Hey friends,

What do Public vs Private Schools and Expensive Cars and the K-Shaped Economy have in common? This topic generated some buzz on social media, so I’ll be interested in your comments as well. Read On.

Also

Eddie

People love to get all worked up about kids going to private school.

They’ll say “oh mummy and daddy must be so rich, they’re so lucky”.

And they sort of hate on you for it.

But then I’m driving home from daycare and I pass the public school parking lot and I see a $100,000 truck, fully loaded, and then an Escalade behind it.

$100,000 car basically means a $1,500/mo car payment for 84 months.

It is sad to see so many people stretching themselves to get into something that is way and beyond out of their budget while sacrificing in other arguably more important areas of their lives.

They’ll say they can’t afford to invest, or send their kids to private school meanwhile they book three vacations each year and have two luxury cars that sit idle for 23 hours a day and depreciate.

This is why there is a “K-Shaped” economy. The people that didn’t learn about money as kids grow up and make choices based on shortermism. They spend precisely what they earn, and more, and worse, buy material goods that turn to waste or depreciate. The top half of the letter lives below their means by forgoing certain luxuries and buys scarcity (think stocks, real estate, bitcoin, gold).

See it for yourself. Start looking around and wonder what lifestyle choices people are making. You will start to recognize patterns, much of it is there for you too see. Then think to yourself, is that what I want for me? My kids? My friends?

Of course, a $100,000 car isn’t automatically a bad choice. A small portion of those cars are owned by truly wealthy people that can afford to make that choice, good for them, they work(ed) hard for it! But only a small % of people are actually rich so the math doesn’t quite add up when you see such an immense amount of premium vehicles driving around.

I went to private school and it was wonderful for me. My parents worked hard and didn’t overspend on frivolity. They chose us, and for that we are so grateful (hope mum and dad read this one :).

By the way, I’m all for public schools. Especially in my area, they are top notch. Lots of friends that went to these public schools that are doing super well in life.

My kids will likely go to private school too. It is not a necessity, given the quality of the public schools where I’m from. Depends on the kid really. Essentially, to me, a lower student / teacher ratio is the main win.

According to google (yes i still use google!), the most common reason behind electing a private school is this: “While academics are important, safety and student behavior are typically the primary drivers for abandoning the public system, with parents seeking smaller, more controlled environments where they have more influence and closer communication with staff.”

Whatever route you go (school, cars), just make sure the choice is something that adds value to your family, not the other way around.

These are just some of the money lessons I will be teaching my kids, Julia and Andrés. Just like my parents taught me.

PS here is the video I posted.

You can either let your money burn away to inflation, or invest in the stock market.

Past performance isn’t indicative of future results, but over time, stocks do pretty well.

I will be at the Edmonton Real Estate conference next week. These events are hardcore networking events, I will be connecting with various people that we have and are continuing to do business with, visit our investment properties (450,000sq ft, mix of industrial and retail), attend a full day of presentations from industry experts presenting their views of the real estate world, followed by cocktail parties and dinners. I will also be touring a 230,000sf industrial opportunity on my way in from the airport. All important elements of playing the real estate game!

“There is a difference between I will and I want.

Even if I don’t want, sometimes I will.

But if you want, I will for sure.”

—me, discussing with Mj who is going to do bath time.

We learn from our parents and grandparents and we then teach our own kids. What are some of the key priniciples you have brought from childhood / are focusing on with your (future) kids?

I ask because as we look around downtown see the sad explosion of homelessness everywhere…mental health, lack of resources, economy, fill in the blank…

A story that I always remember about my Grandad Eddie H. Gudewill is that he would drive his boys around town and if he saw a homeless person on the street he would point and say “Boys! That’s how you’ll end up if you don’t get a good education”.

This is not a public v private debate. I think good education starts in the household and so talking about values and being present and having fun and teaching kids alongside their development in schools is crucial.

No guarantees where they’ll end up despite our efforts, but as the old adage goes, give it your best shot.

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