Private school -- what portion of income are people spending?

[Anonymous]

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what do you do?



quote=Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This is OP. Our gross annual is ~$850k including bonuses, and I forgot ~$70k in cash, though doubt that moves the needle on most peoples' opinions. Thanks for the input so far.

Of course you can afford it but you clearly have a spending issue.

+1. Have your incomes more than doubled in the past 1-2 years? Otherwise your lack of savings are baffling.

Yes, income essentially doubled in 2020 when we moved here for my spouse’s job. We moved from a much higher cost of living market, so despite aggressively saving what we could, housing, taxes and childcare costs all made it difficult. We ended up buying a more expensive house here than we were planning to because the market was going up so quickly (and we have an elderly parent who will likely live with us soon and so needed more space for that). Nevertheless, I’m 31 and my spouse is 36 and until these responses, I felt pretty good about our savings .

To the other poster asking about student loans, these are law school loans and the conventional wisdom I’ve heard is it makes more sense to invest the money than pay these off since the interest rate is <3% and we’ve been able to invest for better returns.

For the time being, tuition would come out of the $100k (after tax) in bonuses, which aren’t included in the monthly $25k, and are essentially guaranteed. Eventually if we phased out the nanny it would come from there. In the meantime we’d still be saving/investing roughly $60-80k/year.

[Anonymous]

4 in big 3, less than 5% post tax.

[Anonymous]

Anonymous wrote:1.1m gross income and 132k tuition for three kids. We notice the checks but don’t really sweat the cost. This country definitely needs higher taxes on the wealthy![/quote

What a stupid thing to say. The issue isn’t whether you feel financial pain, it’s whether the govt would allocate resources better than you would. If you make dumb decisions, just give the money to the government. I don’t so I don’t want them taking more than the 2 or 3 millions they already get per year.

[Anonymous]

Anonymous wrote:4 in big 3, less than 5% post tax.

So you make around $3.2 million? Wow.

[Anonymous]

Anonymous wrote:

Anonymous wrote:4 in big 3, less than 5% post tax.

So you make around $3.2 million? Wow.

Wait that is post-tax so you bring home $3.2 million!? Wow I feel poor.

[Anonymous]

Our HHI is $950k. We expect to go over $1m this year and I am sweating $40k tuition for our only child next year.

[Anonymous]

Anonymous wrote:Our HHI is $950k. We expect to go over $1m this year and I am sweating $40k tuition for our only child next year.

What are you sweating? Are you overextended elsewhere?

[Anonymous]

Anonymous wrote:Our HHI is $950k. We expect to go over $1m this year and I am sweating $40k tuition for our only child next year.

That is… weird. We have literally the same HHI and tuition for rising Ker. It’s by no means a drop in the bucket, but I don’t see the need to sweat.

[Anonymous]

How do so many in their mid 30s have 2-3 million dollars in cash/investments? Presumably these people all went to grad school until their early/mid 20s. To save 2-3m in 10-12 years is exceptional even for a household of two high earners, absent some windfall like major house appreciation, inheritance, etc. Still true even if no grad school and spread over 12-15 years. I don't think 2-3m in the bank is a prerequisite for putting 2 kids through private school.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Our HHI is $950k. We expect to go over $1m this year and I am sweating $40k tuition for our only child next year.

That is… weird. We have literally the same HHI and tuition for rising Ker. It’s by no means a drop in the bucket, but I don’t see the need to sweat.

on a $1M income it's a drop in the bucket

[Anonymous]

5-10% of gross income, depends on bonuses.
Could prob pay via annual dividends or interest churning off PA, if wanted to.

[Anonymous]

Again, OP, you’ll be fine. And you can always reassess down the line.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our HHI is $950k. We expect to go over $1m this year and I am sweating $40k tuition for our only child next year.

That is… weird. We have literally the same HHI and tuition for rising Ker. It’s by no means a drop in the bucket, but I don’t see the need to sweat.

on a $1M income it's a drop in the bucket

A drop in the bucket to me means, it doesn’t affect any other choices. If I didn’t have this expense for the next 13 years, I would be less conservative about spending and fly business class all the time.

[Anonymous]

Anonymous wrote:How do so many in their mid 30s have 2-3 million dollars in cash/investments? Presumably these people all went to grad school until their early/mid 20s. To save 2-3m in 10-12 years is exceptional even for a household of two high earners, absent some windfall like major house appreciation, inheritance, etc. Still true even if no grad school and spread over 12-15 years. I don't think 2-3m in the bank is a prerequisite for putting 2 kids through private school.

Clearly a lot of inherited wealth masquerading as bootstraps

[Anonymous]

Also there are other expenses like the annual fund, tuition assistance auction, summer camps, tutors, all sorts of enrichment other friends are doing....don't forget to fund the 529s (unless you're a savvy investor who think can do better on own)

Anyhow think you are fine! Will maybe have to cut back here and there. You are young, income and investments will likely go up etc!

Most really rich parents are generational wealth. Some big law types... and some just look very wealthy as they are spendy but likely not all that rich!