25, Computer Scientist in Southern California

[HornedToad10]

Hello,

I don't normally do introduction posts but for this site it seemed applicable.

I'm 25, male and live in Southern California

I have a Master's in Computer Science from UCSB after deciding that a PhD wasn't really what I wanted to do and is just too time-consuming. Now I am contemplating going to night school to get an MBA to go along with the masters. My company would pay $10k/year but it would be a time commitment and I'm not sure if I'll be at the same job for the next 3 years. Thoughts on this, and how much an MBA would help me? And what kind of career path that would direct me too.

I've been working for my company for about 4.5 months so far. As for early retirement, I don't have any specific timeline; too far away to really know. I would like to be earlier than 65, but main priority is FI and buying a house that I will like.

Here's the financial information for critique:
Base Salary: 63k
Company 401k match: Effectively 10% (if I put in 5%, which is what I am doing)
Bonus: Maximum of 10%, I've heard it's pretty regular to get some bonus. So I am guessing 5-8%, but will see when/if it happens.

Emergency Fund: $1700 (working my way to $5000)
Taxable: $4500 (ind. small cap stocks)
Roth IRA: $8200 (ind. small cap stocks)
Vanguard Roth IRA: $3500 (Emerging markets)
Roth 401k(1/3 is Roth, 2/3 is company match so non-Roth): $3000
40% international, 40% large, 10% REIT, 10% Mid

ESPP: $3000
- Saving for engagement ring fund until end of cycle, then next ESPP will be to fund Roth IRA 2008. Make minimum 15% profit every 6 months on the max I can put in (15% of my salary)

Debts:
$3500 student loan - will be paid off beginning of Dec. when they start charging me interest
$4400 interest free loan: paying close to minimum payment on it

Asset:
2005 Honda Civic: 30k miles Phenomenal gas mileage...=)

Net Worth (including estimate of $9k for car): $24,500

Savings/4 weeks:
Roth 401k: $242
Company Match: $480
ESPP: $720
Taxable: $700-750

Thanks for reading, looking forward to reading your comments. I've been doing a ton of financial/investment reading and have especially enjoyed reading this site.

HornedToad

[mh]

Quote:

Originally Posted by HornedToad10 Hello, I don't normally do introduction posts but for this site it seemed applicable. I'm 25, male and live in Southern California I have a Master's in Computer Science from UCSB after deciding that a PhD wasn't really what I wanted to do and is just too time-consuming. Now I am contemplating going to night school to get an MBA to go along with the masters. My company would pay $10k/year but it would be a time commitment and I'm not sure if I'll be at the same job for the next 3 years. Thoughts on this, and how much an MBA would help me? And what kind of career path that would direct me too. I've been working for my company for about 4.5 months so far. As for early retirement, I don't have any specific timeline; too far away to really know. I would like to be earlier than 65, but main priority is FI and buying a house that I will like. Here's the financial information for critique: Base Salary: 63k Company 401k match: Effectively 10% (if I put in 5%, which is what I am doing) Bonus: Maximum of 10%, I've heard it's pretty regular to get some bonus. So I am guessing 5-8%, but will see when/if it happens. Emergency Fund: $1700 (working my way to $5000) Taxable: $4500 (ind. small cap stocks) Roth IRA: $8200 (ind. small cap stocks) Vanguard Roth IRA: $3500 (Emerging markets) Roth 401k(1/3 is Roth, 2/3 is company match so non-Roth): $3000 40% international, 40% large, 10% REIT, 10% Mid ESPP: $3000 - Saving for engagement ring fund until end of cycle, then next ESPP will be to fund Roth IRA 2008. Make minimum 15% profit every 6 months on the max I can put in (15% of my salary) Debts: $3500 student loan - will be paid off beginning of Dec. when they start charging me interest $4400 interest free loan: paying close to minimum payment on it Asset: 2005 Honda Civic: 30k miles Phenomenal gas mileage...=) Net Worth (including estimate of $9k for car): $24,500 Savings/4 weeks: Roth 401k: $242 Company Match: $480 ESPP: $720 Taxable: $700-750 Thanks for reading, looking forward to reading your comments. I've been doing a ton of financial/investment reading and have especially enjoyed reading this site. HornedToad

i'm a so cal. software engineer from UCSB too.
who is nearing ER.

if you are doing software / engineering work, then an MBA is not very useful
IMHO. If your company thinks otherwise, well maybe you should consider
another company (only half kidding there :-))

max out your 401k / ROTH's regardless of matching etc..
taxes were the single biggest thing that has effected me
during my "savings life.

[HornedToad10]

Quote:

Originally Posted by mh i'm a so cal. software engineer from UCSB too. who is nearing ER. if you are doing software / engineering work, then an MBA is not very useful IMHO. If your company thinks otherwise, well maybe you should consider another company (only half kidding there :-)) max out your 401k / ROTH's regardless of matching etc.. taxes were the single biggest thing that has effected me during my "savings life.

The MBA is more of if I want to go into management I think. (I was assuming MBA would put me on more of a fast track to management). Which I like, but don't know whether I like that or technical more. I'm new to the working world, so haven't fully decided. I liked the independence of a MS/PhD student in making higher level design decisions, so that's partly what I was wondering about with the MBA.

My company isn't pushing towards it at all, it's just a program that they have available for employees.

Thanks for the advice about taxes,although right now I feel pretty solid with my retirement savings, since I also want to be saving for a house also and would need a decent downpayment.

I am currently doing ~$7500/year into Roth IRA/Roth 401k and then company puts in $6300 into 401k. So I figure if I can also save ~$15k towards a downpayment each year it'll be pretty balanced.

Thanks for the comments.

[Brat]

I am not employed in your field so can't comment on PhD or not.. but after you are well entrenched at your place of employment you should think about the following:

Do you have a passion for cutting edge/developmental positions or do you prefer a more predictable environment? At a certain level I am talking about your tolerance for risk.

The reason I ask is because your employer may have positions that pay as much as you are earning in SO CA but are located in lower cost areas (such as Salt Lake or Boise). The 'venture' work-groups are rarely located there but they are hardly professional back-waters. Professionals in that type of location can save a lot and IRA investments at your stage in life are worth a lot more than the same $ saved later.

'Venture' work groups are typically populated with young tigers, lots of opportunities but more career risk as well.

Unless you are a dyed-in-the-wool SO CA resident with family in the area or have significant professional opportunities there, look for a position in a year or two where your skills have the same market value but the cost of living is lower.

[Coach]

HornedToad, you're off to a great start! Keep your eye on the prize and you'll be ready to retire well before 65.

I think an MBA would be a terrific idea. It gets harder to go back to school the older you get, and having an employer willing to pay is a big plus. And even if you never get the degree, "working on an MBA" fleshes our your technical expertise.

Best of luck and welcome to the board!

Coach

[RetireeRobert]

Quote:

Originally Posted by mh i'm a so cal. software engineer from UCSB too. who is nearing ER. if you are doing software / engineering work, then an MBA is not very useful IMHO. If your company thinks otherwise, well maybe you should consider another company (only half kidding there :-))

Any advice from HornedToad or you to a high school senior who is interested in pursuing a Computer Science or IT degree? My son is right now visiting colleges with offerings in these areas. His high school happened to offer four years of programming/computer systems and hardware courses, and they peaked his interest.

What is the job search like currently for bachelor's degree college grads in Computer Science?

[mh]

Quote:

Originally Posted by RetireeRobert Any advice from HornedToad or you to a high school senior who is interested in pursuing a Computer Science or IT degree? My son is right now visiting colleges with offerings in these areas. His high school happened to offer four years of programming/computer systems and hardware courses, and they peaked his interest. What is the job search like currently for bachelor's degree college grads in Computer Science?

It's ok at the moment. Not like the old days when i graduated though,
when they were scouring schools for people. There's an element of off-
shoring present also that was not there when i was a grad.

If you are looking at schools i would suggest one that has good co-op program / intern program.
that's a really good way of landing a job. if you do good work as a co-op/intern you've got a good chance of them hiring you.

A lot of kids these days will work on open source projects
prior to graduating. if you do this, it gives you some credentials that
you can work with people and get real projects done. it also gives you
something more to talk about in you new-grad interview other than.
"I aced CS301 last quarter". no one really gives a
crap if you got and A instead of a B.

I can't say much about the IT realm. It never held any interest to me.

[RetireeRobert]

Quote:

Originally Posted by mh It's ok at the moment. Not like the old days when i graduated though, when they were scouring schools for people. There's an element of off- shoring present also that was not there when i was a grad. If you are looking at schools i would suggest one that has good co-op program / intern program. that's a really good way of landing a job. if you do good work as a co-op/intern you've got a good chance of them hiring you. A lot of kids these days will work on open source projects prior to graduating. if you do this, it gives you some credentials that you can work with people and get real projects done. it also gives you something more to talk about in you new-grad interview other than. "I aced CS301 last quarter". no one really gives a crap if you got and A instead of a B. I can't say much about the IT realm. It never held any interest to me.

Thanks for the advice. In fact, his first choice school happens to have a co-op/intern program. They do 2 six month internships with participating employers (one in junior year/and summer, and one in senior year/and summer), and then take an extra year to graduate.

His first choice school also touts in its brochures for the CS Dept be a leader in "open source" happenings.

Perhaps his first choice school is the way to go. Thanks again for your advice.

[HornedToad10]

Quote:

Originally Posted by RetireeRobert Any advice from HornedToad or you to a high school senior who is interested in pursuing a Computer Science or IT degree? My son is right now visiting colleges with offerings in these areas. His high school happened to offer four years of programming/computer systems and hardware courses, and they peaked his interest. What is the job search like currently for bachelor's degree college grads in Computer Science?

I'd say it's a great major. It prepares you directly for a career and it'll be easy to get a job in your field when you graduate (provided you are relatively top tier at your school).

I second the advice about getting an internship co-op. Lots of friends got offers directly from where they did their internships at, and the offers were typically better than normal since the companies already knew them and liked their work.

I would also encourage getting a master's, I personally think it is well worth it and let's you have a little more freedom/authority in your job, instead of just being a flunky. Especially if the school has a 5 year BS/MS program, then a Master's is only one additional year.

I'm not sure about the tradeoff of 2 internships/co-ops for taking an additional year to graduate. Depends on your son. The advantage is they are 6 months and school sponsored. But it's pretty easy to get a summer internship in college or a 3-6 month internship senior year if you get ahead in classes. This probably depends on how many tech companies are around the school.

Not sure what else to add, let me know if you have any more specific questions.

[RetireeRobert]

Quote:

Originally Posted by HornedToad10 I'd say it's a great major. It prepares you directly for a career and it'll be easy to get a job in your field when you graduate (provided you are relatively top tier at your school). I second the advice about getting an internship co-op. Lots of friends got offers directly from where they did their internships at, and the offers were typically better than normal since the companies already knew them and liked their work. I would also encourage getting a master's, I personally think it is well worth it and let's you have a little more freedom/authority in your job, instead of just being a flunky. Especially if the school has a 5 year BS/MS program, then a Master's is only one additional year. I'm not sure about the tradeoff of 2 internships/co-ops for taking an additional year to graduate. Depends on your son. The advantage is they are 6 months and school sponsored. But it's pretty easy to get a summer internship in college or a 3-6 month internship senior year if you get ahead in classes. This probably depends on how many tech companies are around the school. Not sure what else to add, let me know if you have any more specific questions.

Thanks, Hornedtoad. I'll pass on your advice to my son, as coming from somone who's "been there, done that" recently. We appreciate it.

[Brat]

Robert, the Toad's advice is very good. The importance of your son choosing the best school where there are internship opportunities cannot be ignored. You can be the best and the brightest, but the relationships developed during schooling will make a world of difference.

I am a U of O math grad, as was my nephew who is Programmer at Microsoft. He is very talented but it took a relationship to get him through their HR grinder, I venture MS has not regretted that decision. If he had attended Berkley or Stanford the transition would have been easier (he didn't apply because he couldn't afford them - admission would not have been an issue).

[tightasadrum]

HT,

great start. I hope my daughter is as focus about her financial future when she is your age.

Your company may be great, but remember what is the bottom line: YOU. Getting as much as you can in the way of skills and transportable "letters" is worth the time.
An MBA will move you to the top of many lists with future employers. Plus it will give you skills with your own money that can't hurt if you use them.


I'm one who believes the AA is important, but putting it anywhere is the the real key. Just get it in the game.

Having said that, I will add that having a significant % in foreign stocks might be a wise move right now. With some of the really stupid things our government has been doing lately makes it worth doing some heavy duty off-shore investment.

Good luck

[Brat]

An MBA has a lot of value but...

When my daughter was in Engineering in the "Valley" I shared with a HR VP that she was unhappy because she had little opportunity to use her people skills. When asked for an example I told her about her frustration with her peer's presentation skills (DD was active in debate when in high school). The HR executive pleaded with me to encourage her to stay in the engineering major as the desperately needed engineers who could communicate with the business side.

She changed her major to finance and is on the business side, but she can communicate with engineers (who are the partners) like one of their own.

IMHO: An engineer in the first years of their profession needs to focus on engineering because those first 10 years the skill set is hot. Professional development during this time should be to develop presentation skills. After that go for the MBA. There is never a 'good time' to add a post graduate degree but several years of work experience should be a prerequisite.

[MissParker]

Quote:

Originally Posted by HornedToad10 I've been working for my company for about 4.5 months so far. As for early retirement, I don't have any specific timeline; too far away to really know. I would like to be earlier than 65, but main priority is FI and buying a house that I will like. HornedToad

I am also in SoCal and am a network administrator at a public agency.
Welcome and good luck buying a house! I have never been comfortable with the housing prices here and have opted to save to buy a house with cash once I retire and move away from California.

[HornedToad10]

Thanks for all the comments. I appreciate it.

I definitely agree that there is a definite need for technical engineers who are socially apt and capable of communicating with non-technical people. That's actually more of where I fit in, to be honest. I'm technically savvy and capable, but I'm not a world-class technical person who loves programming, or the various technical solution. To me, the technical aspect is a means to an end to solve a problem. But the time spent in sports in High School and College have definitely helped my communication skills and other soft skills and that's more of where my strength is.

As for California, I am planning on staying. At least for awhile anyway. All my family and friends are here, and my girlfriends' family. And unless I get a truly compelling reason to move, right now it is worth it to me.

But moving is definitely worth considering, as the Cost of Living, state taxes, and housing prices are very steep.

[IPCK]

Mate, i can't say much since you are a highly skilled person and all the best to all your future project.If you interested in remote back ups let me know.

Sunspot

[Rambler]

You seem to be a good candidate for an MBA. I woul suggest that you work for a few years first though. An MBA will be much more meaningful to you if you have some experience under your belt. I have hired a few MBAs over the years, but I would not hire one with only school (sorry, with only 4.5 months of work, that is essentially no work experience). Why? The typical school only MBA grad is pretty proud of his paper, but doesn't have real, hands-on execution experience...they think they can handle things when they really have no idea what they are doing. With work experience, running and/or participating in projects, executing, and real-world people skills, you become something of real value. The flip side of the coin is that if you wait too long to go back, it gets really hard to do it, and it is of less value to you because you have already learned much if not most of what they have to teach you. I have learned this much thru experience...I don't have an MBA but have been to Stanford Executive Program, which was a great experience. Thru that experience, I got a good taste of their MBA program, and figured out that I had already learned most of what they were teaching thru experience...so don't wait too long. I would say that 4-5 years work before the MBA is about right.

Good luck.

R

[danm]

I wouldn't get the MBA - unless you're shooting for the executive jobs, and you have a good shot at it. Better to float up to the top of the technical ranks. Less stress, lots of money, more autonomy (depending on the company).

Put savings on autopilot (401k + some outside savings + whatever else), get results for the company (and collect raises, options, whatever else they give you), keep an eye out for investment opportunities, and in the meantime enjoy yourself and forget about FIRE. Then one day you'll find you're close, which will be a pleasant surprise.

[figner]

"me too" for what danm said. If you're heading for upper management, I'd say the MBA might come in handy. But if you're lazy like me and want to have a life outside of work too, topping out the technical ranks will get you a decent salary, little to no overtime, and much less stress. I know many managers who lament that they work horrendous hours and don't get to do the technical work they used to enjoy. It's not worth the slight bump in salary, IMO.

[SecondCor521]

One bit of advice on the MBA (from someone with a BSCS and MBA): Make sure the companies you want to work for after you get the MBA really care. One major technology company I am aware of -- because I worked there 11 years -- didn't really view an MBA as relevant to becoming a first or second level R&D manager, and beyond that it was only marginally helpful for getting the jobs. What mattered more was "technical lead" and "liaison" type experience, as well as high technical marks.

2Cor521