On Monday night I met with my financial advisor. Now if that seems like I have lots of money to invest and grow, you’re sadly mistaken. My advisor is a friend of mine who I knew before he even was a financial advisor. He basically tells me where I should put the four pennies I have in the bank.
As we were finishing up some paperwork, he told me that engineers that he has as clients that are around my age are worth, on average, a quarter of a million dollars. That is, they have assets that total $250 000. I was amazed… but then I got a little sad. I’m not even worth a tenth of that. I’m like worth… a quarter in total, $0.25. In fact, a year ago, my net worth was in the negative.
I can see how some people could accumulate that wealth though. Say you work hard and graduate with an undergrad degree in engineering by 22 or 23. You immediately get a decent paying job. It doesn’t have to be spectacular pay but decent. You work steadily and receive regular promotions and pay raises. You don’t blow your money on frivolous things but make decent investments with your cash. Ten years down the road, yeah, that could mean a cool quarter million.
I know a few people that might be in that boat, all of them my classmates in engineering. One of them is a dude named Al. Al hailed from Kamloops I believe. He came to UBC to get his mechanical engineering degree. He had a job lined up even before he wrote his last exam. In fact, he wrote his last exam on a Friday and started his new job and career on the following Monday. He took the weekend to recover from five long years of study. Within two years he was married and had a kid. He’s kept on working. Al was balls to the wall and I bet he still is to this day. Quarter mil right there.
I, on the other hand, was balls to wall in getting my degree but had nothing left or didn’t want anything left after I circled my the answer on my last exam. Forty-eight hours after my last exam I wasn’t reading over the new employee handbook, I was on a plane to Hawaii.
I graduated from UBC when I was 23, which should have given me seven good years of income. I only worked full-time three years of out that seven and two of those were at $12.50 an hour or less. Two years were spent travelling and dicking around. The other two were at grad school (which I do not regret).
That is not to say I’m disappointed with my current situation. I have a great job that many people would knock down old ladies to get. I’m lucky to be where I am but it’s hard not to think where I might be if I had figured all this out when I was 23 and not eight years later.
Erwin:Keep in mind that that’s a biased sample; only people who have substantial assets use financial advisors. There’s no way that the average net worth of a ~30-32 year old engineer is anywhere near $250k. The typical starting salary for freshly-graduated engineers from our era (late 90s) was $45-50k and after 10 years are making about $80k now. That means, even if they saved 20% and match/beat the market investing, that’s still well under $150k. And there’s no way that new grads save 20% – things like student loans, getting on your feet (car, furniture, possibly kids, etc etc) sucks up every spare dollar in those early years.The only people that have $250k after ten years are people who have had a windfall of some kind (inheritance, insurance, parental generosity, whatever), have a substantial spousal income, and/or have managed to profit from the real estate inflation of recent years (and that type of net worth isn’t terribly helpful unless/until you can escape to a cheaper market).
Bart: Look at me, I’m a grad student. I’m 30 years old and I made $600 last year. Marge: Bart, don’t make fun of grad students. They’ve just made a terrible life choice. Ha! Look at us now, worth literally tens of dollars!