The following is a guest post from John, a regular reader of Financial Samurai, on how to earn a six figure income right out of college.
My first interaction with Sam was a comment I made on what would become one of Financial Samurai’s most popular posts of all time: The Average Net Worth For The Above Average Person. I argued some point and disclosed my six figure income at the ripe age of 23. Sam suggested I share my story due to seeing widespread doubt that many people like me exist out there.
In true optimistic fashion, I interpreted that to be a guest post opportunity over four years later. Financial Samurai has been the only site I’ve followed consistently and it continues to inspire. I’m convinced he has secret writers to be able to put out so much content, but I’m honored to be a part of it!
Calling All Juveniles Delinquents
This post is for you. Now is the time to cut the crap out if you want to make a six figure income. The scoreboard of life started in 9th grade. And that means better grades and less Pokémon GO. The best ones were Pokémon Red and Blue anyway. But, you’re too young for that, aren’t you?
If my parents showed me a site like this, I might have made better decisions during that critical time. Instead, all I had back in 2005 was the Bureau of Labor website telling me my selected career was going to be in decline for the next 10 years.
If you or your person of interest has an inclination towards math and science and a strong work ethic, I believe the following is the best bang-for-the-buck strategy of earning a six figure income by the age of 21.
Step 1: High School – Be Aggressive. Be Be Aggressive!
You have a maximum of one semester to screw around in high school. I did so myself until I found out some idiot from my childhood had a higher rank than mine. Quite childish, but it was the spark that lit the fire under my rear.
In the comeback of the century, my rank rose from 32 to numero uno by the beginning of senior year, just in time for college applications. Much of my carefree youth was sacrificed during this time.
But don’t worry. You don’t have to make it all the way to the top, because you’re not going to an Ivy League school (see Step 3 and Should I Go To A Public Or Private School). Instead, channel your aggression towards maximizing Advanced Placement (AP) and community college courses. Why? Because these translate into real college credits later for a fraction of the cost now.
You should still shoot to be in the top 5% of your class. Pure determination alone can get you into the top 10%, and that’s likely going to get you a spot in a public university. For example, students in Texas are guaranteed admission into any public university in the state if they are within the top 7% of their class (formerly 10%). There’s a similar program at Georgia. Check if your state schools have similar guaranteed admission criteria.
If you choose a good public school and follow all the steps to earn a six figure income, you are setting yourself up for a path to wealth.
Step 2: Choose Petroleum Engineering
A petroleum engineering degree holds the best value out there from a financial aspect. If you want to earn a six figure income, selecting a lucrative major is important. The Bureau of Labor has even lightened up their view, claiming future growth of “10 percent from 2014 to 2024, faster than the average for all occupations.”
Unfortunately, their guess is worthless. These same jokers predicted a sustained industry decline 10 years ago. I remember because my parents and friends all advised against it. Sure enough, 2006-2014 was arguably the best time in history to be in the industry. Remember $4 for a gallon of gas?
However, the petroleum business is a commodity business, which means there are good times and bad. I’m surprised the Bureau of Labor hasn’t flip flopped on their outlook yet due to the oil price collapse.
Truthfully, it’s been an absolute fecal-tsunami recently with a lot of experienced hands leaving the industry. But, you’ll have three years to wait out the storm. Global demand for oil and natural gas isn’t going anywhere in this generation, and the industry will be ripe with opportunities when the sun comes out again.
The drilling rig: one with nature.
Step 3: Attend a Public University
The top programs for petroleum engineering are offered by public universities. Notably The University of Texas at Austin, Texas A&M, Louisiana State University, and Colorado School of Mines. Much of the value of a PE degree comes from being able to obtain the best education on the market from public schools like these rather than obscenely priced private schools.
The sticker price to study one year at MIT is about $50,000. For a school like UT Austin, it’s about $37,000. The trick though is to stay within your state. Instead of $37,000, a Texas resident will only pay $10,500, netting a discount of over 70%.
Here’s another tip on your journey to a six figure income. If your state doesn’t have a great petroleum engineering program, select chemical engineering. It’s not as lucrative and you might be a step behind, but oil and gas companies will still hire you. After about 3 years, there won’t even be any differentiation at all.
Further, the ultimate advantage chemical engineers have is that they are not limited to the dirty oil industry! If solar wins out and the oil price tanks for good, you’ll have several industries where you can jump ship to: biotech, food, pharmaceutical, nuclear, you name it.
Another advantage public schools have is their far broader acceptance of AP and community college courses. After all of my credits were applied, I entered college as a junior and graduated in 3 years instead of 4. That’s an extra savings of $10,500 or $50,000 if I were smart enough to get into a school like MIT. I’m not even including room and board and textbook expenses. Absolutely huge.
Maybe you don’t have as many AP credits as I did? You can still accelerate your schedule by knocking out basic classes through community colleges while at the university!
Related: Should I Attend A Public Or Private University? Depends On Your Fear And Guilt Tolerance
Step 4: Obtain an Internship
Forget working part time at Starbucks during the school year and instead, invest your time studying. The top priority is collecting internship experience, because you’re only here for 3 years. And since freshmen typically don’t have relevant work experience, the only way companies can judge your worthiness is through your GPA.
While grades aren’t everything, they do an excellent job of sticking out in a pile of resumes and getting your foot in the interview room. For example, I absolutely sucked at networking. I remember attending some welcome reception and walking around the room for 5 minutes before going back to my hotel room!
However, because I had a 4.0 GPA, I still got invited to over 25 interviews that semester. As a result, I became a Level 99 interviewee primed for dominance the following recruiting season.
After the first internship, it’s much easier to get the second because now you have work experience to talk about. Further, if you show up to work, do a good job and engage with people, they’ll likely ask you to come back. But if you’re following my 3 year plan, the second internship will be your last so choose wisely.
The perfect scenario is interning for a company you admire and receiving a full time offer at the end of the summer. This would normally be in August after your junior year, with your full time job to start in the summer after graduation…meaning you can coast your entire senior year.
You can party, find your true self or whatever you kids do these days. A few B+’s here or there won’t ruin your life anymore, but just don’t flunk. A solid internship will make it easier to get a great job with a six figure income.
The Best Bang For Your Buck
Well here we are. You’ve finished college in three years at age 21 and have the coveted six figure income. Back in 2010, the starting salaries were in the $80,000-$90,000 range with a $5000-$20,000 signing bonus. The starting salaries have crept up over the years and can now be over $100,000 without any bonuses.
Petroleum engineering only requires a bachelor’s degree. Lawyers, doctors and pharmacists can make six figure incomes out of the gate too. But when does the gate open? After 3-5 years of additional schooling? After a couple years of residency when you turn 30 and have $200,000 in student loans?
The beauty of this job is that a masters degree, PhD or an MBA are not required to advance, not even for the vice presidents who clear $300,000-500,000 in salary and who knows what in stock options.
Petroleum engineers can maintain a normal life. Perhaps you’re thinking of a career in finance. I know I still wonder what could’ve been every time I visit Sam’s site. However, a senior engineering role (6-10 years) can command a $200,000 per year salary.
Despite the high pay, I rarely see anyone consistently working more than 40 hours per week. When you calculate the hourly rate, it’s equivalent to someone who earns $300,000 but working 60 hours per week.
Oil companies are concentrated in low cost of living cities. Houston, Texas is the oil capital of the world. While certainly less glamorous, a $100,000 income will get you a lot further in a city like Houston or Dallas than in San Francisco or New York City.
Related: How To Make Six Figures At Almost Any Age
The Final Step To A Six Figure Income
Petroleum engineering is just one example towards a high paying career, and there are many other avenues as you can see in the chart above. I was blessed with market timing, geographic location, and an interest in the math and sciences.
Ultimately though, it’s still a J-O-B where you’ll be working for the man and trading five days for two. But it’s a heck of a safety net while you start the process over again. Oh, you thought you made it to the end? Nope! The final step is creating your own six figure salary, this time without an employer.
That’s what sites like Financial Samurai are for, helping people build multiple income streams and accelerating their wealth through sound financial principles. I hope to do the same!
Related: The First Million Might Be The Easiest: Millionaire By 30
Recommendation To Build Wealth
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This is a good framework, that’s for sure. That said, I think there are quite a few good paths one could take to achieve the same goal.
– Study anything and become an investment banker; this is the path I took and I earned $130,000 when I was 22. The knock on this path is you can burn out very quickly.
– Study computer science and work take advantage of the current supply/demand imbalance; 22 year old engineers at Google or Facebook can make $110,000 base salaries; bonus and stock grants can push you toward $200,000 quickly
– Study statistics/actuarial science and become an actuary; you will start at $80,000-$85,000 and you will only work 40 hours; if you can continue to pass exams, breaking $100,000 is possible in 1-2 years, and reaching $200,000 is attainable before you’re 30; the key is you work 40 hours a week
There are several more, but they have to do with sales. Ad sales, insurance sales, etc.
One thing in common for these paths is you have to have your act together in high school, that is one point I truly agree with. While everyone is trying to be cool in high school, or skipping class in college, having extreme focus can pay off very quickly and lucratively at 21/22. This point cannot be stressed enough.
Hi there,
This will probably annoy you, but I’ll bet you change your mind about living in Wisconsin for the rest of your life…you could be limiting yourself greatly. If you’re truly in it for only 1-3 years, I’m not sure it’s even worth getting a degree as you’d be in school longer than the workforce.
I don’t have firsthand data but I believe you’d earn a similar amount working in investment banking as in Pet E for the first few years. However, you’d probably work up to twice the hours (60-80+ per week). If you do well and stay in the industry you could make an extremely high income…much more potential. Might have to go to a prestigious school and be at the top of your class however.
As a Pet E. out of college, you’d likely earn around 100k + bonuses. After 3 years, you’ll probably earn around 115 – 130k working only 40 hrs a week. This gives you time to work on other businesses. However, you’re subject to downturns like the one we’re facing now. Lots of graduates and even experienced people unable to find jobs currently until the oil price turns around, so it’s a bit of a gamble.
With your geographics and your desire to start a business, I’d choose a business degree. Pet E. is extremely specific and you’ll only be marketable to the oil and gas industry. I’m also not aware of much activity in Wisconsin. I would be cautious about your assumptions on getting out after 1-3 years unless you have some kind of funding from other sources. 100k is only 50k after taxes and a frugal living style.
Thank you for the reply.
Now that I think about it, I’ll probably move out of WI later in life.
My parents will be paying for all of my education.
Now, I will be attending UW-Madison, which is not a good school for Pet E. However, it is a top 25 school for IB. Nonetheless, now the decision is between Software Engineer and IB.
Software Engineering:
Wallstreetplayboys states that Facebook, Google and IBM will still be around in a decade and having a set of skills that are difficult to learn will help land positions at major technology companies. Negatively, this segment will also be cut between the haves and have nots.
IB:
Wallstreetplayboys states “The only problem is each individual should choose carefully. If the sector goes into secular decline, either you will be fired or you will get lucky and be a multi-industry expert as spaces consolidate.
Long-story short, there are really only two paths that make sense. A major bank within a good sector (either the bank is good at getting on deals or they are expanding) and secondly within advisory.”
By the time I graduate college (2022), will IB or SE be in higher demand? If you were in my shoes, what would you do?
P.s.: by business degree did you mean a segree for IB?
Only piece of advice I’ll leave is to take everything with a grain of salt. No one (me included) can predict which industry will be in high demand and or which career will be the right fit for you individually.
Income potential is important for picking your degree but make sure you have enough interest to last through the school work and the 5-10 yrs of work that come after it to make the degree worth the time and cost regardless of who is paying.
I suppose I meant a more general business degree since it’s broader and you plan to start your own business sooner rather than later. Good luck!
Hey man,
I’m currently a high school senior who lives in Wisconsin, amd I plan on living here for the rest of my life.
Right now I’m choosing between investment banking and petroleum engineering. Both being the top 2 paid jobs right out of college.
My plan is to make as much money as I can and then quit after 1-3 years so I can use the money and go all out on my future business.
According to my geographics, when it comes to making the most money right out college, what would you choose if you were in my place? A job as an investment banker or petroleum engineer?
Sorry I meant to respond to your comment but instead I started a new reply below. Letting you know in case you don’t get notification.
Great post!
I did things a little differently but ended up in a similar boat. I got married when I was 18. My wife went to nursing school (2 year program at the local community college) and I went into the police academy (6 month program).
By the time I was 22 years old, we brought in just over $200k in 2012 from our combined incomes. Luckily my wife and I are on the same page when it comes to our personal finances, so right away we started saving about 40% of our after tax income.
Almost 5 years later we are making even more from our jobs, but we still continue to save about 40% of our income. With this money we have been investing mostly into cash flow real estate and a few other investments. The plan is to continue saving 40%, investing that money, and re-investing the profits from our investments. As time passes, our growth is beginning to become exponential (kind of like how compound interest works).
We live in a modest 3 bed 2 bath house that is about 1,300 square feet. I drive a Toyota Prius that I bought in 2013 for $24,000 which I paid off in early 2015. My wife drives a Subaru Forester which we bought for about $25,000 and will have it paid off in less than 2 years from now. My point is, we know better than to spend our money on luxuries at this early stage in our financial careers. If we invest all of this excess now, how much better off will we be 15 years from now when we are in our early 40’s?
The best part is that there is no reason that anyone cannot do this. Even if you are still flying solo…. if you can figure out how to live on only 50-70% of your income, you will be surprised how quickly you can save up a good chunk of money to start investing in a meaningful way.
I have a very similar story. I became a nurse as a career change, and now make over $200k. It’s very easy to work OT and second jobs as a nurse. My wife and I live in our 2 family, and rent out the basement apartment to help with the mortgage. Drive Prius and used Subaru, still able to do vacations, not worry about money month to month, we are in our late 30s now, 2 small kids, net worth over $600k and saving >50k per year.
I think you are on the right track about his willingness, or lack thereof to relocate. Knowing him, he is quite passive and possibly only limiting himself to local options. He has interned and maintained good grades. Despite his lack of ambition and possible reluctance to relocate, I am still surprised that he is having such a hard time finding something local as if there are no jobs in NY in Chem Eng field at all. Any advise I can pass on to my passive friend other than relocating?
Tell him to pay a professional to critique his resume interviewing skills.
***resume and interviewing skills.
Interesting post. I made about 110k at age 25 working less than 40 hrs and about 4 weeks off. It was my first gig and a non engineering degree. I graduated with a Masters and now make much more simply because i work more hrs. Im in the healthcare field. Job is tolerable and hrs are flexible with a high level of freedom and flexibility. My path was different from most as i fell into the profession, rather than having a concrete plan. I am blessed I suppose. I have a friend who gruduated with a Chemical Engineering degree and has not worked in the field since graduating from a reputable Uni about 4 yrs ago. Last we spoke, he was working night shift at Dunkin Donuts. He tells me he cant find any work in the field. Whats up with that? He is in NYC.
I don’t know of your friend’s particular situation but I’m curious as to what his resume look likes or what kind of grades he made. Is he willing to relocate or is he looking for a specific type of job? There are so many reasons why someone with a Chemical Engineering degree will say they haven’t found a job but I’ve found that top of that list is people who decided they hated the major a little too late, made poor grades or those who are not open to relocation or field work. Four years is a long long time for a ChemE to not find a job, he’s doing something wrong.
Love this! I have a Bachelors and Masters in Chemical Engineering and live in the great energy capital of the world. I know everyone’s path is different and everything isn’t about money but boy am I glad I chose this path.
I rarely work more than 40 hours (neither does my boss), my job is challenging in terms of problem solving but not stressful- read i’m not bored, my coworkers generally keep to themselves – no office drama, I get a nice raise and bonus every year, time off is generous, I work from home 25% of the time and I make around 150k all in. Graduate school was free through research and my undergrad degree cost less than my annual salary – paid for by bank of daddy. My house costs less than my annual salary. I don’t know of any other field that gives you such a high reward for very little effort. I didn’t have to go to med school for 10 years neither do I have to work 60 hour weeks or wear a stuffy suit. I wear blouses and jeans to work everyday and I’m easily the best dressed. Instead of jumping ship to management like many Engineers I’m developing my skills in a highly technical and specialized area with hopes of becoming an Independent Contractor around the 12 year mark, targeting around $220 and hour. You can do anything with a Chemical Engineering degree – both the diploma and the skills you will learn, I can’t sell this dream enough!
If you like math, listen to the writer. I literally don’t know what I will be if I wasn’t an Engineer!
Nice post John and great to see your stuff here on FS! I have a similar path as the one you described just for biomedical engineering. I’m not making six figures yet but hope to be soon within the next few years and would like to ultimately end up in more leadership/management roles. I think the engineer path is a great one but for people who don’t like the route you described I think plenty of routes through healthcare, finance, and of course the professional schools are great to go through as well.
Here’s my perspective as someone who took the safe route with engineering.
I work for the US government as an Engineer (degree is mechanical engineering). The ultimate safe route.
1) I chose to work and live in an extremely low cost of living area while my pay is based on the equivalent of living in one of the most expensive cities in America.
2)I knew that although my salary would not be as high as private industry, I will be receiving an annuity (aka pension) once I choose to retire early at 50 years of age.
3) my place of location has pay for performance, which isn’t as lucrative as private industry, but allows for me to get more salary for quality work, relative to how the rest of the government works.
4) I knew going in I would get an annuity, FOR THE REST OF MY LIFE, and if I choose, my wife can receive a portion of that annuity for the rest of HER LIFE. I can retire at 50. Calculating my salary projection versus how much my annuity will be once I activate it, I’ll be smooth sailing post retirement.
5) a 401k with a 0.026% to 0.038% management fee????? you can’t beat that. For every 100k, I pay 26 to 38 dollars.
6) job security through the roof.
7) 40 hour work week. That’s it.
I just hit 8 years of working for the man, I make just below 100k, will be hitting it next year, with enough career growth for another 20 years.
Job satisfaction is high, I get to do ACTUAL MEANINGFUL WORK. Humble brag, my work has saved lives.
Engineering was the safe route, working for the government an even safer route. I won’t be making big dollars like some of my private industry friends, but neither do I have the long hours or extra stress.
It’s what I am doing with my dollars that makes the biggest difference.
I did not come from wealth, I’m the first from my extended family to go to a 4 year school, and I have goals.
1. Have enough money to live off the interest for retirement.
2. Pay for my children’s education.
3. Have a nice pot of money to pass on to my children.
I also work in the O&G industry as a petroleum geologist. Geologists typically have to get a M.S. degree in order to get hired into O&G but they also start above $100,000 base salary. I also enjoy an awesome work-life balance, hardly ever having to work more than 40 hours per week. I love my job but the roller-coaster ride of commodity prices can be disheartening at times.
Great article. I disagree with step 2. Do not choose Petroleum Engineering as a first degree. One can always do this for a masters degree instead. Best to choose mechanical engineering. The chance of ending up with a high paying job in the oil/oil service industry is the same with a mechanical engineering degree. Most of my professors in grad school in the Petroleum engineering department were mechanical engineers.
Yes, you can always do a masters but that’s two more years of schooling = 2 years of lost income. It is a risk vs. reward thing…but perhaps the best option is a chemical engineering degree. Chem E is treated nearly like Pet E most of the time. They do however differentiate between mechanical in terms of pay…unless you get a masters like you say.
Masters can be done online.
Sam,
Long time reader, first time ever commenting!
Lousy HS student. State school, liberal arts and sciences degree. Grad school at night (Ivy, no idea how I got in) while working full time in health insurance, having kids and rehabbing houses on the side in my mid-20’s. $100k at 28.
As you can see from my abbreviated history above, I hustled. I’m in my 40’s now and glad I did and haven’t let up. Didn’t have the best SAT scores, not the best grades. Read business books voraciously including The Millionaire Next Door and realized my grades ages 14-22 didn’t define me unless I let them. Everyone else was drinking and parting, and I was busting my butt in my 20’s. Glad I did.
Sam, I follow and reference your “just start a website, dammit” advice and started my own a few months back. Goal is to post once every 7-10 days, and move that to once a week, soon. Without being “that guy” I’ll post the address below if you’ll allow it through. The site is very niche and (as far as I can tell) very unique. Well, maybe the end result in my
mind after 2-3 years of posting is!
http://Www.prepareformedicare.com.
Lastly, even though I’ve read your Uber posts, I recently signed up for both Lyft and Uber, mainly to see if I can expense my commute and pick up some gas/parking money along the way. I in no way need it; just part of my DNA hustle. Lol. Keep writing great material and occasionally introducing us to great guest posters. Thanks.
Hi John,
I have some follow-on questions for you as I read more about your thoughts on your site.
It seems like you no longer want to work so much and are trying to break free ASAP in your mid-to-late 20s? Is this true? If so, why do you think you burned out so quickly from petro engineering, especially if it only takes you 40 hours a week? 40 hours a week is a walk in the park in comparison to banking, consulting, law, medical etc. Why not just work as a petro engineer for longer?
What exactly does a petro engineer do? Can I do what you do? I’ve found that a lot of stuff is automated or dictated by technology, and all one has to do is learn how to use the technology and understand the figures. How much of the job can be learned on the job? What components of the job do you think are fun?
If the job is causing you to burn out so soon, maybe it’s best to go the even higher paying route if you plan to call it quits within 10 years anyway?
Thx!
Sam
Sam,
Seeing as I am already in my late twenties, I’d say those dreams have been squashed sufficiently. I’m much more about FI than ER however. The goal is building alternate income streams and optionality rather than trying to quit early. As many have mentioned here, it’s also about enjoying the ride.
Perhaps my dry humor blurs my message, but I don’t consider myself to be burned out. I think that would be an insult to everyone working more hours than me with perhaps less pay. Not to mention those in actual physically demanding jobs. I have extra energy to burn and am making moves to explore working in the banking side of things. Acquisition and merger activity is expected to pick up with smaller oil companies struggling.
Not to be delusional, but all the things you said about petroleum engineering do not apply. I would say you could not do what I do without learning about fluid mechanics. A very large part of the job is using sparse data to weave together a story using engineering principles.
A petroleum engineer is responsible for determining how much oil is in the ground and forecast how fast it can be produced through wells. Much of the time is spent building computer models of the underground oil reservoirs and justifying to management that your predictions are reasonable.
I say models, but truthfully, an oil reservoir is not something that can be automated and predicted with high certainty. By the time you learn everything about the field, there’s not much more oil left and you’ve already spent the capital. And every single oilfield is different than the next one. You can press buttons and get a number, but without knowledge of the underlying physics and experience of theory vs. practical, you’ll have a hard time defending your forecast.
For example, when mechanical engineers design parts of an airplane, the process can be tested and refined before production and sales. In the oilfield, companies are drilling up to 30,000 ft where the reservoir will never be seen by anyone. Yet, engineers must still construct models based on a few well points in the ground. Imagine filling in the entire map of San Francisco with just 4 known street intersections. This is why companies can spend $100 million on a single well and find nothing but rock and water.
An aspect I enjoy from the job is when the team you’re working on all comes together to present a final story. Each person (geologists, other engineers, economics) has their part and supports each other. Being a global industry, I’ve also enjoyed meeting people from all parts of the world. I’ve been able to travel about 8 times internationally..another perk (depending on the person) I did not really touch on.
This is probably a lot more than you asked for, but I wanted to hit all your questions. Perhaps this can help some aspiring engineers make their career choice. Thank you for the opportunity to reach so many people at once. I really enjoyed interacting with all your readers.
Hey FS,
I am indeed from Texas and attended UT Austin. Is the bias that obvious? ;-) The elusive passive income is what I’m after as well, but some personal decisions and reflections have slowed it down a bit for me.
It is a hard time for all employees tied to oil and gas. The 30 year employees have gone through about 10 of these…so it’s about as boom and bust of an industry you can get! The ones who have made it through though will retire with unbelievable financial security. Monthly pensions of 15-20k+!
With the oil crash, I’m not sure petroleum and chemical engineering is the best choice anymore. Though I would DEFINITELy say “STEM” degrees give you way more bang for your buck than arts degrees. I’m a computer engineer turned published children’s author, so I’ve been in both fields. Engineer is gruelling and doesn’t have the emotional payoff that writing does, but man is it lucrative. For those who don’t like engineering, they could work there for 10 years, make enough to retire early, and then do whatever their little heart desires. It worked for me and it was worth it. Can’t easily do that with most arts degrees. If I had to choose again, I’d definitely choose engineering…or accounting.
Absolutely agree with you that internships are the key. Since I had an internship/co-op program in college, I graduated with ZERO student debt and a job offer. Having the ability to work for your tuition, housing, and food has been a lifesaver and I love not having to rely on student loans or the “bank of mom and dad”. Highly recommended.
While new petroleum engineers might be in danger in the short term, chemical engineers should still be fine. They are not exclusive to the oil and gas industry, and actually the oil refining side does quite well when oil price is low (Chem E’s can work in refining).
During my short time writing posts, I’ve also noticed quite a difference in emotional payoff. I imagine after spending 10-15 years in engineering, the hardest thing to do will be walking away from a consistent income to do something you find more fulfillment in. I hear though that it’s worth it!
Fantastic, thanks for sharing your story John! I am curious, you talk about UT a lot, are you by any chance from UT or in the Texas area? I’m not sure I can make 6 figures before the age of 25 with my employer but I’m going to look for other passive income opportunities to make sure that I get to make 6 figures by that age. It’s a bold goal but I hope that I can make it. Petroleum engineers are having a hard time right now but that’s the boom and bust of any commodity, right?
I’d like to present another alternative to engineering, for those who don’t find that appealing: become an airline pilot. The major airlines are facing a tremendous shortage of pilots in the coming decade and for most that is due to the huge looming wave of mandatory retirements. That means not only will there be incredible demand for new pilots, but those who get hired in the next few years will move up the seniority lists very fast and enjoy the commensurate benefits of seniority (higher pay, more days off, more vacation, etc) far sooner than those of us who entered the industry twenty years ago. And life at a major airline can be pretty good. Nearly every major airline captain these days is making north of $200k, and some of the more senior bring in closer to $300k. And that is without a requirement for an advanced degree; a four-year degree from any accredited institution gets you in the door.
Of course there are some drawbacks. Learning to fly isn’t cheap. Another $50,000-$100,000 on top of the costs of a college education is realistic for most. But just as with college tuition, there are loans available to help pay for flying education. And one can flight instruct part-time while attending college to not only help pay for classes, but also gain valuable flight experience. Obviously the military, either active duty or national guard, is another potential option for defraying the costs of flight training.
Also, airline pilots don’t spend every night in their own bed, generally speaking. But the potential for a lot of time at home is very high, particularly as one’s seniority improves. 17-20 days off per month isn’t at all uncommon, and they can be arranged in any number of ways to suit one’s preferences.
I believe that for a college student who plans ahead and starts early, this is a very good time to start a career as an airline pilot, possibly better than any we’ve seen in this lifetime.
Brian, thanks for posting this. I’ve always been fascinated by aircrafts and piloting. What are the chances for a 30 year old with no experience?
How long does it take to reach commercial airline pilot, and do people lose their enjoyment in flying during that?
As you mention, flight school and the cost to learn has always been a barrier. Are there such things as scholarships or mainly just loans?
Hi John, 30 years old with no experience is no problem. You could realistically be employable at a major airline by age 35, and you’d still have a 30 year career ahead of you. It took me longer than that to get here, but as I mentioned before, there’s a severe pilot shortage coming and I think anyone starting now will have a quicker path to the majors than I did.
As for losing the enjoyment…flying for a living is like any other job. You’ll have good days and bad days, and it will start to feel like a job if you do it long enough. But of course it is very different than a typical desk job and it certainly affords one plenty of time off to pursue other interests if one chooses.
There are a limited number of scholarships available for flight students but I wouldn’t count on those; competition is fierce and there are very few awarded. Anyone starting now and taking the civilian path to a flying job needs to be prepared to make a hefty initial investment. There’s really no getting around that, but as you said there loans are certainly an option. Also, for those with prior military service, the GI Bill can be used for flight training. Hope this helps.
I liked your post. I was a Mechanical Engineering undergrad and got a Masters in Aerospace Engineering and was working by age 23 for a Fortune 50 company making Aircraft Wheels & Brakes. Since then I’ve moved to several fields and got into management. Made over $100k per year ($140K) at age 27 and onward and upward from there. My grades were poor, too much lack of focus the first two years of undergrad so then did an undergrad research position and co-published a paper to help me get a scholarship into grad school. Now I love learning about new businesses and leading people to achieve good business outcomes. It makes me a better investor too.
At age 43 I am entry level FI with a young family but am still working and enjoy it as of now. Make sure you take time to smell the roses along the way!
-Mike
Awesome, thanks for the story. $140k 15 years ago must have been huge at age 27. I hope to also find a real passion in my work…I imagine it makes it easier to smell the roses :-)
I basically followed the same plan. Chose mechanical engineering @ Colorado school of mines. Back to Houston to work in O&G. Started at $67k 22yr old. Bumped to $78 6 months after. Been at $96k for the last couple years due to pay freezes. I’d like to get over 100k soon but I guess I’m just lucky to have a job at this point.
My wife is in a different field which diversifies our income…plus we run a profitable blog where I get to exercise my business muscles! Life is great!
Following a plan like this is the key to getting ahead early in life. But that’s also the problem, you need to figure it out early in life too…I was fortunate to have great parents and mentors.
That’s quite a large bump in salary after only 6 months! My increases have been leveling off, but I’ll occasionally step back and remember I’m still employed.
It’s nice to have that safety buffer from a second income in a different industry.
Sam, I’m an engineer as well. I’ll share my story. Perhaps I should start a blog too.
A little off topic. If you think demand for oil and gas isn’t going anywhere, do you think the investments in oil/gas sector will rise and shine again? I’ve been throwing quite a bit of money there this year.
I’ve always wanted to work on an Oil Rig and have been doing some research. Working as an engineer there will save you TONS of money. Free food, free accommodation, Free entertainment. AND you have no where to spend your money. Great for fresh grads.
Software Engineers in the Bay Area usually make 6 figures as well as a new grad, but usually half of it goes to rent. And since it’s all relative, engineers are just average joes in the bay area, since everyone engineer makes 6 figure.
Internship definitely helps. My GPA was so bad I was embarrassed to tell anyone, but one internship landed me another, then landed me a full time job, and now I could go where ever I want. If you don’t have GPA or internship, I’d say you might be screwed and your starting point after graduation will be much lower than those with internship experience or good GPA. There was a point I felt like my life was over and I’ll never be able to get a job after graduation. There were also thoughts of working at McDs or a sales rep at the mall.
I absolutely believe the oil/gas sector will rise again. The million dollar question is when. In 2008, the oil price went from $140 down to $40 but recovered quickly. In the late 80’s, price collapsed and would remain depressed for 20 years…leading to the the significant gap in people with 15-25 yrs of experience.
Eventually, supply will run low as the easy oil gets consumed. As the shortage causes the price to spike, oil companies will again invest in more difficult oil projects because the economics make sense again. Ideally…companies should be continually investing so prices are stable but short term financial targets always seem to be paramount.
As oil truly runs out, I believe economics will spur investment into alternative energy rather than politicians or environmentalists. As much as people may hate Big Oil, they are the ones best positioned to start the process. They will have the capital from record oil profits. They already have all the engineers and R&D on staff. Most of all, implementing gigantic capital projects has been their bread and butter. Sorry, this is probably more than you asked for.
As someone that works offshore. Yes all of those things are free but with Ebay and Amazon a click away it’s easy to spend money. Having the discipline to save when you’re not working is harder than you think. I find it easier to travel(this is me), stay out late, and justify more expensive hobbies which all of these can drain the money you’ve saved while working. .
My only question is what is the problem with Ivy League Schools? I was getting the feeling you were telling people not to go there, or were you just assuming most couldn’t get accepted?
No real problem with Ivy League schools…it’s just that they could cost up to 5x more without 5x more benefit to your career. However, it may make complete sense to attend Ivy League level schools depending on what industry you’re trying to get into.
My discussion is meant to be very specific to the oil and gas industry. You will get a hire salary from an oil company graduating with a Pet E degree than an electrical engineering degree from MIT. Further, the best Pet E programs happen to be taught by public schools.
Great story, but I disagree being top of your class is important.
I was consistently top of my class with perfect marks, and it never got me anywhere near what you were making in chemical engineering.
Frankly, I don’t think employers want to pay for the best and the brightest. I think they want the best value for the money…which sometimes means outsourcing your job to “foreign competition”.
Just my experience, thanks for the great story Sam and John.
Interesting perspective. It appears you’ve done quite well the past 13 years without having been near top of class, which proves your point.
I agree that grades aren’t everything, but more often than not they can give you more options. If an employer is going to outsource, I suppose nobody stands a chance, but you’d want as many advantages in your favor when competing for jobs in which there is a chance!
Interesting topic Sam, but it applies where you live, mostly, because the cost of the living ratios.
It would be really great if you could do a topic of living costs with top earnings for different countries.
I got in top 0.7% in my country and under 25, but compared to USA I’m in the low-income bracket. While the percent is really something over here, it’s not that great compared with USA.
Great post! I majored in Electrical Engineering, instead of going the tech route (mistake?) I went into infrastructure and engineering services. The work is pretty easy and I work no more than 40 hours a week. I’m in my early 30s moving up proves to be very hard even with PM experience and being a licensed PE, this industry is very flat… So I’m going to business school this fall to get an MBA part time. I sat in some classes and I actually love it. I never explored the possibility of studying business before but nonetheless I’ve had side interest in economics and leadership psychology for a long time and read a lot. Don’t know if I will see an ROI immediately but I am probably going to enjoy these courses.
The PE license seemed pretty difficult to obtain especially since I ignored the FE when I had the chance. Do you think it has helped get you further in your career?
Sounds like you’re making moves towards your interests so that is great. I think most of the potential in obtaining an MBA is making connections with your classmates. You never know what kind of opportunity those can lead to!
I followed this plan pretty much exactly, except I chose mechanical engineering, and it worked out well for me.
I will admit I am getting burned out, but it’s not because I don’t love the work. It’s because I hate the BS involved with working for a big company. That’s why I’m on the verge of “retirement.”
In response to Sam’s question “But what if you aren’t so smart?” I would say you probably don’t deserve to earn a lot of money, unless you are willing to work really hard at something not a lot of other people can do.
I’m in the same boat. I don’t know how major corporations still operate with profit w/ the amount of BS that goes on. I sometimes consider working for a smaller company but I know there’s BS there too…just a different kind.
Have you seen that image of a person jumping over a fence because the grass is greener on that side, but as soon as they get over there the grass turns brown and now the other side of the fence is green.
not sure if links are allowed:
https://imgur.com/gallery/6LvKFL1
Congrats. I grew up in an oil country, and most of my peers went into oil (offshore, etc). Yes, it pays well, but I wasn’t happy (and our high school pretty much filtered EVERYONE into the oil industry). I personally have no interest in the oil industry; I like the tech industry more :)
There’s definitely an oilfield culture…particularly in smaller companies. My family does not come from oil country and I believe I was the only Pet E major from my high school. I do not fit in at all and that’s probably why I work with one of the major companies…a bit more diversity.
I have a relatively similar story. I am a 24 year old with a Computer Engineering degree. Did well in high school, scholarship to a good public school and I’m now making ~140k plus bonuses and stock options. I currently live on the east coast, but know tons of college friends in silicon valley making even more (although the cost of living is much higher).
I like what I do but eventually would like to start my own engineering company. I feel like this is different than what Sam was referring to with regards to dissatisfaction with the work that engineers do. Engineering is a pretty easy gig honestly. I work 40 hours a week on engineering work and occasionally work a few extra hours on business development. I’m going to finish my masters in a few months (completely paid for by my company) and then be looking to make ~160 after that.
As has been said above, if you are a decent engineer in a high demand field (computer, electrical, petroleum), you could make 100k right away. I have job offers come in weekly and could easily make more if money was the only thing that I was looking for in a job.
Having that level of job security must feel great and re-assuring. When I visit other personal finance forums (particularly on reddit) half of the success stories seem to come from computer science majors. It might be the perfect blend of degree value, job availability, and work levels/flexibility. The ability to freelance or work remotely seems to be another potential benefit.
Yes reaching FI is important, but let that alone drive you to freedom (or boredom) sooner! How about balance act of – raising good family (in timely manner, don’t have a down kid at age 44 — rather finish having healthy litter by age 35!). PACE your life and goals – enjoy the journey as much as the destination — because, once you reach your “made-up” destination, there is no “coronation” ceremony !!
Now – no beating down on the FI topic, definitely strive to achieve it! Start early, decent career, good salary, great savings (do 401K max-out!!), additional specialization, either publish papers, patents, or present at conferences — which grows your respect and network (future job prospects). Do buy a home in “good” location/school-district, raise great kids/family, while increasing your equity in the house. Do have limited exposure to bad-habbits (but “controlled” ones, might I add), do cater to that inner-self/devil a bit.
As you progress your mid-career 6-figure/+ salary, and full 401K contributions over the years, along other bonuses/stocks/investments you may have made/saved., you are on your path to that million and/or FI.. As you reach into late 30s, early 40s, see the financial picture: your 401K+investments growing about 7% average — on a typical 800K investments — that amount to $56K/year, your salary (don’t forget savings!), plus say 25K/year growth on your home-equity (in good town/school-district)., you will be closing “double” the six-figure income. Keep the progress going, cruise-control, and enjoy the ride along the way — you be on your way to FI soon. Do learn Golf, you know how to hob-nob with big boys (or girls)
Now – if you are more ambitious, go for additional streams: have your own company, web-site, rental-homes, and/or other ways to invest time/money to generate more income! Go for it. Hi, you can infact reach FI without these extra streams of income!! Although, more dough will help your endeavors better :-)
Thanks
sc
I have been living the FI life for the past 8 years (left the workforce before age 40), and I couldn’t agree with you more. Don’t put life off for the sake of reaching FI, enjoy the journey while getting there.
Hi sc,
I appreciate your perspective and the advice from someone who’s perhaps been through it all.
Enjoying the journey as much as the destination is in my view the most difficult aspect of striving for financial independence. Also easier said than done!
Naturally, my personality loves to sacrifice the present for the future, but then I’ll wake up one day and wonder if I’ve wasted the past 5 years of my life.
In my opinion, the one thing you never want to sacrifice for reaching FI is starting a family, if you want one.
7% seems like a generous expectation of stock returns (on average) given there is over $12 trillion of negative interest rate debt out there and the 10 year at 1.5%. Although, I hope that you are correct that 7% still happens.
My stock portfolio is 8.2% for the year. This seems very doable. But we shall see what the volatility will bring :)
The up-years aren’t the problem with hitting 7% equity returns. It’s averaging in the -20 to -60% years. Always amazing people after 6-7 years of a bull market forget the shoe will fall again, although that’s use a sign the market is close to a peak when retail piles in.
My wife and I have a very similar story. I graduated in 2011 with a Bachelors in Mechanical Engineering from a public university. I took an engineering job with a major oil and gas company making $80k starting. With steady pay raises and 5 years experience, I’m now making $125k. My wife started out in the oil and gas industry working for a consulting engineering company for $75k in 2012 and steadily rose to $88k. However, there are definitely drawbacks to the profession. I have lived in 4 different cities since I started working (you have to move where the work is). Also, I was laid off from my previous employer in April 2015 due to the downturn in oil prices. I was very fortunate to find a job with another oil major in September 2015, but it required relocating to a different state away from my fiancee (married just a few months ago!) and family at the time. My wife was laid off from her O&G job in Feb 2016 as well. I can honestly say that the sacrifices I and my wife have to make by working in oil and gas have been worth it though. We’ve aggressively saved our money, and we’ve made money on each of the relocations. We’re on track to reach financial independence much, much sooner than if we had chosen careers in another industry. I also thoroughly enjoy working in the O&G industry which is more than many people can see about their jobs/career path.
Thanks for sharing your experience. Sorry to hear about all the layoffs and relocations, but on the bright side you probably gained a lot of varied experience and perspective of different cities.
I’ve been spared so far…but I’m always on edge. If you’re going to get laid off, I think the trick is to get laid off quickly so you can find another job before the market dries up indefinitely!