Tag: T_topU

I never buy iPhone #branded uni

Posted on by tiger40490

iPhone is a poster boy of a class of products that I always say NoThanks. Similarly

  • latest laptops? I buy the reliable low-end models. The one luxury feature for me is touch-screen! A less luxury feature is low-weight.
  • branded pianos
  • fancy big homes with low rental yield
  • luxury college degree? Instead of NoThanks, I did pay for one at UChicago and learnt my lesson.
    • I will limit the topic of college, as it has the tendency to dominate this blogpost 喧宾夺主.
  • luxury cars .. a different category. Safety and quality !

I think the FIRE community of the U.S. would endorse my NoThanks.

— value/price ratio:
A common feature among these cases is the existence of an alternative offer at a fraction of the price.

I define my notion of quality and value (usually including durability and reliability) and I always find these “iPhones” extremely un-competitive in terms of value/price ratio.

By far the biggest case is luxury college. I have many blogposts about the quality question.

— show-off
another common feature — the manufacturers of iPhones spend huge amount of the marketing dollars creating an impression of superior quality, innovative features and sometimes exclub status. Many buyers really fall for it and buy these things to show off.

With the college choice, show-off is a key motivation, but things are more nuanced. I have blogged about the nuances.

As I age, I see more and more similarities between branded college and branded clothing, branded phone etc. The “consumer” here is the parent. East Asian parents spend very large amount of disposable income on these status items.

— FOMO: With iPhone, I feel my wife and other people are often driven by FOMO.

Many parents fear that an unbranded college means their kids are handed a second-best “ticket”. They fear their kids will pay a price in adulthood.

overpriced property market: homeOwnership,sdxq..

Posted on by tiger40490

In overpriced markets like Beijing, rental is relatively underpriced and represents a real bargain. However the Chinese doesn’t perceive the bargin in a positive light, due to a deep, long-held preference for ownership, as an essential basis of security, achievement, social status.

I feel it’s an irrational bias, although I could be biased.

How about sdxq homes? Poor bargain in terms of rental demand and commute

How about Ivy League colleges and UChicago? Poor bargain, according to Kyle.

In all of these cases, mainstream preference is NOT an accurate reflection of the correct priority in my situation. It’s crucial to honor my own preference (and wife’s) rather than other people’s preferences.

few]%%cohort have global branded degrees→迷恋

Posted on by tiger40490

In their 20’s, China was much poorer than now, so very few could afford private colleges overseas. Due to competition, few could get a scholarship to a branded college overseas, so they have to settle for a lower-tier colleges overseas.

After a certain age like 30, a low single-digit percentage would see enough justification for the high cost of a branded degree.
Most of the Chinese peers already had a postgrad degree in their 20’s. Hard to justify another postgrad degree.

If they were unable to earn a global branded degree, then I think that’s one reason so many of them have unrealistic evaluations of a branded degree.

##[19] big discretionary spends 4中产华裔

Posted on by tiger40490

Original title “big discretionary spends4Chinese middle-class]US”

Trigger: If I benchmark with those earning 200k, my wife and kids would want vacations to Japan, Europe… When I tell them “not necessary”, they might feel impoverished, right? (It’s again the struggle between FOMO and livelihood.)

Not sure. Useful to zoom into the biggest discretionary spends. Figures below are monthly outlays.

Deepak CM pointed out that the immigrants middle class leave their home countries and come to the U.S. to live a “better” life. “Better” means discretionary spends.

I arrange the monthly amounts from big to small. This analysis is similar to Melvin3, and different from the “amortized” calculations.
[M=part of Melvin3 US^sg]

— [M] USD 3k->5k-7k/M : mortgage P/I + pTax.
They would want a bigger home. I can accept a small home, but prime location!
Wife may want a top school district.

— USD 5K/M/child (60k/Y) for a branded college
CSY’s son has a 60k/Y college fee (similar to Ivy League). 50% paid by parents i.e. 2500/M. With such additional burn rate, my idea of “lower stress, lower pay” easy job is impractical.

— [M] USD 1k/M (minimum) luxury car. Figure is TCO including amortization and depends on usage.
They might want a brand new car, not pre-owned.
In Singapore, I have debates about the need for a private car. In U.S., the debate is about how many cars and how big.

— USD 1k/M/child enrichment, special training? Not sure how prevalent. Figure varies a lot.
— USD 0~2k/M/child private school? Not prevalent.
— smaller items.. lifestyle creeps:

  •  vacations? Not sure how prevalent
  • family outings, dining out
  • sportswear? very much discretionary.
  • electronic gadgets
  • musical instruments
  • photography
  • toys

designerLabel≠2x better Quality

Posted on by tiger40490

Many Asian parents are not affluent enough to choose luxury designer labels but they act differently when it comes to college selection.

These middle-class parents don’t have 5 million net worth that enable them to afford a 250k “designer label” college education where the quality thereof is only marginally higher. However, the stereotypical Asian middle-class parent often chooses to spend like the upper class on education. They go for the most luxury they can afford.

“Prestige” is Kyle’s term. I call it “branded” as it’s similar to any /luxury designer label/. Designer labels marketing message usually includes something like “Yes we are priced well above the second tiers, but quality is what you get.”

Some Asian parents seem to consider branded college as 5x the quality of a 2nd tier college. Is that true? At a branded university, quality of education is often superior but there’s no objective numerical multiplier like “2 times better”. Spent 250k on top college but your kid outshone by colleagues is my most elaborate illustration of the quality paradox.

Even though as an insider I know the quality of education is similar between NUS, UChicago or other colleges where my colleagues studied, I feel a deep fear that sending my kids to the smaller brand could damage their future.

  1. transportation tools like Cars are the #1 best example of prestige translating to quality, due to heavy wear-n-tear.
  2. Building materials also have substantial differences in quality.
  3. furniture has quality difference.

Pattern: the more physical/mechanical something feels, the more I believe in its quality. For learning, 达者为师. Best books are freely available.

Best teachers are often at lesser-known colleges. So if a lesser-known college employs the real leading experts in the field such as Doug Lea, Stoustrup, John Hull or the 古典文学专家 in 北师大, then parents get a better bargain in those colleges, in terms of access to teacher.

I feel my friend CSY is trapped in a rabbit hole, unable to take a step back.

branded uni %%insider advantage #Kyle,Sofia

Posted on by tiger40490

A related ROI — gauging value@branded degree: a top-5 ROI@UChicago

One of the top 3 advantages of an insider — reduction in hazardous pressure to save up and push my kids for a branded college.

As Kyle pointed out, if we had not gone to UChicago or Columbia, I would have accepted the brainwash/propaganda and believed that branded colleges enrich a graduate’s life. Even with this first-hand experience as an insider, I still find it hard to resist the peer pressure from fellow Chinese parents. If I had not gained this insider insight, how much harder would it be? I would say impossible to avoid the brainwash and accept that these prestigious research powerhouses is actually poor value for money in terms of undergrad education.

Statistically, both Kyle’s career and mine count as two data points to support a high correlation between college prestige and career. However, if the survey asks me a binary question “Has your prestigious college education enhanced your career significantly?” we would say NO, but this crucial data is lost in the official statistics.

— saving 百万.. In 2021, I told Sophia that one tangible gain from UChicago is the insider insight. This insight would help me save a huge amount (USD 500k+) on college.

The reality — U.S. top colleges are affordable only to the rich[1]. I know I’m not that well-off, so this saving will affect the quality of our family life [影响生活质量].

[1] For a modest family to get any scholarship from a Tier 1 college, you  have to compete with thousands of applicants and be really special. Selectivity is one in thousands. )

–I wrote to Kyle–
I feel both you and me have an insider’s assessment of the intrinsic value of a branded college — We know it is overvalued and not worth the money.

Similarly, there’s overvaluation of advanced financial math, including stochastic calculus. A few of my professors said as an insider’s advantage, they have a better appreciation of the limitations in the mathematics.

branded uni@@ #YH

Posted on by tiger40490

I feel at least half the Chinese (and Korean, Indian, Russian) parents in the U.S. seem to target the ivy league or other famous colleges so as a result they greatly increase the competition.

My wife and I don’t have the financial resources (like half a million), or the appetite or the time/energy to engage in this competition. Sometimes it feels a bit like a rat race…

If my kids are close to that academic standard then yes I will endeavor to help them grow towards it and hopefully get into a decent college, if not a famous one.

FYI I have a master’s degree from University of Chicago, on par with ivy league in terms of reputation and academic standards (with more Nobel laureates than most ivy league colleges)

I feel famous universities are like medical schools, sports cars, designer whey — designed for the rich and the image-conscious. In terms of quality of education, a lesser-known national top-100 college can be comparable and decent.

Crucially, many bright students accept a scholarship offer by a second-tier quality colleges (like SBU) after a cool-headed value/price evaluation. Their families recognize that branded colleges are, like branded clothing, only marginally better in quality. As a result, top colleges don’t have real monopoly on talent. Other colleges produce many successful graduates.

branded uni: best$value plan #Kyle

Posted on by tiger40490

Kyle believes college prestige does matter to job seekers, not only because of campus recruitment. Based on his belief, he wants to find a best value for his future kids — a low-cost college with good prestige.

Q: what level of prestige?
A: he said top 50 or lower by U.S.News ranking, which is based on nothing but professor research.

This prestige is not related to quality of education. I then told Kyle about Grace Dong’s experience at PACE. Peer influence from fellow students is a big part of quality of education. Obviously top colleges have more motivated, brighter students.

He stressed repeatedly that he didn’t want to send his kids to Ivy league. I think this is similar to my habit to avoid branded clothing. However, I would still send my kids to a branded college if I can afford it, because it’s no worse than an unbranded college.

Lateral thinking —

  • internship — is important for my son
  • Geographical location of the college is possibly more important than prestige. Some 2nd-tier colleges in NYC get many campus recruitments from Wall St
  • Q: how about sending my kids to Singapore universities?

250k gift4kid: branded uni tuition^tiny property #H.Y

Posted on by tiger40490

I like YH’s question.. practical question — “When my son goes to college, Should I cash out the RegoPark studio to help him pay for an Ivy-league degree, or let him keep the property?”

YH feels the cash-out route is not great ROI. YH felt that with a prestigious degree his son may be able to earn a bit higher, but those kids from lesser-known colleges also have some opportunities, possibly fewer. The house, if not sold, can help relieve the housing pain when he starts working in the tri-state region.

The house may appreciate over 4 years.

https://tanbinvest.dreamhosters.com/2019/01/07/spending-250k-on-top-college-but-your-kids-arent-more-success-than-his-colleagues/ is a blog I wrote on a related topic.