Grumpy Old Man or Sage Mentor?

[imjustawarrior]

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

My SIL who is a realtor told me that a fair number of people who buy McMansions cannot afford to furnish all the rooms.

 

[engineernerd]

It sort of sounds like young men doing what young men do...showing off to impress each other.

If it's helping to broaden their industry contacts (i.e. they aren't just interacting with guys from the same company), maybe it has a little bit of upside to balance the downside? Do you have much insight into who fared better after being RIF'd in the past - did guys like these who were part of a showoff crowd get better new jobs faster than others?

 

[Route246]

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.

That is a good test. Another good test is to take them to lunch and offer to pay or if you're lucky enough have the company pay. See how they order. If they ignore the left side of the menu you can make judgements that otherwise are not available. If they order as if they are paying then you can discern they are probably going to do better in life financially.

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.

The magic word is patience. When I was younger I lacked patience but as I got older and watched compounding happen the patience became easier. I did not live a deprived life when I was a young, single engineer. I turned into a better saver once married.

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.

I think this is something young people do not want to think about. Ageism and comfort zone attachment is probably what does more of my ex-colleagues in than anything else. I had an irrational fear of this when I was young because I saw so many older colleagues get comfortable and suddenly become unemployable once they got RIF'ed. I probably over-compensated but it has served me well. I spent a lot of time with like-minded colleagues trying to figure out how to future-proof our career paths. Some of them are barely hanging on but they are still employed. A few successfully senf-retired (not forced) earlier which is probably the only doubt I have about my own career path but proudly not being aged out is the reward which means something to my diminishing self-esteem as my productivity wanes. I'm proud of my career but realize I may have self-lingered too long but my work is my life and retirement is six months away...

Grumpy old man can go to his grave with a smile on his face, I guess.

 

[ivinsfan]

Have you ever noticed all the newer type and age homes that have a big yard and a double door off the kitchen/family room? Most of them have a deck plate that was part of the construction..yet the vast majority actually have no deck...no money no deck..

 

[Diogenes]

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, ....

Good advice, but it's double-edged. Smith saved his nickels and invested in the S&P 500... then "got exited" at age 50 or 55. He's adrift, even if the money-situation is fine.

What these callow dissolute kids have figured out, is one of those perverse laws of nature: if you strenuously prepare for a rainy day, guess what: the torrent is likely to come. If you act like blue skies are perpetual, you just might get lucky, and never see a drop fall on your perfectly coiffed hairdo.

In my former company, the 401K had exactly one participant: me. Not to hijack the thread, but the plan fell afoul of IRS rules about contributions by "highly compensated employees". I tried to evangelize the benefits of savings, especially in taxed-deferred vehicles. Management said that such advice was uncouth and unwarranted. Not long thereafter, I got canned. Those spendthrift kids, buying silly claptrap and cycling the credit cards? They got raises.

The OP is neither grumpy nor necessarily old. He's just been chastened by experience, in a way that only experience can chasten. May we all learn our lessons, with a minimum of chastening.

 

[Koolau]

.

In my former company, the 401K had exactly one participant: me. Not to hijack the thread, but the plan fell afoul of IRS rules about contributions by "highly compensated employees". I tried to evangelize the benefits of savings, especially in taxed-deferred vehicles. Management said that such advice was uncouth and unwarranted. Not long thereafter, I got canned. Those spendthrift kids, buying silly claptrap and cycling the credit cards? They got raises.

That's a really sad story. Like the saying goes: No good deed goes unpunished.

 

[Aerides]

Leave them be. They are smart young people in their 20's and 30's with awesome incomes, in a HCOL area, and will probably be fine, or learn the hard way (ie, not from being guided, but experience).

Sounds like they are having a lot of fun.

This is the good one sentence answer when asked for input. That should get the thought process going. Other than that, "hey I'm still working why are you asking me?'

My advice to young people is to have an exit strategy by 50.

 

[steelyman]

A friend and I were talking about that period in our lives recently. She asked what I did at that stage. I said I spent a fair amount of time “chasing skirt” and she smiled.

 

[pjigar]

The people on a FIRE site are not typical.

I have came to the same conclusion after many years of trying to coach anyone who remotely interested in how I did it. Getting wealthy (at any income level because wealth is relative to your lifestyle) is so simple (save and invest) but it is very hard and boring. On the other hand, talking about your expensive lifestyle is glamorous.

 

[frayne]

They are living the American dream, going into debt early and planning to work until they drop. The concept of saving and investing for retirement is foreign and lost on them until it isn't.

 

[SJ1_]

this seems to be "normal"

 

[MarieIG]

I would not chase them down with advise, but if they asked, I would give some simple advise, i.e, pay yourself first, time in the market, compounding, the pitfalls of high interest CC debt, etc. From experience, a few will listen, most will not. Some need time to peculate, and circle around back.

 

[latexman]

Grumpy Old Man or Sage Mentor?​

Why not both?

 

[TickTock]

Good advice, but it's double-edged. Smith saved his nickels and invested in the S&P 500... then "got exited" at age 50 or 55. He's adrift, even if the money-situation is fine.

I disagree. Smith may well be temporarily adrift if unexpectedly exited at 50 or 55, but Smith had an exit strategy, has considered what to do next, and has the financial means to do so (including taking his time to find another job, if that's what he wants). Jones, who did not save his nickels and never considered an exit strategy, is unexpectedly exited at 50 or 55, is adrift, and has none of those three things. Better to be Smith.

 

[freedomatlast]

You may want to rethink the advice you gave them about the Roth at the income level mentioned in the thread. To make a full contribution to a Roth IRA in 2025, your Modified Adjusted Gross Income (MAGI) must be below $150,000 if filing single or $236,000 if filing jointly.

 

[Ronstar]

I remember young engineers at our place being very frugal without me having to mentor them. I did offer advice when asked.

So if I was OP, I’d probably give them advice if asked, but not try to push them how to manage their money.

 

[audreyh1]

I remember young engineers at our place being very frugal without me having to mentor them. I did offer advice when asked.

So if I was OP, I’d probably give them advice if asked, but not try to push them how to manage their money.

Yeah, that’s what I remember. Quite a bit of frugality with the younger engineer folks, bringing their lunch, modest car, etc.

 

[Badger]

Although he will never know and he may have thought I wasn't listening at the time I am so glad that I paid attention to my father's advice and watched how he saved/invested for his retirement to take care of my mother.
Those who are living on the edge and spending everything they earn and more are on their own. I got nothing for them unless they begin to realize they are behaving like the fabled grasshopper then I might make some suggestions if they ask.

 

[Morgan22]

You may want to rethink the advice you gave them about the Roth at the income level mentioned in the thread. To make a full contribution to a Roth IRA in 2025, your Modified Adjusted Gross Income (MAGI) must be below $150,000 if filing single or $236,000 if filing jointly.

They can do a "backdoor" Roth contribution. You may have seen this mentioned on this forum or Bogleheads before.

 

[freedomatlast]

I know all about back door Roths, but if you're never at a favorable tax rate due to income level, it doesn't make any sense to do that.

 

[jazz4cash]

As a very young engineer I remember getting mildly raised eyebrows when I pulled out my brown bag lunch in the cafeteria. They didn’t mock me until I carefully folded up the brown bag for reuse.

 

[imjustawarrior]

I know all about back door Roths, but if you're never at a favorable tax rate due to income level, it doesn't make any sense to do that.

Could you please explain "never at a favorable tax rate" a little more? I'm not understanding your reasoning.

I would think a backdoor Roth would always be better than putting the money in a taxable account due to dividends. If one doesn't have the money for a taxable account, then of course this doesn't apply. It also doesn't apply if there are no dividends or all the dividends are qualified and the person is in the 0% LTCQ tax rate.

 

[pjigar]

As a very young engineer I remember getting mildly raised eyebrows when I pulled out my brown bag lunch in the cafeteria. They didn’t mock me until I carefully folded up the brown bag for reuse.

I used to bring a lunch box! It wasn't until 6 years of working, I felt comfortable buying in the cafeteria.

 

[imjustawarrior]

As a very young engineer I remember getting mildly raised eyebrows when I pulled out my brown bag lunch in the cafeteria. They didn’t mock me until I carefully folded up the brown bag for reuse.

Good for you. I always brought my lunch in a re-used plastic grocery bag. I was too frugal to even by a brown lunch bag.

I remember getting mocked by my manager when I was a Sr. Manager and I pulled out my candy bar Trac phone. Everyone else had flagship smartphones. I didn't care. I'm pretty sure I retired before all of them, and I was never laid off like they were.

 

[big-papa]

Very interesting. I started my engineering career in the mid 80's (semiconductor) and I have to say that most of my peers were, almost without exception, cheapskates. Things have definitely changed. In the last 10 years or so of my career, most of the team I managed directly were in their 40's and up, though they had direct reports below them who were quite a bit younger. The 40+ team still had the cheap-ness thing going but definitely not the youngers ones.

I think the proliferation of startups and lure of fast money via IPOs changed a lot of things...

Cheers