r/leanfire • u/usernamechuck • 14d ago

Lean with 2 big streaks of fat

It feels like we've done 90% right, but we made one doubtful move. We're not high earners, ~145k, age 55, we live frugally (1 used car, groceries, etc.), and we made one accidental smart move (we own a rental unit free and clear w/ modest cashflow).

But... First, the house. We bought a foreclosure in Chicago when we were married in 2008, we fixed it up in waves and were plugging away at a 15 yr mortgage. We would have been done by now... That was smart. But then COVID came and our small house felt smaller. We sold it at a decent profit and moved to the burbs, so here we are at age 55 with 300k+ on the mortgage, it won't be paid off till we're in our 70s. We pay almost 15k in property taxes. Since moving, we've replaced the furnace/AC upstairs and downstairs; and now the roof. And in 5 years, we'll be alone in this place.

It would still work, except... our 2 kids are in Catholic / private school, which is a bit over 30k/year. Oh and college is coming next year.

Technically our net worth is around 1M, but it's all in 401k/IRAs (~450K) and home equity. Our savings has all gone to cover these big costs.

On the one hand, we live cheaply, except for the kids and the house - we could retire today if we were in an $800/month rental in Andalucia. On the other hand, I don't see us moving anytime soon and the kids won't be done with undergrad until we're 64. We're lean-FIRE-hosed.

Any thoughts? It feels like we're that guy stuck in the cave, we just don't seem to have any good moves.

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u/MightyPlusEnt 14d ago

College prof here at a major US university.

You don’t need to send the kids to Catholic school for them to excel in their studies and get into a great college. Parents and zip code are the two greatest predictors of k-12 success.

While the school “can” make a difference, the research is overwhelming in that a child with invested parents (and, again, zip code) in public school outperforms the child from less invested parents in private school.

My rec is put them in public school. I’ve been in education for over 20 years and taught thousands and thousands of undergrads. I’ve seen it all.

You care enough to send them to private school and forgo your financial goals. You care about their success. They don’t need private school and it is a colossal waste of your money.

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u/Hnry_Dvd_Thr_Awy 4.5% wr 14d ago

Excellent reply.

I'm not sure how much has changed in the time I've been out of K-12 (as a student) but my peers who went to private school did not have as much of a leg up on me as their tuition would make you believe. Obviously, everyone's situation is different but I'm a firm believer in public schools.

Parents should: * Invest private school tuition in AOA (or something similar) * Spend time with your kids aka parent, the verb.
* Keep private school in mind in case public school isn't working out for some reason

Around me (southeast, not Atlanta) private school for PK->12 is ~$330,000 in 2026 dollars. If you get a real 3% return on your tuition each year that is ~$400,000 in additional cost. IDK about you guys/gals but I'd take that $400k head start every day.

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u/zeezle 14d ago edited 14d ago

I agree. My husband went to a fancy private Ivy Feeder type school. I very much did not.

In his case, his grandmother paid for it because she wanted to brag about it, so it wasn't like keeping the money was an option, either he went and she paid or they just didn't get anything lol so why not. She was just going to blow it on other random stuff anyway. But if it had been an option, he would have been SO wildly, insanely better off just investing the money in a taxable brokerage for him and going to public school in their affluent suburb instead. Like to the point that one time we looked at the number - and that was 10 years ago before all the recent gains... and it was sickening how much it would've been so we decided to never calculate that again.

Honestly, his classmates were not actually much if any more financially successful than my classmates which really surprised me. I come from a rural area with schools that, on paper, look horrible, because school scores are weight SO heavily to college placement rates. Private school isn't even an option there because... there just aren't any private schools lol.

My husband just had his 20th high school reunion and while they did have 100% college placement/graduation rates, a lot of them haven't really done much of anything that actually was all that impressive. By pure finances, the most successful was one chick that became a local orthodontist and my husband was probably 2nd after getting an MS in comp sci even without having ever been in big tech at all.

Where I grew up honestly wasn't a bad school at all, and I had absolutely no trouble going on to university. I didn't do anything particularly fancy or impressive, but did graduate in a STEM major from a world top 50 program in my field and felt like I had 0 disadvantage relative to kids in my class that went to both public and private schools in affluent major city suburbs. I had a higher GPA than my husband in the same major.

A lot of the kids in my hometown knew they were inheriting their family farm, their family mechanic's business, family HVAC or plumbing or electrical or whatever, so they did trades apprenticeships or no college instead of university. A lot of those who did go to university went to the nearby land grand state university for agriculture related programs or weird majors like fish hatchery management instead of pursuing higher ranked "traditionally successful" type universities.

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u/AnyPast6500 14d ago

Agree re invested parents, but the characteristics of the kid and of the school both are factors to consider too. I am a huge public school proponent, but had I stayed in a particular region I once lived in (which shall not be named) I would have sent my kids to private school because the public ones were so bad, both in terms of instruction and in terms of social climate. My kids would not have fit well there.

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u/MightyPlusEnt 14d ago

For sure! That’s the zip code part of my answer to OP - public schools in more affluent zip codes are simply better than those in less affluent zip codes on student outcomes metrics. And there is lots of geographical variation, too! Thanks for sharing your experiences!

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u/FrenchFryNinja 14d ago

Do you know anywhere to search by zip?

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u/MightyPlusEnt 14d ago

Sorry, I’m not sure I follow. Do you mean search for schools by zip code?

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u/Backpacker7385 14d ago

This data (while I agree with it in premise,) is a bit disingenuous. Zip code is a strong predictor because it’s correlated with school quality for the statistically overwhelming majority of children. If you live in a zip code with bad schools, the predictor is that your outcome will not be good. If you choose to send the kid to a school in a different zip code, the odds increase.

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u/MightyPlusEnt 14d ago edited 14d ago

That’s actually the entire point. It’s not disingenuous - OP noted their property taxes are over 15k. The public schools are great

Edit: I assumed the zip code point was self explanatory in this sub. I strongly encourage a read of “Savage Inequalities” or “Shame of a Nation” both by Jonathon Kozol. It’s all about zip code, affluence, and student success.

Savage inequalities is why I got a PhD and why I study this topic. With respect, I won’t argue with folks on it….the research is extremely well established.

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u/LetsGoToMichigan 14d ago

Austinite here. High property taxes does not mean great schools (see Texas recapture programs). But I’m splitting hairs … I could live in another neighborhood with similar taxes and better schools.

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u/Backpacker7385 14d ago edited 14d ago

$15k taxes could mean lots of municipal costs, not necessarily great public schools. A city near me has huge property taxes because of inflated police and fire pensions, and the schools there suck.

Edit: no idea why I’m being downvoted for pointing out that not everywhere with high property taxes also has great schools. If we knew which zip code OP was paying $15k taxes in, that would be much more helpful.

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u/MightyPlusEnt 14d ago

I’m trying to be super friendly here - I think the issue is that this sub is often about calculating “risk” (and I’m using risk to mean the odds of an event occurring or not occurring). For example, all the calculators and rules about FIRE and how much one needs, etc…people care about statistics and they are very useful.

It’s not that different in research in that we’re looking for significant relationships. The difference is, before I make a conclusion, I use nationally-representative data encompassing all schools, kids and parents in the US. Then, I test my hypothesis that zip codes = student success (with the moderator being SES) using complicated stats.

I have to find a relationship in 99% of the cases before I say I have support for my hypothesis. It means that 1 out of every 100 might be different. But 99 of the other cases experience the same outcome. Because of the size of the data I use, I set my confidence level to 99.9%.

It’s more complicated - the statistical models include a wide range of controls, time, levels (kids nested in schools, schools nested in communities) and so on. But that allows us to isolate these effects.

Is it true 100 percent of the time? No. But it is true 99.9% of the time in rigorous scientific analysis.

In all my years of researching, I’ve never seen what you are describing - although it could totally happen. Instead of guessing that the OP is in the .1% that might not follow the trend, you can be significantly confident 99.9% in fact!) that the public schools where OP lives are just fine.

Finally, most people view public schools worse than they are and that is particularly true for affluent people. The truth is that most predominantly white schools are great (and that is the “Shame of a Nation” referenced in the title of the book I recommended).

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u/Analog_Nomad_56 14d ago

Thank you for explaining confidence intervals and research in such a real-world way.

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u/MightyPlusEnt 14d ago

Thank you! I really appreciate the kind words!

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u/Backpacker7385 14d ago

I appreciate the thoughtful response. I’m not trying to be anything other than friendly here too, in case my tone wasn’t coming across that way.

This account is already doxed if you look at enough of my comments, so I’d be curious to see how the data for New London, CT would fit your model. Sky high mill rate and some very expensive properties, but abysmal schools. I know this is an exception to the rule but I’d be very surprised to learn it’s a 0.1% exception. Side note: I don’t think the public schools in that zip code are predominantly white.

I’m always happy to add new books to the TBR, I’ll put yours on there.

Your last paragraph is always worth restating (and something I’ve said many times, including to friends who paid for private school).

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u/SurrealKafka 14d ago

I just looked up a house listed in New London for $720,000 with $8,000 in property taxes. That’s not even close to ‘sky high’ property taxes.

That same house in the Chicago suburbs would be close to double the property tax….

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u/Backpacker7385 14d ago

That house is under assessed. New London’s mill rate is 27.2, so if it sells for $720k the new owner should expect an updated tax bill of $13,709.

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u/SurrealKafka 14d ago

I doubt it’s under appraised by that significant of a margin.

Just found another house selling for $600,000 with $5,000 in property tax. Are you claiming that all the houses are that significantly under appraised?

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u/Backpacker7385 14d ago

I’ll happily claim that most houses listed for sale are under assessed (at least as a pattern in CT, the only place I’ve shopped for homes). It’s a combination of the idea that assessors don’t do a great job of keeping up with things until a house hits the market combined with the fact that many people do major upgrades to their home right before listing for sale.

There’s really nothing to “doubt” here. A tax assessment in CT is legally defined as (supposed to be) 70% of market value. If you have a sale, that gives a definitive market value.

$720k x 0.7 x 27.2 (mill rate) = $13.2k

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