When I went to a few campuses as a college speaker, I asked some of the students how much they had to pay for their college university education. Typical tuitions these days were reported to be between $5,000 to $8,000 per year and when you add up other expenses like books and rooming, annual expenses were easily up to $10,000 to $20,000 per year. In the US, tuitions alone were $10,000 to $15,000.
Multiply these figures by three to four years for a typical undergraduate degree and you can see that college and university education does not come cheap these days. In my days, my MBA tuition was only $1,200 per year so education costs certainly have gone up and they are expected to continue with this trend.
So if you have children whom you wish to put through college or university someday, you are looking at an enormous amount of funding that will be required. Although some students can get financial assistance through student loans, these cases will end up having them trying to pay these loans off for the next ten or more years after graduation. One friend of mine claims that her son owes over $30,000 in student loans and he graduated five years ago.
Affording Your Children’s College Education
Even for parents who can afford their children’s college education, the question would be, can they afford this without drastically limiting their own lifestyle?
Traditional investments like mutual funds or even registered education savings plans have been performing poorly for many years. These will likely not be adequate by the time your child reaches the age to enter college or university. Additional funds will probably be required whether they come from extra cash from the parents and/or having the kids work part time.
Other Investment Plans Required
This is why especially for parents, other investment plans are required in order to ensure enough for children’s future college education funding. Funding of children’s future education is one of the main reasons why many of my fellow real estate investors have moved away from traditional investments like mutual funds, stocks or bonds and into real estate properties. Over the long term, real estate has proven to greatly outperform any other type of investments.
Although I’m not a parent myself, I can see why many of these investors went into real estate. The earlier they start with real estate investing, the better while their kids are still young. In time, their real estate holdings will more than adequately put all of their children through college or university without negatively affecting their own lifestyles.
I’ll be writing a lot more about these types of financial issues in this blog since so many people are affected by them. So stay tuned.
