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[quote=Anonymous][quote=Anonymous]Engineer here. Lots of good discussion, and the point I always make is that you have to consider the time/year variable when comparing salaries. You can't just look at what someone may earn at 45. If an engineer is making $60k at 22 and $85k at 25, when the future MD and JD are still in school borrowing $60k a year, that's a roughly $140k per year delta DURING THE MOST IMPORTANT YEARS of your total earning cycle (i.e., the early years).

Understand the time value of money, and you can end up like me. Decent engineering job, 40 years old. 40 hours a week, every Friday off, $150k, not in a particularly high COL area, house paid off, net worth of $2.5M.

So with $2M invested, figure you can count on 7% a year on average, that's $140k for doing nothing, and that's mostly tax-free, and that goes up every year.

My wife makes about $80k working part time.

Combine everything, and we're looking at over $250k per year, and we have no bills.

Meanwhile, my internist whom I play squash with is still paying off his med school loans, is nowhere near paying off the mortgage, and hasn't had a chance to accumulate much in the way of investments. He'll never be able to catch up. (And NPs and PAs are infringing on his, and all doctors' incomes, a little bit more every day.)[/quote]

Fellow engineer here. While I applaud you of your accomplishment, I have several doubts about your proposal. You have 2.5M now and you describe that got here through "time value of money" - this suggests that you just set it and left it there, and was not actively working as a trader or investment manager. If we assume you started out with 0, and that you went through 20 years of gains, it would take an investment of 50k per year for the past 20 years at an annual compound rate of 8% returns to get to 2.5 million. Not only is 50k/year in savings difficult for your present 150k/year salary, it's was clearly impossible during the earlier years, which has the most effect on the compounding.  Something doesn't add up.

You talk about the internist you play squash with, but this is an anecdote, I hope you are not trying to use your anecdote to draw the general case. If you look at the occupations of those who makeup the top 1% of income earners, there are far more physicians and dentists than there are engineers:

https://archive.nytimes.com/www.nytimes.com/packages/html/newsgraphics/2012/0115-one-percent-occupations/index.html?hp

As we can see from the data, while only about 1.1 to 1.9% of Engineers earn in the top 1%, a whopping 27.2% of Physicians are in the top 1%. So yes you can look at that 1.9% and say that yes technically you can indeed be rich being an engineer, but I wouldn't bet on it with those odds. [/quote]

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