@maya54 Your missing the finer point of public vs. private schools. While some schools are excellent and provide an excellent academic basis. There is no school system, even insert any town-- that can match the small class sizes, rigor and attention wealthy kids get at private schools. Granted not all private schools are equal. (I went to Ivy league schools and have lived in a town with an average home price over 1 million so I have seen wealth). It’s not the same thing.
It’s in these schools where you see things that the wealthy “buy” for their children. Yes, in public school you can get the same test scores, have a 4.0 ( 5.0 now) in a public school but you will not have the same experience. Common core vs. Interested teachers who give meaningful work daily ( check), bucolic campuses where meals are served family style ( check), independent study classes, classed with 5 kids studying some advanced topic, guest speakers etc, etc, etc. Many guidance counselors for each student. Yep. Any service you can think of, yes. Our local public school is pretty awesome, it scores in the top nationwide. They spend 14-18K per kid. But it is a very very different place from an elite private school. Very different.
I went to private school and liked it but thought public school would be the better choice for our kids. It was for a while. But honestly common core and a host of other issues drowned out the social value of going to school in the town you live in. Why did the wealthiest people in our town send their kids to private school? I had no idea, when my kids were younger. Until we looked closer. Then I knew. Aha, so that’s why they all leave.
What I am saying is, school is not just about what college you go to, it’s about the experience and joy of learning. At the most elite schools they have 5-10 kids applying for a single spot? Why? Is it just because of status? Nope, it’s because parents realize what these schools offer and are willing to pay for the option. Public schools are the foundation of democracy and we need to make them the best possible. But they aren’t great in every town and even in towns where they are best by stats, they can’t match schools spending 25-50K per kid. So, in our town a lot of the best students go private. And I’m sure it’s the same thing in many wealthy towns.
Hey, maybe you and your kid doesn’t want those services but many in the top 1% do. It seems to be consistent across generations. For the really wealthy, it includes pre-college choices as well.
@Happytimes2001 Out of curiosity, what do the wealthy do when they have “average” kids who won’t thrive given the rigor and expectations of the schools you describe? It can’t be that all the children of the wealthy are also gifted. Are there private school equivalents of the Colleges that Change Lives?
@gallentjill Funny you asked. I think many uber wealthy do send them to very elite schools via legacy/development. Many play sports and have access to everything so they have the resume for the arts, sports etc. For the academics, they get help. Remember help is available daily with every teacher. Plus some can get private tutors. Many of the schools take a % of these kids. The kids work hard and graduate in the lower end of the grade. It doesn’t matter for them. They’ll go to a college other kids would love to get into ( again, often on legacy/development preferences). Some will go to really expensive high schools which are less academic. They often will bring in kids who are gifted or highly talented in sports, arts etc to beef up the class. There can be a real divide between the many facets of talents in these schools. The kids know it. The parents know it. All agree to it. To me, it’s fairly amazing. They bring in the gifted kids, for example, so they can win National Merit scholarships and academic awards, the sports kids so they can have a great sports program, etc. etc. The 1% all seem to think it’s great. My kiddo was shocked to learn that the top schools were not all about academics and that very few kids were in the top % in terms of scores and grades.
Or do not get admitted, since elite private schools are often selective.
But note that a luxury class school and socialization with wealth may not necessarily be a good thing. A kid may acquire expensive habits and attitudes that may make it difficult to live within his/her means in the future, even if s/he makes high income.
There are a lot of private schools in my area and I consider some of them equivalents to CTCL’s. They are nice schools usually with beautiful historic buildings in a tony setting, and they admit kinda average students who go on to nice, not prestigious, colleges.
Private schools are big around here. It’s changing a bit, but the standard joke is that you ask people where they went to high school because it would be rude to ask how much money their father has.
Everyone knows which private schools are academically selective, and which ones kids go to because their families are rich but the kids are not quite bright enough for the top schools.
I didn’t notice much difference between public and private schools in terms of alcohol and drug abuse. Plenty of that going on in both places. We know at least one family that pulled their son from private school to get him away from the drug influence in his friend group there.
It looks like some posters here feel like they should be embarrassed or ashamed about being rich - but I go to Wal-Mart, and stay at Motel 6, and sit in the back of the plane, even though I could afford………
I don’t get that at all. Nothing wrong with having enough money to spend, and spending it on things that you enjoy.
But plenty of people in the 1% income group are only temporarily rich, or maybe newly rich. That’s why they don’t feel rich, because they know they don’t have the wealth (assets/net worth) to sustain the spending that they can now manage on their salary. Check out the top 5 NFL draft choices from 10-15-20 years ago, and see if they stayed rich.
The top 1% in assets is much more stable than the top 1% in income. The asset group is more likely to feel rich because they are. The high income group could go either way.
“Why did the wealthiest people in our town send their kids to private school? I had no idea, when my kids were younger. Until we looked closer. Then I knew. Aha, so that’s why they all leave.”
My point is that where I live that is not the culture. People with net worth of 10-30 million send their kid to the public’s. Here a lot of the best students don’t go private. It’s just not part of the culture here. So it not what “me and my kid want” its more that my kids would have had no interest in being the only kid in our neigborhood not going to the weekend football games or the many dances and other activities held throughout the year. And our school is routinely rated as excellent. Why change things.
A friend whose husband went to a private school started her kids there only to have them come home upset that all of the kids in their club sports went to school together and they felt like the odd man out. Her husband said “it’s not supposed to be punishment” and pulled them out.
And as a result of this culture the privates often end up with kids who arent’ as good students as the top of the class. Students often with “issues” behavioral and academic. This of course drives the tippy top here to the public schools where the highest level of classes have top teachers who get top pay.
When my daughter went to school in the east people from there were constantly surprised when kids from our area would tell them that “Private schools aren’t really a thing where we live, like it is for you.”
I have been enjoying listening to The Millionaire Next Door. But today, as I rode my bike, I heard so much more about how millionaires buy their cars than I ever needed to, lol.
He makes MUCH of the fact that high salary does not mean wealthy, and he uses net worth to define that term.
I’ll be very interested to read the update the author’s daughter has written to her father’s book that @jym626 referenced recently.
I think @Happytimes2001 may be referring to the boarding school experience which eliminates these concerns.
This might be the case in some places, but was not our son’s experience. He did not acquire any expensive habits or attitudes as he never saw them. At his school, he had no idea who was wealthier than whom as the kids never made these distinctions. Even the handful of kids with household last names were indistinguishable in the crowd. Some may have returned to fancy homes on breaks or taken expensive vacations, but that was not obvious in the day-to-day on campus. Also, more than a quarter of the student population at many of the most well-known schools receives some level of financial aid, and even some who pay full-freight may take on significant debt to do so; not everyone is rich. Our son didn’t realize until the end of his sophomore year that his best friend came from one of the household-name families because it wasn’t a name HE recognized and wasn’t something we would comment on. Nothing about the kid indicated the wealth at home, and that was typical. If anything, it seemed that some of the less wealthy kids (girls mostly?) felt the need to wear certain brands of clothing, but the wealthiest among them were often the least conspicuous.
I know this is a bit off topic, but I throw it out there because we had some preconceived notions about what our son might experience in this environment and were surprised that not one of our concerns was founded.
Hmmm, that does suggest that some students felt the need to play the expensive status symbol race, and it was those for whom doing that was potentially the most problematic.
According to the latest statistics I’ve seen, top 5% in wealth (= household net worth) starts at around $2.4 million. I’ll tell you why I don’t feel rich at that level. I’m 65, turning 66 next week. I’m actively contemplating retirement. DW is just a few years behind me. Conventional retirement advice for many years was the “4% rule”—you should plan to live on 4% of your accumulated savings in your first year of retirement, and match that amount or adjust it upward for inflation in subsequent years. Now many retirement advisers are saying 3% is more prudent given the long-term rates of return they foresee. At 3% per year, a nest egg of $2.4 million gives you $72,000 to spend each year, much of it taxable if it’s coming from 401(k)s, traditional IRAs, interest income, dividends, etc., and other parts subject to capital gains tax as you cash in after-tax investments. Now $72K is nothing to sneeze at—it’s enough for a solidly middle class lifestyle, but nothing more. Note also that net worth includes equity in our home, so a fair chunk of our net worth is tied up in a not fully liquid asset that also takes care of our housing needs, but (as others have noted) is a particularly costly investment to maintain what with taxes, insurance, maintenance, and repairs.
Of course, that’s not the whole story. Our health care will be heavily subsidized by Medicare. We’ll also collect Social Security benefits–about $60k/year if I forego collecting until I’m 70 and DW until she reaches her FRA. That puts us up to $132K in mostly taxable income, which probably qualifies as upper middle class, but again I wouldn’t call it rich. We’re certainly comfortable, even relatively affluent, and we should be just fine in retirement, which gives us valuable peace of mind that many people do not have in their retirement years due to inadequately financed retirement which apparently is still the norm in this country… But I would say we’re definitely not rich.
A 20-something with $2.4 million in net worth might be rich. Even a 40-something might be rich, or well on the way toward becoming rich at $2.4 million. A retiree or someone closing in on retirement is not rich with $2.4 million in net worth, in my opinion.
Okay so if that’s just comfortable, then most retirees should just pack it in or make their way over to Walmart to sign up a as greeter. I mean c’mon; most of the country is living on far less, and retiring on far, far less.
I don’t get why so many, with so much more than the vast majority, are so reluctant to say–“this is great!” and call it a day.
Being able to retire and nevertheless have a “solidly middle class lifestyle” with a conservative savings/spending plan (like the one you describe retirement advisors’ suggesting) is a perk of the rich. To disagree is to say that almost everyone in the US is completely impoverished.
For all parents who consider private school, they have to weigh where there kid will thrive. Maybe it’s at the local public school, maybe it’s at the elite private school, maybe the kid has some issue and isn’t that academic so they go to a private known for easy admittance. We have a few like that around and everyone knows the schools. But most parents want their kids in school with a known reputation. For some that’s the best public school in the area, for others they decide to go the private route.
Most parents at the 1% income level know each other even across towns. My kiddo said you won’t believe whose going to X or Y school. Many attend the same camps, sports programs, etc. Kids are just kids. They make friendships based on similar interests not on the parents’ net worth. But some of these ties are deep. And there is definitely a network. That might be attractive (or not) to the parents or kids. Still, it’s something to consider.
In the end, most parents are just trying to give their kids the best education they can. That means different things to different people.
When you can’t buy what you want when you want, you won’t feel rich. Saw a story in the late 80s or early 90s, MLB pitcher who made a million dollars a year was going broke because he had 10 cars and was buying another one. When asked why he didn’t ask his accountant about his finances and if he had the cash, his response was “I was afraid he would tell me no”.
Lots of arguments in this thread seem to be about terminology. In my mind, there are quite a few stages between being poor and being rich. But some comments seem to imply these are the only two possibilities.