A Vicious Circle

It has begun – and it’s relentless.

It happens at nursery drop-offs and pickups. At playdates and playgrounds.

At birthday parties and barbeques. And anywhere else where you might be unlucky enough to bump into an acquaintance with a child who turns 5 next fall.

“So, where is your daughter going to school?”

The Days Are Long…

…but the years are short.

Whoever came up with this was spot on.

Four years have flown by. In September of next year, our little girl needs to go to school. Cue in the eternal debate on state vs private schools.

It may be a function of living in Chelsea, but there seems to be a torrent of anguish and anxiety that has taken over the brain of every single parent within a five-mile radius.

The reason is simple. Everyone signs up to 5+ private schools when their children are born. As a result, most schools are 5 times oversubscribed. Pure math, nothing surprising here.

But instead of letting things shake out in a natural way (no, kids haven’t yet figured out a way to go to more than one school at once), panic ensues.

Short of putting up tents outside the school gates, freaked out moms and dads are resorting to every possible strategy to improve their offspring’s chances of getting into the “right” school.

There are stories of trying to “network” one’s way into a connection with the headmistress. Expressing eternal love for the school in monthly (!) letters, which also happen to provide a detailed download on little Emily’s stellar abilities.

Regularly dropping off cookies while “checking in” on the latest developments at the said school.  We’ve even heard of parents who offer to make sizeable monetary donations, all in the hope of getting a chance to sign up for a £20k+ annual expense for the next 15 years.

What gives?

The Wrong Crowd

My wife and I are somewhere between curious observers and reluctant participants in this whole process.

After some reflection, we’ve settled on a strategy that works for us. There’s a decent state school not too far away so we’ll play the catchment area lottery to see if we can get in.

If that doesn’t work, private it is. The good news is that there are a few excellent private schools nearby.

The bad news is that every tiger mom and alpha dad in the neighbourhood seem to have those same schools at the very top of their list – hence moving us to the reluctant participant category.

I’ll spare you the details of the assessment process – and the lengths some parents go to in order to prepare their children for it.

Suffice it to say that we refuse to make every detail of our daughter’s life about clearing the subjective bar set by people who should know better. Life is too short.

What I find truly fascinating, however, is that for many parents, the quality of education their child is going to get is at best a secondary concern in this whole process.

“This is the same school Prince William went to”

“Claudia Schiffer took her son there”

“Did you know that Hugh Grant is an alumnus?”

It took about five minutes to get a full download on Wetherby’s storied history from one of the dads in the playground when he found out our second child was going to be a boy.

I’m not sure what I was supposed to make of those factoids. Make a desperate dash for the headmaster’s office, begging him to give our yet-unborn son a spot? And if so, was it the Hugh Grant story that was supposed to seal the deal?

Yes, I watched Love, Actually a long time ago. No, that doesn’t qualify old Hugh for a spot on the list of role models for our son. Based on what I know about Hugh, I hope he never makes it on to that list.

Another day, another playground, another dad:

“We took our daughter to a birthday party and there were two Goldman MDs there”

“One of the parents is a senior partner at CVC”

Once again, I’m intrigued as to the inferences I am supposed to make here.

Do Goldman MDs happen to produce uniquely intelligent offspring?  And do birthday parties take on a special meaning when attended by someone from private equity?

Signaling Virtue Status

Now, having only lived in the UK for a decade, I won’t claim to understand the path to breaking into the “aristocracy”.  Far from it.

What I do know, is that at least as far as investment banking recruiting is concerned, the primary school you may have gone to makes zero difference.

Things that do make a difference are:

  • Having gone to a half-decent uni (the Russell Group will do just fine)
  • Having great grades (First class if you can swing it, otherwise a 2:1 will suffice)
  • Solid A-levels (ideally, you’ve got a few * in there)
  • Most importantly, displaying a solid work ethic and good judgment.

That’s it. There may even be a slight bias against candidates who are perceived as having come from well-to-do families.

You want to hire someone who will jump at the opportunity to work 100 hours a week and make money, not someone who will run back to the family compound after the first all-nighter.

I’ve also seen very little tangible evidence that sending your kids to the “right” school is a good way to get a leg up in your own career.

No, the Morgan Stanley MD won’t offer you a job just because your wife organized a great birthday party for the children.

The FTSE 100 CEO won’t care that his daughter is in the same class as you.  Chances are, you probably won’t even meet him as he’s always away on business.

Hugh Grant won’t get you a role in his next movie, and Claudia won’t ask you to cooperate on her next venture just because you bumped into them at parents’ night.

Now, there are reasons all of the above might well happen.

The Morgan Stanley MD might well offer you a job in case you happen to be at Goldman and have a loyal client base that will follow.

The FTSE 100 CEO may well want to meet you because you are a McKinsey partner with fantastic insights about his business.

And Claudia just might want to collaborate – but only because your name is Victoria and you happen to be running a successful fashion label of your own.

The people that matter know this. The schools also know this but continue to perpetuate the narrative. Hey – they’ve got to make a living.

Granted, many folks view private schools for what they are – likely a better educational option for their children, especially in areas that lack decent state schools. A big financial outlay, compensated with tightening those budget screws elsewhere.

True cost of private school

And yet, for many others, expensive private education has become yet another status symbol.  Instead of buying a Ferrari or a Rolex, they flaunt Glendower Prep and North London collegiate.  In the never-ending status arms race, the stakes continue to rise and are now well into millions of pounds.

Unlike a real arms race, this one doesn’t pose any immediate danger.  But anyone taking part should remember that it was ultimately the arms race that finally bankrupted the Soviet Union – and brought it to its knees.

Don’t let the same happen to you.

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21 thoughts on “A Vicious Circle”

  1. This post made me chuckle, it wasn’t so long ago I experienced those same discussions about those same schools.

    One thing you’ve missed is that the “prize” (such as it is) is the social network the child grows up within.

    Arms race was a good way of describing it. There are hundreds of “perfect” candidates for those rare internships at Goldman or the summer work placements at Apax Partners when these kids are a bit older.

    However your kid only manages to actually land one of them, because one of their classmates’ parents has known them since they wore short pants and calls in a favour to open the door.

    Those without that access don’t get a look in.

    For those already on the inside it is easy to overlook the survivorship bias element of how people got there. What they do with the opportunity from that point onwards is largely up to them, but their chances of bringing in business are certainly improved by the old school tie network they have graduated into.

    Not a guarantee of success of course, but to those parents of the 4 year olds it is table stakes for the chance of entry into that world.

    Later in life, when you need held getting a big tender over the line or a favourable ruling from a regulator, it helps a lot if you went to school with the relevant minister or someone who has influence with them.

    Not how the world is supposed to work, but it is the world we live in.

    Good luck with the decisions, I hope your kid is happy at whichever school she attends.

    1. Thanks indeedably. It’s not the most enjoyable process but we are pretty level-headed about it.

      The thinking is that our daughter already has a massive leg up in life vs where my wife and I started, and we are pretty happy with where we had gotten to without expensive private schools etc. No need to stress her out at the age of four.

      I agree there is some advantage you get from being in the right social circle but I doubt whether “table stakes” are worth it once you probability weigh them. Sure, one MAY benefit from an improved social network – but how many elementary school classmates people hang out with for the rest of their lives? And who is to say your kids will even want to get into banking or become industry titans?

      Equally, why not remove the pressure for your child to become an overworked banker/consultant/private equity investor by investing the money instead and giving them a substantial monetary head start in life?

      Yes, teach a man to fish, etc. but there have got to be ways to instill discipline in your children without beggaring one’s family.

      1. I completely agree.

        One of the main reasons I chose the state school route for my kids was I wanted to define their baseline for what was “normal” at a reasonable level.

        The rarified world of private jets, summers at Como, and winters at Zermatt is lovely for those who can afford it. But imagine being the kid who grew up in that world, then discovering you lacked the ability to earn at the levels required to sustain it for yourself as an adult. That is a lifetime of disappointment right there! Not an issue for those who consciously choose that path for themselves, but for the others… ouch!

        Many of the parents who sign themselves up for that regime of private school fees (that will cost the equivalent of a paid off mortgage, per child) is they want to keep that door open. Their child may choose to become a school teacher or a firefighter, but if they did want to become a banker or a consultant then it is a viable potential career path.

        Yours and my experiences both demonstrate that it remains possible to do it the hard way.

        1. Spot on. And imagine the disappointment if your child cannot even afford to join his / her classmates on those trips to begin with.

          Good thing about hard things is that they also happen to be much more enjoyable, at least once you’re done with the hard part 🙂

  2. In the end, we went with what you call the state school; we happened to get lucky with our catchment though that luck runs out in a couple of years with high school. We were torn and considered a private school because with state schools, its hit or miss if you’ll get a good teacher (every year). For the most part, we’ve been lucky, but we’ve also gotten the short end of the stick in a teacher who literally had a mental breakdown in class (we essentially lost that year).

    The second reason we were torn is that with private schools, you as a parent can hold them accountable for the quality of the education. That is, unfortunately, missing in a state-run school (at least at the same level). It’s a hard choice, and as you put it, a very expensive choice. Unfortunately, it’s a decision that we might still have to make – the quality of education is important after all.

    1. Sorry to hear about your experience with the teacher. Hopefully doesn’t happen again.

      Broadly speaking, this is how we are approaching the dilemma as well. If we get into a decent state school, away we go. If not, time to whip out the credit card.

      Will put a dent in the family budget (and push out FIRE by a few years at least), but as you say, getting a good quality education is important. We are not too fussed about the other private school advantages (i.e. status) but will not budge on this one.

  3. I live on the other side of the channel. Things rings so true for us, seems our kids are of same age.
    I had to get my child to a very expensive private daycare, so much so it was killing us. The worst part, it was not because we wanted to but had no choice as our city could not guarantee a place in a public one.

    Its three years there, luckily my current employer covers that bill, I see it being an exclusive place. Maserati, Porsches and Tesla’s are common while we stick to public transport and occasional rental for drop offs. In the past years I have not gotten to know many of them, nobody really wants to engage in these places. Maybe us being brown immigrants makes it harder, who knows.

    Next year we need to decide if he goes to a public school or a private one, our decision will not be based on the company but rather our potential future state and if we will stick around to Germany or move elsewhere.

    1. That’s the other aspect of it – let’s say your child gets into a school where you are “punching above your weight”, financially speaking. Easier for parents to overcome, being older and having a clear set of values. Much tougher to explain to your children why they cannot go on that class trip to Switzerland or have the same kind of birthday parties as their friends.

      And so continues the cycle of consumption and keeping up with the Joneses.

  4. Dollars and Drams

    Schools are less about education and more about status. Get into the best school so you can say you went to the best school. This is true for students, and, unfortunately, this is the case for parents as well. By having children that attend the best schools, their self-perceived status as good parents immediately elevates. The whole educational system is full of politics.

    1. “Self-perceived” being the key word here.

      It’s like driving an expensive car. No one (but the owner) admires the driver, they admire the car.

  5. I’ve not long finished paying prep school fees for my two (lucky enough to have a grammar for secondary). If I knew then what I know now I would’ve invested the money in a BTL for them instead. The only significant benefit was the range of sports teams/matches, would’ve been better-off in the state sector with some private tutoring when needed.

    1. Similar to Raj, I’d love to hear the specifics.

      I’ve also heard that some folks take their children out of private for secondary and use the money for tutors instead. Apparently unis fall over backwards when they come across state school students that walk and talk like privately educated ones.

      1. I’ve heard the same, but not yet sure if this is an urban myth or not.
        In terms of academic return on investment, tutors are where you get the big impact. It was painful for me to start with them in y5 on top of school fees but they did wonders for my kids’ confidence and results.
        Two final points I’d make, firstly my friends all agree that ‘customer service’ is better at private schools, if you’re unhappy about something those schools are motivated to resolve your problem, and this is worth something. On the other hand, remember that fees only ever go up (Covid aside) and by comfortably more than inflation (one year our school announced an 11% hike), so be sure you can cope with this over the next x years if that’s the route you want to take.
        Ultimately, I paid for private school because my parents had for me, and I felt parentally obligated. However this was an emotional decision, not a rational one.

        1. Great points. I think few people appreciate the true impact of inflation. Firstly, the fact that one’s parents were able to afford private school doesn’t mean that will apply a generation later, with school fees and earnings growth compounding at drastically different rates.

          And then there’s the fact that the fees you are paying will likely double by the time your child finally leaves for uni. If your earnings don’t rise as quickly, you will get squeezed.

  6. @Rob – did you not find it gave them a good grounding ? We are facing the same dilemma (daughter is 3) and those that advocate prep schools say that these schools are at least a year ahead of their state counterparts.

    1. I think (just my opinion) that it’s an ‘apples and pears’ comparison. Academically there’s no advantage outside of smaller classes (no difference in the quality of teachers), so if you’ve got the time to help with homework and can fund tutors as needed then there’s no (academic) disadvantage.
      Everyone’s situation is different, but I’d recommend making a decision based on objective facts rather than feelings of parental obligation/guilt.

  7. I went to private school and think my dad was a bit miffed when I said I couldn’t see the point. He was definitely at the ‘only just wealthy enough to afford it’ end of the spectrum. For me as you say salting money away for her to give her choices is a much better use of my money in my opinion.
    We’ll move to a better catchment area if we have to. I’m hoping by the time she’s five ill be 45 and pretty much fi other than my mortgage which is optional to me

    1. My boss on the other hand is sending two of his children to the oratary. Even with a scholarship I can’t see how he can possibly afford it (he and his wife probably earn 100k between them.) He’s definitely impoverishing himself to do it. At least if I did it now I could do it without it impacting on my own retirement

      1. It’s a tough one. As you say, even if you don’t impoverish yourself, it still makes a meaningful difference to the ability to retire early – and spend quality time with said children (who may or may not want our company by then)

  8. Thank you for a good article. Given that per child a private education can cost £200k+ after tax (£300k+ pre tax), and your liquidity is constrained you greatly increase the date of your retirement, your exposure to the risk of losing your job and the risk of marriage problems. The simple solution is to move to be near good state schools. With 3 kids at state / grammar schools my retirement number is £1m lower than it would otherwise be, with a lot less stress.

    1. Fully agree. We live near a v. good state school but the catchment area has shrunk rapidly, so unclear whether we will get in.

      If not, the “number” goes up materially!

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