Rich Dad advise needed on investing strategy

[Chad Reidlinger]

I wanted to pose this question to a BP forum to get your take on this. Private school or more expensive home? So Rich Dad Poor Dad has left quite an impression on me. I'm being very mindful to adding to my asset column and not my liabilities column. I don't live in a bad area at all, but I would like to improve my children's schooling location whether thru a better school district or private school. Private school will cost me about $11K per year for both my kids and they are now only 4 & 6. So potentially that will cost me $132,000 until both my kids graduate from High School. That doesn't jump out as a great investment when you look at just the numbers and it's 100% a liability unless you say I'm investing in my children :) If we move into the area we are looking at my house payment will most likely jump from about $1,000 per month now (crazy low and it's a 4/2 with a pool and completely remodeled) to a payment of around $4,500 per month if I buy the house my wife wants. I can afford the payment, but do I want to afford the payment. I won't need to incur the cost of private school and I can rent my current primary residence for about $2,900 per month. I will have to take out a HELOC on my primary now to come up with the 20% down on the other home so that will add another $450 per month to my current primary residence payment. So I'll net about $1,450 from my rental to go towards the $4,500 monthly payment. My other concern is I had planned on using my HELOC to accumulating investment property via the BRRR strategy. I feel this will surely set me back on my investments plans although my current primary will become a rental. Thoughts? Maybe you can see why I'm driving myself crazy. I can find a cheaper home in the new school district but that will still yield about a $3700 payment and will be a similar house to what I already own...thanks in advance for your advise.

[Charlie Fitzgerald]

I'm going to address this from the parent/husband of a teacher perspective.  We live in Las Vegas NV.  Consistently ranked in the bottom 5 states for education.  We also raised three daughters here and they all went to public schools.  All of them graduated in the top 5% of their classes coming out of high school.  they all went on to college, and got there degree or are working on getting their degree and at the end of the journey, we'll be the proud parents of a Doctor, a Lawyer and a School Teacher.  the statement above regarding you get out what you put in cannot be more accurate.  I am a product of private schools myself (although it as back I the 70's!) and I do not feel I got a better education (other than religion classes) and I certainly did not get in any less trouble simply because I attended private schools...probably got in more.  Personally, I'd rather do what I need to do to keep my kids safe in the public school environment (my kids went to some rough neighborhood schools because that's where the accelerated learning schools were located in our district...so we drove them to school and picked them up) and be an active participant in their education, supporting the teachers that for the most part, really do know what the heck they are doing, and let them get a great education and a better than great "real-world" view of their surroundings.  That's my $0.02 worth on that.

As far as the move up goes...my wife and I were in the same situation.  I was perfectly happy with the home we had been in for 15 years and had it just the way we wanted it and almost paid off.  Then we decided to build a "castle" and capitalize on the boom (back in 2003).  We came to our sense in the middle of that, sold our position in the house before it was done and stayed put for another 8 years (thanks God!) then we moved into a house that was twice as big as our old one, and yet half as big as the one we were building prior (as our kids were now all out of the house and in college or beyond) and we are far better off and happier for doing it this way.  You and your wife need to figure out your plan of course, but maybe you do it in two steps.  Move into a house that takes you where you want to be for the better schools in your area, but only takes your mortgage from $1000 to $2500-3000 a month.  rent your current home and get settled into the new one and then take a shot at the additional building of rental real estate.  I think you can do everything you want to do and achieve all the goals you want to achieve.

Hope this helps.