At a crossroad - Expensive House or Private School Tuition? UPDATE

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Haledom
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At a crossroad - Expensive House or Private School Tuition? UPDATE

Post by Haledom »

Long-time lurker and I apologize for the long post but I can't think of a better group of people to ask this question to!

I am 39 and my wife is 37 and we have 2 kids (6 and 4). We are both physicians and have been relatively frugal in our time since residency. We own our house (valued at around $300, 000) outright and have 2 boring vehicles (a Honda and a Toyota). We have no outstanding debt (other than month-to-month credit card debt that we pay off on time). No student loans either.

Our combined AGI is around $350,000 (mostly from our W-2 incomes) and our jobs are fairly stable. At present we have close to $700,000 in our 401K's (combined), another $300,000 in 529's for our 2 kids, about $70,000 in Roth IRA's and another $720,000 in our brokerage account. I manage my accounts at Vanguard and it is all invested in index Mutual Funds and ETF's.

Our single biggest expense is childcare (Montessori) which accounts for half of our monthly budget.

We are at a point in life wherein we are in need for a bigger house (kids, grandparents staying with us for longer periods) and as we contemplate a move, we are of course taking into consideration the school districts in our area.

Unfortunately our city of residence has a dichotomy in terms of school districts with the good school districts being significantly better than the average ones. The private school option will cost us anywhere b/w 40,000 – 50,000 a year (for 2 kids).

We have thus narrowed our decision making to 2 options

Option A - Better Public School district.

Buying a house that meets our needs will cost us close to $1 million. We will have to compromise in terms of the houses in that area being older and thus needing more maintenance. Houses in that area (as long as they are remodeled) don’t seem to depreciate in value and we hope to get the principal back. We will have to pay a higher amount in interest over the term of the loan and pay a higher amount when we sell the house. Taxes in the area will run us around $3000 a year more as well. Also we may have to spend some extra money in remodeling the house over the years (in order to help retain the value).

Option B - Public School till elementary and then consider Private Schools

We can get a brand new construction for close to 700,000 but then there is a reasonable chance that the kids end up in private school and we ending up eating that cost over the ensuing years.

Obviously the high amount of debt scares us and after years of watching my cohort buy expensive houses and cars, I am conflicted about borrowing money for a six figure house. However I also know that paying for private school year after year will make me wonder.

What would you guys do?
Last edited by Haledom on Thu Dec 19, 2019 10:08 am, edited 1 time in total.
Starfish
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by Starfish »

There is a third option, rent in the good school district for several years.
I like more the expensive house idea, you can sell at the end. Usually it also appreciates better if it is in a good school district. As long as you buy a cheaper/smaller house in an expensive neighborhood it should be ok.
Paying for private school looks like is gonna cost similar with the difference between the cheaper house and the more expensive one, money you will never see back and you get no low interest mortgage for (a big deal in my opinion, it's like a discount).
staythecourse
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by staythecourse »

Easy. Buy in a good school district. The delta of 300k is nothing at your levels of wealth, future income security, etc... One can always go private, but you can't go opposite if your public school is no good. Also, houses will always do well in a good public school area on resale especially if there is a dichotomy of good vs. average. Most folks would rather pay the delta difference and move into a good school district that is established then try to improve an average one and hope others join in the process.

If it was me, I would push the envelope and buy a house beyond the 1 million in the good school district if you find one that meets all your criteria AND you are settled to stay in the area long term. There is no point just having money for spending 20 years later when you good use some of it to buy a house that has everything you want considering your family is done now.

Good luck.
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delamer
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by delamer »

Did you mean public school THROUGH the elementary grades and private schools thereafter for Option B?

Because the calculus is different for 12 years of private school versus 6 years.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
Topic Author
Haledom
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by Haledom »

Did you mean public school THROUGH the elementary grades and private schools thereafter for Option B?

Because the calculus is different for 12 years of private school versus 6 years.
I meant public school through elementary and then switch to Private School once the kids hit middle school (for Option B).
SC Anteater
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by SC Anteater »

As with the others, my view is to buy the expensive house in the good public school district. My view is that you're buying an asset (the house) rather than paying the expense (private school tuition).
delamer
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by delamer »

Haledom wrote: Mon Apr 01, 2019 1:58 pm
Did you mean public school THROUGH the elementary grades and private schools thereafter for Option B?

Because the calculus is different for 12 years of private school versus 6 years.
I meant public school through elementary and then switch to Private School once the kids hit middle school (for Option B).
That makes the decision more difficult.

If you were going to be paying for 12 years of private school, then Option A would make more financial sense given the price difference between the homes you are considering.

But if the kids would be in public school for several years under Option B, then the financial impact is more balanced.

Are you confident that your kids would be able to transfer to a private school beginning in middle school under B? Sometimes the slots are filled by kids who were in the affiliated elementary school.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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Haledom
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by Haledom »

Are you confident that your kids would be able to transfer to a private school beginning in middle school under B? Sometimes the slots are filled by kids who were in the affiliated elementary school.
I think so, there are a fair number of private schools in the area and some of them don't offer elementary education at all.
ohai
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by ohai »

I'd lean towards the expensive neighborhood, as it will give your kids continuity in the school system. The cost of either option doesn't seem that different, but you'd probably have more desirable neighbors in the better area.

In terms of budget, it's not a "retire early" plan either way, but you have to choose at some point.
iudiehard1
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by iudiehard1 »

Great question. One that We have pondered ourselves and have had countless conversations with others about. In a weird way, the conversation always comes down to what you think you are getting in terms of the “private education”. Those that break towards spending the money on the private education find ways to justify the costs in terms of Christian, Special Needs, ultra advanced, etc. Thats all a personal decision, but it is a LUXURY decision to do so. It seems almost anti-cultural to say, but you can rarely (if ever) justify the return on investment for the private school. Your kid might (MIGHT) get into a better College? I’m not judging, as I think people should absolutely send there kids to private school if they so desire....but it is a luxury choice not an A vs B house. In fact, the good school district reinforces the higher home value you are attracted too.

We choose the buy the more expensive house is the great public school. But sometimes wish for a simpler life in the country with more acreage and the private school. We looked at it like this: we simply put the price of private education on the cost of our house and hope we recover some of the tuition by the increase of our house when we sell it to someone just like us....3 kids looking for good schools.

You can’t go wrong!
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delamer
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by delamer »

Haledom wrote: Mon Apr 01, 2019 2:15 pm
Are you confident that your kids would be able to transfer to a private school beginning in middle school under B? Sometimes the slots are filled by kids who were in the affiliated elementary school.
I think so, there are a fair number of private schools in the area and some of them don't offer elementary education at all.
It is a tough call; you should be fine with either choice from a financial point-of-view.

So I would look at the intangibles like commute times, house amenities, value of private schools, etc. and see if those push you in one direction or another.

Good luck.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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leeks
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by leeks »

You can afford either. Pick the neighborhood you prefer to live in (and minimize commutes) and the neighbors/school peers you prefer.

For me it would be older neighborhood, especially if walkable. I would want children to be able to walk/bike/transit to school and activities as they get older (more exercise, less dependence on parents as chauffeurs). But that reflects my personal dislike for most new construction and car-dependent suburbs.
Iorek
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by Iorek »

I would do the more expensive house in a heartbeat, but then I don't consider a 700k* mortgage for people who earn 350k to be a lot of debt. I also think the advantages of new homes over older homes are usually overstated (new homes can have problems that just haven't manifested themselves). To me it's a no-brainer.

Also, thinking about the possibility of plans changing, given that the debt load would be fairly low and not constraining, I think you would be much better off if you bought the more expensive house and used private school than if you bought the less expensive house and used public school. In the former, you are wishing you hadn't spent so much on a house but chances are that the house will keep its value as well or better than a new home in a worse school district (so you've just diversified some of your savings). In the the latter you are wishing you had better schools to send your kid to.

*it seems as though you could put anywhere from 20% to 100% down for a new home; this is just an example assuming you move the equity from your current home to your new home.
EnjoyIt
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by EnjoyIt »

Some downsides of living in a more expensive house:
Living in a more expensive neighborhood may add lifestyle creep
Going to a school where all the kids parents make more money, your kids will find that they will need to spend more of your money to feel average where in the less expensive school that is not the case.
The kids might also pick up lousy personality traits from some stuck up entitled kids.

Have you considered the less expensive house, going to the average public school and hiring tutors to make sure they are top of the class?

I'm sure you are aware but I will throw some numbers at you anyways:
Private school for 1 child for 12 years at $25k a year invested during those 12 years and then allowing that sum to grow for another 32 when they will turn 50. At a historical 8.7% growth of a 60/40 portfolio with 3% inflation, each kid would have: $2.5 million in todays dollars. Just something to think about as well.

If it was me, I would pick a reasonable sized house that has a decent school system. Average is good. I would make sure the house is very close to work so that I have as little commuting as possible and be able to spends much time as possible with my kids before you ship them off to college. I would gladly pay more money for a more expensive house if it meant decreasing my commute time significantly.
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grkmec
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by grkmec »

This is easy. Buy the 1mm house. The incremental cost is $300k, right? So here is some quick math. Say you finance 75% debt and 25% equity.

300k * 75% * 4% debt cost = 9k incremental interest
300k * 25% * 6% cost of equity = 4.5k in opportunity cost on equity

So call it 15k in incremental cost.... vs., the cost of private school at $45k a / yr?

Seems like a bargain
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Haledom
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by Haledom »

Thank you everyone for their responses and I truly appreciate the input.
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Orbuculum Nongata
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by Orbuculum Nongata »

Interesting either/or. My vote is for the expensive house. Despite its costs, you and your family might at least benefit from it.
Potential - distraction = performance.
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Haledom
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by Haledom »

BTW, I know how this sounds like a first world problem!
Sam1
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by Sam1 »

My in-laws chose option #2. When they retired it meant they had a less valuable house AND had spent hundreds of thousands on tuition with no financial return.

My parents chose public and my parents had a more valuable home with no mortgage at retirement to sell and had invested instead of spending on private school.

You can guess who is better off financially.

I live in a HCOL area where your HHI is very common. I will be frank with you that you don’t have a high enough income to build wealth and do something like send two kids through private. It would require significant sacrifices in another area like savings, your house etc. since private school is half of what it cost where I live I assume the 350k probably seems high to you. Seems like you should be able to spend on privates but sadly you can’t.
jharkin
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by jharkin »

I would buy in the good school district. You can afford it.

Also dont get hung up on the HGTV propaganda that any house that's not brand new will automatically be a maintenance headache.

I live in a 200 year old house and I have less problems than people I know who live in houses < 20 years old. I see million dollar houses being built in my town with vinyl siding and cheap gas insert fireplaces. In 20 years the siding will be sun faded and cracked and they will have no choice but to rip it all off and reside. The cheap plastic windows will probably be failing by then as well. That gas insert fireplace may rust out and need replacing. The cheap builder grade furnace may be starting to have problems

OTOH, when my (ooh scary) "old" house starts to look less than pristine outside I can just get it painted. The cast iron radiator heat will outlive my children. Maybe after 100 years the brick chimney might need repointing...

And asphalt shingle roofs tend to need replacing ever 20-30 years or so whether the house is 30 years old or 300...
fasteddie911
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by fasteddie911 »

Financially it's basically a wash. In the end you could have a $1M house to your name instead of 700k, but if you add in the cost of higher maintenance, renovation, taxes, etc., it may break even too. I'd consider other factors. Location, neighborhood, proximity to amenities, commute, etc. School factors, extra-curriculars, sports, etc. that may benefit your child more. Also I'd consider worse-case scenarios, if one type of school isn't a fit for your children or if they don't get into private school. All else being equal, I may consider the 700k house. Less debt hanging over my head, less ongoing costs and hidden maintenance costs (as opposed to school being a known cost), and less mental "cost" from worrying about maintenance and reno issues.
Sam1
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by Sam1 »

fasteddie911 wrote: Tue Apr 02, 2019 8:17 am Financially it's basically a wash. In the end you could have a $1M house to your name instead of 700k, but if you add in the cost of higher maintenance, renovation, taxes, etc., it may break even too. I'd consider other factors. Location, neighborhood, proximity to amenities, commute, etc. School factors, extra-curriculars, sports, etc. that may benefit your child more. Also I'd consider worse-case scenarios, if one type of school isn't a fit for your children or if they don't get into private school. All else being equal, I may consider the 700k house. Less debt hanging over my head, less ongoing costs and hidden maintenance costs (as opposed to school being a known cost), and less mental "cost" from worrying about maintenance and reno issues.
Assuming $50k of makntence cost each year is extreme. This is assuming you’re replacing the roof, buying a new AC and heat and other major work every.single.year. I’ve lived in my home for 7 years and done a good bit of work and haven’t spent this much. Besides the fact that I doubt maintenance cost a few miles away (sounds like the cost differential is due to location) is going to be that much more than the less expensive location. Put it this way - there wouldn’t be a steep discount if I were to replace my roof or buy a new appliance in a less expensive part of town.

Don’t negate the stress of large tuition payments. There is usually a cost to not paying tuition all at once. Even if you can spread it out, I don’t see how paying $4k a month in tuition is any less stressful than a mortgage!

Also school isn’t a known cost. One of the main complaints in my HCOL city is that tuition increases significantly every year. One needs to assume a 3% annual increase.
ajg189
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by ajg189 »

I may be in the minority here, but I do not think a good public school is comparable to a private school. This is not a decision that should be made on a purely financial basis, given that you can afford both. As a graduate of a private school, I think the quality of my education and resources available to me were far better than what you get at a public school (much smaller class sizes, greater availability of AP classes, better college guidance, etc.). I also think it is a great way to establish a strong network early on. Finally, I will say that my school prided itself on diversity, so we had students from all types of backgrounds, races, and religions. Where we lived, our public school did not provide such a rich and diverse learning environment. There are definitely lifestyle pressures though...to be fair, this is an issue that will also exist in a wealthy public school or in private universities.
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by Glockenspiel »

ajg189 wrote: Tue Apr 02, 2019 8:35 am I may be in the minority here, but I do not think a good public school is comparable to a private school. This is not a decision that should be made on a purely financial basis, given that you can afford both. As a graduate of a private school, I think the quality of my education and resources available to me were far better than what you get at a public school (much smaller class sizes, greater availability of AP classes, better college guidance, etc.). I also think it is a great way to establish a strong network early on. Finally, I will say that my school prided itself on diversity, so we had students from all types of backgrounds, races, and religions. Where we lived, our public school did not provide such a rich and diverse learning environment. There are definitely lifestyle pressures though...to be fair, this is an issue that will also exist in a wealthy public school or in private universities.
As a graduate of a public school myself, I do not want my kids growing up thinking they have all the privileges in the world. I feel good public schools are better for developing resilient kids who aren't sheltered from many of life's challenges.
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by Jack FFR1846 »

ajg189 wrote: Tue Apr 02, 2019 8:35 am I may be in the minority here, but I do not think a good public school is comparable to a private school. This is not a decision that should be made on a purely financial basis, given that you can afford both. As a graduate of a private school, I think the quality of my education and resources available to me were far better than what you get at a public school (much smaller class sizes, greater availability of AP classes, better college guidance, etc.). I also think it is a great way to establish a strong network early on. Finally, I will say that my school prided itself on diversity, so we had students from all types of backgrounds, races, and religions. Where we lived, our public school did not provide such a rich and diverse learning environment. There are definitely lifestyle pressures though...to be fair, this is an issue that will also exist in a wealthy public school or in private universities.
You're using your experience to expand to ALL private schools. This isn't accurate. Our son was in a private middle school because our town's elementary and high school are first rate, but the middle school is crap. Although he avoided the bad middle school, his math skills in 3 years (6th-8th) in the private school trailed the public school curriculum by a full year. His English skills improved greatly and having a keyboarding class (in my opinion THE most important class in all of school classes) was top notch. There are pros and cons.

The private school was not high cost and there were several programs where parents could do work for the school to reduce cost further. Our public schools have parents driving Range Rovers and 16 year old girls driving $50k Wrangler Rubicons. So in our experience, if we want to remove the kids from Afluenza town, it would mean staying out of public schools.

To the OP: this hasn't been brought up, but can you find better paying jobs? I would think that 2 physicians could make double what you're making.
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Thegame14
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by Thegame14 »

how is apple Montessori half your monthly budget at $350K income, that is like $228K after tax, so that is 19K a month, so Montessori is $9.5K per month for two kids???? the highest daycare I found was $1,800 a month per child, so something is off. Unless you mean half of your expenses, but that still seems off, if you bring home 19K a month, and daycare is like let's say $3.5K total max, you still have tons of money left over...... Id keep the kids there until they hit closer to an age that a "better" school matters, and then move to a better school district....
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Haledom
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by Haledom »

Financially it's basically a wash. In the end you could have a $1M house to your name instead of 700k, but if you add in the cost of higher maintenance, renovation, taxes, etc., it may break even too. I'd consider other factors. Location, neighborhood, proximity to amenities, commute, etc. School factors, extra-curriculars, sports, etc. that may benefit your child more. Also I'd consider worse-case scenarios, if one type of school isn't a fit for your children or if they don't get into private school. All else being equal, I may consider the 700k house. Less debt hanging over my head, less ongoing costs and hidden maintenance costs (as opposed to school being a known cost), and less mental "cost" from worrying about maintenance and reno issues.
The location of the more expensive house is great. Close to museums, parks, walkable neighborhood and amenities are not too far. We will have to give up on having a larger backyard and it does feel closer to "city living" than to living in the suburbs. Our commute would not be hugely different either way.

I do worry about maintenance costs and I am actively researching into that. Almost all the houses are brick and go back to the 1920's. A large number (at least the ones that sell quickly) tend to be renovated/remodeled from the inside. There are a smaller number of newer constructions but they would typically be beyond our budget.
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by Iorek »

IME a house built in the 20s will often be of better quality thana house built in the last 20 years (as long as you avoid something like knob and tube wiring, which an inspection would reveal).
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Haledom
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by Haledom »

how is apple Montessori half your monthly budget at $350K income, that is like $228K after tax, so that is 19K a month, so Montessori is $9.5K per month for two kids???? the highest daycare I found was $1,800 a month per child, so something is off. Unless you mean half of your expenses, but that still seems off, if you bring home 19K a month, and daycare is like let's say $3.5K total max, you still have tons of money left over......
I should clarify, our childcare costs tend to run us around $4000 a month which is roughly 40% of our monthly expenses. So I apologize for stating "half" in my original post
Id keep the kids there until they hit closer to an age that a "better" school matters, and then move to a better school district....
We are seriously contemplating that option too. Currently both kids are in the same school but our older one ages out of there next year. We are considering keeping the younger one in the current school till she turns 5 (since we will have to pay daycare anyway) and send the older one somewhere different. Once the younger one turns 5, they can both go to the same place.
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Haledom
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by Haledom »

To the OP: this hasn't been brought up, but can you find better paying jobs? I would think that 2 physicians could make double what you're making.
We are working on that! :D

We are both primary care physicians and are on work visas which precludes us from opening our own practices etc.

In addition, I have been working at a community clinic (that caters to the uninsured/medicaid population) for the last 7 years. I love the work and my patients and while I don't feel pressured to turn myself into a revenue generating machine (by seeing more and more patients), it does curtail my income.

Until now, though I haven't felt the need to push my income - we lead a comfortable lifestyle and tend to resist the "keeping up with the Joneses" lifestyle. Therefore buying an expensive house goes against our grain and we want to make sure we're doing it for the right reasons.
Dottie57
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by Dottie57 »

Glockenspiel wrote: Tue Apr 02, 2019 8:37 am
ajg189 wrote: Tue Apr 02, 2019 8:35 am I may be in the minority here, but I do not think a good public school is comparable to a private school. This is not a decision that should be made on a purely financial basis, given that you can afford both. As a graduate of a private school, I think the quality of my education and resources available to me were far better than what you get at a public school (much smaller class sizes, greater availability of AP classes, better college guidance, etc.). I also think it is a great way to establish a strong network early on. Finally, I will say that my school prided itself on diversity, so we had students from all types of backgrounds, races, and religions. Where we lived, our public school did not provide such a rich and diverse learning environment. There are definitely lifestyle pressures though...to be fair, this is an issue that will also exist in a wealthy public school or in private universities.
As a graduate of a public school myself, I do not want my kids growing up thinking they have all the privileges in the world. I feel good public schools are better for developing resilient kids who aren't sheltered from many of life's challenges.
This.
mighty72
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by mighty72 »

Financially speaking, private school will never win. It is an expense or high fee investment into your kids future, depending on the way you look at it. And we are on forum built on a great idea of low cost investment and good public schools are good.

It is a personal decision. It depends on what you want from the school your kids go to and does that school provide it. We are in a good school district and we still think about private school. The reason being:
  • high student teacher ratio
  • over crowding of school and classes
  • lack of art, music, etc as regular classes
  • lack of quality afterschool in the school
Our kid is learning but needs help. We can get tutoring but hard to find a good one which would work with our schedules as both of us are working.

We might make switch this year and put it in the list of non-boglehead things we did
staythecourse
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by staythecourse »

ajg189 wrote: Tue Apr 02, 2019 8:35 am I may be in the minority here, but I do not think a good public school is comparable to a private school. This is not a decision that should be made on a purely financial basis, given that you can afford both. As a graduate of a private school, I think the quality of my education and resources available to me were far better than what you get at a public school (much smaller class sizes, greater availability of AP classes, better college guidance, etc.). I also think it is a great way to establish a strong network early on. Finally, I will say that my school prided itself on diversity, so we had students from all types of backgrounds, races, and religions. Where we lived, our public school did not provide such a rich and diverse learning environment. There are definitely lifestyle pressures though...to be fair, this is an issue that will also exist in a wealthy public school or in private universities.
We live in a metro. city and there are plenty of private schools, but as the data shows the ones that excel from an academics standpoint are due to feeding off high socioeconomic classes which usually means more whites. If you want diversity you can get it from a public or private school, but don't think you can get it from EITHER and not sacrifice a lower academic successful school. The two are tied hand and hand. In my area the "token" scholarships given from the private are VERY few and thus have VERY few minorities and those from lower socioeconomic classes. Their minority student body is likely <10% as opposed to most of the public schools that range from 50-90% minority.

My daughter goes to a magnet school that is probably the best non gifted school in our metro. city and by design HAS to take folks equal from all the socioeconomic classes in our city. I am still not happy we don't have enough diversity, but when I walk by a high achieving private school it is hard to find anyone that is not white and doesn't have a mercedes SUV.

Good luck.
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HomerJ
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by HomerJ »

Buy.

And then when the kids are grown, sell.

You'll get most (all? maybe more?) of your money back.

Private school tuition money is just GONE.
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staythecourse
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by staythecourse »

mighty72 wrote: Tue Apr 02, 2019 11:16 am Financially speaking, private school will never win. It is an expense or high fee investment into your kids future, depending on the way you look at it. And we are on forum built on a great idea of low cost investment and good public schools are good.

It is a personal decision. It depends on what you want from the school your kids go to and does that school provide it. We are in a good school district and we still think about private school. The reason being:
  • high student teacher ratio
  • over crowding of school and classes
  • lack of art, music, etc as regular classes
  • lack of quality afterschool in the school
Our kid is learning but needs help. We can get tutoring but hard to find a good one which would work with our schedules as both of us are working.

We might make switch this year and put it in the list of non-boglehead things we did
Why not take all the money you are saving and hire an after school tutor and sign them up for art or music lessons? You kill many birds with one stone AND still will be less then private school.

I have always loved the idea of supporting public education so am really biased (I admit it), but thought the adv. of not paying for private school is it frees up SO MUCH money to hire whoever you want for whatever you need for your kids going forward. They want to play the violin? No problem, just hire one on one lessons that best fits your schedule. You kid wants to play baseball, just hire one on one coaching. You want... You get the hint. Great thing now is there are SO MANY private resources available to supplement whatever deficiencies or interests your child may have that ANY school (public or private) are really becoming obsolete outside of the social interactions. Heck, I am starting to think recess and lunch are becoming the most important part that is hard to simulate outside the school.

Honestly, if I or my wife had time I would EASILY just home school. We could finish the entire day's teaching in 3-4 hours and have time the rest of the day to supplement their interests. Of course, the negative is they would not get to interact with other kids and I would probably go crazy being around them all day AND try to teach them.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle
staythecourse
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by staythecourse »

Dottie57 wrote: Tue Apr 02, 2019 11:00 am
Glockenspiel wrote: Tue Apr 02, 2019 8:37 am
ajg189 wrote: Tue Apr 02, 2019 8:35 am I may be in the minority here, but I do not think a good public school is comparable to a private school. This is not a decision that should be made on a purely financial basis, given that you can afford both. As a graduate of a private school, I think the quality of my education and resources available to me were far better than what you get at a public school (much smaller class sizes, greater availability of AP classes, better college guidance, etc.). I also think it is a great way to establish a strong network early on. Finally, I will say that my school prided itself on diversity, so we had students from all types of backgrounds, races, and religions. Where we lived, our public school did not provide such a rich and diverse learning environment. There are definitely lifestyle pressures though...to be fair, this is an issue that will also exist in a wealthy public school or in private universities.
As a graduate of a public school myself, I do not want my kids growing up thinking they have all the privileges in the world. I feel good public schools are better for developing resilient kids who aren't sheltered from many of life's challenges.
This.
Agreed and not just for the kids. I can NOT imagine having conversations with the more "snooty" parents. I love the interactions we have with the public school parents cohorts. They are down to earth and know those good traits will only help ground our own kids.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by stoptothink »

staythecourse wrote: Tue Apr 02, 2019 11:30 am
Dottie57 wrote: Tue Apr 02, 2019 11:00 am
Glockenspiel wrote: Tue Apr 02, 2019 8:37 am
ajg189 wrote: Tue Apr 02, 2019 8:35 am I may be in the minority here, but I do not think a good public school is comparable to a private school. This is not a decision that should be made on a purely financial basis, given that you can afford both. As a graduate of a private school, I think the quality of my education and resources available to me were far better than what you get at a public school (much smaller class sizes, greater availability of AP classes, better college guidance, etc.). I also think it is a great way to establish a strong network early on. Finally, I will say that my school prided itself on diversity, so we had students from all types of backgrounds, races, and religions. Where we lived, our public school did not provide such a rich and diverse learning environment. There are definitely lifestyle pressures though...to be fair, this is an issue that will also exist in a wealthy public school or in private universities.
As a graduate of a public school myself, I do not want my kids growing up thinking they have all the privileges in the world. I feel good public schools are better for developing resilient kids who aren't sheltered from many of life's challenges.
This.
Agreed and not just for the kids. I can NOT imagine having conversations with the more "snooty" parents. I love the interactions we have with the public school parents cohorts. They are down to earth and know those good traits will only help ground our own kids.

Good luck.
Could not agree more. We choose to live well below our means for this purpose.
downtowngriff
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by downtowngriff »

How about a wrench on this general conception, and back in line with the original comment in this reply chain? We are in an area where the two best public school districts feature less diversity, and arguably more privileged children, than the majority of the private schools. These two schools systems also have relatively affordable housing, compared to other MSAs. We want our children to be better exposed to the 'real world'. We are a few years off from making a decision, but we are battling whether our children should go to the highly rated, homogeneous population public schools, or a more diverse, alternative idea accepting private school.
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by Stinky »

Glockenspiel wrote: Tue Apr 02, 2019 8:37 am
ajg189 wrote: Tue Apr 02, 2019 8:35 am I may be in the minority here, but I do not think a good public school is comparable to a private school. This is not a decision that should be made on a purely financial basis, given that you can afford both. As a graduate of a private school, I think the quality of my education and resources available to me were far better than what you get at a public school (much smaller class sizes, greater availability of AP classes, better college guidance, etc.). I also think it is a great way to establish a strong network early on. Finally, I will say that my school prided itself on diversity, so we had students from all types of backgrounds, races, and religions. Where we lived, our public school did not provide such a rich and diverse learning environment. There are definitely lifestyle pressures though...to be fair, this is an issue that will also exist in a wealthy public school or in private universities.
As a graduate of a public school myself, I do not want my kids growing up thinking they have all the privileges in the world. I feel good public schools are better for developing resilient kids who aren't sheltered from many of life's challenges.
I fully agree with Glockenspiel.

We chose the more expensive public school option when our kids were in early elementary years, instead of Montessori. We never looked back. The children stayed in the public schools through high school, got admitted to good colleges, and are self-sufficient today.

It was a great decision for us.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
staythecourse
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by staythecourse »

downtowngriff wrote: Tue Apr 02, 2019 12:00 pm How about a wrench on this general conception, and back in line with the original comment in this reply chain? We are in an area where the two best public school districts feature less diversity, and arguably more privileged children, than the majority of the private schools. These two schools systems also have relatively affordable housing, compared to other MSAs. We want our children to be better exposed to the 'real world'. We are a few years off from making a decision, but we are battling whether our children should go to the highly rated, homogeneous population public schools, or a more diverse, alternative idea accepting private school.
How are the academics at the private school? The problem, with my experience, is you can't answer that question. Private schools do not have to take the same state exams for each grade as the state public schools do. That is the easy way to analyze objectively public schools (apples to apples comparison) the same exam by grade taken by kids on the same day throughout the state.

Private school decide which test they are going to administer and curiously NEVER seem to make public their scores. I have asked them when my kids were going into private and got a run around answer. Trust me if they were great they would publish it since that would enhance their ability to recruit more kids and thus $$$$ for the school.

The reason I am bringing this up is there is a STRONG correlation based on all the studies that school performance is often tied to the socioeconomic status of the children. That usually means more the minorities the lower the socioeconomic status which means lower test scores. That is not a hard and fast rule, but pretty common. So, there is always a trade off of diversity and academic success. The schools that do both are truly exceptional and are role models for ALL schools (public and private). So for many the diversity wish are often in conflict with the "which school is best academically".

Good luck.

p.s. When I think of diversity I am not just thinking race, but income. If you live in an area that only has rich folks that was your fault in the first place of buying there. If you really want diversity why would you only want to live next to upper middle class or affluent neighbors then pay more for the experience of having your kids go to a school with more diversity? That seems circular logic to me, no? You should have bought in a more diverse neighborhood then your kids would be going to a more diverse neighborhood school.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by veindoc »

staythecourse wrote: Tue Apr 02, 2019 11:18 am
ajg189 wrote: Tue Apr 02, 2019 8:35 am I may be in the minority here, but I do not think a good public school is comparable to a private school. This is not a decision that should be made on a purely financial basis, given that you can afford both. As a graduate of a private school, I think the quality of my education and resources available to me were far better than what you get at a public school (much smaller class sizes, greater availability of AP classes, better college guidance, etc.). I also think it is a great way to establish a strong network early on. Finally, I will say that my school prided itself on diversity, so we had students from all types of backgrounds, races, and religions. Where we lived, our public school did not provide such a rich and diverse learning environment. There are definitely lifestyle pressures though...to be fair, this is an issue that will also exist in a wealthy public school or in private universities.
We live in a metro. city and there are plenty of private schools, but as the data shows the ones that excel from an academics standpoint are due to feeding off high socioeconomic classes which usually means more whites. If you want diversity you can get it from a public or private school, but don't think you can get it from EITHER and not sacrifice a lower academic successful school. The two are tied hand and hand. In my area the "token" scholarships given from the private are VERY few and thus have VERY few minorities and those from lower socioeconomic classes. Their minority student body is likely <10% as opposed to most of the public schools that range from 50-90% minority.

My daughter goes to a magnet school that is probably the best non gifted school in our metro. city and by design HAS to take folks equal from all the socioeconomic classes in our city. I am still not happy we don't have enough diversity, but when I walk by a high achieving private school it is hard to find anyone that is not white and doesn't have a mercedes SUV.

Good luck.
I don’t think all public schools are necessarily that diverse either. It depends on your neighborhood. We live in a suburb of 20k which is overwhelmingly white and wealthy. It is so refreshing to meet the rare parent who is not a physician, engineer or banker. And when a developer wanted to build apartments in our town you can imagine the uproar. We knew what we were getting ourselves into and try to cross pollinate in other neighborhoods so to speak to allow our kids not to grow up in a bubble. If the homes in the OPs neighborhood are either 700k or a million, I can’t imagine that either public or private school will hold an advantage over diversity.

I favor the house. It gives you both options. I have a friend whose oldest son goes to the public school and the younger in a private. He started preschool there (Montessori) and she felt that the smaller class size would benefit him better. He has serious allergies and the teachers know him and his health history very well. Same for another set of parents. Girls are in private school. Boy was tired of interacting with the same 16 people and begged to go to public school. He’s doing great.
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by dewey »

I'd go for the house and the good public schools. Business Week did a piece a number of years ago favoring public schools over private (unless circumstances would dictate I'd add--though the article didn't go there as I recall). On a cost basis they favored good public schools, then save the money for college/graduate school. And private doesn't necessarily mean good, or better than public. It's more complicated than generalizations.
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by SC Anteater »

Jack FFR1846 wrote: Tue Apr 02, 2019 8:47 am
ajg189 wrote: Tue Apr 02, 2019 8:35 am I may be in the minority here, but I do not think a good public school is comparable to a private school. This is not a decision that should be made on a purely financial basis, given that you can afford both. As a graduate of a private school, I think the quality of my education and resources available to me were far better than what you get at a public school (much smaller class sizes, greater availability of AP classes, better college guidance, etc.). I also think it is a great way to establish a strong network early on. Finally, I will say that my school prided itself on diversity, so we had students from all types of backgrounds, races, and religions. Where we lived, our public school did not provide such a rich and diverse learning environment. There are definitely lifestyle pressures though...to be fair, this is an issue that will also exist in a wealthy public school or in private universities.
You're using your experience to expand to ALL private schools. This isn't accurate. Our son was in a private middle school because our town's elementary and high school are first rate, but the middle school is crap. Although he avoided the bad middle school, his math skills in 3 years (6th-8th) in the private school trailed the public school curriculum by a full year. His English skills improved greatly and having a keyboarding class (in my opinion THE most important class in all of school classes) was top notch. There are pros and cons.

The private school was not high cost and there were several programs where parents could do work for the school to reduce cost further. Our public schools have parents driving Range Rovers and 16 year old girls driving $50k Wrangler Rubicons. So in our experience, if we want to remove the kids from Afluenza town, it would mean staying out of public schools.

To the OP: this hasn't been brought up, but can you find better paying jobs? I would think that 2 physicians could make double what you're making.
O.K., this sounds exactly like my town (though my kids went to the middle school and did fine). You aren't in the Bay Area, are you?
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by KlangFool »

OP,

Cheaper house in the good public school district. It is beyond school. You want to raise your kids in a good neighborhood.

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Re: At a crossroad - Expensive House or Private School Tuition?

Post by cherijoh »

staythecourse wrote: Tue Apr 02, 2019 12:37 pm How are the academics at the private school? The problem, with my experience, is you can't answer that question. Private schools do not have to take the same state exams for each grade as the state public schools do. That is the easy way to analyze objectively public schools (apples to apples comparison) the same exam by grade taken by kids on the same day throughout the state.

Private school decide which test they are going to administer and curiously NEVER seem to make public their scores. I have asked them when my kids were going into private and got a run around answer. Trust me if they were great they would publish it since that would enhance their ability to recruit more kids and thus $$$$ for the school.

The reason I am bringing this up is there is a STRONG correlation based on all the studies that school performance is often tied to the socioeconomic status of the children. That usually means more the minorities the lower the socioeconomic status which means lower test scores. That is not a hard and fast rule, but pretty common. So, there is always a trade off of diversity and academic success. The schools that do both are truly exceptional and are role models for ALL schools (public and private). So for many the diversity wish are often in conflict with the "which school is best academically".

Good luck.
And if the private school achieves it's diversity via a robust scholarship program, then you know that they are cherry-picking the brightest "diversity" kids for the scholarship(s).

If you take a chunk of the better performing students out of the public school pool and send them to private school, the remaining public school students will do poorer on average. So if the private school test scores (or SAT scores or % with admission to selective universities, etc.) were proven to be better, would it be due to a superior "education" or a superior "segmentation" of the population? There is no way to answer this question, since you can't do a double-blind study with a placebo.
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by fourkids »

Always buy in the good school district. your house is much more likely to retain/increase its value that way.
$50k/yr for 12+ years of private school tuition could pay for a lot of house
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by leeks »

Not sure if considered already but if there's any chance you will have more children, private school would become even less cost effective.
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by Sam1 »

fourkids wrote: Tue Apr 02, 2019 1:44 pm Always buy in the good school district. your house is much more likely to retain/increase its value that way.
$50k/yr for 12+ years of private school tuition could pay for a lot of house
Private school is so expensive now that it doesn’t make sense unless you’re independently wealthy

It’s 50k per kid per year for even grade school where I live. We have 2 kids. 2 * 50k * 6 = 600k just for elementary school!! Can you imagine how well off my children will be if instead of writing 600k in tuition checks, I invest the 600k!?!?
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Haledom
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by Haledom »

Not sure if considered already but if there's any chance you will have more children, private school would become even less cost effective.
Nope we're done!!! :happy
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Re: At a crossroad - Expensive House or Private School Tuition?

Post by mighty72 »

staythecourse wrote: Tue Apr 02, 2019 11:27 am
mighty72 wrote: Tue Apr 02, 2019 11:16 am Financially speaking, private school will never win. It is an expense or high fee investment into your kids future, depending on the way you look at it. And we are on forum built on a great idea of low cost investment and good public schools are good.

It is a personal decision. It depends on what you want from the school your kids go to and does that school provide it. We are in a good school district and we still think about private school. The reason being:
  • high student teacher ratio
  • over crowding of school and classes
  • lack of art, music, etc as regular classes
  • lack of quality afterschool in the school
Our kid is learning but needs help. We can get tutoring but hard to find a good one which would work with our schedules as both of us are working.

We might make switch this year and put it in the list of non-boglehead things we did
Why not take all the money you are saving and hire an after school tutor and sign them up for art or music lessons? You kill many birds with one stone AND still will be less then private school.

I have always loved the idea of supporting public education so am really biased (I admit it), but thought the adv. of not paying for private school is it frees up SO MUCH money to hire whoever you want for whatever you need for your kids going forward. They want to play the violin? No problem, just hire one on one lessons that best fits your schedule. You kid wants to play baseball, just hire one on one coaching. You want... You get the hint. Great thing now is there are SO MANY private resources available to supplement whatever deficiencies or interests your child may have that ANY school (public or private) are really becoming obsolete outside of the social interactions. Heck, I am starting to think recess and lunch are becoming the most important part that is hard to simulate outside the school.

Honestly, if I or my wife had time I would EASILY just home school. We could finish the entire day's teaching in 3-4 hours and have time the rest of the day to supplement their interests. Of course, the negative is they would not get to interact with other kids and I would probably go crazy being around them all day AND try to teach them.

Good luck.
I am 100% with you. The only thing we cannot buy is time. I know it is partly our fault but we like our jobs and the money we make which enables us to do a lot of things. We can help kids with some areas (math, science) but language is an issue as we are immigrants and were taught English in a very different way. Also, we are not comfortable having someone else drive the kids around.
Home schooling is out as we want the kids to have an opportunity to develop a social network outside ours.
I wasn't clear earlier, our kids are in public school and we struggle with the decision whether or not to put them in private. Ultimately, I see them doing elementary in public and middle & high in private.
High school is an issue because every kid takes AP and the many kids don't get classes they want.
Good luck!
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