One Step Ahead

[BostonAndOC_RE_perspective]

Raybyrnes,
Check a little closer. UCLA, UC Berkeley and USC give out hundreds, if not thousands, of partial to full tuition scholarships/year, purely merit-based. I know – I got one when I went to one of those schools that was 50% tuition, and my parents were (and still are) loaded. This is a very effective tactic for luring kids away from the Ivies and Stanford (who both give out ZERO merit-based aid). Maybe this is the reason that USC’s newly admitted freshman class of ~4K students has an average SAT of 1376, indexed to the old scale (2100 on the new scale).

I even had Occidental (prestigious liberal arts school in L.A.) offer me a full-ride back in the day. I had a buddy who went to CalTech and he got major scholarship $$$. The key is that you need to be a heavy hitter academically and have some other quality that makes you stand out from the other 4.0’s/1500’s, especially the ones coming over from India and China.

Bottom line: if you have a household income of greater than $60K, you will get zero need-based aid outside of loans. I personally save like a madman becuase I don’t want to bank on a scholarship, and I want my children to feel free to aspire to any college they choose.

[IONEGARM]

“Timing a market is fairly ridiculous. There are properties today that can be bough right now that will see very little or no depreciation.”

What you are talking about in the above quote is effectively trying to time the market, just in a different way than what you are accusing other of doing it. You are timing that the market will be level or slightly down and that is why you are getting in, others are betting it will go down, which is why they are not getting in.

Real Estate Headquarters for the SFV and Conejo Valleys

[Chance the Gardener]

Raybyrnes… I’m actually a 2nd year law student who will be 40 y/o before I take the bar. I have a BSEE and have worked in commercial construction for over 10 years. I think very highly of an education. What I don’t think highly of is students who decide to go to college and grad school who have never even done the economic analysis — who haven’t even done the personal assessment of attitude and aptitude that would allow them to know whether they could make it pay off. For three years, my wife and I lived on her income alone, saving mine for law school. Now, I’m paying cash. When its all over, I’ll have enough cash to hang my own shingle if I want. In the meantime, my wife and I have learned to live well within our means. We pay cash for cars that we keep for ten years… all the while saving money for their replacement. We sold our house in August of 2005 and realized nearly a 500% profit on our down payment. We’ve rented ever since. We’ll probably use the proceeds of that sale to buy a condo downtown once I’m out of school and turning a profit. Whatever we buy we’ll probably live in for a long time. I’m not waiting because I’m trying to find the bottom, I’m waiting b/c I can rent for what I make on the interest I earn on a CD funded with the house sale proceeds. Paying cash is never foolish, its only a reflection of your personal risk tolerance. I know that I’m fortunate… I know not everyone can do what I’m doing. But parents can certainly teach their kids the value of living within your means by not leveraging their own households to send them off to college.

If a college bound student doesn’t recognize the concepts of opportunity cost and living within his means it won’t matter that his income is greater than if he didn’t go to college. And, they don’t teach that at Berkley!

[blackbox]

Logic did’nt stop home prices on the way up, and it sure as hell not going to help you on the way down.

[LookoutBelow]

Institutional education is HIGHLY over rated. Especially post graduate studies. My degree is in a discipline (B.S.M.E) and I NEVER used it in my whole professional life. I was relatively successful, and ALWAYS had my small business ventures on the side, separate from my job which provided a lot of time off. I retired at 38 yrs. old.

The people I associate regularly with are likewise financially independent, only 2 out of the 6 in my peer/bro's/friend/golf/surf/family group have college educations. But DONT let that fool you, they are VERY SHARP.

Why would you put yourself through such dilemma over your kids future education ? It could very well stunt their imaginitive creativity. Im not convinced its really that important.

If a persons goals are to retire at a younger than average age then spend the rest of your life living it YOUR WAY without too much worry of finances, then I suggest you tell your kids to get into business for themselves, the very expensive education they recieve in higher rated colleges are NOT going to teach them how to make 10 million dollars, they are going to teach you how to make SOMEBODY else 10 million dollars, while they work 8-6pm 5-6 days per week for 120K per year max, might get a 15K bonus at the end of the year if they're a good employee.

Yeah, theres a lot of smart people out there with phd's, so what ? Look at their national average pay ? 80K or so, Im willing to bet my landscaper makes at least TWICE that per year, so who is the smartest ? He surfs in Costa Rica 3 times a year and will be debt free in 4 more years or less. Its just not that hard.

Back to your original topic, trying to time the market is folly. I dont believe it can be done with any regular success. I missed it by 2 years and we sold off all real estate (3 houses) in 2001, but I like the side I missed it on. As Joe Kennedy said, "only a fool holds out for top dollar"

Please dont misunderstand me here, I am not an elitist prick, my brother in law is a Molecular Biologist (PHD) he is what I would call a smart (damned smart in his field) person. He makes about 85K per year living in Kansas somewhere, he works 60-70 hours per week doing what I consider extremely BORING work, he's pastey white and balding, overweight in all the wrong places, drinks too much and looks 20 years older than he is from the lifestyle he lives. There was/is a real estate boom going on over there too, he bought ANOTHER bigger house EXACTLY at the top of this market…..He is MISERABLE ! (I was just reminded how miserable he is over the holidays)

He thinks I got "lucky" and equates my position in life as a lottery winner, he refuses to believe I worked hard and more importantly worked smart for it…… Now Iam rambling….this drives my kids nuts…Have a good day, dont take life too serious, its only a game, but a game worth winning.

 

 

[BostonAndOC_RE_perspective]

For anyone that has kids, there was an article by Ben Stein in the NY Times business section a few months ago I would recommend you look up and read. The topic was the old “90% of the wealth is controlled by 1% of the population,” and helping your child make their career choices with that in mind. Many pursuits are noble, but if money is what ends up mattering to an individual, Ben then goes on to illustrate how one might educate a child on choosing the right path that will land them in that 1%. Guess what? It involves education – lots of it. For every self made entrepreneur there’s 1000 guys that went to Yale and made Managing Director at 36, pulling down 2-comma salaries.

If you have kids, and truly love them, you will drive them like a racehorse to excel academically so that they can have a chance at attending an elite college. It’s a proven method for success.

[Raybyrnes]

This wasn’t cmeant to be a vine on education. We are all bringing our personal experiences to the forum. As an east coaster transplanted to San Diego I think I see things very differntly. My friends work for Bain, McKinsey, Goldman, Lehman, Boston consulting or are retired at this point after making millions trading Dot com.s from 1993 to 2000. What I can say is that all of these people were extremely intelligent to begin with so I am certain they did not need to go to top schools to acheive there level of success but I will also say that it certainly helped in the interview process. All of these people enjoy what they do and they are making 7 figures doing it. In addition there are many middle market companies that are constantly trying to get these guys to leave to take the reigns of their companies. They have extremly good quant skills and are very personable. They are also some of the most competitive people in the world. It is this combination of skills sets that has helped them be successful. Good schools and a formal educaiton helped to magnify these talents for these individuals. That is what education is suppose to do.

So I want to let others know that if my chilren find their passion in a business pursuit I will be equally supportive of their interests but statistically many small business fail so I want them to know how the deck is stacked. Work for an investment bank for 2 years and get an MBA and the deck is stacked in your favor.

[PD]

1) There are huge numbers of careers that require a college education. I can’t think of any careers where a college education disqualifies you (although someone might be able think of ONE).
2) A good chunk of 18 year olds don’t know what they want to be when they grow up. Getting an education is the best bet for success.
3) A college education is also a college experience. You can’t quantify that in dollars. Even though I went through some rough times and was poorer than dirt, I would not trade my college experience for anything.

If life was all about making/saving money, I would never have had children. Some things are just worth the cost. 🙂

[Raybyrnes]

PD

I agree. Not only would you not have kids. You would not give to charity, you wouldn’t tip a waiter. Education is not for every kid. My cousins from Ireland are all Master Carpenters who found there calling at a yourng age but they simultaneously came from a family of carpenter and have now moved on to become developers in a roaring Irish economy. For them to have spent time in school would have kept them form there what they loved. For the same reason I think that if someone is going to pay an athlete a gazillion dollars to play a professional sport there really is no reason to stay in school. But agian this is a very rare few.

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