ARBOR WEALTH: Chris Gardner, private schools, and Joel Sonnier
“Little Johnny came home today … said a bully beat him up;
Little Susie had failed her test and felt like giving up.” — from “Field of Love” as performed by Joel Sonnier
Have you ever, like me, marveled at Will Smith’s performance in the 2006 movie “The Pursuit of Happyness?" The story depicts Chris Gardner’s rise from homeless father to his position as owner of his own investment advisory firm. I watched this film again recently, and simultaneously considered some new statistics regarding the widening wealth gap in the U.S., especially regarding educational spending.
The wealthy have always spent more on their kids’ education. And this often includes private school tuition and professional tutoring for standardized tests. But wealthier Americans significantly increased their spending during the Great Recession, or as Josh Boak says in a recent A.P. article, “They doubled down on their kids’ futures.” The top 10 percent of earners average just over a quarter million dollars a year in income. Their per child educational expenses increased by 35 percent during the first two years of the Great Recession. For most middle class earners, though, locked into stagnant wage growth for decades, this was not an option.
The cost of a college education has increased significantly over the last 10 years. And a larger proportion of today’s college students hail from wealthier families, simply because escalating expenses are eliminating attendance by many whose families cannot keep pace with tuition hikes.
Wealthier Americans have always bought homes in desired school districts, and they pay 32 percent more nationally to do so. So millions of American schoolchildren enjoy better facilities and programs in more elite educational institutions because their parents can afford to live in a preferred area.
With all this said, and even considering new spending trends, it’s nothing new. Wealthier folks spend more than their less wealthy counterparts, not just on education, but on housing, cars, food, travel and entertainment. They commit more to saving, and invest more of their income, than do poorer folks, who need every dime just to cover the basics.
Do the children of the wealthy enjoy an educational edge? Absolutely. Is it fair? Probably not. Such is life. Chris Gardner’s trek from homeless single parent to advisory firm principal was much more difficult than that of other investment advisors. Gardner never knew his father, spent part of his youth in foster homes, and was never the beneficiary of extravagant educational spending. But he desired success more than most. He outworked contemporaries who enjoyed better educational opportunities. One of the great tenets of American history is that anyone, with enough native intelligence, passion and drive, can eventually achieve professional goals.
Is it more difficult for some? Absolutely. Can it still be done? Apparently it can.
Margaret R. McDowell, ChFC, AIF, a syndicated economic columnist, is the founder of Arbor Wealth Management, LLC, (850-608-6121 — www.arborwealth.net), a “fee-only” registered investment advisory firm located near Sandestin. This column should not be considered personalized investment advice and provides no assurance that any specific strategy or investment will be suitable or profitable for an investor.