Thanks to several commenters in my going back to work post, I'm getting more enthusiastic about sending my kids to community college!
As a result, it may no longer be necessary for us to try and accumulate $1.5 million for two children to attend a four-year private college starting in the year 2036. It may also no longer be necessary to have to go back to work after slashing our passive income due to a new home purchase with cash.
I know. Saving $1.5 million for two kids to go to college sounds absurd. But the math doesn't lie.
$1.5 Million For College For Two Kids
Look up the all-in cost at any top 100 private university today. Boston University is at $86,000 ($344,000+ for four years). NYU is at $90,000 ($360,000+ for four years). USC is at $90,921 ($363,684 for four years).
If you compound $340,000 for 15 years at 5.4% a year, you'll get $750,000 for one child. But in reality, the total cost may be higher than $750,000 because costs will continue to go up while the child is in school. If you have two children, the total cost is $1,500,000.
Why assume my kids will go to expensive private universities? It's because I'm being conservative in my financial assumptions. I'm also being conservative about my kids' intelligence and work ethic.
Set Low Expectations For College
Although I'm trying to help eradicate an entitlement mentality by making my kids work manual labor until they leave the house, I can't assume my teachings will stick. They are born with their own personalities and will grow up in a comfortable environment.
I'm also a realist. Both my wife and I have average intelligence. We went to public universities and didn't score high on the SAT. With the reality that Asian Americans also face higher academic standards to get into many top universities, going to community college is a growing avenue for people like us.
Little will change about college admissions after Affirmative Action was struck down by the Supreme Court. As a result, I hope to save lots of money and years of stress by going the community college route.
Making Six Figures After Graduating From Community College
If you can make at least $100,000 a year today, you are making a top 20% income. And if you can make a top 20% income by going to community college, even better!
Here's one comment that has helped convince me going to community college is a wonderful option.
Champ writes,
Both of us went to community college and earned 6 figures before we both retired in our 60’s. All our children went to community college and transferred to state universities. Total college costs for 5 children: $180,000. No grants, no scholarships, nothing.
They paid their own way. They all earn over 6 figures and one son and his wife earn 7 figures. Relocate and live responsibly instead of high-rolling nonsense.
Great Career Results And Income Post Community College
The fact that all five of Champ's kids attended community college, transferred to a state university, and earned six figures or seven figures is huge! Champ and his wife also made six figures before retiring as well.
The average earnings for community college graduates is around $33,538, so the above examples are high. However, the average community college graduate may not be a personal finance enthusiastic with highly involved parents.
With Champ's 100% hit rate of all his kids making six figures or more, we can postulate that attending community college was highly beneficial for their entire family. After all, earning $1,000,000+ a year is a top 0.1% income.
Of course good parental guidance, grit, choosing the right major, and longevity count towards making an above-average income. So does attending a solid state school like William & Mary. However, let's embrace community college for the affordable platform that it is.
Look at all the success stories from community college graduates in the comments section of this post! Here are more community college statistics by the Department of Education in case you’re interested.
How I Plan To Spend The Savings Thanks To Community College
If we stay in San Francisco, then we can shoot to send our kids to the City College of San Francisco. The in-state tuition is $1,168 a year, which our children can pay themselves by working minimum wage jobs. As a result, the $340,000 I currently have earmarked for my son's college expenses can now be spent!
It's hard to say by then whether transferring to a 4-year state university is necessary anymore. So for the sake of this exercise, let's say K-12 + two years of community college + parental education is enough education to make enough money.
The key is to change my mindset from being a prodigious saver to a lavish spender. Given the college financial aid system only believes parents should save 5.64% for college, I must bring down my saving rate from 30%+ to match. By matching the typical American consumer, I should feel much better about spending now.
I won't fully go into the typical American consumer mode by getting into debt to pay for a lifestyle I can't afford. Instead, I'll just try to spend down the $340,000 that I already have.
And given there is a penalty for spending our 529 money on things outside of education, I plan to just spend ~$340,000 of upcoming cash flow or sell other assets with no penalties and minimal tax liability instead.
Example Of Spending Like There's No Tomorrow
Below is a great example of an 29-year-old American couple living high on the hog and now fearing bankruptcy. I'd like to come closer to feeling what it's like to spend way beyond my means. I think it'll be exhilarating!
Given I'm in decumulation mode, this type of spending habit is helpful to observe. It's going to be tough spending the $340,000 earmarked for my son's college in the year 2036. But let me at least mentally give it a go through this post.
Investments: $50,000
Given community college is inexpensive and could potentially be free, there is no need to save and invest so much for college anymore. It's easy for my children to pay for college by working while they're in college. Student loans are not necessary.
Since 1995, I've been addicted to accumulating wealth through investing. However, with community college as the #1 option, I won't need to invest the entire $340,000 anymore.
However, the one thing I am concerned about is how artificial intelligence may wipe out millions of good-paying jobs in the future. As a result, my children in 20 years may be left underemployed.
As a hedge, I'm actively investing in artificial intelligence by building a $500,000 position in private AI companies. This way, if AI does revolutionize the world, then my private AI company investments should provide a handsome return. If AI ends up being an overhyped technology, then at least my kids will stand a better chance of landing jobs after community college.
The easiest way to invest in private AI companies and other private growth companies is through the Innovation Fund. It is an open-ended venture capital fund with only a $10 minimum. As such, it's easy to dollar-cost average into some of the world's most exciting companies, such as OpenAI, Anthropic, Databricks, and Canva.
Nice Automobile: $120,000
I plan to buy a new car in 2025 given my existing car will be 10 years old by then. If I keep the $340,000 in Treasury bonds yielding 5%+, by 2025, it will have grown to $378,000.
Given the best time to own the nicest automobile you can afford is when you have kids, I will buy a new or slightly used Range Rover or something similar for $120,000.
Yes, I will most likely be violating my 1/10th rule for car buying. But again, I'm just spending what I already have. This leaves us with $258,000 left to spend. But maybe I should save $82,000 and pick up a 2024 Honda CR-V instead. It looks great!
More On Vacations Each Year: $16,665
When our daughter turns six, we will start hopping on planes to go on more adventurous vacations.
In three years, the remaining $258,000 left over from our son's college fund will have grown to about $303,000, assuming a 5.5% annual return. Using a 5.5% withdrawal rate in three years, we can then spend $16,665 more on vacations a year while keeping the principal value the same.
I feel that spending a lot of money on travel when the kids can't remember or appreciate their vacations is a waste of money. As a result, we've just been taking local vacations to Lake Tahoe, Sonoma, Napa, and Santa Cruz. All places are within a 3.5-hour drive away.
Starting in 2026, we plan to do more slow travel. In other words, we plan to go to places like Taipei, Barcelona, Amsterdam, Beijing, and Paris for two months during the summer and one month during the winter. We'll also spend more time in Hawaii, Virginia, and New York, where we have relatives.
Yearly global travel during grade school should provide for a tremendous education. This is a huge benefit that saving money by going to community college can provide.
More Fine Dining: $16,665
With still $303,000 left, I'd like to also bump up our fine dining expenses by $16,665 a year. Not only do my wife and I enjoy eating well, our kids might end up eating more calories. They are somewhat picky eaters, which may mean they sometimes are not eating enough.
With a $16,665 decline in the college fund per year starting in 2026, the college fund will decline to $136,350 by 2036. As a result, more spending is necessary before then!
Around-The-World Cruise: $50,000
My parents have been good to me all my life and I'd like to be good to them back. Before COVID, they always enjoyed going on cruises. However, due to their frugal nature, they would purchase inside cabins with no views. That changes now that my kids will likely attend community college.
I'd like to buy them an around-the-world cruise for $50,000 within the next three years. The $50,000 should be enough for them to enjoy a room with a view and a balcony. If they don't want to go on an around-the-world cruise for two months, I can treat them to two, $25,000 cruises, each lasting two weeks!
After spending $50,000 on cruises, my son's college education fund will be whittled down to about $36,350 by 2036. There's only one thing left to do with the remaining funds.
Check out this nice cruise cabin I could get for my parents. Photo by Travel + Leisure.
Roll Over $30,000 To A Roth IRA
One of the consistent feedbacks I received about paying for college is to not pay for my kids' college tuition. Let them have skin in the game by taking out loans and working during school. This way, they won't take their college experience for granted. Maybe they'll work harder at getting good grades in order to get a better job.
My McDonald's job in high school was one of my greatest motivators to do better in high school and college. I didn't want to be stuck making minimum wage for the rest of my life.
Earning $4/hour while having to stand in front of a hot stove for eight hours a day struck fear in my heart! And fear is one of the key ingredients for achieving financial independence.
With about $36,500 leftover in my son's 529 plan, I'll do the responsible thing and roll over $30,000 to a Roth IRA for him. Perhaps by 2036, the rollover limit will increase as well, thereby covering the entire $36,500 left.
With $30,000+ in his Roth IRA, he'll be able to take the best job offered to him, regardless of whether it is in a high-cost city. From there, I wish him the best!
Spending An Extra $1.5 Million Is Going To Be Near Impossible
Phew! Figuring out how to spend $340,000 in today's dollars ($750,000 in future dollars) was tough! Given I have two children, I've got to find a way to double my spending if both kids go to community college.
I just don't think spending $640,000 today, or $1,500,000 in future dollars will be possible for us to do. We've been too frugal in our ways for too long to make such a drastic spending change.
I guess I could buy two $120,000 automobiles. But owning two cars in a city feels like a PITA. We could spend $33,000 more on vacations a year. That will be fun and probably the easiest to do. Instead of flying Economy, we can blow our budget on Economy Plus baby!
We could spend $33,000 more on food a year. But I tried this for several months and it didn't work out well. I've got a new post dedicated to this topic entirely.
Finally, we could pay for two, $100,000 around-the-world cruises. But once you've been around the world once, do you really need to go again within the next 10 years?
All this seems excessive from a consumption standpoint. I don't think I could spend this much more money over the next 12-15 years. Neither do I feel comfortable giving this much money away before my kids turn into independent adults.
And to be clear, we have a different bucket of money for donations.
Maybe Spending A Fortune On Education Is The Easiest Path
After going through this thought exercise, maybe spending $750,000 per child on a college education is a better use of funds. Education, after all, is what will set us free. It is a lack of education that keeps people down.
It just feels dumb to spend so much money on college when everything can be learned online for free. The value of a college degree has declined. Further, if given a choice, I feel most children would rather go to community college and have $750,000+ in their bank account than go to an expensive private university.
A final takeaway from this exercise is how much LESS stressed I feel now that community college is a serious option. Not having to back back to work is a tremendous relief itself.
It feels great to no longer have to save for college. Given we superfunded two 529 plans already, it's also nice to have the option to spend a lot more money over the next 12-15 years. Finally, it's freeing to care less about college prestige.
Practical knowledge is more useful than book knowledge. But just in case going to commit college doesn't lead to six-figure and seven-figure jobs for my children, I plan to teach them as much practical knowledge as possible about making money.
Here's a podcast episode where I debate with my wife about whether paying for private school is worth it. Enjoy!
A Conversation With A College Admissions Consultant
For more on getting your kid into an elite private or public university, you may enjoy this conversation I had with one of my readers.
Reader Questions And Suggestions
Do you think community college is the way versus a private college? Are there any other community college graduates earning six figures or seven figures a year? How would you spend your children's college savings funds if you no longer had to pay for their college?
Invest In Your Children's Future By Investing In AI Today
The world is already ultra competitive thanks to globalization and technological advancements. Now AI has the potential to wipe away millions of jobs in 20 years.
Because I care for my kids, I've come up with a solution. I am actively investing in private and public AI-related companies as a hedge.
I recommend checking out the Fundrise venture product that invests in AI companies and only has a $10 minimum. Specifically, the fund invests in the following five sectors:
- Artificial Intelligence & Machine Learning
- Modern Data Infrastructure
- Development Operations (DevOps)
- Financial Technology (FinTech)
- Real Estate & Property Technology (PropTech)
Roughly 75% of the Innovation Fund is invested in artificial intelligence, which I'm bullish about. After my kids are out of the house, I don't want them asking me why I didn't work in AI or invest in AI near the beginning!
Most venture capital funds have a $100,000+ minimum if you can get to invest in the first place. The Innovation Fund only has a $10 minimum and you get to see what the fund is invest in first before deciding on how much to invest.
Fundrise is a sponsor of Financial Samurai and Financial Samurai is a six-figure investor in Fundrise.
Everyone in my family spent 2 years at a community college before transferring to a 4 year school. I transferred to an Ivy League school and got the same degree (and opportunities) for half the price. You miss out on some early college social bonding opportunities as a transfer but not having a crushing amount of loans when you graduate is wonderful.
I graduated from a community college and was hired during my first quarter, without even completing a single class. I designed software for an insurance product while taking up to 21 credits per quarter. My community college degree paved the way for a successful 25+ year career in software design, alongside highly credentialed colleagues. My wife holds a master’s degree and is pursuing a Ph.D., with around $35,000 in remaining student debt.
We provided our three children with a private school education through high school. Our eldest runs a successful vintage clothing business, our second focuses on crypto and stock investments, and our youngest runs a profitable babysitting service. All three children attended Montessori schools, where their self-directed learning thrived. I taught them the value of money by taking them to the coin store, which led to successful coin trading at a young age, with valuations in the thousands.
My wife is also an educator, and we have a strong family dynamic with her family being first generation immigrants and mine being frugal hardworking independent midwesterner’s.
Great article, Sam
Rusty
When it comes to community college vs a 4 year university, it doesn’t have to be ALL OR NOTHING. You can go part-time to a university and part time to a community college. You can also take the bare minimum courses at a university to maintain scholarships, student organizations, sports, etc. and then supplement another class or 2 a semester at a community college. Doing this over the course of a traditional 4 year university will still save you thousands! Be creative and avoid the ALL or NOTHING mindset.
Hi Sam, $750,000 for a child’s college ? Please see my story. My parents never suggested college. I decided to attend college after my own research and with my labor and savings. I enjoy your writing but fear you will stress out your children at an early age. Sorry for my blunt opinion.
Circa 1960s, I worked every summer as a plumber’s helper with my Dad. Started at 10 for 4 hours at near by new house roughs cutting and soldering water pipe drops and ate lunch with the men. Summer and other times age 13 to 17 worked 8 hours/day learning all types of plumbing. I went to Florida at 17 to study marine tech/diving used my paper route , odd job and plumbing savings to pay tuition. I worked 30 hours/week at supermarket paying all my bills. The tech school was 1/2 VN vets. VN vets taught me the correct way to register for draft at 18. One use shared house address, then move, Two your parents are dead, Three adult self supporting, saved. I returned to WNY worked more plumbing with larger shop 1972 to 1978. I lived at home to enjoy my younger brother, two younger sisters, my parents and Hamburg N.Y. Our Mom had a nervous breakdown when I was 10 so helping the family was important to our TEAM. Saved money and enrolled in Erie county technical institute for 1975 AAS in chemical technology. 1975 passed Town of Hamburg Master Plumber exam, 1976 BA Chemistry ACS certified, 1978 MA Chemistry, 1979 Lab supervisor of Occoquan Watershed monitoring lab VATECH Manassas VA., 1981 Lab supervisor of Potomac Electric electric system lab. Retired chief electric system chemist of 3 utilities. Married 1979 in 1981 my Wife competed MS in Biology at Georgetown and entered Medical school. I worked OT at PEPCO and PT property maintenance for landlord till 1985.
When I asked Dad in 1975 for support to continue education. Dad said NO because “I would never steal your MANHOOD by questioning your ability to work for your goals”. Dad was right I could do it all. I always made money plumbing, tutoring chemistry, work study, side chemistry analysis and MA paid $100/week teaching lab and free tuition.
PS I struggled Dyslexia was part of my early story but help arrived. School was always difficult but I kept smiling. Sister Robertine in the 7th grade decided I would read to my level. So we worked together for 1 hour every day after school. Dad decided at 10 that I would learn a trade. So my experience is there are no failures only challenges do not give up and be willing to change your mind. My Dad was always encouraging ” Hey you got a 80 in English up from 75 nice improvement son”. I remember my Dad asking me to explain what a master degree in chemistry involved. Dad said sure sounds interesting and NYS pays your tuition and $100 a week because you teach chemistry labs. Son you sure came a long way in a short time. My Dad always said if you can figure out that school thing no person will ever out work you. My Dad was removed from school at 16 in 10th grade to work in train wheel forge supporting his blind Father’s new family of 9 lazy adults that did not work. Dad always said go for all the life experiences possible and meet all the wonderful people life will present. Some ideas to consider.
Crazy right? Thanks for sharing your story. Amazing how much cheaper education was back in the 1960s and 1970s.
If you have kids, what did they do for college and work?
Hi Sam, Children are not given to everyone. My wife is a board certified OBGYN. Sometimes change of life arrives in late 20s, YES. Many folks are faced with infertility treatments for years.
Education $300 to $400 per semester in 1970s at SUNY or 150 to 200 hours of work. Miami Dade was $600 per semester in 1971 or 300 hours of work. The typical college student made $2 per hour.
My TI SR10 cost $300 in 1973 or 150 hours of work.
My Aunt Sally bought TI SR10 for QA/QC staff at TRICO so I got discounted price of $150 or 75 hours of work.
Buy the old car and keep on road to commute to college.
PS My Wife was #3 in HS class and received full academic scholarship to Syracuse University in 1974 to 1978 BA Psychology and BS Biology. My wife parents were not going to spend money for a girl’s education said September 1973 scholarship letter arrived November 1973 LOL.
Agree about children not given to everyone. It took us about 3 years before having our first with one false start.
As a result, I appreciate them a lot and have stayed a stay at home dad for the past 6.8 years so far.
Sam, I agree enjoy your children every day. We did 8 years of infertility with no starts during residency and first practice. My best family memories from childhood are working with my Dad and all the outings to lakes and streams in WNY. We are now on Big Island the last 2 months having fun and scuba. Keep up the good work and blessings to you and your family,
Keep Smiling ! Steve
Fun thought we have no idea what professions will be available in 15 years,
Thank you for your support of community colleges!
I know they’re not all equal, but my husband and I both attended them and make 6/7 figures on average after transferring to UCs. We paid for our educations without parental support, and it’s nice to see this getting socialized with your readers. More diversity (in this case in the more elite direction) would make community colleges even better.
I am a huge proponent of the community college route. I attended community college in the Central Valley of CA and transferred to SFSU in the mid-1990’s for a 4-year degree. I stayed in SF working in Finance and Banking and achieved a 6 figure salary without being very ambitious. I believe the first two years of education primarily consists of general education requirements which would be similar in scope no matter what university a student attends. I still recall I attended a community college transfer meeting where the speaker indicated he went to Harvard. His message to us was that he earned some college credits at the community college level before attending Harvard and he feels there was no noticeable difference in the quality of classes that he took at the freshman and sophomore level. From a ROI perspective, community college is a slam dunk. I think there is huge value in the community college route and more people should explore it. I couldn’t imagine being a young person graduating with $200-300k of debt after college. That would be a financial burden that could hamper a person’s success for a lifetime.
This is a topic that not only can be costly, but it can destroy marriages too. It was a certainly a factor in the failure of my marriage. Following is my story. And my views.
I came from a family of limited means. I had no choice other than to attend the local no-cost schools. But I worked hard, got a degree, continued to work hard, and later married. I am year-1 generation X.
When our 2 children were of high-school age my wife insisted that they go to the top private school. Of course her intent was good – she wanted the best for her children – but at what cost? Well, for us, both working, it was going to cost ~20% of our net income per child for 5 or 6 years.
My view is that this is an exhorbitant waste of money. People are successful based on their ability, their work ethic, and often their EQ. They become financially successful, in part by having a good job, but largely by following sound financial practices as taught on this blog. The benefits of a good school may amount to 5% or 10% of the outcome at most, but at a staggeringly high cost.
But in my case there was no choice as the wife insisted. And following the high costs of a private high school there was then university and student debt added on top too.
We divorced in my late 30’s and now I am in my late 50’s. In my late 30’s I had next to nothing. I am now FIRED with a net wealth of $4m+, a portfolio producing ~$180k in net income, and living expenses about half that. I also have a second, and very supportive, wife. I am also now able to provide financial support to my children if necessary.
But what of my ex-wife and 2 children? Well, the ex-wife continues to grumble that she can’t retire and that life is so unfair. Hardly a surprise to me – I said over 20 years ago this would be the end result. My 2 children are both now working and both have good jobs. But looking back with hindsight was all that expense, potentially costing my ex-wife her ability to retire, worth it? Absolutely NOT. My children are doing OK – but they could have acheived exactly as they have at a far lower cost.
This is my advice:
Firstly, and most important (more important than ANYTHING else by a HUGE margin) choose the right life partner. It seems a long way off in your 20’s or early 30’s, but by god, understand your partners attitude towards things like schooling children BEFORE you even get married. And if your thinking is not aligned beyond-reasonable-doubt, RUN. And don’t stop RUNNING. If you don’t RUN, this alone with likely destory your financial future.
Secondly, I am of the strong opinion that the cost of private schooling is totally out-of-control. It is not necessary. What, instead, is necessary, is the proper up-bringing of your children, teaching them what is hard work, what is perseverence, what is failure and what is resilience. THESE are the important things that are the foundations of success. Not throwing huge sums of money, you likely do not have, at private schools.
Thirdly, I know just as many people who are highly successful in their careers having never been to a private school as I know people who have achieved tofa (two-tenths-of-f**k-all) after having attended an expensive school and thinking they are entitled and everything will just come to them (hint: It does not). In other words, I have seen no correlation between career and financial success and the school you attended. None.
So, DO NOT put your own financial future at risk – and that of your children. All that money spent back then, invested instead in a low-cost fund (e.g. Vanguard), would have paid the deposit for a house for each child, and likely even more. Of course, as said in this article, you could just upgrade your own life-style instead. New cars. Business class. Long holidays. Chanel handbags. The list goes on! Whether you want to upgrade your own life-style or invest to set your children up with a strong financial foundation, the alteratives to the private school are stand-out better alternatives.
Don’t get sucked in by the “oh, you have to do the best for your child” crowd. It is NOT the best for your child. And it is NOT the best for you. It is the best for the accountant at the private school though.
John
John, thanks for your incredible comment and advice! I hope everybody reads it. In fact, I may just read it in an upcoming podcast or republish it as a wise post from a reader. It’s so good.
“tofa (two-tenths-of-f**k-all)” HAH! I have never heard of this. Thanks for sharing.
One thing I got to point out though is this: Now that you are FIRED with a $4M+ portfolio, maybe spending all that money on private school for two kids was just fine. After all, you’re set after spending all that money. Sure, you might have an extra $1 million if you sent your kids to community college or state school, but would that make a difference to your lifestyle today? Doesn’t seem like it.
I’d love to hear more about this b/c I am concerned with being an old man and having too much money, then dying with all this money. B/c that would mean wasting too much time and stress when I was younger trying to accumulate money.
THANKS!
Hi Sam,
Thanks for your comments.
Some further comments. I think the theme of the paragraph’s below is about hindsight.
Yes, in most respects I am “set” in spite of spending all that money on private schools. But, at the time, in our 30’s and struggling with kids, mortgages, building careers, trying to at least enjoy life a bit – spending 40% of our net income for 5 or 6 years on private schools seemed crazy (to me). It was just more stress for me. Now, 20+ years on, with hindsight, you could argue it was fine – but I was frugal after the divorce, built wealth, had a lucky career break, and achieved FIRE. My ex-wife continued her ways with money, and still cannot retire. Had that money spent on schools been in a Vanguard fund for my ex-wife I am sure it would make a significant difference for her now. And all this aside, I am a strong believer in getting value for money and not wasting it – private schools, in my opinion, provide very low value for money.
Regards dying with too much money. When you are young, and have little, and a long life ahead, you need to work hard and bear your share of stress to build wealth. I don’t think you can regret spending too much time and stress accumulating money – afterall you don’t know what life will throw at you in the decades between your 40’s (when you have likely accumulated money) and your 80’s (when you likely will die). It is surely better to get to the end with plenty left, than to have stopped accumlating too early, had some major black-swan event hit you, and die destitute.
Ironically, I often think the opposite to you. That is, I often wonder whether I should have endured MORE stress. Why do I say that when my wife and I are arguably “set” with $4m+ in our 50’s? Well, as they say, ~$5m is enough to look after yourself. ~$10m is needed to look after others. And I often wish we could do more for others. At times I feel guilty, I guess, for having an easy life now, when I have the skills to earn very good money (along with very high stress!), that would enable me to help others who simply do not have these skills/opportunities.
So, in my view, if you are lucky enough to have been able to continue to accumulate after being FIRED, have not had any black-swan events hit you, and you start to forsee having too much, then you are in the most envious position of all. You can now achieve the ultimate that money can bring – helping others. So help others. Decumulate. Leave a legacy. Was the extra stress (that is only extra with hindsight anyway) you endured worth it given what you can now do for others? The answer to that is personal, but for me it would be a resounding Yes.
John.
I agree, during your 20s and 30s and 40s, it’s hard to feel fully comfortable financially, unless you have a massive windfall.
I am just trying to look at the positive of perhaps a suboptimal situation due to your divorce.
Correct me if I’m wrong, but being able to have well-adapted kids who can make their own money and establish their own lifestyles has to be the ultimate reward for a parent, no?
I would think every parent would give everything for their children to live dignified and productive lives. So in that sense, maybe paying for expensive private school tuition all those years is actually a discount?
I am constantly struggling with thus situation between private and public school, as a public school grad, who feels life turned out just fine.
And I also don’t know how my kids will turn out until maybe 20 years from now. So everything is kind of a gamble as I try to figure out how to consumption smooth for the second half of my life.
So your perspective and others are very valuable.
Sam,
I am a public school grad too. You struggle between private and public schools because, like any parent, you want the best for your children, and we are “sold” over and over again that if you want the best, a private school is necessary. But the thing is, it is not necessary (in my view). Come back to sound financial practice and be clear on what is a “Need” and what is a “Want”.
It just shows how powerful the marketing is. While most of us on this blog would understand a new BMW, for example, is a want and not a need, and can resist the marketing that it is a need, we still fall for the marketing around private schools because it “pulls” at the most personal of things – our desire as parents wanting the best for our children.
Yes, being able to have well-adapted kids who can make their own money and establish their own lifestyles IS the ultimate reward for a parent. 100% agree. But here is the thing – no amount of money can buy a well-adapted kid – “Well-adapted” comes from upbringing. Not from money. And not from schools.
Often those who are given the most become entitled, and are not able to make their own money. That is the irony. Send your children to a private school, mixing among the children of other wealthy parents, and it is easy for them to become detached from reality and entitled. On the other hand, there is the view that adversity builds character. It helps create resilienace and endurance. This is an argument for giving your children less – would it be a bad thing if your children struggled a bit and learnt to manage for themselves? Like you did. Or is it better to give them everything? Has our own successes in life and satisfaction that we now have come from adversity and making things work, or being handed everything we needed and wanted?
My view is that you CANNOT always solve issues by throwing money at it. Money CANNOT address nor solve many things in life. In fact, inappropriately deployed money may damage our kids and work against that goal of having children who can make their own money and their own lives.
Take Bill Gates for example. He is reportedly only gifting $10m to each of his children. A tiny amount of his wealth, all be it $10m is a fortune for most. He is on public record as saying he expects his children to build their own lives, and most of his wealth will be given to charity.
And that comes to the last point – it is ultimately up to our children. No amount of money can ever ensure our children live dignified and productive lives. As parents we provide what is needed (needs V wants again) and the best upbringing we are able, but ultimately it is our children’s responsibility to make their own lives.
John.
Coming from an immigrant family with little financial means, I went to a CA CC after HS as I wasn’t sure what I wanted to do and didn’t want to burden my family with high tuition. Found my way, transferred to a UC, and now, earn solid six figures with a great work-life balance.
Going through the CC system is a great path for students looking to explore with lower financial risk. There are even some well-paying careers that can be started with an Associates degree — e.g., registered nurse, respiratory therapist, radiologic technician. These are great avenues for those interested in pursuing health/medical-related professions as one could work in these professions while in 4-year university gaining relevant clinical experience, and if they desire, apply to health professional graduate schools (MD, PharmD, DPT, OPT, etc) with a competitive advantage as these graduate programs strongly prefer clinical experience.
In addition, there are many CCs that partner with businesses to provide internships that are only for CC students. I partook in such opportunity and had a part-time internship that lasted as long as I wanted and paid 4x CA minimum wage (early 2000s), which covered my daily expenses and allowed me to save toward my UC tuition.
The trade-off though is if a student has no guidance, they may be left wandering aimlessly and never transfer to a 4-year university or graduate. One example is I had a coworker who spent 6 years in CC before finally figuring out what he wanted to do — got advanced degrees and graduated in his early 40s.
For my kids, I’m planning to encourage them to participate in their high school CC bridge program whereby they take CC courses during Junior and Senior year. CC tuition covered by the high school and my kids would finish their general education requirements for college allowing them to potentially graduate from a 4-year university in 2 or 3 years. Huge cost savings and gives them the opportunity to start their careers earlier.
I’m a professor at a community college in California, and here’s an easy hack to get the best of community college. While in high school, all three of my children completed two or three UC transferable classes (follow the IGETC coursework for your California community college) per year at community college (i.e. dual enrollment) and had terrific GPAs because of the smaller workload. As a result, their high school transcripts were stellar and they had their first year of college completed by the time they graduated. They entered college with year 1 completed and thus avoided overcrowded general ed courses. Better yet, the state of California (and many other states) offer free community college tuition to high school students which saved us $5k in expenses. They will or have completed their B.A./B.S. degrees in 3 years thus saving roughly $50k in year one expenses between tuition and living expenses. Better yet, they’re in the workforce a year sooner which results in another $50k-75 swing.
Meh. My SAT scores saw me being recruited by the like of Harvard and several others but I figured that was unrealistic and chose a solid engineering school not too far from home, I had a scholarship anyways.
Then I discovered I had very little interest in being an engineer. My grades were abysmal; turned out chemistry and calculus, with no motivation, are a bad combination. Spent a year living at home, working 30+ hours a week, and going to a community college, and making Dean’s list for all 3 semesters. Then back to a big school to finish the bachelor’s. A few years later I picked up a masters in my spare time. Then got drafted by my employer (who’d paid for the masters) to go teach for a few years at yet another university as a member of the faculty (and where I ran into the prof that had flunked me a couple of times my freshman year as he hosted a function to welcome us new faculty members — small world). Obviously, the community college experience didn’t cripple me for life. In fact, I consider it the best educational experience of my college career on an hour for hour basis.
My daughter got her entire teaching degree at a junior college and it was usable anywhere but, after teaching overseas for a few years (she wanted to see the world) she returned and became a professional computer gamer and streamer for a couple of years (I was a bit shocked that there was actually decent money in it, apparently a female excelling in the area of strategy war games was kind of a novelty), then took a job as a social media manager for a large computer game company. It’s a weird world. Glad she graduated with zero college debt and not from Yale with a 200k student loan.
Community college is a no brainer to me. I paid for my community college working full time as a security guard then got a job in computers with a company that paid for my college and transferred to a 4 yr college. Make six figures in computer security now for over a decade. My son just turned 22, did 1 year of community college in high school where it was half price. Dropped out of college after high school and got a full time job. Decided he didn’t want to be a mechanical engineer…his passion was being a mechanic. So now he’s been a mechanic for a couple of years and loves it. Has no debt and considerable retirement savings already from participating in the 401k and contributing to his Roth IRA.
I thought your article was a bit tongue in cheek and more about learning to spend (working on your deaccumulation phase). I think you know there is a huge amount of options between Ivy league big $$$ education and community college.
More interesting to me is learning to spend. I have been in such a saving and investing mode for so many years (and been successful) that I could spend $100s of thousands of dollars this week on “stuff” and not make a difference to my long term financial plan. On one level that is unfathomable to me since I started with nothing and is cool. But also I have no real interest in fancy cars or houses or boats. Buying rental properties to accumulate even more wealth also not that appealing. At 60, I want to simplify my life. Not interested in rental agreements and dealing with rental management companies.
I have become intentional about travelling more. I do like to do that and I think a neat way to spend. Travel in a bit of luxury. Otherwise I give alot away and support my kids when it makes sense. The biggest benefit is probably that work is now optional – huge benefit for daily life.
Yes sir. This article is purposefully a little “tongue in cheek” so to speak. I’m trying to highlight the opportunity cost of what you could spend to enjoy life by not sending your kid to a private university.
I’m shocked at the cost and the rising costs of college. I want people to really think about their college spending decisions b/c it could hurt or help them for decades after.
Spending money decumulating is hard!
My wife and I both went to a community college then transferred to a state University.
We both make six figures.
Community college still has a cost though. Did you factor that in; I may have missed it in your post.
What is the high cost of Community College that I missed? CC is cheap or free in most states now. Please fill me in. thx.
My son did his 1st 2 years at a northern CA CC and then the last 2 at Columbia University. Saved me a fortune by completing 2 years at a Community College.
That’s a nice move! Do you think it was easier to get into Columbia coming from CC? Is the application process different?
I don’t remember if it was different. The CA CC system is very good at guiding students into either public or private universities, it is all mapped out and the counselors were very helpful . It was great going to New York back in May to see him graduate. My daughter did the same, 2 years at a CC then 2 years at SF State.
Gotcha. What is your son doing after Columbia?
Given Columbia and SF State are two very different schools, was going to CC a default route for both kids, regardless of their academic prowess? Just curious why not have your daughter apply to schools like Columbia as well?
Thanks!
My daughter worked her butt off in high school, captain of two sports, 36 ACT, 4.0 GPA IB diploma all driven by dream to go to Notre Dame. Fast forward she just graduated from ND, has a great career and had a wonderful experience. I would do it all again (especially instead of a Range Rover). I get what you are saying but your kids will have a say in the matter, invest in them! Obviously I was blessed to do that for her with no loans.
Congrats! But what about the kids who are not captains with high academics? Not everybody can do it. I know I couldn’t, although I was captain of my varsity tennis team.
What is your daughter doing now and how much did ND cost you?
What about the joy of spending four years with new friends, freedom, networking and potentially finding a spouse? Seems like a terrible thing to rob your children of if you can afford it.
Think they can make friends going to CC too. Is college the only place where you made friends?
If so, check out: Solutions To The Loneliness Epidemic
Lots of Meetup activities now online. Something for everyone.
While I was working in private industry my degrees were useless. However, the one place where a degree is absolutely essential is in government, which is also the only place you can get a pension anymore. You need those credentials in a government job. I am so happy I got my MBA all those years ago because without it, I wouldn’t have the job I’d have today and I wouldn’t have been able to pivot my career. I paid for my MBA myself and got it in the evening, which was a much better education because we all had professional or executive positions and our group projects reflected that and we all learned from each other. I think the advanced degree is more important than the undergraduate degree. My friend’s son is basically getting paid to get his PhD from UCLA. He has a position funded by grant money and he lives at home. Your kids could live at home and graduate from Cal.
No one cares where you completed English 101 or other compulsory courses. People might look at the degree, but never where/how you spent the first one or two years. I went to a well-known four year school, and now work with students at a community college. The assignments they come in with are at least as, if not more, demanding than what I had in my overblown college. Just because something costs a lot, it doesn’t make it valuable.
I grew up in Northern California and went to Yuba College, where I got my AA, then I graduated from Sonoma State University with my BA. Took me 5 years to get it done. Then I got my teaching credentials at a Chapman University extension. The only debt I took on was $5K for the credential, but paid it off immediately.
I enjoyed the college process. My dad encouraged me to go for a liberal arts education. I think the California state system was fantastic and economical. And it gave me a great start.
Through luck, creativity, persistence, and a great mindset, I think I’ve been successful in my life, according to me:) I taught in a classroom for a short while, then got into teaching on movies sets (kid actors) in the entertainment business, coordinating home school groups, became voice over artist, renovated houses with my brother, moved to Texas and built and operated two mobile home parks, opened a donut shop, got a real estate license then a broker license, operated a small property management business….I went to college for none of these endeavors. Life is what you make it. Your own attitude and mind set will determine so much of your success. How you treat people, how you learn to value your resources and energy, how you spend your time; these make a difference in life.
I live back in Northern California with my spouse (together 19 years) and have no debt, our home and rental properties are paid off, cars too, and we have a good income stream from our investments that truly makes work optional. At 51, I feel happy and ever so grateful to God and my parents for instilling in me a proper mindset.
I didn’t go to a fancy school. Yuba College. Sonoma State. Life is up to you.
Sam,
It’s been a pleasure reading your posts throughout the years. Most things we tend to agree on. However, even if we don’t see eye to eye on everything it’s fun hearing new and different perspectives and ideas! Isn’t that why we like to read?
I’ve always thought your take on college savings was extraordinarily high. First of all because like with everything in a free market, if something becomes too expensive it will no longer be worth the price tag and investment. We are seeing that with colleges and degrees already. More people starting to think about the trades again, skipping college and starting a business, going to CC etc. Colleges cannot keep raising prices at the rates they have been. The plethora of learning that can be done without going to college is only growing with technology as we all know. Secondly, bigger price tag does not mean better education necessarily. If you come from a good hard working family that teaches good financial values sky is the limit no matter where you go.
My dad was a blue collar worker that ended up starting a self storage business and investing whatever he could in stocks and bonds in the side. He never made much more than 60k a year but now has over $3 million. I’m so happy that him and my mom are comfortable and living well.
My brother and I went to a state school university and stayed home to save money. I am a nurse anesthetist and he’s a dentist. I’m 35 yo and have been a CRNA for 10 years now. I make $400k a year now because I have my own business. I started investing in the real estate and stock market with the little I had at 18 yo. I kept rolling my money and adding as I made more. I have about 1.7 million in stocks bonds and cash. And almost a million in real estate equity. No need to go to a fancy school. I’m hoping my boys go to a cost efficient state school. Put that 750k for each kid in the sandp 500 instead. Way better investment! By the time they are 48yo with a 9 percent return they’ll be rolling in 10 million! Without ever having to save a dime. As long as they do something they like, do it well and help those around them I’ll be happy for my kids! And I’ll know I’ve set them up for the long run.
Best regards,
Brett from Michigan
After reading your post I’d have to say my Dad got a helluva return on his investment. After going to Ventura JC, I had my heart set on USC since I was 10 years old. We have 6 SC alums in my family and I was next in line. My Dad wasn’t a rich guy by any means, but insisted paying my way through college. After gaining acceptance in ’95 we sat down and went over the costs. At the time, USC tuition was $38,000/yr and once my Dad saw that his eyes were the size headlights.
While he still insisted on paying, it would’ve wiped out his entire life savings to do so. That look on his face changed my mind and I opted to go out of state and attend Arizona State. It turned out to be the best move for me and my Dad. Out of state tuition was $8k/yr for 3 years and I not only had the time of my life, but learned how to fend for myself and stretch my dollars from part-time work and odd jobs to pay rent, food, and misc. on my own.
Once I graduated with a degree in Sociology, it took me 6 years to get to six-figures and have been making that ever since. I started my own business 7 years ago which was a total gamechanger and have been making $500k + for the last 5 years. This year I’m on pace to make just over $900k.
For me, a fancy degree looks great on a wall and on your resume. But ultimately, your degree is what you make of it. With a “party school” degree I was still able to make it to the top 1% of income earners in the US. And it feels good to be able to give back to my parents anytime.
I’ll likely send my son through the JC route to see how serious he is about earning a degree and to save some money. But I will ultimately leave his college choice to him and where he sees the best fit. Not going to push any one college over the other and we’ll take tours of every college he considers.
One thing I will stress and teach him myself is financial literacy and investing your earnings. If I can hammer that into his head before 18 that’s a win in my book
Hi Sam –
Sometimes you can’t put numbers behind the experience that a 4 year college offers to a freshman out of high school (assuming the child is prepared). Moving into the dorms with other students in the same situation and being on their own as an 18 year old, allows for an incredible personal growth situation. Yes, California State colleges and UC’s are an affordable solution. However, if a child shows a deep passion to an exceptional private college, I think it’s money well spent.
Experience is overrated for an 18 year old unless learning how to party is needed for success in life. Parents are suckers for this stuff. Parents should do themselves a favor and visit the campus they are interested in around Halloween and then ask themselves if they want to fund what happens.
Both my wife and I went to Community College and transferred to UC Berkeley and graduated with degrees in Business and Engineering. We find it interesting amongst our friends and acquaintances that there appears to be an unstated bias against CC. Some would prefer for their kids to go to what are commonly regarded as less academically strong party schools. We do not understand it.
Really? It is my understanding that if you go to a CC in California you have a MUCH greater probability of acceptance into the UC system.
Community college is a great option for specific circumstances. Yes, save money. Yes, can transfer to 4 year. Yes, most jobs are attainable and won’t care if you started at cc. Yes, great for specific professions- trades etc! But in my experience- unless for a trade- or specific technical education, wealthy* (say top 1% income) parents do not target or promote cc. It is practical, and not a bad idea at all, but it has no prestige. That’s hard to promote in that social circle. More likely to find a top public college if Ivy is not in the cards. As you know- still expensive in US. Don’t spend down your money.
Hi Sam – Suggest you look a bit harder at the quality of the education at some community colleges these days, pass rates of standardized tests, graduation rates and admission standards. For some degrees and career paths, at some community colleges, it absolutely makes sense. But the quality of education at some community colleges has become questionable. Sometimes you get what you pay for.