Friday, August 28, 2009

Off to College-----

Well, the Spouse took our Oldest off to college (at Reed in Portland) this week. After the emotional breakdown, it occurred to me that our move to Piedmont in 1996 might generate enough savings to pay for college.

You may know that I developed a biz school-style spreadsheet looking at whether it's cheaper to move to Piedmont and go to public k-12 schools, or move to surrounding Oakland neighborhoods and pay for private schools. The usual question buyers face.

After 2 years, even with one child, the tuition payments are higher than the marginal Piedmont payments, assuming one could afford to buy the more expensive home, of course. One ah-hah insight is that you'll eventually sell the Piedmont house and recoup your investment, while the tuition costs are a straight outgo, with sizeable inflation, no less. Email me (Kennedy@MaureenKennedy.Net) you want a copy of the factsheet summary or spreadsheet....

But back to college. I went back to the spreadsheet, and noticed that the present value savings, after 12 years of Piedmont schools, assuming 2% appreciation on the home increment, are:

For one child: $61,000
For two children: $236,000
For three children: $411,000
For four children: $586,000

So we've roughly paid for college at Cal for the three boys, or paid for half of private college expenses, if our alternative in 1996 were to live in Berkeley and put the kids in private schools (and of course, for many, that's not the alternative).

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