It is probably one of the most unreliable acquisitions you will make in your lifetime. It will cost you up to HK$2 million at today's rates and there is no guarantee of any return whatsoever. Yet, it is a risk most people are willing to take - despite the fact the price is rising every year. According to Bruno Lee Kam-wing, HSBC's Asia-Pacific head of wealth management, funding your child through university can easily amount to about HK$500,000 per year if they opt to go overseas. Take into account that most courses last about three to four years and it can add up to a staggering HK$2 million. 'And that's just a ballpark figure,' Lee said. 'In some universities that would pay just the tuition fees and you would need to double that figure.' Even if your child chooses to study in Hong Kong, without any financial assistance from the government, fees at today's rates are about HK$40,000 a year. Factor in the cost of living, books, entertainment and other expenses, and you are easily looking at about HK$100,000 a year - the equivalent of two months' salary for the average family. It is a figure which is getting bigger every year. In Britain, where overseas students contribute 8 per cent of all university income, fees for overseas students rose 5 per cent over the past year and between 30 and 50 per cent over the past decade. The current average stands at about HK$115,000 for most universities, according to the Universities UK group. The price is even higher, reaching up to HK$250,000 per year, for a place at one of the more elite universities such as Imperial College. There are scholarships, but these are few and far between. No wonder higher education costs are one of the biggest worries for parents. According to a survey by HSBC Asian Insurance Monitor, about 27 per cent of people consider it one of their main long-term financial goals - more or less on a par with buying a house - while 22 per cent worry they have insufficient funds to pay for their children's education. 'Parents in Hong Kong care a lot about their children's education,' Lee said. 'They believe education can change someone's life. To them it is a big investment.' However, there are ways to ease the burden of this mega investment, or at least to minimise its impact. Follow these simple rules: Start young Start planning as early as possible. The sooner, the better, Lee said. Starting your plan at the time of the baby's birth gives you 18 years in which to save and invest and can drastically reduce the amount you need to put aside every month. As an example, he said, you will need to save HK$9,259 every month at the current zero interest rates to reach HK$2 million in 18 years. However, delaying your plan until your child is 10 gives you only eight years, which bumps up payments to HK$21,000 a month - almost 80 per cent of the disposable income of the average Hong Kong family. A higher annualised return of 5 per cent will reduce the required payment to HK$5,252 a month over 18 years, and HK$15,400 over eight. 'If parents are willing to take on a little bit more risk, one with an assumed rate of return of 10 per cent, over 18 years the amount they need to put aside falls to HK$2,898 per month ... and to HK$11,549 with the eight-year scenario,' Lee said. 'This is the benefit of taking some [investment] risk and the importance of starting early.' Sheila Dickinson, a senior vice-president with financial advice and investment firm ipac, agrees it is better to start early. 'You may think 18 years is such a long way off. But time goes very quickly and suddenly university is just around the corner and you have only got a short period to try to fund what is potentially one of the most expensive things you are ever going to have to provide for.' Do your homework According to Lee, you must set yourself a target figure by answering some fundamental questions. 'You have to think about whether you want your child to go to university locally or overseas, because the cost implications, particularly the cost of living, could potentially be very different,' he said. Dickinson advises against using an 'average' target figure, stressing it is important to work out your own personal target amount. 'As with retirement planning, there isn't an average income to aim for because it all comes down to what you want to provide and what type of lifestyle you want to achieve. This is exactly the same when it comes to education planning and funding. You do this by looking at the fundamentals such as where you are now, how many children you have, how old they are, how long is it before you need the education fund, what ambitions do you have for your children and what level of education you want to provide.' Look at the big picture As high as they might be, fees are not the only expense you will have to fund. There are also living costs and again, how much extra you will need depends on where your child will study. Obviously, the cost of living for a student at a Hong Kong university, with the luxury of being able to stay at home, will be much less than that of a student living in the West. Britain's 2008 NatWest Student Living Index estimates the average living costs of a student at HK$2,200 a week, not including rent, while the www.ukstudentlife.com estimates the annual cost of accommodation at HK$110,000 to HK$150,000. There are other important costs such as flights home, visa fees and health and travel insurance that you need to add to your target amount. Decide the best route Once you have your target figure, you need to consider how much of your current disposable income you can afford to set aside and how to get the best out of your savings. A simple saving environment may be safe but as Lee points out, it does not make your money work for you. He said there are two possible routes: pure investment and investment-linked insurance. 'For pure investment, the easiest choice is a stock-saving plan, where you can pick and choose stocks, or exchange-traded funds such as the Hong Kong Tracker Fund,' he said. 'The advantage of the Tracker Fund is that you don't have to think about which stock to select. You just participate in the growth of the market. One alternative is a unit trust saving plan.' However, the drawback of pure investment, Lee said, is that it only works if you continue to contribute, unlike an investment-linked insurance plan that carries a premium waiver option that protects the plan if something unfortunate happens that renders parents unable to pay. 'It is important to understand that investment-linked insurance is a long-term commitment and there is a charge if you surrender within 10 years.' Buying an investment property is another option, but Dickinson recommends it as part of a diversified portfolio - parents should not rely solely on it because of its lack of liquidity and because rental returns can be disappointing. 'Whatever you decide, don't leave it too late. Don't take a risk by doing nothing,' she said. Be flexible Like any financial plan, it is important to remain flexible and review your education fund and its progress on a regular basis, Dickinson said. 'There is a good chance you will need to update it as your child grows older and the goals you have as a parent may change because of the input they make on the type of course they want to pursue, and also because of increased education costs and other issues that may have an impact,' she said. Do not sacrifice everything 'Although saving for a child's education should be a huge priority, it is also important for parents not to ignore their own financial well-being. They need to plan for the time when their children have flown the nest and for their retirement,' Dickinson said. 'Education should not be viewed as a solitary area but in relation to your overall circumstances and lifestyle goals.' Expensive lesson A Hong Kong university education costs an average of HK$40,000 a year, while fees at universities overseas are even higher In Britain, the average annual fee for most universities is, in HK dollars: $115,000 Annual fees at an elite university in Britain can cost up to: $250,000