I think it’s safe to say that we all want the best for our children. We will move to different zip codes to change school districts or hire tutors to assist with coursework.
In some communities, putting your kids in a private school is a golden rule. However, private school costs money—lots of money.
Real Estate vs. Private School. Today, I will pose a deep question for us to ponder. What is better for your kids, putting them in private school or buying a home earmarked for their future?
FIRE Writer: Retire & Write
It’s a tough call, but it is a conversation you’d rather have outside your family circles. Most people will go with private schools from the start without hearing the entire argument. Don’t worry; I am here to give you an unbiased opinion.
Prior discussions. This is not my first foray into a more extensive debate between education and passive income. Previously I wrote a series on how to pay for college with real estate.
- Pay for College with Real Estate 101: Real Estate vs. 529 Savings Plan
- Pay for College with Real Estate 102: Buy a Home, Sell a Home
- Pay for College with Real Estate 103: Leverage Home Equity Loans
- Pay for College with Real Estate 104: Cash Out Refinance
- Pay for College with Real Estate 105: Rental Wins
I also compared attending a four-year college to four years of creating content. The general idea is to take the expected behavior and question if some change is in order.
Dividend Investing in Your 70s
Not unbiased. I may not be as impartial as I said earlier. My goal is to be in a financial position to homeschool my grandkids.
I am currently reading a book on homeschooling, and it’s my life’s work to keep my grandkids out of public and private schools. I feel I can do a better job than both of these institutions. But that is just me.
Is private school better than public school? The first question you have to ask yourself is if private and public schools differ drastically.
I went to a low-grade public high school and turned out okay. But, things could have taken a turn for the worse if I didn’t have strict parents.
Don’t Gamble with Retirement 8
I will say that the behavior in private schools will be much better. Regarding education, we know that private schools generally have smaller class sizes.
Is there a good public option? Do you have a more prestigious public opportunity around you? This may be an excellent way to save some cash. Are there buses available to take your kids to a better school?
Why are you considering private school? Are you considering private school as a status symbol? Lots of people love to say their kids are in private school.
The Magic of High-Yield Bond Reinvestment
Private school is an expensive way to keep up with the Joneses. You can go broke paying for a private school, and don’t forget that you will also need a financial solution for college. America is expensive, and a private school education adds to the costs immensely.
The real estate option. But what if we did a cost analysis between buying a rental property or putting our kids in private school?
To some, they will always put their children’s education first. This is not the article for you because you have already decided.
When your child turns 21, will her private education be better than owning a rental property? Well, let’s look at the numbers.
Series “I” Bonds vs. 30-Year Bonds
Crunching the numbers. Let’s assume private school costs $15,000/year from age 6-18. That would give us $180,000 towards private school over the years, give or take.
Since we don’t have the $180,000 in liquid cash as they turn six, we need a better option to purchase a place.
There are a few choices we can make. We can drop a new mobile home on our property if we have land—a relatively inexpensive option.
We can also go to Mississippi or Alabama and drop $30,000 to $40,000 on a down payment.
Cash flow is king. We aren’t looking for extreme cash flow upfront. We can make $100 to $200 a month in the beginning. Over twelve years, we can probably get to $600-$700 a month on cash flow.
Happy Cash Flow Retirement 8
Let’s say we get into saving and investing and pay off our rental property just as our daughter graduates public high school. What financial options does this offer our daughter now?
House hacking for college. Our daughter could move to our home in Alabama and live for free. Even better, she can rent rooms out and turn a profit from the start.
She could live with us and use the $1,500/month cash flow to pay for some of her courses. If she goes to community college, this may cover all of her costs.
40-Year Interest-Only Mortgage
She could do a home equity loan and use the money to purchase another rental property. Now, she has two streams of income.
Financial education for the win. Our daughter would be earning real-world financial education with tangible assets. I submit that this education is far superior to anything she learned in private school.
My story. My kids currently attend subpar public schools; however, we own three homes. Even though their education isn’t as good as a private school, they will be in a great financial position for the rest of their lives.
Does having financial assets make up for a poor education? Yes and no. If you come to terms with their weak education system, you can step in to fill the gap.
I’m Buying 30-Year Bonds Over 4%
As I said earlier, homeschooling is the best education, in my opinion. However, you need to be financially stable for one of the parents to stay home.
Conclusion. Most parents will get emotional about sending their kids to private school. I am the best teacher for my kids; however, I am not in a position to quit my job just yet.
I failed my kids on that front, but I am correcting myself for my grandkids. In the meantime, I ensure my kids get as much out of public school as possible.
They also have real estate they can leverage for their entire lives. Given a choice between my three houses or private schools, I keep my houses 100% of the time.
If you are reading this, it means you want the best for your children. There are no correct answers, but ask yourself a question.
What if your parents gifted you a rental property when you were responsible enough to manage it? How would it change your life to have $700-$1,000/month of passive income, plus financial leverage?
If you see that as a favorable situation, you may want to consider doing that for your children or grandchildren. I look forward to homeschooling my grandkids and setting real estate aside for them upon their birth. What will you do for your children? Good Luck!
- PDF of the Month: Retire Rich with a Business 4 (Free 149-Page PDF)
- Free PDF Downloads: Download FREE PDF LIST here
- Financial Mindset: Become CEO of Yourself 2 (Free 196-Page PDF)
- Retirement Planning: Your Retirement Planning Guide 2 (Free 255-Page PDF)
- Investing: How We Plan to Retire on Dividends 2 (165-Page Free PDF)
- Cryptocurrencies: Counting on Crypto 2 (Free 159-Page PDF)
- Real Estate: Financial Independence through Real Estate 2 (Free 123-Page PDF)
- Business: Retire Rich, Retire Comfortable with a Business 2 (Free 185-Page PDF)
- Latest DGWR: Don’t Gamble with Retirement 8 (Free 445-Page PDF)
- Everything!: The Biggest Book on Passive Income Ever 2! (book)(Web Edition)(Art Edition)
- I bought a Kindle Oasis: Check it out on Amazon
- Read My Books for Free: Free Kindle Books Schedule
- Crypto Exchange: My Favorite Crypto Exchange VOYAGER (Join Voyager)
- Kindle Unlimited: Why I Finally Subscribed Kindle Unlimited (learn more)
- Book Reviews: 505 Takeaways from 101 Books (pdf)
- Writing: The Publishing Chronicles (Part 1, Part 2, Part 3, Part 4, Part 5)
- Best REIT- Fundrise: REITs vs. Homeownership (Join Fundrise)
- Follow us: On our Facebook Page and Join our Facebook Group
- Support the Channel on Cash App: $Kingmarine1981
- For more detailed analysis, join my Youtube: MFI YouTube Channel
Monthly Dividend Tracker Template: Buy on Etsy
Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing
Leave a Reply