Do you need RM1 million to educate your child?

A good education ensures a good job and financial security. (Rawpixel pic)

Is RM1 million a necessity to provide your child a head start in life? Or do you believe that this figure is simply ridiculous?

There are many aspects to an all-rounded education. It includes the cultivation of great values, academic excellence, life skills, social skills and so on.

Here’s why education is perceived to be tied up with financial security:

Grandpa’s story

Grandpa was born and raised in a small town near Taiping, Perak. At that time, most people were either completely illiterate or had some basic education. The job market was limited.

To escape poverty, you had to have a “Do whatever it takes” mindset to make a living and thus, be enterprising. Shortly after Malaya gained independence from the British, grandpa set up a small store.

He sold goods such as t- shirts, blouses, shoes and sunglasses which were sourced from suppliers from larger towns. But running a business was not easy.

He faced the harsh reality of not having a steady income yet still having to feed his family of seven and to provide for his employees.

He could incur a loss and face cash flow issues if he made a mistake in sourcing his products.

The birth of job security

In grandpa’s opinion, securing a job with the government is tantamount to financial security.

Government servants enjoy perks that a small business owner like him did not have. This includes a monthly salary, annual leave, promotion and a retirement plan.

Grandpa thought that a government job will shelter his children from the hardship and realities of running an enterprise.

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

Earning a degree ensures your future employability. (Rawpixel pic)

From entrepreneurs to employees

In the 1980s and 90s, Malaysia boomed and was regarded as a “Roaring Tiger” in Asia.

Foreign investments from Japan and US flowed into the country. Corporations were set up and mushroomed in Malaysia.

Working for a big corporation, particularly a Multinational Company (MNC), became preferable to working with the government.

This was due to faster career advancement which translated into faster income increment and fat bonuses.

With the increasing demand for higher positions and paychecks, bosses responded by asking for better academic qualifications.

The importance of a university degree

Soon, it was no longer enough to have an MCE or SPM, national examinations taken after 11 years of schooling, in your resume. The bar had been raised to a university degree. Thus the degree is a ticket to secure a better job with greater pay, working benefits and work environment.

Enrolment into local universities became highly sought after. Regrettably, acceptance is not based on merit and achievements. It is entirely possible for Straight-A students to be turned down for their preferred degree courses.

This inspired students and parents to search for other options, including pursuing a degree overseas. Some wealthy parents are happy to provide this advantage to their children. However, most of the Malaysian population is not rich.

Studying for a degree abroad is expensive and considered to be out of reach for most local families.

Overseas education is localised

This led to the birth of private education in Malaysia. Fulfilling parents’ and students’ dreams of obtaining an overseas degree at a fraction of the cost is brilliant.

Businessmen who had the vision set up private colleges and universities for long-term profits. This led to the establishment of private schools, international schools and even premium kindergartens.

The fees are atrocious and may cost up to RM1 million per child, from primary one to secondary six.

After his education, your child should be financially independent. (Rawpixel pic)

Will your child recover your RM1 million investment?

Your child should be financially self-sufficient after you’ve provided for his education. He should be able to:

  • Earn his own keep with a good job.
  • Purchase his own transportation.
  • Purchase his own house and its furnishing.
  • Fund his own wedding and honeymoon.
  • Buy his own insurance policies, write his will and set up a trust fund.
  • Build his own investment portfolio.
  • Plan for his own financial independence and retirement.

Is academic education an illusion to your financial security?

All education systems have their own unique attributes, but there is one common factor that unites them – the lack of education in money management.

Academic excellence can land you jobs and connections, but most people lack the wisdom to manage money after receiving it. This robs you of becoming financially secure and living a more rewarding and fulfilling life.

Regardless of the amount you spend on your child’s education, you need to think if the amount spent is justifiable. If you are happy, that’s great! But, if you feel that you have “overpaid” for your child’s education, you may want to adjust your plans to what suits you and your children the best in the years to come.

This article first appeared in

Ian Tai is the founder of, a platform that empowers retail investors to build wealth through ownership of fundamentally solid stocks. It is an essential tool that sifts out stocks that grow profits consistently from a database of over 900+ stocks listed mainly in Malaysia.