Hello Firefrog
Once upon a time, we had three small children.
When No: 1 Son was in Grade 6 we were required to advise the Primary School which Secondary School he would be attending.
Well, that was quick! Where did six years go? We hadn’t really thought about secondary schools much, and hadn’t put his name down anywhere, so this was a bit of a problem.
He decided to take matters into his own hands. Despite some very good local Government schools, he decided he wanted to attend a boarding school.
‘Mummy’ he said, getting out his calculator, ‘When you take into account how much food I eat, and how much hot water I use, it won’t cost much extra to send me to boarding school.’
Mike was horrified. The boarding school in question was closer than the government school. ‘People will think we don’t love him!’ Mike said.
So even though we tried to talk him around, the boy was adamant.
‘Mummy’ he said ‘You can’t make me go to the government school. If I can’t go to the College, I am going to run away’.
The College had waiting lists where babies were registered at birth. Nevertheless, I rang them up and told them the story. The Secretary laughed and laughed, took my details, and rang me back in half an hour.
‘The Principal says that this is just the type of student we want. When can you bring him in for an interview?’ she asked. And so, the boy-who-would-run-away went to College. As a Day Student.
So, this left us with our Do It for One, Do It For All policy staring down at three children x six years x Private School Fees. About the cost of a three bedroom house.
So I had a good think about this.
And this is what I thought.
If we impoverish ourselves by sending our children to Private School at a conservative cost of $180,000, and at the end of that time they have had (hopefully) six years of lovely school experiences, and perhaps a mark or two higher than if they had gone to the $18,000 all up cost of the government school, and we end up on the Pension, has this really done any of us any good at all?
So I decided that if we could ‘afford’ to send them to a private school (under the guise of ‘investing in their future’), then we had to match, dollar for dollar, that same investment in ourselves.
The school fees would be approximately $100 per child per week. Yes, for a number of years we would have two children at the school as the eldest one left and the youngest one entered, but we had to invest dollar for dollar, no excuses.
And that is what we did. We invested for them and we invested for ourselves.
I am happy to say, that the house I bought in 1994 for $105,000 is now worth about $350,000. Apart from the deposit, I have not ever had to make up the payments. I structured the deal so that the rent would cover everything, and it always has done.
So they all had a nice time at school and the Mission Brown single bowl sink house has effectively paid for the school fees and paid us as well.
If we sold it now (which we won’t) then we would see the $180,000 paid back to us. Of course, why kill the goose which lays the golden eggs? It doesn’t cost us anything and the cash flow from that property has enabled us to buy more properties, which are all happily clucking along, laying golden eggs as fast as they can.
At a conservative estimate, I reckon the Mission Brown house has increased in value about $45 each day, every day (plus the rent) since I bought it.
So, Firefrog, what is there to be paralysed about? You earn a significant income. If you want to spend it all, great, but if you want to set an example to your children, then put on your Nikes and start to walk the talk.
Do you know where the Mission Brown house is (was)? On my general school to shops run. It wasn’t anywhere fancy, it was in the same postcode and it had been on the market for months.
It has never been empty, and the mortgage is still about the same, about $65,000. It gets $320 per week rent.
Most importantly, because of that house, all three children (who are not so small anymore) also bought investment properties from their afterschool earnings at the local Bi-Lo. The Boy-Who-Would-Run-Away bought his first property ‘Off The Plan’ at 16 & half.
Yes, sir, that Private School education decision was a very important decision. We made sure that the children all worked from their 15th Birthdays and their work ethic and financial sense is remarkable. Plus, with the exception of the youngest who was very ill for some years, they all did reasonably well academically, too! However, the youngest (who is now 22) now controls property worth about $850,000 so he hasn’t done too badly, considering.
That $180,000 in School Fees has paid handsome dividends – because we made sure we paid ourselves the same as we were paying the school.
We simply could not afford to not do so.
Hope this helps
Kristine
