<p>I used to live in an 800 sq. ft house, and now that I think of it, I don't think there were any closets.</p>
<p>I remember wrestling with my wife :) and I pushed her and she went right through a wall. I don't think the house was up to code. :)</p>
<p>I could live there again.....but not with kids. :)</p>
<p>[One thing I learned from Finance is that you need to analyze the return on investment and not just focus on the investment/expense. That is, I would gladly spend $250,000 for an education if I can help my S or D obtain $15,000,000 of income over 30-40 years of their working careers. ( 30 x 50K) This is only a small part of the discount cash flow analysis that can be done.</p>
<p>That said, I would hesitate to even spend $100,00 if I did not think that there career choices could make enough money in return for the capital invested.]</p>
<p>Compared to what? This is only valid if you compare the lesser cost of an education elsewhere and the earning power it brings.</p>
<p>Also, lets say the debt is $20k for plan B and you invest the 80k and leave it untouched for 30 years at a reasonable rate of return? </p>
<p>Also have you factored in debt repayment and the cost of interest on the loan?</p>
<p>I'm sorry to throw so many variables into this neat answer you have. </p>
<p>If the difference in pay between education at school A vs. B is 10k and you've committed 100k plus interest to make that extra 10, how many years until you break even?</p>
<p>Dtark, that's what my house looked like. Just mine had no pool and was built in '56. My cabin on the ranch is half that size. Still no pool. </p>
<p>Isn't Tiburon one of the priciest towns in the Bay area? My sis in law lives in Walnut Creek on/near Mt. Diablo and even though she lives in a pricey area she talks about Tiburon prices.</p>
<p>Opie, you are correct that if income is low, but cost of living is also low, the standard of living might be the same as a high income + high COL family living elsewhere. But from the college financial aid point of view, that high income family might just as well be eating rice & beans every night or lighting Macanudos with $100 bills. It's the same result: zero aid. They don't make allowances for all the differences in cost of living, but do take into account every penny of income.</p>
<p>I'm going to stop complaining now. I have healthy kids, a great H, & a very expensive new roof on my 100+ year old house. Life is good, really!</p>
<p>
[quote]
where the heck did they put their clothes?-
[/quote]
LOL! They managed with less, that's for sure! I suspect that hygiene wasn't as important, either.</p>
<p>Tiburon is very expensive. It is one of the priciest towns. Ross is slightly more expensive.</p>
<p>"Dtark, that's what my house looked like. Just mine had no pool and was built in '56. My cabin on the ranch is half that size. Still no pool."</p>
<p>Your cabin is about 600 sq. ft?</p>
<p>Uhhh, you should have bought in Tiburon.</p>
<p>I edited myself into a mistake. :( What I had tried to convey was that my cabin was half the size of my 82 house and I was going backwards. Somewhere I got my references screwed up. The cabin is @1200.</p>
<p>But yes. My 2100 sqft house (if in Tiburon) would be my ticket out, that's for sure. ;)</p>
<p>That mistake changed all the meaning. lol</p>
<p>"My home in 82 was 3/2/2 2100 sqft. Where I live now is smaller. I'm going backwards. :("</p>
<p>We're all going backwards. Some of us just haven't figured that out yet. :)</p>
<p>It* is* a shock for people when moving from one area to another-
my brother moved from the South Bend Indiana area last year- where he had a huge house- belonged to the country club- and "needed" a ride-on lawn mower.
However his employer- ( Bayer) pulled up stakes and his next job was in Everett, Wa.
What a shock to him that he had to downsize quite a bit & even at that not be able to live in the area that he wanted.</p>
<p>I can empathize with him though- he was spoiled by the schools and by always having pretty nice houses for the past 25 years- he never has had to live in a very dense area- which pushes prices up. But considering that he isn't paying anything for either of his college age kids to attend school- my empathy only goes so far.</p>
<p>On the other hand- we are still getting lots from the Southern Ca contingent- who are quite pleased with their real estate"deals".</p>
<p>I do however- think that * something* should reflect cost of living and availability and quality of instate schools.
I think it is shabby for schools to "hold" tuition, while raising room and board and expenses- and making it sound like they are a great deal.</p>
<p>Thats one thing schools aren't that upfront about- how difficult and expensive it is for on & off campus housing.
To divide dorm rooms that were built for 2- for 3 or 4 people & to admit more students than there is room for in the local area- just doesn't seem right.
( which is where the perks of having a tiny house come in- my daughters single room at Reed, was about the same size as her room at home & she didn't have to wait for the bathroom)</p>
<p>I'm thinking our kids may be reaching back to us to fund the education of thier children (our grandchildren). So as soon as we pay off, or help our kids pay off thier loans we will then get a reverse mortgage on our home, rather than see our grandchildren go uneducated. Doomsday I know.. but is it where we are headed?</p>
<p>"We're all going backwards. Some of us just haven't figured that out yet."</p>
<p>You're playing with a full deck when you count 52. Every year thereafter is down hill (but you can subtract a year from your age - this year, I'll be younger than my wife! ;))</p>
<p>I would LOVE to have a smaller house. But I hate moving more. (we only have 1600 square feet, but it is way more than we need.)</p>
<p>"You're playing with a full deck when you count 52. Every year thereafter is down hill"</p>
<p>Mini, you are so much older than me :) so I have to ask you, does the slide accelerate? </p>
<p>I want a smaller house, but the idea of moving, eech.</p>
<p>"so I have to ask you, does the slide accelerate?"</p>
<p>Yup. The orchestra conductor is resigned to the fact that I'm not getting any better (and wasn't any good to begin with, but since I'm one of the orchestra's founders, I can fire him, but he can't fire me.) My squash playing has improved, but only because I hadn't played in 30 years (but in the case of the violin, it was 47 - when I took it up.)</p>
<p>I have squash on Tuesdays, and violin on Wednesdays. I have to be careful to remember to bring the proper stringed instrument to each. ;)</p>
<p>
[quote]
So much of college financial decisions are just focused on costs. I think that it may be healthly to look at (career earnings)/college costs.
[/quote]
</p>
<p>If people think the only purpose of a "good" college is increased career earnings, then the money might well be wasted.</p>
<p>mini, lol............</p>
<p>Wow. Great question. Let me try this simple example.</p>
<p>College A: Total 4 year borrowing costs=200K Total costs + simple interest =210K
College B: Total 4 year borrowing costs=100K Total costs + simple Interest =105K
Assume interest = 5% Payback period 10yrs after graduation.</p>
<p>The difference between Cost from College A to College B= 210-105=105K</p>
<p>Question is how many years would it take to pay back difference in education of College A to College B if the difference in job income is 10k between College A to College B?</p>
<p>Assume College A starting salary 50K
Assume College B starting salary 40k
Assume both salaries increasing 3.5% per year compounded.</p>
<p>Year 1
CollegeA=50,000
CollegeB=40,000</p>
<p>Year 2
A=51,750
B=41,400</p>
<p>Yr3
A=53,561
B=42,849</p>
<p>Yr4
A=55,436
B=44,349</p>
<p>Yr5
A=57,376
B=45,901</p>
<p>Yr6
A=59,384
B=47,507</p>
<p>Yr7
A=61,463
B=49,170</p>
<p>Yr8
A=63,614
B=50,891</p>
<p>Yr9
A=65,840
B=52,672</p>
<p>Yr10
A=68,145
B=54,516</p>
<p>10 Yr Total Income
A=586,570
B=469,256</p>
<p>Difference between College A vs College B income after 10 yrs
117,314</p>
<p>After 10 years the income differential of 117k pays for the 105k initial differential in college costs!</p>
<p>frankie38, I do like your numbers and explanation. I don't think the world is that linear.</p>
<p>Which professions will I make more money if I go to the $200,000 plus school over the $100,000 school?</p>
<p>Do I get paid more as a teacher, a nurse ,a doctor, a lawyer, an accountant, you get my drift.</p>
<p>And maybe you do for some professions? But are the differences due to geography, connections, ability, what?</p>
<p>Like I said, I do like your numbers, but I have questions.</p>
<p>First ten years out, and given costs of education and loan repayments, my wife who graduated with a two-year nursing degree from a community college will likely do very significantly better than an Ivy-trained physician. (Yes, I've done the numbers).</p>
<p>Mini, your politics are going to change. :)</p>
<p>Nice example, but you did not add anything but a 3.5% COLA. What we are really hoping to see is kids who find initial jobs, do well and get promotions to more interesting and better paying jobs.</p>