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Old 05-14-2017, 11:15 AM   #61
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Home Equity Loan was an answer to her query about how her tuition is being paid since stafford only covers 5-7K out of 30K tuition bill per year. Her follow up question was 'What happens if we do not pay back?' and my answer was that we lose this house. Thats it - One time conversation where my other two kids happened to be there so they heard it too. She said that would be bad and that was it.


I know you're sensitive about this but I think it's unethical how you've positioned it. Surely there are other ways to make children have a skin in the game without resorting the deception. As parents, children watch everything we do and say and often
the values they display as adults is a reflection of what they learned from their household.
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Old 05-14-2017, 12:49 PM   #62
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Originally Posted by retire2020 View Post
Home Equity Loan was an answer to her query about how her tuition is being paid since stafford only covers 5-7K out of 30K tuition bill per year. Her follow up question was 'What happens if we do not pay back?' and my answer was that we lose this house. Thats it - One time conversation where my other two kids happened to be there so they heard it too. She said that would be bad and that was it.
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I know you're sensitive about this but I think it's unethical how you've positioned it. Surely there are other ways to make children have a skin in the game without resorting the deception. As parents, children watch everything we do and say and often
the values they display as adults is a reflection of what they learned from their household.

You gave a rant to people who took exception to your way of paying for your kids college... but I will comment anyhow....

I am with Letj.... actually LYING to my kids is not something I will do... I have brought them up to always tell me the truth no matter what.... that if I find out they lied to me the punishment will always be worse than if they told the truth.... so far it seems to be working... my daughter lied to me earlier this year about one of her friends.... I felt she was lying and when I found out she got the boom lowered on her... if she told the truth nothing would have happened except for me asking a few more pointed questions and trying to teach her something...


So, you can be as upset as you want for people making comments about your methods, but I agree with them and think your method is bad... especially when the kids learn that you lied.... unless of course you do it all the time and they already know...
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Old 05-14-2017, 12:55 PM   #63
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Telling the truth after the fact and admitting your initial approach wasn't the best after thinking about it, can still teach a positive lesson to your kids. Just a thought.
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Old 05-14-2017, 03:14 PM   #64
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Ok, some disagree with Retire2020's approach. It's his approach, move on.

For me, if presented with the pure Q & A, would I delay RE to be in a better position to help with my kids' grad school cost.... maybe, but my situation is different.

- I'm in my late 40's, targeting ER at 50 so the option may be easier to work longer for extra $$$
- My job is about the same, I could walk out any day if the BS bucket overfilled
- Due to current age of my kids, they would not of started college when I ER
- I rec'd very little help with my undergrad expenses, i.e. one time gift of $100 dollars
- I worked full time and full time student (prefer my kids to not do this)
- I worked full time for 4 years after undergrad and leveraged employer benefits to cover 2 grad classes per term. They paid for 2 grad degrees over 3 years.

I have extra $$ targeted at helping with first new car, wedding, home down payment, and emergency. They are fixed amounts, not blank checks. If grad school is more important (also depends on the career/major), then I might help. None of this have been discussed as they are too young except for the desire for them to go to college.

As for OP's question about employer 401k or move to IRA. It depends on the investment options and expense. I have done both, but am fortunate to have several former employers 401k at Fidelity, so it's not too bad. I've consolidated investment money to three, i.e. Vanguard, Fidelity, and TDAmeritrade. I need to focus on consolidating the excessive checking accounts, but that was due in part with real estate and managing expenses.
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Old 05-14-2017, 04:24 PM   #65
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I didn't say anything wrong with it.
Good! Because there indeed isn't anything wrong with it........
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Old 05-14-2017, 07:56 PM   #66
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OP here, thank you everyone for you thoughtful responses, advises, and sharing your personal experience/plan on this topic:

While I totally agree with letting the kids to have skin in the game and it is a great lesson for them to manage their finances. However, it makes me feel good to help out. I learn this from my mom who was a single mom and had scarified all her life for us to have a better life then her. Happy mother days to my late mom and all the moms out there.

As mentioned, I've told my children that I will fund their 4 yrs (in state) colleges and they will be on their own after 4 years if they decide to continue. (In oldest child case, it will be ~$200K in loans). I plan to take half of the college funds of the 2 younger kids and loan it to the 2 olders, so the older ones will have part of their loans interest free.

Obviously, the risk is that if they won't finish their grad school and/or won't pay back the personal loans. And to provide an insurance for this risk I can do OMY or 2MY as some has suggested. Beside I would like to have some paddings to my FIRE plan, I feel kind of nervous to pull the trigger when none of the kids are yet to launch.



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Old 05-14-2017, 08:23 PM   #67
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Good! Because there indeed isn't anything wrong with it........
Maybe to you. But everybody has their own opinion on this. I personally believe the parents should be responsible for it. My husband and I refused money from his parents when it comes to schooling. That was our responsibility.
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Old 05-15-2017, 06:15 AM   #68
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OP here, thank you everyone for you thoughtful responses, advises, and sharing your personal experience/plan on this topic:

While I totally agree with letting the kids to have skin in the game and it is a great lesson for them to manage their finances. However, it makes me feel good to help out. I learn this from my mom who was a single mom and had scarified all her life for us to have a better life then her. Happy mother days to my late mom and all the moms out there.

As mentioned, I've told my children that I will fund their 4 yrs (in state) colleges and they will be on their own after 4 years if they decide to continue. (In oldest child case, it will be ~$200K in loans). I plan to take half of the college funds of the 2 younger kids and loan it to the 2 olders, so the older ones will have part of their loans interest free.

Obviously, the risk is that if they won't finish their grad school and/or won't pay back the personal loans. And to provide an insurance for this risk I can do OMY or 2MY as some has suggested. Beside I would like to have some paddings to my FIRE plan, I feel kind of nervous to pull the trigger when none of the kids are yet to launch.

Thanks
Congrats to you, you have raised 4 well adjusted hard working kids who value education, that is a huge accomplishment. Young adults with this kind of motivation will be able to figure out the pitfalls of financing masters degrees. IMO you'd be paying them a compliment by assuming they can figure it out themselves.

If you really want to retire, go for it. Perhaps throwing master's degrees in the mix is just you being not ready or nervous about pulling the trigger and finding reasons to keep working.
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