Anonymous
Post 07/09/2018 17:06     Subject: I’m told I need to INVEST $259k over 18 years
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:The cost of college goes up a lot every year.


It has to stop at a point because more and more people will default on student loans. Student loans are what allowed the cost to increase so much anyway.


Yep. Remember the mortgage loan crisis and how lenders were making loans buyers couldn’t afford to repay? How buyers were gambling that real estate values would continue to climb quickly?

Lenders are now focusing on student loans. Students expect they will be able to get a high paying job upon graduation (good luck with that!), while lenders and schools are making money hand over fist.

It’s like the mortgage crisis all over again, but this time with our children. Many young adults will never be able to buy homes, will delay marriage and children, and will struggle financially for decades.

A college degree used to be a good financial investment, but now you really have to run the numbers and choose a major with a good return on investment.


It is different because people can default on a mortgage and eventually walk away. Cannot do that with student loans. Cannot be discharged.
Anonymous
Post 07/09/2018 17:04     Subject: I’m told I need to INVEST $259k over 18 years
Anonymous wrote:
Anonymous wrote:The cost of college goes up a lot every year.


It has to stop at a point because more and more people will default on student loans. Student loans are what allowed the cost to increase so much anyway.


Yep. Remember the mortgage loan crisis and how lenders were making loans buyers couldn’t afford to repay? How buyers were gambling that real estate values would continue to climb quickly?

Lenders are now focusing on student loans. Students expect they will be able to get a high paying job upon graduation (good luck with that!), while lenders and schools are making money hand over fist.

It’s like the mortgage crisis all over again, but this time with our children. Many young adults will never be able to buy homes, will delay marriage and children, and will struggle financially for decades.

A college degree used to be a good financial investment, but now you really have to run the numbers and choose a major with a good return on investment.
Anonymous
Post 07/09/2018 16:52     Subject: I’m told I need to INVEST $259k over 18 years
Anonymous wrote:
Anonymous wrote: I admit I’m confused by the amount we are supposed to invest ($1,200 per month) for each child to fund private college. That means we will be investing approximately $259k over 18 years. That is enough to pay for private college now at 60k per year. Is the calculator not including any appreciation?!?

Our goal is to invest at least 60k by age three. This is one year of tuition. I sure hope this would grow to at least two years of tuition by age 18, which would be in 15 years.


The cost of college has been outpacing appreciation, inflation, damn near every financial sector in the last 10 years, and there's no real indication it's going to stop. So if your kid is under 5 now, you should assume college will be closer to $100k/year when s/he is ready to go.


College is becoming a giant pyramid scheme.
Anonymous
Post 07/09/2018 16:51     Subject: I’m told I need to INVEST $259k over 18 years
Anonymous wrote:
Anonymous wrote: I admit I’m confused by the amount we are supposed to invest ($1,200 per month) for each child to fund private college. That means we will be investing approximately $259k over 18 years. That is enough to pay for private college now at 60k per year. Is the calculator not including any appreciation?!?

Our goal is to invest at least 60k by age three. This is one year of tuition. I sure hope this would grow to at least two years of tuition by age 18, which would be in 15 years.


The cost of college has been outpacing appreciation, inflation, damn near every financial sector in the last 10 years, and there's no real indication it's going to stop. So if your kid is under 5 now, you should assume college will be closer to $100k/year when s/he is ready to go.


NP. Cool, so working parents are supposed to pay for a private college degree at current prices out of our monthly cash flow, while also paying $1.5k/mo/kid for childcare, paying back our own student loans, and saving for retirement?
F*** the whole system, I’m sending my kids to Germany or Norway for college and telling them not to come back
Anonymous
Post 07/09/2018 16:51     Subject: I’m told I need to INVEST $259k over 18 years
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote: I admit I’m confused by the amount we are supposed to invest ($1,200 per month) for each child to fund private college. That means we will be investing approximately $259k over 18 years. That is enough to pay for private college now at 60k per year. Is the calculator not including any appreciation?!?

Our goal is to invest at least 60k by age three. This is one year of tuition. I sure hope this would grow to at least two years of tuition by age 18, which would be in 15 years.


The cost of college has been outpacing appreciation, inflation, damn near every financial sector in the last 10 years, and there's no real indication it's going to stop. So if your kid is under 5 now, you should assume college will be closer to $100k/year when s/he is ready to go.


It has to be more than 100k per year to require an investment of 259k.


Yes, that's the point. OP seems to think that college will still cost $60k/year in 18 years. See the follow-on post "that's like saying you need to invest $1M to have $1M when you retire!" You're not aiming to have $259k when the kid gets to college by investing $259k, you're aiming to have much more, because you'll need much more, for the much higher college costs in the future.


No I don’t think this. Just like I also don’t think $1 million in retirement is the same as $1 million in today’s dollars.

It just seems to assume an extreme increase in cost over the next 18 years.

Anonymous
Post 07/09/2018 16:50     Subject: I’m told I need to INVEST $259k over 18 years
This is why more people are choosing state schools, some of which are still expensive. Privates are really only for the very rich and very poor.
Anonymous
Post 07/09/2018 16:49     Subject: I’m told I need to INVEST $259k over 18 years
Anonymous wrote:
Anonymous wrote:The cost of college goes up a lot every year.


It has to stop at a point because more and more people will default on student loans. Student loans are what allowed the cost to increase so much anyway.


They will just garnish wages forever.
Anonymous
Post 07/09/2018 16:49     Subject: I’m told I need to INVEST $259k over 18 years
Anonymous wrote:
Anonymous wrote:
Anonymous wrote: I admit I’m confused by the amount we are supposed to invest ($1,200 per month) for each child to fund private college. That means we will be investing approximately $259k over 18 years. That is enough to pay for private college now at 60k per year. Is the calculator not including any appreciation?!?

Our goal is to invest at least 60k by age three. This is one year of tuition. I sure hope this would grow to at least two years of tuition by age 18, which would be in 15 years.


The cost of college has been outpacing appreciation, inflation, damn near every financial sector in the last 10 years, and there's no real indication it's going to stop. So if your kid is under 5 now, you should assume college will be closer to $100k/year when s/he is ready to go.


It has to be more than 100k per year to require an investment of 259k.


Yes, that's the point. OP seems to think that college will still cost $60k/year in 18 years. See the follow-on post "that's like saying you need to invest $1M to have $1M when you retire!" You're not aiming to have $259k when the kid gets to college by investing $259k, you're aiming to have much more, because you'll need much more, for the much higher college costs in the future.
Anonymous
Post 07/09/2018 16:48     Subject: I’m told I need to INVEST $259k over 18 years
Anonymous wrote:The cost of college goes up a lot every year.


It has to stop at a point because more and more people will default on student loans. Student loans are what allowed the cost to increase so much anyway.
Anonymous
Post 07/09/2018 16:47     Subject: I’m told I need to INVEST $259k over 18 years
The cost of college goes up a lot every year.
Anonymous
Post 07/09/2018 16:46     Subject: I’m told I need to INVEST $259k over 18 years
Anonymous wrote:
Anonymous wrote: I admit I’m confused by the amount we are supposed to invest ($1,200 per month) for each child to fund private college. That means we will be investing approximately $259k over 18 years. That is enough to pay for private college now at 60k per year. Is the calculator not including any appreciation?!?

Our goal is to invest at least 60k by age three. This is one year of tuition. I sure hope this would grow to at least two years of tuition by age 18, which would be in 15 years.


The cost of college has been outpacing appreciation, inflation, damn near every financial sector in the last 10 years, and there's no real indication it's going to stop. So if your kid is under 5 now, you should assume college will be closer to $100k/year when s/he is ready to go.


It has to be more than 100k per year to require an investment of 259k.
Anonymous
Post 07/09/2018 16:44     Subject: I’m told I need to INVEST $259k over 18 years
Anonymous wrote: I admit I’m confused by the amount we are supposed to invest ($1,200 per month) for each child to fund private college. That means we will be investing approximately $259k over 18 years. That is enough to pay for private college now at 60k per year. Is the calculator not including any appreciation?!?

Our goal is to invest at least 60k by age three. This is one year of tuition. I sure hope this would grow to at least two years of tuition by age 18, which would be in 15 years.


The cost of college has been outpacing appreciation, inflation, damn near every financial sector in the last 10 years, and there's no real indication it's going to stop. So if your kid is under 5 now, you should assume college will be closer to $100k/year when s/he is ready to go.
Anonymous
Post 07/09/2018 16:41     Subject: I’m told I need to INVEST $259k over 18 years
Anonymous wrote:Actually more if you want to pay for graduate school too.


But how is that possible? It’s like saying if you want to retire with a million dollars you need to invest a million dollars.
Anonymous
Post 07/09/2018 16:40     Subject: I’m told I need to INVEST $259k over 18 years
Actually more if you want to pay for graduate school too.
Anonymous
Post 07/09/2018 16:39     Subject: I’m told I need to INVEST $259k over 18 years
I admit I’m confused by the amount we are supposed to invest ($1,200 per month) for each child to fund private college. That means we will be investing approximately $259k over 18 years. That is enough to pay for private college now at 60k per year. Is the calculator not including any appreciation?!?

Our goal is to invest at least 60k by age three. This is one year of tuition. I sure hope this would grow to at least two years of tuition by age 18, which would be in 15 years.