Net worths of engineers?

[baseliner]

So I was speaking to some STEM students, and more than a few were asking me what are “expected net worths” of engineers based on where you are in your careers.

Got me thinking as well -

Lets all post our net worths here if youre comfortable?

Ill start -

8th year engineer
Savings = 18k
Student loan remaining = 24k
House + car assets - liability = 15k

[pkgny2022]

25th year engineer
Savings = $2+MM
House + car assets - liability = 500k

[ucbalumnus]

Thomas J. Stanley’s Stop Acting Rich suggests that engineers and educators tend to accumulate higher wealth relative to income, due to a greater tendency to live below their means.

http://www.bankrate.com/banking/savings/to-act-like-the-rich-be-frugal/ is an interview with Stanley:

@Thomas J. Stanley in bankrate.com interview

Beyond income, one’s vocation has much to do with accumulating wealth. Educators, engineers, business owners and retail store managers have a tendency to live below their means and to be quite efficient in transforming their income into wealth.

Of course, merely being an engineer does not automatically mean living below your means. However, the nature of engineering, which is making design choices under real life constraints (including cost) may mean that those who enjoy solving those problems at work may be more prone to applying similar thinking to their personal finance choices. That engineers tend to be good at math can also help, in terms of understanding and applying basic financial math.

In contrast, some other professions seem to have more spenders:

@Thomas J. Stanley in bankrate.com interview

The income statement affluent are those with high incomes and relatively low levels of net worth. They are not very productive in transforming their incomes into wealth. Many of the people in this category are highly compensated physicians, attorneys and executives. Many are driven to hyper-consume by their need to display high social status.

[Gator88NE]

engineers and educators tend to accumulate higher wealth relative to income, due to a greater tendency to live below their means

That really is the key to building wealth.

See the following link where Andrew Hon breaks down the net worth of a typical salaried person in engineering/management at US tech companies (over a 15 year period).

https://www.quora.com/What-is-the-net-worth-of-a-typical-salaried-person-in-engineering-management-at-US-tech-companies

He then models it for someone who is “Spendthrift” vs “Frugal”.

I think there are issues with the model (he mentions not including income tax), including some of his assumptions, but it gives you some idea of how net worth can build and change over time.

[ucbalumnus]

Re: https://www.quora.com/What-is-the-net-worth-of-a-typical-salaried-person-in-engineering-management-at-US-tech-companies

Seems like his “spendthrift” assumption is still less spendy than a large percentage of higher income people. After all, the “spendthrift” in his example still saves “only” $1.4 million after 15 years.

May have to remap his categories:

spendthrift → somewhat frugal
typical → frugal
frugal → very frugal

[Colorado_mom]

I’d say we are doing far better than average Americans for couples. But I think that is because I married another engineer and we’ve both had pretty good jobs and only a few times not working (maternity leave x2 for me and unemployment for him) . Also we are able to live below our means. That allowed us to pay the school loans off before we had kids. I won’t lie - the 10K from MIL toward our first house helped too!

This small sampling of course won’t tell the whole story. I’ll take a peek at the links later.

[Sybylla]

    Why not pay off student loans rather than having low return savings? Is 8th yr 8 yrs post graduation? No mortgage? Was that school loan very large?
      There are engineers and engineers, and pay rates must vary vastly. Bogleheads.org is a good start to get ahead with some planning.