I also think some cultures are just more open to sharing things like this than others.
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Where I live, your school is determined by where you live, and it’s a relatively narrow band of the SES band. Actually, pretty narrow in every respect. In a city though, that could be true.
At a boarding school (and there are several near us), because of FA policies and the fact that students aren’t determined by geography, there’s a much wider range in all respects.
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Depends…
Elementary schools usually have small relatively homogeneous attendance areas. Middle schools and high schools commonly have attendance areas that cover several elementary schools, so they may be more diverse, but not necessarily covering the full range of diversity possible in the general area.
Colleges may draw from larger areas, but also commonly have SES skews.
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I wonder if these high income earners have high-value assets they can take loans against in the case of a large emergency expenditure, e.g. a HELOC on their multi-million dollar mansion could easily cover 6 months of expenses minus the fun stuff if they run into an issue like a sudden major surgery.
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Most private schools are not boarding schools though. Certainly the college prep privates in our area skew far more narrow than our public schools both income and race-wise (and we do not exactly have very diverse publics here). The religiously-based privates are more diverse than the college prep ones.
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I went to a public school where most families lived in a nice house, 2 cars and most kids had similar amount of spending money. I didn’t know many kids who flew to aspen for ski trips or took trips overseas, but we all had enough money to go to friendly’s, movies, or bowling. It wasn’t until I went to college that I met kids who lived a lifestyle I was not aware of. The public school was also not very diversified when it came to race or religion. Whereas my kids’ prep day school was more diversified when it came to race, and there kids on FA. D1’s best friend came from a single parent family. It’s not often talked about, but there are a lot of soft skills (presentation, time management) that they do not teach at public schools because of resource.
Both of my kids are over 30 and launched now. I probably over spent on their education and not as much on other luxuries. I just recently retired. I didn’t actively save for retirement until they were out of school because most of my money went to their education. Yes, there were times when I felt like I was living paycheck to paycheck, especially when their tuitions were due. But looking at where my kids are in their lives and opportunities they’ve had that I didn’t, I would do it all over again. Their education will be their inheritance, not my monetary assets.
This post is not to challenge people who didnt make similar choices as me, but to say this was my choice which reflected my personal values.
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I have lived in several places around the country with abundant private school choices. There are the “top” schools- Dalton, Horace Mann, Roxbury Latin, The Latin School of Chicago. And then there are dozens of others-- private schools which despite the fancy names and high price tag- offer a different product than the public schools but not a better product. Something for everyone- the athletic but lazy rich kid- yeah, we’ve got those. The artistic but hates academics- yeah we’ve got those. The “I need to go to college to get grandpa off my back” kids- yeah we’ve got those.
It is really a myth that private always means “better college outcomes with less effort”. Lots of rear view mirror thinking among some of these parents. Not tippy top multi-generational wealth families- kid ends up at Denison or Trinity instead of the legacy Princeton or Yale- it’s all good, the money was inconsequential and the parents reluctantly realize that P or Y would have eaten their kid alive. But for the “merely affluent” for whom the pricetag meant something- the local public HS with all those strivers heading off to top tier universities looks pretty solid in retrospect.
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As someone who has been financially fortunate in adulthood (despite growing up modestly) the idea that people making $500k can’t save enough doesn’t match my lived reality. It’s not that they can’t - it’s that they’ve prioritized other spending and are making other choices - which, btw, is totally understandable as we all have different interests and priorities. Just don’t tell me it’s “can’t” instead of don’t want to sacrifice other things.
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I was linking to a thread on CC inspired by the article. If you end up joining the Politics in Education forum, you will then be able to see the link.
Even with this more robust survey, about 10% of 1%ers have revolving credit card debt and nearly 20% of 2-5%ers have revolving credit card debt. Seems like that might be why some credit card companies keep coming up with more elaborate credit card options to attract that demographic…because 20+% interest rate on the amount that a top 5%-er is carrying on revolving debt is unlikely to be chump change.
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One thing I most appreciated about our “good enough for me” local public schools is they were diverse in many different ways, even SES at the elementary level. There were some doctor/lawyer/businessperson types in the neighborhood, and there were also carpenters and other blue collar workers, nurses, teachers, mechanics, office staff, restaurant workers, people on assistance, new immigrants just getting started, etc. I guess it was a sort of unicorn of a neighborhood. But there were lots of towns like this in North Jersey.
I did not want my kids to live in a bubble. Though I will say that they were probably a bit unprepared for the level of wealth they encountered in college, particularly my S at an Ivy.
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Both things could be true — all the categories of people you list could exist (probably do) and it could still be easier to get into rejective colleges from private. 40% of the graduating class from our high school went to a “T20” and I can tell you they are not all “brilliant” like you think you need to be if you went to a public high school. They are very strong kids who work hard — but this outcome is not likely if very strong kids who work very hard at a public high school applied to the same set of schools. I am just looking at the data. And I don’t think the vast majority of these kids are hooked.
But your kids went to a strong private school where that outcome is typical. All private schools (like public ones) aren’t created equal. I live in an area where there some world class private schools with unbelievable outcomes but there are also plenty of middling private schools that don’t send as many kids to top schools as our public HS.
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Ok. Then send kids to a strong private school :-). Why would you pay some 30-50k (was 25k when we started) for a weak private school? And I can tell you that large portion of the kids were regular kids. You don’t have to be a genius to get in. I would put the % of super smart kids at less than 10% (maybe less than 5%) I am only saying that cost aside (which is meaningful), there seems to be some benefit. I am not taking an absolutist position.
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We did the research on this in areas where we considering moving when we came to the US and I was very surprised to find this outcome - coming from a country where private was almost always superior to even the best public schools. It was part of the reason we decided to go the public school route here (my kids had been in privates before) - that said it’s not necessarily an ultimately cheaper decision to buy a house in a top public school area around here.
On the main topic:
Like others here, I grew up very modestly and was fortunate to do well as an adult. I think it can go both ways - we are still (my husband grew up poorer than I did) pretty conditioned to watch pennies even now, but we do live well - but we always paid the mortgages down as fast as we could and put most of the subsequent free cash flow into savings/investments. I have also seen people who grew up poor who find it hard to stop treating themselves now that they have money and spend a lot of their income and don’t save much. I have also seen those who grew up pretty privileged who seemed to take it for granted that they should be able to spend what they want and also didn’t end up saving very much (not sure if they were waiting on an inheritance though which may change that equation). And none of the people I am thinking about had say a high amount of med school debt to pay off. I think it’s really hard to determine the combination of factors that might lead to someone with a $500k income living paycheck to paycheck, but I think it’s more than “we need a class on compound interest” given that all the ones I am thinking of were in the finance industry and were supposed to understand this stuff…
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Time to get back to the original post and back on topic. Users are free to start a new thread about public/private school diversity.
This is correct, and yet it also may not reflect that many of the folks who feel strapped may not have made all those “expensive” choices as a package. Odds are that the $500,000 earners who feel they are struggling did not relocate into that situation but instead added to it bit by bit.
Maybe they bought the apartment/house because they had what seemed a good, affordable opportunity years ago - the building was going co-op, the neighborhood was showing signs of gentrifying, right time right place, fear of missing out altogether. Maybe at that time, they didn’t have kids. So maybe they didn’t consider schools.
And then they had kids who were unlikely to thrive in the public option so needed to consider options that would cost them. Perhaps they are expecting their kids to get into a test-in high school so see the tuition as temporary (and many who take this approach find it works.)
Maybe one of the wage earners lost a job and ended up with another with less compensation. Maybe they worked with start-ups but never got that big equity kicker. Maybe a medical leave was required.
They have enough tying them to where they are that relocating to another lower COL area just doesn’t seem like an option. But they are stretched.
This isn’t to say that if they HAD to make a change, they could/would not. @Thorsmom66 is right as this shows it’s a choice. But it may have been a series of choices, each made in the context of the one made before it, and unwinding them may be a bit of a tangled mess. Sure, it’s a box of their own making, but it’s also easy to see the challenges in dismanlting it.
As context, I am of an age at which many/most of my (mostly high-salaried) contemporaries are retiring. Several friends are continuing to work because they NEED the paycheck to shore up their retirement holdings. Their situations vary but all have some element of this, including raising children in expensive cities. So it seems that they would have answered that they were not reaching their long term goals - for decades.
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Seems like a large number of choices, each of which increases the baseline cost of living, adds up to make the baseline cost of living very high.
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One factor I do not believe anyone has brought up is the composition of income. If the survey is talking about total income, many people who make over $500k have paychecks that represent a fraction of that total - potentially less than half. It may be - for example - that their base salary is $200k with a 50% bonus (so $100k) and $200k in equity which, once granted, takes 4 years to vest. That paycheck looks very different than a pure salary of $500k paycheck. In that case, it is easier to see someone with $500k of annual income living paycheck to paycheck. However, they would potentially have stronger savings potential if they can bank all or most of the bonus and all or most of the stock once vested.
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I think the discussion strayed a bit from the point that the percentages in the original post were based on how people were feeling about their savings. Feelings are not exactly quantifiable. If you ask several people who each have a million saved in 401(k) how they feel about being financially ready for retirement, the answers will vary greatly depending on how far from retirement they are, how long it took them to get to that number, where they think they will retire, etc. If not adjusted for these variables, the results will look like a large percentage of 401(k) millionaires can’t afford to retire. 
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