This article examines the role of parents’ school experiences in adolescence on their educational investment strategies for their own children in middle adulthood. We focus our analysis on the parents’ decision to organize private tutoring (also called shadow education) for their children. Previous international research largely agrees that families with a high socioeconomic status (SES) are more likely to invest in tutoring to achieve competitive advantages in the educational race for higher credentials and maintain a high social status. In Germany, however, recent studies suggest that tutoring in Germany primarily serves underperforming children from les educated families to acquire relatively higher school degrees by compensating the higher demands of academic school tracks. We propose a theoretical decision model based on rational choice and life course theory incorporating psychological factors related to school performance of the parents (such as performance anxiety and ability self-concept) and operationalize four components that are intended to explain the (un)equal use of tutoring: (1) children’s school background, (2) parents’ cost and (3) benefit considerations, as well as (4) parents’ school biography. In addition, we hypothesize on the intergenerational transmission of performance-related factors from parents to their children and how this affects SE investment. We test our hypotheses quantitatively through logit regressions and a structural equation model using unique longitudinal data for 558 families (parents and their children) from the German “LifE” study (1979–2012). Our study produced two key findings: On the one hand, the parents’ previous school performance plays a direct role in the extent to which they themselves are able to provide their children with the necessary support in the event of poor performance. On the other hand, the performance-related experiences of the parents during school are to a certain extent transmitted to their children and thus influence their grades, ability self-concept and performance anxiety. These factors, in turn, are decisive for the decision to organize SE. Our findings indicate that instead of reducing the decision-making process for SE to absolute dimensions of student performance and parents’ SES and related cost-benefit calculations, dynamic factors behind this family decision related to intergenerational transmission and individual characteristics should be considered.