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Private school pupils end up £200,000 richer Watch

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    (Original post by Hal.E.Lujah)
    Don't see why this is a surprise to anyone. Rich get richer. You invest in something it has stronger returns than the people that didn't invest. :dontknow:


    It's a shame but it's a symptom of oligarchical England.
    But as the Telegraph shows, and as my post shows with greater concision and clarity, private school is a loss-making investment.

    So, private schools tend to reduce wealth inequality!

    (Original post by BritishBlu£)
    I think it is a case of the rich getting richer, yes, because only the rich can send their children to these schools.
    Another way of approaching this question is to ask why won't a bank loan parents money to send their children to private schools. Of course some simply couldn't repay the loans, but far more people pay off mortgages than send their children to private schools, so clearly many more people could repay a £100k loan than send their children to private schools. I suggest the answer is that private schools don't actually increase income by more than they cost.

    In turn, Tarquin then puts in a good word for his chum Harold, who gets hired and then later puts in a good word for Priscilla and so forth and everyone is greatly enriched
    Unless all these people are no good, in which case the company fills up with low productivity employees and eventually goes bankrupt. This sort of nepotism simply cannot be important in competitive sectors. One sniff test it fails right away is that there are far more immigrants working in The City than in, say, hairdressing.
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    (Original post by Observatory)
    But as the Telegraph shows, and as my post shows with greater concision and clarity, private school is a loss-making investment.

    So, private schools tend to reduce wealth inequality!


    Whilst I genuinely appreciate such a strong post as the one you linked to, and gave it rep, I feel there is a glaring omission in the end 'value' in education. If you factor that in amongst the returns on the investment then it surely becomes an agent of wealth inequality, mannerisms and adopted interests aside the educational opportunity divide is massive.


    So basically the opportunity cost of paying for education for children is worth it because of the potential greater earnings they can receive independent of inflation, if that makes sense.
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    (Original post by Hal.E.Lujah)
    Whilst I genuinely appreciate such a strong post as the one you linked to, and gave it rep, I feel there is a glaring omission in the end 'value' in education. If you factor that in amongst the returns on the investment then it surely becomes an agent of wealth inequality, mannerisms and adopted interests aside the educational opportunity divide is massive.


    So basically the opportunity cost of paying for education for children is worth it because of the potential greater earnings they can receive independent of inflation, if that makes sense.
    I don't fully understand - whatever benefit mannerisms or clarinet lessons may give is already baked into the £60k figure (as I argued, that figure is probably even an overestimate), while the investment returns I gave were in real terms, i.e. adjusted for inflation.

    One possibility might be for the government to simply give everyone instruction in upper middle class mannerisms. This would be neither expensive nor time consuming, and would make the country a much more pleasant place in general. However, look out for the left's view on that one, because I doubt they'll like it.
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    (Original post by Observatory)
    I don't fully understand - whatever benefit mannerisms or clarinet lessons may give is already baked into the £60k figure (as I argued, that figure is probably even an overestimate), while the investment returns I gave were in real terms, i.e. adjusted for inflation.

    One possibility might be for the government to simply give everyone instruction in upper middle class mannerisms. This would be neither expensive nor time consuming, and would make the country a much more pleasant place in general. However, look out for the left's view on that one, because I doubt they'll like it.

    But those benefits exist outside of inflation; they're an affective risk investment that avoids potential bubbles. That's why Private Schools are still worth it. It's also worth mentioning that Private education costs are usually from disposable income, meaning that the private school candidate can still expect investment packages to be prepared for them.

    That's a strange thought, and one that I'll be mulling over before responding to... :giggle:
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    (Original post by Hal.E.Lujah)
    But those benefits exist outside of inflation; they're an affective risk investment that avoids potential bubbles.
    Investment over the long term should return 3-6% (depending on risk) above inflation. The calculation of the value of savings in my post did not assume low or zero inflation.

    That's why Private Schools are still worth it. It's also worth mentioning that Private education costs are usually from disposable income, meaning that the private school candidate can still expect investment packages to be prepared for them.
    Private school is an investment: an investment in presumed future earnings increases. The problem is, according to this data, private school costs more than the future increase in earnings is worth. Investing that money in equities and bonds is always is going to be better than investing it in private schooling, regardless of whether other money would have been invested in equities and bonds anyway.
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    (Original post by Quady)
    I think its on about gross earnings rather than net. You can probably reduce the numbers by 30% to take NI/income tax into account.
    True - the school fees on the other hand fit comfortably into the NISA limit!
 
 
 
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