How would you answer this question? 


Is it a Yes, believing that RM 1 Million is a necessity to provide your child a head start in life? Perhaps, you may opine that the amount needed is a lot more than RM 1 Million and it is worth investing into it. 


Or, is it a No, believing that the figure is simply ridiculous? You believe spending RM 1 Million into your child’s education fees is wasteful and should not be seen or counted as an investment. It is a luxury of the affluent. 


There are many aspects to an all-rounded education. In essence, it includes the cultivation of great values, academic excellence, life skills, social skills and so on and so forth. Here, I’ll keep the scope of this write-up limited to a kid’s ability to support himself financially, on average, after he has graduated from university. 


First, I would like to share why I believe education has been greatly emphasized and is perceived to be tied up with one’s financial security. 


My Grandfather’s Story …  

My late grandfather was born, raised, and resided in a small town some tens of kilometers away from Taiping, Perak. 


At that time, most people were either completely illiterate or had some fortune to receive basic education. The job market was limited. To escape poverty, most people had a ‘Do Whatever It Takes’ mindset to make a living and thus, were, in a way, largely enterprising. It was the same for my grandfather. 


Shortly after Malaya gained independence from the British, my grandfather set up a small store where he sold goods, mostly fashion wares such as t- shirts, blouses, shoes, and sunglasses, which were sourced from suppliers from larger towns like Taiping to local folks in his town. 


But, running a business was not easy. 


He had faced the harsh reality of not having a steady income but having to feed his own family of seven and to provide for the livelihood of his employees. Also, he might even incur a loss and have cash flow issues if he made a mistake in his sourcing or procurement for his products. 


The Birth of Job Security … 

Like any parent, my grandfather wanted the best for his children. In his opinion, having a job with the government is tantamount to financial security. Why? The reason is that a government servant would enjoy promises of perks that a small business owner like himself would not enjoy.


They include a monthly fixed salary, annual leave, promotion and the best of all is a well-defined retirement plan to see you through the remainder of your life. 


To him, my grandfather may viewed that having the government as a long-term paymaster is likened to have a sanctuary, sheltering his children from hardships and cruel realities of starting up and running an enterprise. Hence, having a job with the government was the best financial idea that he had and I believed that he instilled the idea to all of his children. 


As a result, three of his five children have worked either for the Government or for Government-Linked Companies (GLCs). 


From Entrepreneurs to Employees … 

In the 1980s and 1990s, the economy of Malaysia boomed and we were widely regarded as a ‘Roaring Tiger’ in Asia. Foreign investments into the country from mainly Japan and the United States had soared. Corporations were being set up and have mushroomed in Malaysia. 


Working for a big corporation, particularly a Multinational Company (MNC), has become more preferable than working with the government. In most parts, this was due to faster career advancement which translated into faster increment in income and fatter bonuses. 


With increasing demand for higher positions and paychecks, bosses themselves responded by asking for better qualifications from their applicants, especially in academic achievements. Better jobs with higher paychecks were often be given to applicants who have superiority in academic qualifications. Therefore, 



The Importance of Getting a University Degree … 

Soon, it was no longer enough to have an MCE or SPM in your resume. The bar has been raised to having a university degree, at minimum. A degree is treated or viewed to be a ticket to secure a better job that entitles him to a greater pay scale, working benefits and working environment. 


Thus, an enrolment into local universities was seen as a ‘prized possession’ and was highly sought after for. 


Regrettably, the acceptance into local universities is not entirely based on merit and achievements. It is possible for Straight-A students to be turned down from their preferred degree courses if they wish to pursue their tertiary education at local universities. Anyhow, it inspired more students and their parents to search for other options. One of them is to pursue a degree from overseas. 


Students, irregards to their academic achievements, were sent overseas, mainly to the U.S., the U.K. and Australia to pursue their tertiary education if they have financial support from their parents. Some parents are wealthy and thus, would be happy to provide an advantage to their children. 


However, the Malaysian population, at large, are not rich. Studying for a degree abroad is expensive and considered to be out of reach for most local families. It often poses a huge financial challenge to some local parents. To some extent, it is about making a choice between university fees with their EPF, savings, home, and everything else … that they worked for in their lifetime. Therefore, 


Overseas Education is Localised

This, I believe, led to the birth of a new industry in Malaysia – Private Education. 


Fulfilling parents’ or students’ dreams of obtaining an overseas degree just at a fraction of the estimated cost of a full-fledged overseas degree can be viewed as a brilliant business model to be capitalised in Malaysia. Thus, a lot of businessmen who had the vision invested their capital into setting up private colleges and universities for long-term profits. Some became wildly successful. 


And, that is not it. 


There is obviously another demand where our current local education system is not fulfilling today – A Complete English-Language Based Curriculum. 


Some may perceive that a complete English-Language based curriculum is more practical and far superior to what is available from the government. This kind of perception is also very profitable. It has led to the establishment and expansion of private schools, international schools, and even luxurious kindergarten. Their fees are atrociously high and may cost RM 1 Million per child, from Primary 1 to Secondary 6. 


In total, you may spend a lot more than RM 1 Million a child to see him through his tertiary education. 


Will Your Child Make RM 1 Million Back? 

and … how long would that be? … after you’d spent RM 1 Million or more in his education fees. 


Or, let me rephrase the question to the following: 


‘Do you expect your child to be financially self-sufficient after you’d provided for his education?’ Basically, this may involve him to:  


  1. Earn his own keep via landing a job.  


  1. Provide for his own transportation. 


  1. Finance the purchase of his own house / property and its furnishing. 


  1. Fund his own wedding and honeymoon. 


  1. Buy his own insurance policies / write his own will / set up a trust fund. 


  1. Build his own investment portfolio. 


  1. Plan for his own financial independence / retirement 


‘Or, would you continue to provide for him even after he has graduated?’ If the answer you have is more likely Yes despite RM 1 Million in education fees, then, I suppose, there is something amiss about our beliefs in education in regards to its ability to offer kids a head start in life and as a shelter against harsh financial realities of life today. 


Is Academic Education an Illusion to One’s Financial Security? 

Suffice to say, all types of education systems, be it government or private, local or overseas, secular or vernacular, science or art streams, … etc have their own unique attributables and their pros and cons. With that being said, there is one common ground that unites all forms of education systems and that is … 


They lack the education of money, but yet, it is something that affects us all. 


While academic excellence may land us jobs and connections, most people are, at large, in lack of wisdom to manage money upon receiving it. It robs people of their time, efforts, hopes and dreams of becoming financially secure and to live a more rewarding and fulfilling life in their lifetime. 


There are lots to be discussed about this subject. But, irregards to the intended amount of your child’s education fees (RM 10k, RM 100k, or RM 1 Million), may I ask you to rethink: ‘Is the amount spent justifiable and the reasons for it?’


If you are happy at where you are, great! I’m happy for you too. 


But, if you feel that you may have ‘overpaid’ for your child’s education or simply have a fresh perspective on its ability to secure your child’s financial future, you may adjust your plans according to what suits you and your children the best in the future years to come. 



If you have any comments / feedback / questions on education, please feel free to post them below. It would be great if they are helpful as this article posted is intended to share and exchange ideas for the betterment of our readers.  Thanks. 


Do you want to find out more about how to protect your family with Wills & Trust? Here is a free strategy report that I highly recommend:

How I’ve Protected my Family’s Financial Future with Will & Trust, and How You Can Do It Too!

Ian Tai
Ian Tai

Financial Content Machine. Dividend Investor. Produced 500+ Financial Articles featured in in Malaysia and the Fifth Person, Value Invest Asia, and Small Cap Asia in Singapore. Regular Host and Presenter of a Weekly Financial Webinar with Co-Founded, an online membership site that empowers retail investors to build a stock portfolio that pays rising dividends year after year in Malaysia and Singapore.

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