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Re: Engineering Career
Old 11-15-2006, 03:03 PM   #21
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Re: Engineering Career

You guys made me go make another graph!

I wanted to explore the difference between staying as an engineer or crossing into management, and how that affects early retirement.

In my graph I have two engineers. They both graduate today and get a job at age 22 earning $50k per year. For the next 8 years they do well, getting 10% raises every year until age 30 when they get to the 6-figure glass ceiling. At this point, high-flying engineer A makes the leap to management and continues to recieve 10% raises every year. Disgruntled engineer B stays in his "dead end" job and gets pathetic 2% raises every year.

Now for the savings: I figured both of these guys are FIRE True Believers, so they start out by maxing their 401K in year one. I also gave them a 5% employer match. Every year their 401K savings goes up a little bit, because that's sort of built into the 401k rules these days (the limit rises with inflation in $500 increments, but I ignored that minor tidbit and just let them increase their 401k by 3% every year).

So every year from age 22 to about 26 they get these raises and they allow their standard of living to creep up. At age 26 they are spending $55k per year and saving the rest. After age 26, I let their living expenses go up by 3% and they saved whatever was left over. By the way, I gave them 10% annual returns on their savings.

So all of this completely ignores taxes! It is not a workable plan, but we can still compare A to B.

High-flyer A saves enough money to equal 25x his expenses at age 39, and retires early. Engineer B has to work until are 45 to save up enough to retire on. When they're both age 46 they kick back on the beach and tell each other stories about the good old days.

So, switch over to management and retire 6 years earlier? Its possible, but you have to find a way to be pulling down a quarter of a million in salary by age 39. That's 20 years in the future, but even so, that's a tough row to hoe.

On the other hand, even if you top out as an engineer and just cruise, its still a very early retirement.

Furthermore, both of these guys made all the right moves. Life interferes with a perfect plan, but sometimes you catch a break too. Roll with the punches and everything will work out in the end.
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Re: Engineering Career
Old 11-15-2006, 03:18 PM   #22
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Re: Engineering Career

I will weigh in as a just-retired 48yo engineer (programmer), working for
2 mega corps (Hughes,TRW) and 2 midsize companies (200-600 people)
in my career, all around Los Angeles. This covers several full boom and
bust cycles.

Most of my raises were COL or close to it. However, each job switch added
a jump, and every few years I would get something extra for some reason.
In the last 8 years my salary went up about 60%, well above inflation.

The biggest advantage I saw to remaining technical was work hours - I
worked 40 hours a week, with very rare overages compensated by overtime,
comp time (approved or not), or bonuses. The management wannabees
were putting in alot more, especially when they finally moved up.
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Re: Engineering Career
Old 11-15-2006, 03:25 PM   #23
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Re: Engineering Career

Quote:
Originally Posted by Spanky
Another way is to start a business ....
That's the route I ultimately chose. Started out as a software developer, which was very satisfying work for me. Did the management bit for several years, and found it painfully dull, but comp was pretty good (especially at the exec level).

Doing a startup was a good fit for me. I had enough savings to coast for years. I did all the product dev work myself. Launched the company on my own dime, so the focus was on pretty much immediate profitability. Then hired out all the crap jobs I didn't want to do, like marketing and support. Finally sold the company, which provided both a ton of cash and made it much easier to move into another exec-level management gig or do another startup.

Obviously, it's not the easiest or safest path, but it's hard to beat for educational value, potential financial upside, and job satisfaction.
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Re: Engineering Career
Old 11-15-2006, 05:43 PM   #24
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Re: Engineering Career

Quote:
Originally Posted by wab
That's the route I ultimately chose. Started out as a software developer, which was very satisfying work for me. Did the management bit for several years, and found it painfully dull, but comp was pretty good (especially at the exec level).

Doing a startup was a good fit for me. I had enough savings to coast for years. I did all the product dev work myself. Launched the company on my own dime, so the focus was on pretty much immediate profitability. Then hired out all the crap jobs I didn't want to do, like marketing and support. Finally sold the company, which provided both a ton of cash and made it much easier to move into another exec-level management gig or do another startup.

Obviously, it's not the easiest or safest path, but it's hard to beat for educational value, potential financial upside, and job satisfaction.
Wab,

Which is most satisfying (not more financially rewarding), software development, management, starting and running a business?

Spanky
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Re: Engineering Career
Old 11-15-2006, 06:57 PM   #25
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Re: Engineering Career

Spanky,
I have been a civil engineer employed at the same consulting firm all of my career (15 years and counting). I became a partner at the firm (entered management) about seven years ago. I decided to accept the partnership offer mainly for financial reasons, and things have gone well so far. I was also interested in having more input in directing the firm's future. As more of my time is spent on administrative duties, the technical skills have suffered a little.

One problem that I have seen with many engineers is that their technical skills are far better than their interpersonal skills. As a result, many top notch technical engineers are "promoted" into management where they fail. Solving a technical problem uses a totally different skill set then breaking up a cat fight between secretaries.
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Re: Engineering Career
Old 11-15-2006, 07:25 PM   #26
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Re: Engineering Career

Quote:
Originally Posted by Spanky
Which is most satisfying (not more financially rewarding), software development, management, starting and running a business?
Good question.

What attracted me to software development was the sense of having a virtual laboratory. I could create things, get immediate feedback, and then make incremental improvements or start over from scratch. The landscape is pretty much unlimited. Even when you're limited to a specific domain, you can continuously create novel inventions within that domain if you want to. That's hard to beat for intellectual satisfaction.

Management didn't provide any of that creative outlet for me. You get to focus on strategy, quality, efficiency, process, etc. I can see how some people can get excited about that stuff, but it didn't float my boat. I prefer the hands-on stuff.

A startup, for me, was hands-on creation coupled with a direct connection to the customers, and direct economic benefit. It's hard to get that as a grunt within a larger org. But if you create the org yourself, you basically get to choose the roles that excite you. Initially, you might have to wear some hats that don't suit you very well, but that can be rewarding as well.

Overall, I think it's hard to beat the startup experience. But it's a pretty big committment. I started a couple of companies, both when I was single. I don't think I could do it when I was married with kids.
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Re: Engineering Career
Old 11-15-2006, 10:03 PM   #27
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Re: Engineering Career

Thanks for sharing your insights. The bottom line is that you have to enjoy what you do. It does not matter it is the technical track or management track. The management track is designed for people who enjoy working with people, leading projects, planning, and organizing, formulating strategies. The technical track is for people who prefer technical challenges over managerial tasks and politics, even though the financial reward may not be as attractive as that of management.

Chrisdut,

You are right - too many engineers are promoted to management without the proper interpersonal skills. As a result, they often fail as managers.

Wab,
Yes, software development is more fun than management and starting a business is exciting but may take time away from family and friends.

CyclingInvesting,
I agree staying technical has its merits, i.e., predictable work hours.
Slepyhed,
Thanks for the comparison. Having a management job may accelerate FI but not by a wide margin.
Kcowan,
It's definitely financially rewarding being a partner in an engineering consulting firm.
Tryan,
Its true - the competition is fierce to the top. However, the potential reward may worth the trip.

tbrw,
There are some companies that still have dual-career track (technical and management). The pay difference may be inconsequential.

jeff2006,
A law degree from respected law school can definitely boost your salary, but the work hours can be quite demanding.

Ed_The_Gypsy,

I share your view about management - it's not exactly fun to deal with people.

Grep,
I concur that engineering career is quite satisfying. You have plenty of opportunities to apply creativity skills.

sailor,
Congrats - you are already at the top of the technical track at age 34 - wow.








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Re: Engineering Career
Old 11-15-2006, 10:21 PM   #28
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Re: Engineering Career

Spanky,

I love to deal with people. It is dealing with the vermin above me that I dislike.
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Re: Engineering Career
Old 11-16-2006, 03:28 AM   #29
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Re: Engineering Career

Quote:
Originally Posted by Spanky

jeff2006,
A law degree from respected law school can definitely boost your salary, but the work hours can be quite demanding.
Yes -- good point -- I agree -- the other side of the deal may well be longer hours and work that is not as much fun over the years . . . .
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Re: Engineering Career
Old 11-16-2006, 03:53 AM   #30
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Re: Engineering Career

well having worked in the electrical control panel design end of the business for 30 years all i can say is next time i get to that fork in the road im going doctor.. the pay hasnt been that great even here in new york.

i even got a phd (pretty huge d*ck) ha ha ha ha
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Re: Engineering Career
Old 11-16-2006, 09:28 AM   #31
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Re: Engineering Career

That's even funnier than "piled high and deep"...
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Re: Engineering Career
Old 11-16-2006, 11:02 AM   #32
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Re: Engineering Career

Quote:
Originally Posted by CyclingInvestor

The biggest advantage I saw to remaining technical was work hours - I
worked 40 hours a week, with very rare overages compensated by overtime,
comp time (approved or not), or bonuses. The management wannabees
were putting in alot more, especially when they finally moved up.
That is an interesting note that you made.....I think there is more than 1 way to skin a cat....certainly some folks that I have worked with started their own side businesses while working their 40 hours/wk. and probably done a lot better than some managers that I have seen (and more job satisfaction)...

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Re: Engineering Career
Old 11-16-2006, 11:27 AM   #33
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Re: Engineering Career

Dh loved being technical (software), but got tired of being subject to bad managerial decisons--so he went into management. He enjoyed working with customers and managing teams, but was pretty clueless about managing upward. Different skill sets! Anyway, he's teaching now, which he also enjoys, especailly working on difficult projects with advanced students.
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Re: Engineering Career
Old 11-16-2006, 09:49 PM   #34
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Re: Engineering Career

Quote:
Originally Posted by astromeria
Dh loved being technical (software), but got tired of being subject to bad managerial decisons--so he went into management. He enjoyed working with customers and managing teams, but was pretty clueless about managing upward. Different skill sets! Anyway, he's teaching now, which he also enjoys, especailly working on difficult projects with advanced students.
I enjoy software development. However, in order to move up, I have to get into a lead or management position. Since I am already FI, I could take the risk and do it. On the other hand, why get into something that you may not enjoy for a small incremental increase in pay?

Spanky
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Re: Engineering Career
Old 11-17-2006, 11:57 AM   #35
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Re: Engineering Career

I have enjoyed being an engineer for 18 years and have more than a dozen patents to show for my efforts along with a decent salary and bonus opportunity now that I am in a management position. The thing I always resented in my previous employment situation was the guys that sold products I designed could make a bonus. I OTOH could not, I didn't even get monetary awards for the patents. If it is money you want to make, engineering may not be the best direction. I prefer to get up in the morning and enjoy what I do compared to making more money and hating to go to work. All that said, I am looking forward to retiring when I am 55, if all goes according to plan, so I can enjoy more of the things that I want to do.
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Re: Engineering Career
Old 11-17-2006, 02:13 PM   #36
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Re: Engineering Career

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I I OTOH could not, I didn't even get monetary awards for the patents.
This is a really, really, really bad practice. Many of the more progressive US private sector employers provide incentive awards, and sometimes royalty, to inventors. I have personally received almost $200,000, and have a friend who has received over a $million. You have every right to be POd about the matter!

Young engineers -- don't put up with this!!!!
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Re: Engineering Career
Old 11-17-2006, 03:47 PM   #37
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Re: Engineering Career

Quote:
Originally Posted by chrisdut
Spanky,
One problem that I have seen with many engineers is that their technical skills are far better than their interpersonal skills. As a result, many top notch technical engineers are "promoted" into management where they fail. Solving a technical problem uses a totally different skill set then breaking up a cat fight between secretaries.
Not only that but few engineers take the time in school to take public speaking classes. I remember when my daughter was in an engineering U program and had lots of speach and debate in HS. An employer I was working with said they were dying for an engineer who could do a decent presentation! She left engineering because she said there wasn't 'enough people' interaction in the profession. What she meant is there was a focus on the individual contributor skillset to the exclusion of other professional skills.

Engineering's loss was Finance's gain.
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Re: Engineering Career
Old 11-17-2006, 09:57 PM   #38
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Re: Engineering Career

Quote:
Originally Posted by Brat
Not only that but few engineers take the time in school to take public speaking classes.
Joining a Toastmaster club is not a bad idea.
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Re: Engineering Career
Old 11-18-2006, 07:18 PM   #39
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Re: Engineering Career

Quote:
Originally Posted by jeff2006
This is a really, really, really bad practice. Many of the more progressive US private sector employers provide incentive awards, and sometimes royalty, to inventors. I have personally received almost $200,000, and have a friend who has received over a $million. You have every right to be POd about the matter!

Young engineers -- don't put up with this!!!!
////////////What jeff said!!!
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Re: Engineering Career
Old 11-22-2006, 05:47 PM   #40
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Re: Engineering Career

This has been an interesting thread - I have two engineering degrees, mechanical undergrad and biomed grad. I work in a highly sought after field, clinical engineering and frankly get paid about average. However, I am an expert enough in my field and efficient enough that I am fairly autonomous. That means I work the hours I want to most of the time.

The comment about the median way to ER is right on - you earn a fairly decent salary early on and if you save early on, you will be able to ER. Contrast with being a doctor - the real money makers have some serious school debts and a long time before they earn the big bucks (4 years undergrad, 4 years medical school, for cardiologist 5 years residency afterwards, cardiovascular surgery 9 years residency, neurosurgery 9 years residency and during residency, they aren't making a whole lot of money and in fact their hourly rate is atrocious and they still have to pay those college, med school bills....).

As for communication skills - I have those, so have been amply rewarded - I'm probably not the engineer who would get a patent, but I'm the one that would be able to explain what that patent would do to the manager....the 'you're blowing smoke up .....' filter.'

As for management - it's weird, I've been asked to become one, but I'm not a very good babysitter of adults - my attitude is there are consequences to decisions and it's not my job to thwart those consequences.....however, I know I am a good project manager and team leader - finish projects on time, on budget and customers happy. So you could look at management in different ways.

As for flexibility of an engineering degree-well, I find it very flexible. I did a stint in international affairs recently (long story) and the PhD political scientist said I was the best analyst he'd seen. I have no social science or political science background or training, however the analytical skilles one is taught in engineering can apply to almost any field. I laughed and told him I better be a good analyst as that is what engineers do. So, I don't believe an engineering degree is a barrier and in many cases an employer would be very happy to hire someone who has an engineering degree-it takes discipline and perserverance to finish one of those. I look at all of the classes I had to take and am amazed at how much knowledge has been added (computer field and information technology alone!) to that for an engineering degree. I did it in 4.5 years 20 years ago - I'm sure it should be 5-6 years now just for an undergrad (grad degree took 2 years, full-time for me).

All in all, I'm glad I picked engineering - the broad understanding of math and science has helped me understand a lot of things professionally and personallY (finance, health, stuff around me in my environment and how it works, etc). I consider it a noble profession - and I respect anyone who has slogged their way through an engineering degree. When many around me were partying like crazy, I had to dig deep for the discipline to study - it has benefited me enormously towards my future goals...and my partying now is so much finer! :-) (making up for lost time perhaps?)

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