Last class, we finished up our Ivy League Debate projects. As expected, all of the groups held a similar standpoint on the matter. If you are taking out loans for your college tuition or your parents are giving you the difference of going to a cheaper school rather than an expensive one, then it is not worth it one bit. All of the presentations gave evidence that attending a cheaper "non-top tier" college instead of an Ivy could save you several million by the latter part of your life. The one (and rare) situation where there might be an advantage to going to an Ivy League school is if your parents covered the complete cost of school's tuition. In this case, the only deciding factor for picking your college should be the average starting and median salaries coming out of those schools. The majority of Americans are not financially blessed enough to have their parents pay their full tuition though. In fact, according to this article (http://www.thecollegesolution.com/stunning-how-many-are-borrowing-for-college), The New York Times found that 94% of college students earning their bachelor degrees take out student loans!
In Mr. Hallam's article, "Millionaire Teacher Sells %50,000 of bonds (http://andrewhallam.com/2011/08/millionaire-teacher-sells-50000-dollar-of-bonds/), he teaches us by example how to diversify your investing portfolio. One of the basic rules he teaches is that your bond percentage should be similar to your age. The reason for this is that bonds are generally pretty consistent, they never have steep falls or increases. So as a person reaches retirement, usually around 60 years old, more than half of their investment portfolio should be bonds, since they don't want to risk losing their savings before retirement. Another important lesson Mr. Hallam teaches us is that we shouldn't have our portfolio dominated by one of the three indexes (U.S., International, and bond). So if one of Mr. Hallam's indexes gains, what he'll usually do is sell enough of those funds so that he can use that money to purchase more for the index that is falling.
Look at this picture. It shows that over a 5 month span, the Canadian Stock Market fell quite dramatically but the Canadian government bond index. That's proof that bonds are usually more consistent.
My sister is a prime example of the Ivy League problem. Last year as a senior at SAS, she was accepted to several schools, including Cornell University. This was probably her first choice because the Cornell has a great school for the area she wanted to major in: Human Psychology. The one problem was that Cornell was the most expensive by quite a bit. They also offered her the least in scholarship ($5,000). Heather decided to go to another school, Furman University, which is a private school in South Carolina. Although that school is expensive too, it costs less than Cornell and she received much more in scholarships. She doesn't regret her decision one bit and loves it there. It would be interesting to find the starting average salaries of those two schools and see the possible reward of going to Furman.
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