Hi Everyone,
I’ve posted a couple of times, but hadn’t had a chance to make an intro post yet (I don’t have internet at the apartment so I’m not on the forums too much…more on this later!). So I stumbled on the MMM blog completely by accident, just via a Google search on some specific finance stuff, and this was one of the links that came up. I’m very happy it did! Most of my habits were pretty Mustachian before finding the site (I thank my parents for this), but having the mutual support network of this forum definitely helps keep me focused on my goals.
Some background: I’m a 28 year old Mechanical Engineer. Graduated college debt-free thanks to the extreme generosity of my folks. Since everyone loves statistics: been working just over 5 years, and have averaged approximately $60K/year since I started. Just ran my net worth a couple weeks ago and divided by $300K (pretax earnings of 60K/year x5 years) it works out to an approximate savings rate of 45%, which isn’t bad. I’d like to do better, but am fairly certain that I need to work on the earnings, rather than expenses, side of the equation. Current situation:
Debts: None. Everything (food, bills, insurance, cell phone) goes on the CC, which is paid in full every month, and earns 1% back with no annual fees. No car payment, no mortgage, no student loans.
Currently, renting at a pretty reasonable $685/month rate. Pretax income is $5000/month. Take home pay is ~$3200/month after 20% going to a 401K (employer matches 5%). Total expenses (including rent) are approximately $2000-2500/month. This has been trending downward for the last year or so. It was highest when I owned and was fixing up the house, after that sold I moved to the new job and had a pretty nice/large apartment, I’ve downsized that and pared down extras: Internet, Netflix, Xbox Live, etc. are all gone. Mostly eat at home with simple meals (spaghetti, stir fry, etc.), and use the library that’s 2 blocks away for internet and entertainment needs (books and DVDs). I own a number of vehicles, but that’s partially a side hustle as I buy broken cars and bikes, fix them up, enjoy for a while and sell them for a profit, then buy something else. The vehicles are mostly for fun/hobby and not a luxury, I have a mountain bike I ride to work fairly often, and have done a 150 mile weekend charity ride on it with full suspension and knobby tires (Badassity up?).
I’m on my second job since college. I worked in the automotive industry right out of school, and since I graduated in 2007, I entered the industry just before it basically imploded. That was an interesting experience. My pay varied depending on hours/cutbacks from 50-70K, and I worked lots of overtime, sometimes unpaid. In the 4 years I was there I went from the most junior person in my workgroup of 7 people to the 2nd most senior. Great experience, but a lot of work for the pay offered. I bought a house (foreclosure) and rented to 3 other engineers at work and we had a great time, and I managed to come out slightly ahead when I sold it after leaving the job and the area. My 2nd job (no longer automotive industry) basically split the difference between my high and low years at the previous job, but with a guaranteed 40 hour workweek (more free time), better job security, and slightly less stress. I’ve been here just over a year.
I am EXCEEDINGLY grateful to be as fortunate in my finances as I have been so far, but occasionally I wonder about pay. That is, I read multiple stories of people changing jobs and earning significantly more. I am relatively safe and secure in my current job, and reasonably happy, but looking at the national averages for engineers with 5 years experience, it seems like $60K might be a little low. In fact, many starting salaries are above this for 1st time grads. I pushed back slightly when I interviewed for my current job, and my boss’s boss, who did the hiring, told me that was as high as he could go. Conferring with several people at my level at work I believe he was telling the truth, as they make the same or less than I do. So I’m certainly not upset at the company, quite the opposite, but I have dreams of early retirement and great adventures, and I think earning more could help with that.
I have modest opinions of engineering, I think it’s a great field, and am glad my degree can land me a decent paying job almost anywhere, but I think that salaries have relatively limited growth potential in the current economy, for some reason many are stagnating, and several of my friends from college have left the engineering field and branched out into finance, business, or sales, in many cases increasing their salaries significantly. I am considering doing the same.
So I guess I need some advice, and I value this board’s collective opinion:
-Stick it out and try to rise through the ranks at the current gig?
-Go back to school for an MBA or other degree and go for the big $$$ job, with an assumed increase in hours and stress, but shorter timeframe to FI?
-Skip school and try and make the jump to another field on the strength of my current experience? (my resume is pretty strong)
-Something else I haven’t even considered? For instance, I have a decent wad of cash saved, and a very reliable motorcycle that is comfortable to ride all day and gets 50+mpg…I have seriously considered quitting the job, jumping on the bike, and riding across the country for awhile, visiting friends and family and touring through the National Park System. Not quite early retirement, but certainly a sabbatical with a fun adventure. My dad recently retired, and he would possibly join me for part or all of such a trip on his bike. I feel these sorts of life adventures are the sort of thing that we live for, and work is just a means to support them. I have a couple of other adventure ideas, such as buying a large-ish boat ~50’ and starting a charter business, or trying to start a repair shop (cars, motorcycles, electronics), for the opportunity to be my own boss and work for myself, rather than someone else’s business.
Any particular words of wisdom for a 20-something engineer? Thanks in advance!!!
switch2richnow 