Grumpy Old Man or Sage Mentor?

[Route246]

I'm an old engineer working with many young engineers. Technically, I've made my bones, published papers, successfully architected projects, etc. and have not been aged out at my advanced age. I'm at peak earnings and doing pretty well professionally and plan to retire later this year at 68 by my choice.

That said, I'm trying to figure out if my attitude towards some of the younger engineers is that of a grumpy old man or a sage advisor. Most of them know I'm FI and doing well but I don't flash my wealth or show off in pretentious ways at the workplace. I'm hip to new trends and can keep up intellectually with the younger ones. I am very aware of my standing, I dress casually in jeans and t-shirt at work (normal attire in Silicon Valley), stay relatively fit and don't slouch or move around slowly, keep my full head of hair trimmed and fortunately I'm only grey around the ears so genetically, I'm relatively youthful looking.

That said, we have semi-annual ESPP and quarterly RSU vestings. For young guys it can be significant depending on where they are in their packages, some doubling or tripling their base salary in terms of packages. As a manager I have access to some of the data so I know they are going pretty well in terms of their packages.

What I'm seeing with some (most of the Asian immigrant green card holders exempted from this discussion) of these young engineers is a severe lack of ability to save and a propensity to spend and borrow. I hear conversations about credit card interest rates, which cards have good balance transfer promotions, car loan and car lease rates and terms. I keep my mouth shut and just listen. It is amazing the way these guys can blow through cash (the few female engineers do not join in these casual conversations so I have no visibility). These guys have minimum $175K packages and many are over $300K. You wouldn't know it based on the things they talk about. The indulgences in dining, partying, vacations, cars and recreation are very surprising and that is where I question my incredulity as just being a grumpy old man or what

Many of these guys don't own and just rent expensive apartments. The entry level home in this area is about $1.5M so it is difficult to get started, I get that, but with the packages these guys earn it can be done with a little austerity and savings coupled to disciplined spending habits they can probably afford to enter home ownership within 5-7 years of serious savings and compounded returns on an S&P index fund.

One co-worker is in the process of buying a new vehicle, $120K and buying it on a lease until vesting comes to the rescue in the near future. Is this the normal way to live or am I justified in my head-shaking? They all talk about investing and ask me for advice because they know I've been successful at it. I simply tell them at their age and income level they should just shove as much into their 401-K, convert as much as possible to Roth and always let it sit in 500-index funds (which we have access to in our plan). Talk is cheap and most of them say it takes too much of their paycheck to save the maximum. I tell them if they do the max they can think about retiring in 20 years or otherwise think about working until you die to survive because your savings and SS is not going to allow you to maintain your lifestyle.

I'm willing to admit to being grumpy old man and then just keep my mouth shut. I'm wondering if I should just keep a muzzle on my opinions about saving and let them have their fun and head into their senior years in financial distress or worse. It is none of my business what they do with their money but if they come asking I'm not sure what to say.

 

[imjustawarrior]

google "how many people can handle a $500 emergency"

Most Americans blow through their money before they get it and save very little. The people on a FIRE site are not typical.

I'm a retired engineer. I never worked in Silicon Valley, but I have been out there many times. SV is a different world. Much more about image. Most of the engineers I worked with were on the frugal side. I remember my first manager driving an old Datsun 210 in the mid-90s.

You probably are a grumpy old engineer, but I think most older engineers are.

 

[Al18]

Just curious what these engineers spend per month on apartment rent. Also, what is the typical state taxes on these salaries?

 

[HFWR]

Economists don’t call us consumers for nothing…

 

[Graybeard]

A fool and his money are soon parted.

 

[skyking1]

If they sincerely come asking, I'd do whatever I could do to be helpful. Beyond that it is straight up MYOB.

 

[Koolau]

If they sincerely come asking, I'd do whatever I could do to be helpful. Beyond that it is straight up MYOB.

Great advice. Let them ask you.

 

[Markola]

I thought engineers were supposed to be good at math.

 

[jollystomper]

I thought engineers were supposed to be good at math.

I have learned that "being good at math" and "being good at personal finance" are not necessarily the same thing .

 

[aja8888]

Someone has to buy those Ferrari's and Porsche's! Let them have their fun while they are young. BTW, I'm an old engineer too.

 

[Route246]

Just curious what these engineers spend per month on apartment rent. Also, what is the typical state taxes on these salaries?

Decent 1BR about $2.5-3.5K, depending on the area. State taxes, figure about 10%, give or take depending on their capital gains.

 

[Route246]

If they sincerely come asking, I'd do whatever I could do to be helpful. Beyond that it is straight up MYOB.

Great advice. Let them ask you.

I never volunteer or comment unless asked. Some know I must have big tax issues because of my recent asset reallocation as we talk in generalities around the break room. They ask me about hiring a CPA and when I tell them how much it costs they look shocked and said they will stick with Turbotax. I don't try to convince them otherwise.

I'm just surprised that white collar professionals are living literally paycheck-to-paycheck when they are making this much money. They take really nice vacations, drive really nice cars but otherwise seem to have little interests in investments, savings and saving for buying a house or putting a child through college. Some of these guys are married with kids and have no idea how to pay for college or save for retirement. It doesn't occur to them that they will get old, they may get aged out of their career if they are not careful and this high compensation can be ephemeral.

 

[youbet]

I'm trying to figure out if my attitude towards some of the younger engineers is that of a grumpy old man or a sage advisor.

As a guy even older than you, by a long shot, I'd say you're a grumpy old man. After another decade or so passes and you're long retired, you'll look back and understand why I'm saying this.

 

[Al18]

Thanks for update on rent and taxes. Wow, those are high and there should be a huge potential to save taxes by investing the max in a 401K.

At the last company I worked for many years, which was on the SP500, the company and 401K provider were on-site twice a year in an effort to get more employees signed-up and to increase their savings. There are 401K rules for highly compensated employees (not me) where they would be allowed to contribute more to their 401K plans if the contribution percentage for the entire company was increased. There were one on one consults and group classes that everyone was encouraged to attend. There were also group conference calls that lasted for 30 minutes discussing retirement by retirement providers every 6 months. If your company doesn’t do this, talk to management.

 

[PlayinwithFIRE]

One thing I didn't get going thru undergrad engineering was a personal finance course.
Maybe it was offered, but of the 2 (yes 2) free electives I had in 4 years...I chose Skiing and Pencil Drawing. I still think I chose right.

When i got into the workforce, it was the first time in my life where I had some money..and yea I had a motorcycle, a jeep and all kinds of fun

Perhaps if someone turned me on to a personal finance course at that point...which would have been a hard sell at that age with me....i may have been much further along than I am.


Grumpy? maybe. Right thinking? maybe. Not everyone's meant to follow your path...

but those that seek your advice may be more willing to hear you atleast and consider it.

pwf

 

[surprising]

DD graduated recently and has a very good job and is suddenly flush with money. Growing up she never asked for anything much, and it was pulling teeth to get her to give us suggestions for Christmas's and Birthdays. Now that she has her own money, she is spending like crazy! Expensive apartment, new motorcycle, new guitar and amp, dining out all the time. I think it's just the newness and freedom to do whatever she wants. Once the newness wears off I'm hoping she starts saving more.

 

[Closet_Gamer]

I saw a lot of this along the way. Every generation undergoes a sorting between those who become savers and those who stay enslaved by consumption.

Engineers are good at math and I think that honestly gives the a leg up in this department but at the end of the day, either you’re a long term thinker or you’re not.

You should run the marshmallow test with them, but maybe with donuts.

Put some donuts on a conference table. Anyone who eats their donut doesn’t get one tomorrow. Anyone who doesn’t eat it gets two tomorrow.

 

[jollystomper]

I'm just surprised that white collar professionals are living literally paycheck-to-paycheck when they are making this much money. They take really nice vacations, drive really nice cars but otherwise seem to have little interests in investments, savings and saving for buying a house or putting a child through college. Some of these guys are married with kids and have no idea how to pay for college or save for retirement. It doesn't occur to them that they will get old, they may get aged out of their career if they are not careful and this high compensation can be ephemeral.

This is more typical than not. Those of us here are definitely the minority among people. I still find that one has to make an effort and have a desire to save and invest, it is not going to come looking for you. The "general news" does not emphasize these things, they tend to emphasize the negative about personal finance, saving and investing even in good times. I still here from more than a few white collar professional friends and younger people how the market is "no better than the casino", and is "rigged" for the extremely wealthy. The financial press tends to whisper at times how the market performs in the long run, but will scream at the top of its lungs with "MARKET SELLOFF!" if the Dow falls a couple of hundred points in a day. Given that situation, it is not too surprising that one finds more of a "live for today" and "eat, drink, and be merry" attitude among many professionals.

It also takes a degree of patience. Scams work because they promise tremendous growth in a short period of time. Compare that to say, investing for growth over 10, 20, 30 years, and a lot of folks would say "I do not have time for that!" or "I cannot wait that long!"

Also, you tend to think of yourself as being more "invincible" when you are younger. You do not think about your salary ever being cut, or getting laid off from a good job, or having a difficult time getting another job. You do not see aging out of your career until you are at the age of being aged out your career. Sometimes the company influences this, they may want everyone to been happy and productive even they they are planning cuts and layoffs behind the scenes.

This was much of my mindset in my younger years. Growing up without much (and seeing what people around me with even less were subject to), having parents who emphasized savings, observing the "steady folks" at work and asking them questions and not assuming I knew anything, and being willing to admit to making mistakes and learning from them slowly turned my mind in the right direction.

 

[imjustawarrior]

One thing I didn't get going thru undergrad engineering was a personal finance course.

I did not have personal finance in kindergarten, public school 1-12, undergrad, or grad school. My dad has a finance degree and sold mutual funds in the 1950s. The only thing he taught me was the rule of 72 and compound interest when I was probably 5 or 6. My tank commander in the Army got me into mutual funds. It can be hard to learn/discover good information about personal finance. It is hard to know something exists if one never hears about it.

 

[audreyh1]

Honestly, what you describe is the more common situation for high earners. Posters here are by far the minority in terms of being major savers towards retirement.

 

[GrayHare]

I try to avoid "you should" statements to people, even when someone asks me what they should do. "Should" comes across as too preachy for my taste. Instead, I'll describe what I had done in a similar situation, how it turned out and what I learned. Whether to emulate or not is then their choice.

 

[Qs Laptop]

One co-worker is in the process of buying a new vehicle, $120K and buying it on a lease until vesting comes to the rescue in the near future. Is this the normal way to live or am I justified in my head-shaking?

This is not the normal way to live and you are justified in your head-shaking. However, these young people are making so much money it's almost like play money to them--"there's more coming where that came from" is probably their attitude. I bet they don't even look at their bank statements.

They all talk about investing and ask me for advice because they know I've been successful at it. I simply tell them at their age and income level they should just shove as much into their 401-K, convert as much as possible to Roth and always let it sit in 500-index funds (which we have access to in our plan). Talk is cheap and most of them say it takes too much of their paycheck to save the maximum. I tell them if they do the max they can think about retiring in 20 years or otherwise think about working until you die to survive because your savings and SS is not going to allow you to maintain your lifestyle.

This is sound advice and you've done your duty. You might advise them to put just 5% of their paycheck into their 401k, just to start out. Pay yourself first. Get them acclimated to the process. Also, you could recommend a book or a website that details your investment ideas.

I'm willing to admit to being grumpy old man and then just keep my mouth shut. I'm wondering if I should just keep a muzzle on my opinions about saving and let them have their fun and head into their senior years in financial distress or worse. It is none of my business what they do with their money but if they come asking I'm not sure what to say.

If they come asking I'd keep saying what you've been saying. It's a winning formula.

 

[imjustawarrior]

I'm probably just a cynical old engineer. My advice to young people is to have an exit strategy by 50. I then list the reasons why: ageism, health, burn out, job disappears/out sourced, other interests become more important, ....

I didn't wake up until 44 after seeing so many friends and co-workers laid off. I created an 11 year plan to get out. I wish I would have started much earlier.

 

[Music Lover]

As a guy even older than you, by a long shot, I'd say you're a grumpy old man. After another decade or so passes and you're long retired, you'll look back and understand why I'm saying this.

It's normal for young people to not want to listen to someone in their late 60's. Most of them can't imagine ever being that old.

That being said, I would rather take financial advice from someone that retired in their early 50's than someone who is 68 and still working.

No offense to the OP.

 

[sdtech]

Many engineers I worked with bought their McMansions early. They are still working....