just like you don't have to spend £100k on a luxury vehicle to have something safe and reliable, you don't need to spend these astronomical sums to give your children a great future.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: StetsTerhune on January 06, 2016, 05:10:06 PM
Education for our children can often be presented as a sacred cow, with the assumption that the amount we spend equates to the level of education we receive and ultimately the success and happiness of our children.  To be sure some costly private schools can be demonstratively better than some public education systems.  But just like you don't have to spend £100k on a luxury vehicle to have something safe and reliable, you don't need to spend these astronomical sums to give your children a great future.

Perfectly said, Nereo. Thank you for that.

I'm a trained actuary ...
If I may quote The Princess Bride: "I could offer you my word as a Spaniard?" "No good, I've known too many Spaniards"
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: MacBury on January 07, 2016, 04:13:43 AM
Education for our children can often be presented as a sacred cow, with the assumption that the amount we spend equates to the level of education we receive and ultimately the success and happiness of our children.  To be sure some costly private schools can be demonstratively better than some public education systems.  But just like you don't have to spend £100k on a luxury vehicle to have something safe and reliable, you don't need to spend these astronomical sums to give your children a great future.

Perfectly said, Nereo. Thank you for that.

I'm a trained actuary ...
If I may quote The Princess Bride: "I could offer you my word as a Spaniard?" "No good, I've known too many Spaniards"
Strange you don't apply the same rigour to a simple school fee calculation that you do to your 'long term retirement pot'?

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Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: StetsTerhune on January 07, 2016, 07:29:56 AM
I'm a trained actuary ...
If I may quote The Princess Bride: "I could offer you my word as a Spaniard?" "No good, I've known too many Spaniards"
Strange you don't apply the same rigour to a simple school fee calculation that you do to your 'long term retirement pot'?

First off I don't what your response is in response to...

I guess the joke could be made that an actuary is someone who mistakes rigor for relevance.

I don't doubt the rigor of your calculations. Having looked read through the whole thread, it seems like you were setting up a straw man of how expensive schools are by choosing the most expensive schools in the UK currently, and then choosing the largest cost growth assumption you could justify (and I'm imagining you chose as low a discount rate as you could justify as well, but I didn't see what it was, apologies if I missed it). I'm sure your calculations were fine.

But I guess to expand on Rebel's "forum etiquette" advice -- If you're going to do a calculation purely to create a straw man to talk about how expensive private schools are... you should probably mention that's what you're doing. Otherwise threads get weird real fast. Which sure seems to have happened here.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: MacBury on January 07, 2016, 08:48:18 AM
Thanks -- Thought Police glad to see you are watching attentively over these posts. We wouldn't to set too many strawmen without your consent of course.

Again the figures are very conservative and they are FEES only excluding school trips uniforms food etc based off ACTUAL paid fees simply projected forward. I simply fail to see how this is not a reasonable assumption.



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Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: MacBury on January 07, 2016, 09:00:30 AM
Education for our children can often be presented as a sacred cow, with the assumption that the amount we spend equates to the level of education we receive and ultimately the success and happiness of our children.  To be sure some costly private schools can be demonstratively better than some public education systems.  But just like you don't have to spend £100k on a luxury vehicle to have something safe and reliable, you don't need to spend these astronomical sums to give your children a great future.

Perfectly said, Nereo. Thank you for that.

I'm a trained actuary ...
If I may quote The Princess Bride: "I could offer you my word as a Spaniard?" "No good, I've known too many Spaniards"
Show me your alternate calculations?

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Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: frugalnacho on January 07, 2016, 09:06:40 AM
Education for our children can often be presented as a sacred cow, with the assumption that the amount we spend equates to the level of education we receive and ultimately the success and happiness of our children.  To be sure some costly private schools can be demonstratively better than some public education systems.  But just like you don't have to spend £100k on a luxury vehicle to have something safe and reliable, you don't need to spend these astronomical sums to give your children a great future.

Perfectly said, Nereo. Thank you for that.

I'm a trained actuary ...
If I may quote The Princess Bride: "I could offer you my word as a Spaniard?" "No good, I've known too many Spaniards"
Show me your alternate calculations?

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I don't think people are questioning your calculations, they are questioning the values you use for inputs.  Your calculations may or may not be correct, but are still irrelevant when you are using an invalid inputs.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: jinga nation on January 07, 2016, 10:04:24 AM
Again the figures are very conservative and they are FEES only excluding school trips uniforms food etc based off ACTUAL paid fees simply projected forward. I simply fail to see how this is not a reasonable assumption.
Just for my education, can you give an example of the schools? Eton, Harrow, Haberdasher Aske's?
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: nereo on January 07, 2016, 10:05:04 AM

Again the figures are very conservative and they are FEES only excluding school trips uniforms food etc based off ACTUAL paid fees simply projected forward. I simply fail to see how this is not a reasonable assumption.


Quote
Show me your alternate calculations?

As frugalnacho said, this isn't a matter of questioning your calculations, but of your inputs.  It's the inputs that I (and others) are having a hard time understanding.  People here are just trying to help and understand.

Here's the inputs that I either don't agree with, or cannot wrap my head around.
1) you have included 5 years of university per child, and private school from age 4 to age 23.
2) Your estimate for University, which you say is real-adjusted, goes up to £75k ($112k USD) for a single year.  You stated you are using a conservative estimate of a 5% annual increase over inflation.  Back-calculating, this indicates in input of £28,500 per year for (all?) expenses per year of university.  Then you calculations assume this will increase almost 3x in real-adjusted terms over hte next two decades.
3) the only option you are considering is keeping your children in a £15k (today's money) private school (includes all expenses) from age 4 through age 18. 

Here are the concerns I have with your inputs:
1a) why are you assuming 5 years of university, and why are you incurring all costs? UK universities typically offer undergraduate degrees in 3 years, and most masters programs are a single year.  Are you budgeting for undergraduate and two masters degrees?
2a) I believe your current estimate of what one year of university cost is way too high.  Currently, one year at many of the UK's top universities - including rent, books, tuition etc comes out to about £15k. Your inputs are assuming costs today are almost twice that.
2b) I think your assumption that costs will show a real-increase of 5%/year for the next decade are absurd.  At that level of increase the overwhelming majority of Brits could not afford to attend.
3a) there are many other options besides sending your child to the most expensive private schools available for 15 consecutive years. 

 
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: RootofGood on January 07, 2016, 10:39:52 AM
EDIT: I've seen the rise in education costs and experienced it first hand, and the only thing I could think about while experiencing it was that it was unsustainable and that some point you will no longer be able to recover the cost of the education.  I mean if an education was seriously $1M why would you even bother?

I'm late to the dance, but this. 

At some point around $250-300k+ (in today's dollars) for an undergrad degree, I think a college education loses it's worth (from a financial perspective) for many careers.  Better to let the kid find a trade or entry level job out of HS and work their way up, plus supplement career development with online learning and courses as needed. 

$300k for college plus $100k of foregone earnings for 4 years of school = $400k difference in net worth at 4 years after HS graduation.  $400k is almost enough to retire on!  If prices ever reach $300k I'll sit my kids down and make them a proposition they can't refuse ("here's the cash; do what you will").

Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: tobitonic on January 10, 2016, 09:40:20 PM
I think the Common Core was terrible, and I think there's far too much testing, curriculum narrowing, and generally developmentally-inappropriate gobbledygook in our public schools.

We're likely going to homeschool our kids for the early childhood years and are strongly considering private (Montessori) for elementary, although that might change.

And yup, I'm a teacher. I strive to provide the most dev. appropriate education I can every day in my classroom. But my kids aren't going to be in my classroom.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: Making Cookies on January 11, 2016, 11:02:41 AM
EDIT: I've seen the rise in education costs and experienced it first hand, and the only thing I could think about while experiencing it was that it was unsustainable and that some point you will no longer be able to recover the cost of the education.  I mean if an education was seriously $1M why would you even bother?

I'm late to the dance, but this. 

At some point around $250-300k+ (in today's dollars) for an undergrad degree, I think a college education loses it's worth (from a financial perspective) for many careers.  Better to let the kid find a trade or entry level job out of HS and work their way up, plus supplement career development with online learning and courses as needed. 

$300k for college plus $100k of foregone earnings for 4 years of school = $400k difference in net worth at 4 years after HS graduation.  $400k is almost enough to retire on!  If prices ever reach $300k I'll sit my kids down and make them a proposition they can't refuse ("here's the cash; do what you will").

I agree. I know a family that invested in expensive, quality education and their eldest child (now middle aged) went on to work minimum wgae jobs b/c that made him happy. The pressure to succeed academically may have driven a wedge between the parents and child. I don't know.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: shelivesthedream on January 13, 2016, 09:34:35 AM
A someone who went to a top UK private school from age 5 to age 18 and then to a top university...

COST OF PRIVATE SCHOOL IN THE UK
Yes, it is actually expensive to go to Eton. Shock horror. However, there are dozens of excellent private schools that are not Eton. If you look at the GCSE and A Level results and find 80-90% are A or A*, you're onto a winner. After that it's just a matter of seeing if you agree with the school's ethos (which will play a minimal part in your child's everyday life, no matter how fancy the wording in the brochure), subjects offered/compulsory, and extra-curricular priorities. My school was huge on sport and music and meh about art, dance and drama. You don't have to pay for any 'extras' (e.g. School trips) if you don't want to but there will be a big expectation and you may disappoint your child so set a clear policy early.

If your child can't pass the entrance exams for a top school (based on GCSE and A Level), don't send them to a lesser school just because it's "private". Send them to a state school and get a tutor. Don't tutor your child for the 11+. It's pathetic. Looking over some past papers together and explaining how to do exams should be enough. If you need intensive tutoring to pass you'll need it just to keep up.

IS PRIVATE SCHOOL THE BEST CHOICE?
I would argue against private primary school. I think it's a waste of money. At that age it is up to YOU, the PARENT to teach your child the habits and character traits that will form a good adult. Do some research into predictors of future academic success. Very very few even mention school. But reading to/with your child every night... Wow! That can work wonders. At primary age it's not so much about learning academics as it is about practicing the three Rs, motor skills, being able to sit still and concentrate, and being interested in things.

When they get to secondary, have a look at your local state schools. Living near school and your school friends is a huge boon to a child. I "commuted" over an hour each way and my best friend lived over an hour in the opposite direction.

If you decide to go private, do not expect this to be a panacea. Anyone who can pay can get their child into a private school (fees and tutoring) so your child won't necessarily be surrounded by obedient geniuses. Lots of them will have enough disposable income to drink and smoke and pressure your child into all sorts of things. Some are disruptive. Private school is no guarantee of anything.

Finally, as someone said above, what do you want at the end of it all? I am currently earning c. minimum wage in a creative job, which would have been easier for me to get if I spent less time on the school coach/doing homework. Your children's goals are not yours. You may not get any "return" on your "investment".

MY RECOMMENDATION
Budget for private school from 11-18. That's when it really worth developing specific academic interests and getting good exam results. State primary and let them get loans for university. (UK student loans are a great deal and all universities cost the same!)
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: Magilla on January 13, 2016, 11:13:59 AM
Whenever the topic of "bestest schools for my super-duper awesome children" comes up I can't help but be amused.

Just a little anecdote:  I emigrated to the US (from a former Iron Curtain country right after the fall of said curtain) when I was 12 and entered 7th grade half-way through, barely being able to speak a word of English.  I went to school and I was  amazed and enthralled with it.  There were FREE books everywhere, there was a science lab fully equipped with everything you needed, ALL the professors were so helpful and the school looked so shiny and new to me.  I went into an ESL class with other immigrants, some who had been in ESL for a few years already.  Because my mother insisted we speak English as home as much as possible and I was a prolific reader, I was out of ESL and into regular class in less than 6 months.  I also participated in science fair, dissected a frog, played my first instrument, cooked stuff in HomeEc, built stuff in shop and generally was by far the best year of school I had had up to that point.

Years later I was talking to someone about what school I went to when I first came to US and when I told them the town they got this HORRIFIED look on their face and told me how horrible that school district was and I was lucky not to have been stabbed.  I guess perspective is everything.  I don't ever remember seeing anything this person envisioned for this school.

That's when I learned what a crock most school rankings and perceptions are.  Since that first US schools I've been through a "good" public school district, top 5 ranked private highschool (scholarship) and ivy league school and I can tell you with 100% confidence they all had very smart successful people and very dumb unsuccessful people.  Usually the difference between the two groups was not the amount of money they had but how much time and effort their parents spent with them and how much drive they had internally.  You can send you kids to the best schools in the world, if you don't instill in them curiosity, love of learning, work ethic and drive it's all for naught.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: cerat0n1a on January 13, 2016, 11:54:23 AM
Living near school and your school friends is a huge boon to a child. I "commuted" over an hour each way and my best friend lived over an hour in the opposite direction.


Strongly agree on this. Far too many parents seem to view childhood as merely preparation for adult life, rather than as a huge chunk of life, to be enjoyed. Why would you send your children off to a boarding school (unless you're in the army/on a oil rig or similar) Why make them get on the bus before 7am every day when they could be walking to school with their friends?

I worked out earlier that I'm probably quite a long way past the halfway mark in terms of how much time I'll spend with my children over the course of my life (unless we somehow end up in a multi-generational living type arrangement.)
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: merula on January 13, 2016, 12:20:02 PM
...it's all for naught.

And you can tell that Magilla got a quality education and is successful because he or she used the correct idiom instead of "all for not", which I see everywhere.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: Magilla on January 13, 2016, 01:03:36 PM
Quote
And you can tell that Magilla got a quality education and is successful because he or she used the correct idiom instead of "all for not", which I see everywhere.

LOL, I hope I don't always get judged on my grammar and vocabulary.  I'm a techie who hasn't thought about these things since first year of college :)  Who knows what horrible things I have done to the English language in the many documents I've written since that time.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: shelivesthedream on January 14, 2016, 12:09:20 AM
Living near school and your school friends is a huge boon to a child. I "commuted" over an hour each way and my best friend lived over an hour in the opposite direction.


Strongly agree on this. Far too many parents seem to view childhood as merely preparation for adult life, rather than as a huge chunk of life, to be enjoyed. Why would you send your children off to a boarding school (unless you're in the army/on a oil rig or similar) Why make them get on the bus before 7am every day when they could be walking to school with their friends?

I worked out earlier that I'm probably quite a long way past the halfway mark in terms of how much time I'll spend with my children over the course of my life (unless we somehow end up in a multi-generational living type arrangement.)

My husband lived five minutes walk away from his school. He washing by 4.05pm every day, could walk home for lunch, could pop home in his free periods... If I was deathly ill I had to choose between waiting for hours until the end of the school day so I could get the coach home (arrive home maybe 5.30pm - NEVER in time to watch Blue Peter!) or get the school nurse to ring my mum and have her finish what she was doing, leave work, drive to pick me up and take me home... By which time it was basically half five anyway.

And my gosh, the morning routine as a teenager... Up at half six, leave the house by quarter past seven EVERY DAY from the age of five. Constant yelling to hurry up from my parents because if I missed the school bus that was it, there was no public transport option. I'm still catching up on lost sleep now!
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: CindyBS on January 23, 2016, 02:47:45 PM
One thing I never heard discussed in the public/private school issue is how the kids who go to private school are (generally) robbed of valuable experiences to socialize with people from different backgrounds.  I realize this varies from school to school and parts of the country, but where we live - private schools are 1) white  2) upper middle-class to rich (with a few scholarship kids mixed in)  3) all native English speakers 4) all 1 religion - usually Catholic or Jewish  5) Completely devoid of kids with disabilities.

My husband works in IT engineering and says at least 1/4 of the people he works with are somewhere on the Autism Spectrum - diagnosed or not.   Then there aren all the visas for IT workers, most of whom are a different religion, different culture and speak English - but a different form of it (heavy Indian accent, British vocabulary, etc.)

If STEM careers are  the HOT field(s) of the future - how are kids supposed to interact if they have virtually NO experience with people from other groups.  Autism is now as just about as common for boys as having red hair - something like 1 in 40 something boys have it.  People with high functioning Autism do very well in sciences and engineering and are typically drawn to those fields for careers.  I don't see the visa situation changing anytime soon.  Add to that the fact that whites are becoming a smaller and smaller percentage of the population.   

Ability to interact with the "other" (insert race, religion, language, disability, etc.) will be a mandatory skill in the future workplace.   

Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: arebelspy on January 23, 2016, 03:28:07 PM
If they only interact with other 1%ers, do you think they find it a problem?
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: nobodyspecial on January 23, 2016, 03:58:39 PM
My husband works in IT engineering and says at least 1/4 of the people he works with are somewhere on the Autism Spectrum - diagnosed or not.
That must be a remarkably diverse and unusual  IT department.

Quote
Ability to interact with the "other" (insert race, religion, language, disability, etc.) will be a mandatory skill in the future workplace.   
How is that a skill?
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: CindyBS on January 23, 2016, 04:58:54 PM
My husband works in IT engineering and says at least 1/4 of the people he works with are somewhere on the Autism Spectrum - diagnosed or not.
That must be a remarkably diverse and unusual  IT department.

Not the whole IT department, his particular subset which is very engineering oriented. 

[/quote]
Quote
Ability to interact with the "other" (insert race, religion, language, disability, etc.) will be a mandatory skill in the future workplace.   

How is that a skill?


Whether you want to call it a skill or a knowledge base or whatever, I think it will be required in the future to know to how to interact with others that are different from you.  Specific examples that come to mind is how to speak directly so a person with Aspergers can understand you (sit down vs. "take a seat"), knowing what different religious holidays are such as Diwali, Eid, etc. and why a coworker may be celebrating it, not having an uncomfortable reaction to a person of a different race, etc.   I think not being able to navigate the increasing diverse workforce will be as much as a workplace faux pas as fiercely clutching one's purse when an an African-American client enters the room is today. 

You may disagree, but for kids who are brought up in very diverse environments, a lot of that is just second nature.   My kids go to very diverse public schools (race, economics, religion, disability) and I work in a similar school so I see it first hand.  For example, at my job it was assumed I knew what Eid was and why many students took it off school (I am not Muslim).  I probably could have asked, but I would it have reflected poorly on me that I did not know.   
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: faramund on January 23, 2016, 07:04:52 PM
It seems academic research seems to indicate that the strongest influence on how a kid goes in school, is how well their parents did at school. Which really isn't that surprising - supposedly if you take top private schools, and normalise for parent's education levels, that pretty much accounts for their good grades.

My wife and myself are both public school educated, as are our kids. Lots of the people I know from back at school, have like us, gone on to be very successful. All in all, unless you want a particular environment (religious/alternate) - I really don't see the point of paying for a private school.

Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: Magilla on January 23, 2016, 10:43:46 PM
One thing I never heard discussed in the public/private school issue is how the kids who go to private school are (generally) robbed of valuable experiences to socialize with people from different backgrounds.  I realize this varies from school to school and parts of the country, but where we live - private schools are 1) white  2) upper middle-class to rich (with a few scholarship kids mixed in)  3) all native English speakers 4) all 1 religion - usually Catholic or Jewish  5) Completely devoid of kids with disabilities.

My husband works in IT engineering and says at least 1/4 of the people he works with are somewhere on the Autism Spectrum - diagnosed or not.   Then there aren all the visas for IT workers, most of whom are a different religion, different culture and speak English - but a different form of it (heavy Indian accent, British vocabulary, etc.)

If STEM careers are  the HOT field(s) of the future - how are kids supposed to interact if they have virtually NO experience with people from other groups.  Autism is now as just about as common for boys as having red hair - something like 1 in 40 something boys have it.  People with high functioning Autism do very well in sciences and engineering and are typically drawn to those fields for careers.  I don't see the visa situation changing anytime soon.  Add to that the fact that whites are becoming a smaller and smaller percentage of the population.   

Ability to interact with the "other" (insert race, religion, language, disability, etc.) will be a mandatory skill in the future workplace.   

Like you say, every school is different, but my personal experience with public and private school is that private school was very diverse and was far more welcoming and inclusive to everyone than public school.  I went to public middle school and 1 year of public high school before I got into a top private high school on a full scholarship.  This school had about 30-40% of the students on at least some financial aid and probably about 10-15% on full aid.  Pretty much every race, religion and income level was represented and far more nationalities than regular public school.   In public school everyone was divided into cliques which often (not always) were divided among sameness lines (race, wealth, nationality, etc).  In private school this was almost non existent (there were still cliques of course but they were more based on your dorms etc).  As a poor immigrant, public school was not kind to me with kids always using expensive stuff as status symbol and shunning anyone without. Whereas, in private school, kids that came from wealth you only think exists in movies couldn't care less.

My point is, don't judge stuff on your preconceptions of what private school is like.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: shelivesthedream on January 24, 2016, 03:27:28 AM
My private school was about 1/3 Indian, 1/3 Jewish and 1/3 other. If I'd gone to the local state school it would have been 3/4 white. Meeting people from different backgrounds is important, but once again it is not the school's job to do everything for you. Children will first copy you, the parent, so you need tomake sure that you have a diverse social circle and know about different cultures. If you're so worried, find a local playgroup or sports team that is more diverse. You won't necessarily get a more diverse school by choosing state over private.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: Making Cookies on January 24, 2016, 05:27:47 PM
Did the private kids take their studies a little more seriously than the public school kids? That's the only problem I see with public schools. A portion don't want to be there, their parents don't value education, etc. I suppose that is what the Honors classes are for.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: Magilla on January 24, 2016, 10:38:04 PM
Did the private kids take their studies a little more seriously than the public school kids? That's the only problem I see with public schools. A portion don't want to be there, their parents don't value education, etc. I suppose that is what the Honors classes are for.

Some didn't just like in public school, however at a private school there are consequences for not doing the work or breaking the rules: you get thrown out.  So in general the percentage of students who care is a lot higher as the bad ones get thrown out. 
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: shelivesthedream on January 25, 2016, 01:10:16 AM
Did the private kids take their studies a little more seriously than the public school kids? That's the only problem I see with public schools. A portion don't want to be there, their parents don't value education, etc. I suppose that is what the Honors classes are for.

Some didn't just like in public school, however at a private school there are consequences for not doing the work or breaking the rules: you get thrown out.  So in general the percentage of students who care is a lot higher as the bad ones get thrown out.

There were some seriously lazy girls in my school. They were disruptive and barely scraped by. Then it was exam year and their parents got them a tutor and they passed with flying colours. Didn't make it better for the rest of us.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: onlykelsey on January 25, 2016, 08:18:19 AM
Some didn't just like in public school, however at a private school there are consequences for not doing the work or breaking the rules: you get thrown out.  So in general the percentage of students who care is a lot higher as the bad ones get thrown out.

I went to public schools but used to tutor private school kids, and in my experience the consequences are next to nothing assuming your parents have money to fix the problem (either by getting you a tutor, or by paying off for your mistakes).
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: Magilla on January 25, 2016, 10:22:45 AM
Some didn't just like in public school, however at a private school there are consequences for not doing the work or breaking the rules: you get thrown out.  So in general the percentage of students who care is a lot higher as the bad ones get thrown out.

I went to public schools but used to tutor private school kids, and in my experience the consequences are next to nothing assuming your parents have money to fix the problem (either by getting you a tutor, or by paying off for your mistakes).

I guess it depends on the school.  My school kicked out one of the daughters of someone who donated a lot of money for the new library because she broke the rules, no exceptions.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: MgoSam on January 26, 2016, 08:57:35 AM
Some didn't just like in public school, however at a private school there are consequences for not doing the work or breaking the rules: you get thrown out.  So in general the percentage of students who care is a lot higher as the bad ones get thrown out.

I went to public schools but used to tutor private school kids, and in my experience the consequences are next to nothing assuming your parents have money to fix the problem (either by getting you a tutor, or by paying off for your mistakes).

I guess it depends on the school.  My school kicked out one of the daughters of someone who donated a lot of money for the new library because she broke the rules, no exceptions.

I'm glad to hear that and yeah it does depend on the school. I knew someone who's family had built a school's library and he could get away with quite a lot. Then again, I don't think he did anything extremely stupid, but would ignore some of the rules. I suspect if he committed a felony or anything that became public, the school might not be so understanding.
Title: Re: Guardian article on even the rich living paycheck to paycheck...
Post by: bacchi on January 26, 2016, 09:12:51 AM
Not for financial reasons but more on theory based on Malcolm Gladwell's studies.

Aha! Here's your problem: believing that Malcolm Gladwell did "studies."


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