Do you agree that if a child is bright enough he or she can catch up and even outdo others later in primary school, and thus no need to invest in expensive private preschool? Or do you think it's better to build a strong foundation during preschool years so they won't lose out in primary school?

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I think a good preschool would be a better one to opt for. As these are the foundation years and it is not about what they make your kid do in context of writing. It is about the environment your kid is in during the initial days of her exposure to the outer world.