Is spending HK$100,000 a year on my child's education a good investment? I ran the numbers.

I know a family in our school district who spends approximately HK$100,000 per year on their single child's education. The child attends a government primary school — free tuition. The HK$100,000 is entirely supplementary: two tutorial centres, private piano, private Mandarin, competitive swimming programme, a weekend STEM enrichment class, and a one-on-one English tutor who does two sessions per week.

I know this because this family is us, give or take, in the years when we were spending most freely. The numbers vary depending on which supplementary activities were running and whether we counted the private tutor my daughter had for eight months in P3. Some years it was HK$80,000. One year it was closer to HK$120,000.

I work in finance. I should have run an investment analysis before spending this money. I didn't. I ran one after. Here is what I found.

The internal rate of return question. If I had taken the HK$100,000 per year and invested it in a diversified portfolio at historical equity market returns, over a twelve-year K-12 period that money compounds to approximately HK$2 million. That is the opportunity cost of twelve years of supplementary education spending at this level. The question is whether the educational returns exceed what the child would have achieved with substantially less intervention.

This is an almost impossible question to answer with certainty, because I cannot run the counterfactual. I cannot raise the same child twice. I cannot know what my daughter would look like academically without the tutorial centres and private tutors.

What I can do is look at the margins. The tutorial centre she attended for three years: her results in the relevant subject improved about 15% over that period. Her classmates who didn't attend a tutorial centre for that subject improved about 10% on average, based on my informal data from the group chat. The marginal improvement attributable to the tutorial centre is approximately 5 percentage points. For HK$26,400 per year. Per subject.

The piano question. Private piano at HK$1,500 per month is HK$18,000 per year. After five years, that is HK$90,000. She is a competent amateur pianist who can play music she enjoys. She will not pursue music professionally. The emotional and cognitive benefits of music education are real and documented. Whether they are worth HK$90,000 is a values question that doesn't have a financial answer.

The swimming question. HK$14,400 per year for the competitive stream. She has good times. She has made friends. She has developed physical discipline and the psychological experience of working hard at something and improving. These benefits are real. They are also available at a less intensive (and less expensive) programme for about HK$6,000 per year. We are paying a premium for competitive ambition that is primarily mine.

Where the money actually produces clear returns. The one-on-one English tutor during the specific period when my daughter was behind in reading fluency: this was targeted intervention for a real gap, it worked, the gap closed. Good return on investment. The P3 Mandarin intensive that helped her catch up to her class after a teacher change mid-year: specific problem, targeted solution, worked. Good return.

The pattern I see, looking back: targeted spending on specific identified gaps produces returns. Ambient supplementary spending — tutorial centres as a baseline feature of life rather than a response to a problem — is much harder to justify financially or educationally.

The thing the investment analysis cannot capture. I have spent evenings reviewing my children's homework. I have worried about their educational progress. I have had the anxiety and the planning and the scheduling. Some of the spending is buying me the feeling of trying hard. The psychological cost of not spending, in the Hong Kong context, is real: the guilt, the comparison, the fear of being the parent who didn't try enough. This has value. It also inflates the spending beyond what the educational return warrants.

If I were starting again, I would spend on specific gaps and specific talents. I would not run ambient supplementary infrastructure as default. I would put the savings somewhere with a compounding return and spend it on university.

I am not starting again. The spending continues at a somewhat reduced rate, managed with more deliberateness than before.

The numbers are a rationalisation for a decision that was never purely financial. That's true of all investments, I suppose.