An article in USA Today recently reported on the Princeton Review’s top 5 list of the “best buys” among public universities. Out of the 100s of schools studied, The University of Florida (UF) ranked 3rd on the list. Coincidentally I had just reinterviewed one of the original respondents from The Millionaire Next Door. Ken told me with considerable pride that his son was about to graduate from UF. I was not surprised that a balance sheet affluent father would have encouraged his son to select a college from the “value meal menu.” Even with out of state tuition, dollar for dollar Florida has provided his son with an outstanding education.
In The Millionaire Next Door, Ken shared his experiences growing up in a balance sheet affluent family environment. His father was a prominent cardiologist. Ken’s father . . . bought a new Buick every 8 years. He lived in the same house for 32 years. Simple house . . . four bedrooms for 6 people [bunk beds]. . . 2 bathrooms.
Ken’s dad often told him:
I am not impressed with what people own. I am impressed with what they achieve. . . always strive to be the best in your field . . . don’t chase money. If you are the best in your field, money will find you.
Today, 15 years after I interviewed him, Ken and his wife are following in his father’s footsteps. They still live in the same house currently valued in the mid-$300,000s. They have, however, purchased two cars, both previously owned. Now in his early 50s Ken is on track to exceed the considerable level of wealth accumulated by his father.
Much of the variation in wealth can be explained by lifestyle factors, i.e. certain habits, activities and spending decisions. None of Ken’s children ever attended a private school. Their parents deliberately selected their home/neighborhood in part because it had the top rated public schools in the state. Today the total cost of private school tuition in Ken’s area, grades 1-12, is between $110,000 and $264,000 per student. Imagine how many pre tax dollars one would have to earn to pay for this tuition? Not surprisingly, 79% of the millionaires I have surveyed report that when purchasing a home they sought a neighborhood that had excellent public schools.
Private schooling for K-12 was never considered by my parents. Nor have my wife and I considered it for our children. We made it a point to have good schools where we live. We feel part of our job as parents is to supplement for any lack the schools may have.
My dad offered the following college deal. 1. Attend the local college for two years, while living at home. 2. Get good grades. If these conditions were met, he would then pay for two more years at the school of his kids choice.
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