The Value Of A Second Language: How Much Money To Be Fluent?

During my time living abroad, about 90% of my friends were fluent in a second language besides English. This high percentage was expected, given that most of my classmates at the International School of Kuala Lumpur and Taipei American School were foreigners, where being bilingual or multilingual was the norm.

Upon relocating to McLean, Virginia, for high school, I noticed a decline, with only about 50% of my friends being proficient in a second language. Today, as I reflect on my current circle of friends, that percentage has declined further to around 40%.

It turns out, 40% is actually quite high given I live in San Francisco, a minority majority city. According to the Census Bureau data from 2019, 67.8 million Americans speak a second language at home (20% of the U.S. population). In 1980 there were 23.06 million Americans who spoke a second language at home, a third of what it is today.

Top 10 States With Largest Percentage Of Second Language Speakers

Spanish, Chinese, French, Russian, Polish, and Tagalog are the most common second languages spoken in America. Below are the states that have the largest percentage of second language speakers according to the American Community Survey from the Census Bureau.

  1. California: 44% of residents
  2. Texas: 36%
  3. New Mexico: 34%
  4. New Jersey: 32%
  5. Nevada: 31%
  6. New York: 31%
  7. Florida: 30%
  8. Hawaii: 28%
  9. Arizona: 27%
  10. Massachusetts: 25%

Struggled With Learning Spanish In High School

In high school, I decided to take up Spanish for the first time. Unfortunately, I began my language studies relatively late, and my brain struggled to grasp proper verb conjugation. The fact class started at 2 pm exacerbated the issue, as I tended to experience a post-lunch food coma, leading to occasional snoozing.

Even after four years of studying Spanish, I found myself unable to engage in an adult conversation for more than three minutes. In contrast, many of my classmates, who either spent part of their childhood in a Spanish-speaking country or had a parent proficient in Spanish, had no difficulty sustaining longer conversations.

Even though my Spanish stunk, my teacher still gave me an “A.” That was when I realized developing a good relationship with your teacher can make a big difference in doing well. Because I surely didn’t deserve an “A!”

Regret Of Not Taking Studying Mandarin More Seriously

It wasn’t until my time at The College of William & Mary that I made a conscious effort to reengage with Mandarin and strive for fluency. I even pursued a minor in Mandarin and embarked on a six-month study abroad program in Beijing in 1997, which turned out to be a magical experience.

The impetus to focus on learning a second language during college arose from the pressing need to secure a job after graduation. The sense of urgency stemmed from a desire to avoid a long-term stint at McDonald’s earning $4/hour. I felt compelled to demonstrate that investing four years and approximately $40,000 in education was worthwhile.

The prevailing notion at the time was that possessing proficiency in a second language would unlock numerous job opportunities, both domestically and abroad. It seemed imperative for college graduates to acquire this skill in the rapidly globalizing world. Despite diligent studying, however, achieving fluency in Mandarin always eluded me.

Fortunately, my minor in Mandarin proved to be useful. It played a role in landing a position in the International Equities department at Goldman Sachs. While I initially worked on the Emerging Markets desk, I swiftly transitioned to the Asian Equities desk.

Given my major in Economics and my passion for investing in the stock market, the job turned out to be a perfect fit.

In hindsight, I would confidently assert that the value of learning Mandarin amounted to at least $500,000, if not $1 million.

As an Asian individual who both looked and spoke the part, I had the ability to put the management of Taiwanese and Chinese companies at ease during roadshows while visiting U.S. clients. During the boom of the Chinese IPO market in the early 2000s, I frequently found myself assigned to accompany management on money manager visits across the country.

Upon transitioning to Credit Suisse two years later, my bilingual capabilities, along with my international upbringing and identity, made me a strong fit for their growing Asian equities business in America. This move not only brought a promotion but also a guaranteed pay raise.

Thirteen years later, I retired with a net worth of $3 million. Reflecting on my journey, without the ability to speak Mandarin, I might not have secured a job in the finance industry in the first place. The acceptance rate at Goldman Sachs for first-year analyst positions was less than 5%, and I didn’t come from a target school.

If I hadn’t pursued a career in finance, my alternative path might have led me to become an eyeglass parts factory manager in Shenzhen, China. While it might not have been the most glamorous job, it was an exciting time as China was opening up to the world.

The Value Of A Foreign Language Without A Direct Income Component

If I hadn’t found a job that utilized my Mandarin skills, the perceived value of a second language might have diminished. For instance, had I secured a position at PriceWaterhouse (got rejected) and primarily spoken English throughout my career, the value of my Mandarin proficiency might have dropped a lot.

However, I still contend that a second language is worth at least $300,000, even if it’s not directly applied in your job.

Here are five reasons why:

  1. Enhanced Social Connections: Proficiency in a second language increases the likelihood of making new friends, finding love, and sharing experiences with others who speak that language. This is especially significant in addressing the loneliness epidemic post-pandemic, as many individuals would likely place a high value on alleviating feelings of isolation.
  2. Practical Benefits: Knowing Mandarin has translated into tangible financial benefits, such as saving money on home remodeling costs and negotiating better deals with tradespeople for property maintenance. I can quantify at least $100,000 in savings for a fixer I purchased in 2014 because I chose a Chinese contractor over a Caucasian American contractor.
  3. Cultural Enrichment: The ability to dream in a second language is a magical experience that opens up new and exciting mental landscapes during the healing process at night. Additionally, learning a second language immerses you in a new culture, fostering greater cultural awareness, improved emotional intelligence, and better connections with diverse groups. Notably, individuals who engage in online hate and participate in Twitter mobs are often observed to lack proficiency in a second language.
  4. More Creativity For Business: Knowing a second language may also stimulate creativity, allowing individuals to draw inspiration from different cultures and generate novel ideas for businesses.
  5. Enhanced Travel Experiences: Lastly, being proficient in a second language can enhance your travel experiences, enabling you to feel more at ease and reducing the likelihood of being taken advantage of when visiting a country where the language is spoken.

Given these considerations, I am inclined to upgrade the value of a second language back up to $500,000, even without a direct income component.

How Much Would You Pay To Speak A Second Language Well?

Considering I believe the value of knowing a second language is between $500,000 and $1 million, it logically follows that I would be willing to pay within that range to speak a second language well.

In today’s context, if a genie presented me with the opportunity, I wouldn’t hesitate to pay $500,000 to attain fluency in Spanish (spoken by 500 million people). Mastering English (1.4 billion people) and Mandarin (1.2 billion people) already covers 40% of the world’s population. If I were feeling particularly affluent, I might even consider paying $500,000 – $1 million to instantly acquire fluency in French (spoken by 450 million people).

Of course, the perceived value of a second language is also influenced by one’s current net worth. For instance, if your net worth is only $50,000, you might be willing to allocate a smaller sum, perhaps around $10,000, to achieve fluency in a second language.

What is the value of a second language (different from how much you’d be wiling to pay)?

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Paying For A Second Language Based On Percentage Of Net Worth

Given the variations in everyone’s net worth, it might be more practical to determine a willingness to pay for a second language based on a percentage of net worth. The younger and less affluent you are, the higher the percentage you might allocate, and vice versa.

I propose that the value of a second language, calculated as a percentage of net worth, falls within the range of 5% to 20%.

With a lower net worth, you may be more inclined to allocate a higher percentage of your net worth to acquire proficiency in a second language, especially if it can significantly boost your career-earning potential. Acquiring a second language early in life also enhances its value since you get to utilize it for a longer period.

Conversely, with a higher net worth, you might be less willing to allocate a higher percentage of your net worth, as your career and earnings power are likely more established. The urgency to learn a second language for career advancement, finding love, or making new friends might be less pronounced.

However, individuals who are extremely wealthy may be more open to allocating higher amounts for intangible benefits that are challenging to acquire with money, such as language proficiency, a desirable physique, youthfulness, and more.

Paying For Private Language Immersion School Gets Easier

In my highly criticized forecast household budget, I have $80,400 for private grade school for two children. September 2024 is when I anticipate my daughter will start preschool 4 while my son begins the second grade.

$80,400 is a lot of money and I would rather not pay it. But it’s impossible to get into one particular public Cantonese/Mandarin language immersion school in the city because we have a lottery system. And another public Mandarin immersion school is also hard to get into, somewhat run down, has high teacher turnover, and isn’t in a great location.

As a result, we’ve decided to bite the bullet and try out this Mandarin immersion private school instead. We’ve tried for two years already with our son, and so far so good. The care is high, the community is great, and the teacher turnover has been low.

The school will be moving to a new 5.4 acre campus, which cost $40 million to purchase and $30 million to remodel. It will be one of the nicest, if not the nicest schools in all of San Francisco. The school opening should also be a good local economic catalyst to support west side San Francisco property prices, where I purchased our new home.

Total Cost Of Private Grade School Tuition vs. The Value Of A Second Language

The complete tuition expense for one child from Pre-school 4 through the 8th grade (spanning 10 years) is estimated at $410,000 in today’s dollars. After assigning a value of $500,000 – $1 million for the ability to speak a second language well, the private grade school tuition now seems more reasonable.

So in a way, paying $410,000 for private Mandarin immersion school is like getting $90,000 – $590,000 off, if they indeed become fluent by the eight grade. What a bargain! Even if knowing a second language was only valued at $100,000, that would bring my estimated 10-year cost down to $310,000 in today’s dollars.

If my kids were to exclusively only learn English in school, I would have more reservations about paying for private grade school tuition. That said, public schools provide a range of second language options. However, these language classes often commence in middle or high school, making it more challenging to master a second language by that stage.

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Could Just Be A Coping Mechanism

This entire exercise in determining the value of a second language might serve as a way for me to rationalize the expense of private grade school tuition. As a graduate of public high school and college, I inherently favor public education, prioritizing value and viewing private school payments akin to opting for bottled water when tap water suffices.

Conversely, my wife, who attended a private high school on partial scholarship during her sophomore through senior years, strongly leans towards private grade school. Her experience of witnessing and experiencing violence at her public schools kept her timid through middle and half of high school. However, attending a boarding school had a transformative effect, fostering her personality and courage.

Therefore, I remain open in our decision to keep our kids in private school, transfer them to public school, or homeschool them when we embark on slow travel. Education, safety, and community stand as our primary considerations for our children. If any of these aspects deteriorate at their current school, we will not hesitate to make a change.

A Race Against Time To Learn A New Language Well

The value of a second language is subjective, but as I age and accumulate wealth, I increasingly appreciate the ability to speak Mandarin. I also increasingly regret not studying harder in Spanish class. The good news is that it’s never too late to learn!

Unfortunately, the longer one waits to learn a new language, the harder it will be for most people to pick up. Consequently, I’m starting our kids early and trying to speak as much Mandarin at home as possible.

What I’ve also found comforting is that sending my kids to a language immersion school has helped me brush up on my own Mandarin skills. I occasionally do homework with my son and I’m constantly looking up how to say things in Mandarin to teach them too.

Despite the criticism of my budget for being greedy, I feel better about our decision to invest a small fortune so both our kids can learn a second language. I’m also excited to have a second chance to learn Mandarin again with my children.

Being able to speak, dream, and make friends in a second language is worth a lot.

Reader Questions

How much do you think is the value of speaking a second language well? Do you speak a second language well? Has speaking a second language helped your career or helped you make more money? If so, how?

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