stream of consciousness
I'm looking at setting up a college savings plan for Ben, and I'm freaking out a little. College costs are projected to increase by 7-8% per year indefinitely, whereas incomes typically only increase at 3% per year (just enough to keep up with inflation). By the time Ben is ready for college in 16 years, college tuition will have almost tripled, whereas my income will have only increased by 60%.
There is no way that tuition can continue to increase like that; it will set college completely out of reach for many people.
Ok... quick calculations. The good news is that, if I am disciplined about putting away 3.75% of my income and Bailes does the same (assuming that we both have the same conservatively-estimated incomes) at a 4% annual interest rate, we can save about 60% of his total college costs before he starts college even if he attends Harvard. If he chose a more moderately-priced school, we would have more than enough to cover his total college costs by that time. I feel better.
There is no way that tuition can continue to increase like that; it will set college completely out of reach for many people.
Ok... quick calculations. The good news is that, if I am disciplined about putting away 3.75% of my income and Bailes does the same (assuming that we both have the same conservatively-estimated incomes) at a 4% annual interest rate, we can save about 60% of his total college costs before he starts college even if he attends Harvard. If he chose a more moderately-priced school, we would have more than enough to cover his total college costs by that time. I feel better.