Career By Design

Personal finances play a major role in the life of a civil engineer. Do you have questions about how you can improve your personal finances? You're invited to participate in an workshop on personal finances. Please post your questions in this thread until Friday, May 14. You will receive answers from @Salvador Bentolila and @Nicolai Oliden until Monday, May 17. Find out more about them here. You can find tips on personal finance here. 

Quick reminder: All questions need to comply with the ASCE Collaborate Code of Conduct.

I look forward to hearing from you! 

****This event is for ASCE members only. You can join ASCE here. ​​

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Tirza Austin
Manager, Online Community
American Society of Civil Engineers
1801 Alexander Bell Drive
Reston, VA 20191
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Thanks, Tirza!

Let's start with an easy one: "What advice do you have for students who are graduating this year and starting their first full-time civil engineering role in terms of personal finance?"

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Danielle Schroeder EIT, A.M.ASCE (She/her)
Associate Engineer
Pennoni
Philadelphia PA
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• put 10% in your 401k if at all possible
• pay off any student loans ASAP
• Build up some non-401k savings too - it will come in handy if you decide to buy a house down the road and give you a cushion if you are ever laid off or decide to go back to school.

This can be tough when you first get out of school because you're typically on the lower end of the pay scale at that point in your career.  But if you cut back on little things - brown bag your lunch or make coffee at home or in the office instead of buying it at Starbucks or Dunkin - those little savings add up.  A little sacrifice up front pays big dividends down the road.  And with the automatic 401k deductions, you'll find you hardly miss it because you adapt your spending to the take-home pay that's actually in your check.

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Greg Thein, PE
Cleveland, OH
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Original Message:
Sent: 05-10-2021 01:22 PM
From: Danielle Schroeder
Subject: "Ask Me Anything" - Personal Finances for Civil Engineers

Thanks, Tirza!

Let's start with an easy one: "What advice do you have for students who are graduating this year and starting their first full-time civil engineering role in terms of personal finance?"

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Danielle Schroeder EIT, A.M.ASCE (She/her)
Associate Engineer
Pennoni
Philadelphia PA
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Hey Danielle,

Great question and great answer by @Gregory Thein. I completely agree with that response. I would add that if your budget or current expenses do not allow you to max out your 401(k), it's worth contributing at least to whatever amount you need to maximize your employer's match, if any.

Your 401(k) will probably give you a variety of pre-selected funds to put your money into. These can be target date funds or other type of mutual/index funds. Make sure to know the expense ratios of wherever you are putting your money into as they can a significant effect on your portfolio over the long term.

For investing outside of your 401(k) you will probably have the option of investing in individual stocks, more specific ETFs or other alternative investments. Make sure to select the investment vehicle that aligns with your experience, how involved you'd like to be and risk tolerance. Each type of vehicle comes with a different risk/reward and is analyzed differently.

Hope this helps and expands on the previous answer!
Best regards,

Salvador​

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Salvador Bentolila P.E., ENV SP, M.ASCE
AECOM
New York NY
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Original Message:
Sent: 05-11-2021 09:39 AM
From: Gregory Thein
Subject: "Ask Me Anything" - Personal Finances for Civil Engineers

• put 10% in your 401k if at all possible
• pay off any student loans ASAP
• Build up some non-401k savings too - it will come in handy if you decide to buy a house down the road and give you a cushion if you are ever laid off or decide to go back to school.

This can be tough when you first get out of school because you're typically on the lower end of the pay scale at that point in your career.  But if you cut back on little things - brown bag your lunch or make coffee at home or in the office instead of buying it at Starbucks or Dunkin - those little savings add up.  A little sacrifice up front pays big dividends down the road.  And with the automatic 401k deductions, you'll find you hardly miss it because you adapt your spending to the take-home pay that's actually in your check.

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Greg Thein, PE
Cleveland, OH
------------------------------


Original Message:
Sent: 05-10-2021 01:22 PM
From: Danielle Schroeder
Subject: "Ask Me Anything" - Personal Finances for Civil Engineers

Thanks, Tirza!

Let's start with an easy one: "What advice do you have for students who are graduating this year and starting their first full-time civil engineering role in terms of personal finance?"

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Danielle Schroeder EIT, A.M.ASCE (She/her)
Associate Engineer
Pennoni
Philadelphia PA

Thank you Tirza,

Quite interesting topic, what about how to manage your finances to ultimately start your own construction company ?

Best regards

Fresh graduate Civil Engineer

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Chenguir Asma
civil engineering student
Casablanca
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Chenguir,

Paying off debts, building your credit, and establishing an emergency fund will be key. For personal only, I don't ever worry about focusing on your credit score. Be a responsible adult and pay your bills and your credit score will be good enough. However, if you want to start your own construction company, you'll likely need a lot of cash and loans to get started so you'll want to get the best possible rates. On top of building your personal emergency fund, I would create an emergency fund for your company. Cash flow is a huge deal for companies and you dont want to turn to a bank for help EVERY TIME you need a little cash to keep you moving forward. Running a company is stressful enough even without the financial stress.
Even if you are years away from starting your own company, I would start researching now how much money you will need at start-up. You might need to make some decisions, sacrifices, moves, etc years before you actually launch. Good luck!

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Nicolai Oliden P.E., M.ASCE
Roadway Team Leader
ETHOS Engineers
Tempe AZ
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Original Message:
Sent: 05-11-2021 08:05 AM
From: Chenguir Asma
Subject: "Ask Me Anything" - Personal Finances for Civil Engineers

Thank you Tirza,

Quite interesting topic, what about how to manage your finances to ultimately start your own construction company ?

Best regards

Fresh graduate Civil Engineer

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Chenguir Asma
civil engineering student
Casablanca
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Hello @Chenguir Asma,

@Nicolai Oliden, thanks for that answer! In addition to everything you said, which I agree to, I would also make sure to learn or understand how accounting is run for business. This can be different from how one runs its own personal finances and is key to get a full picture of your company's financial health. I am specifically referring to the different entity types, how to record revenues and expenses, and the different financial statements (income statement, cash flow statement, and balance sheet) are some examples of things I would like to know by the time the company is up and running.

Hope the above helps and let me know if you have any other questions!
Salvador​​

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Salvador Bentolila P.E., ENV SP, M.ASCE
AECOM
New York NY
------------------------------

Original Message:
Sent: 05-11-2021 05:42 PM
From: Nicolai Oliden
Subject: "Ask Me Anything" - Personal Finances for Civil Engineers

Chenguir,

Paying off debts, building your credit, and establishing an emergency fund will be key. For personal only, I don't ever worry about focusing on your credit score. Be a responsible adult and pay your bills and your credit score will be good enough. However, if you want to start your own construction company, you'll likely need a lot of cash and loans to get started so you'll want to get the best possible rates. On top of building your personal emergency fund, I would create an emergency fund for your company. Cash flow is a huge deal for companies and you dont want to turn to a bank for help EVERY TIME you need a little cash to keep you moving forward. Running a company is stressful enough even without the financial stress.
Even if you are years away from starting your own company, I would start researching now how much money you will need at start-up. You might need to make some decisions, sacrifices, moves, etc years before you actually launch. Good luck!

------------------------------
Nicolai Oliden P.E., M.ASCE
Roadway Team Leader
ETHOS Engineers
Tempe AZ
------------------------------


Original Message:
Sent: 05-11-2021 08:05 AM
From: Chenguir Asma
Subject: "Ask Me Anything" - Personal Finances for Civil Engineers

Thank you Tirza,

Quite interesting topic, what about how to manage your finances to ultimately start your own construction company ?

Best regards

Fresh graduate Civil Engineer

------------------------------
Chenguir Asma
civil engineering student
Casablanca

Tirza,

Thanks for this topic. I really appreciate this topic as this has become something I've personally begun taking really serious and something that I rarely see civil engineers discuss amongst us.  

I'm doing freelance structural engineering work with the intent to go full time in the future. One of the things I'm working on is building an emergency fund to supplement income from my work if necessary. My questions is how large of an emergency fund should I consider and what should I consider in regards to where I stash it?

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Jay Garth P.E.
Structural Engineer I
Progressive AE

EWB: An Engineering Culture Shift
Grand Rapids, MI
------------------------------

Jay,
Awesome work with the freelancing! When it comes to an emergency fund, typically 3-6 months of expenses is what you want to shoot for. Not income, but expenses. The idea is to be able to support yourself if you lose your job and can keep paying the bills until you get a new one. Any more than 6 months you end up with too much cash that could be better used for investing.
3 vs 6 is a personal decision. I am currently a single income household with 3 kids. I went for the full 6 months. Our low end budget monthly expenses are about $4k so we saved $24k. Right out of school pre-family, I would have been perfectly comfortable with 3 months of expenses saved ($6k-8k)

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Nicolai Oliden P.E., M.ASCE
Roadway Team Leader
ETHOS Engineers
Tempe AZ
------------------------------

Original Message:
Sent: 05-11-2021 10:05 AM
From: Jayvon Garth
Subject: "Ask Me Anything" - Personal Finances for Civil Engineers

Tirza,

Thanks for this topic. I really appreciate this topic as this has become something I've personally begun taking really serious and something that I rarely see civil engineers discuss amongst us.

I'm doing freelance structural engineering work with the intent to go full time in the future. One of the things I'm working on is building an emergency fund to supplement income from my work if necessary. My questions is how large of an emergency fund should I consider and what should I consider in regards to where I stash it?

------------------------------
Jay Garth P.E.
Structural Engineer I
Progressive AE

EWB: An Engineering Culture Shift
Grand Rapids, MI
------------------------------

@Nicolai Oliden, thanks for that answer!

@Jayvon Garth, I'd like to add that another personal decision of what to be done with the emergency fund is whether to keep it in cash or invest it. Currently, interest rates for high yield savings accounts aren't too high, and cash can lose value over time due to inflation. An alternative is to invest those funds into stocks or bonds for example. HOWEVER, have in mind that once the funds are invested, the balance will fluctuate and you may end up paying higher capital gain taxes also if the funds are withdrawn before a year. On the flipside, you have the potential of getting a larger return than by having your cash just sitting in the bank.

There is no right or wrong answer here. It all depends on your situation, how well you can sleep at night if you have your funds invested, how experienced you are with investing, and what your risk tolerance is, among others. Very personal decision, so just wanted to share it so you can now the options and decided what you believe is best for you.

Good luck and all the best,
Salvador​​

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Salvador Bentolila P.E., ENV SP, M.ASCE
AECOM
New York NY
------------------------------

Original Message:
Sent: 05-11-2021 05:25 PM
From: Nicolai Oliden
Subject: "Ask Me Anything" - Personal Finances for Civil Engineers

Jay,
Awesome work with the freelancing! When it comes to an emergency fund, typically 3-6 months of expenses is what you want to shoot for. Not income, but expenses. The idea is to be able to support yourself if you lose your job and can keep paying the bills until you get a new one. Any more than 6 months you end up with too much cash that could be better used for investing.
3 vs 6 is a personal decision. I am currently a single income household with 3 kids. I went for the full 6 months. Our low end budget monthly expenses are about $4k so we saved $24k. Right out of school pre-family, I would have been perfectly comfortable with 3 months of expenses saved ($6k-8k)

------------------------------
Nicolai Oliden P.E., M.ASCE
Roadway Team Leader
ETHOS Engineers
Tempe AZ
------------------------------


Original Message:
Sent: 05-11-2021 10:05 AM
From: Jayvon Garth
Subject: "Ask Me Anything" - Personal Finances for Civil Engineers

Tirza,

Thanks for this topic. I really appreciate this topic as this has become something I've personally begun taking really serious and something that I rarely see civil engineers discuss amongst us.

I'm doing freelance structural engineering work with the intent to go full time in the future. One of the things I'm working on is building an emergency fund to supplement income from my work if necessary. My questions is how large of an emergency fund should I consider and what should I consider in regards to where I stash it?

------------------------------
Jay Garth P.E.
Structural Engineer I
Progressive AE

EWB: An Engineering Culture Shift
Grand Rapids, MI

Thoughts on investing in crypto vs traditional investing (i.e. stocks, mutual funds, ETFs, etc)?

Jaffer Almosawy

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Jaffer Almosawy P.E., ENV SP, M.ASCE
Project Engineer
Las Vegas NV
------------------------------

I have 2 main thoughts on this
1) don't invest in anything you dont understand
2) I would invest 10-15% in traditional investing first. then if you happen to have any extra money that you dont mind gambling with, I'm not against the crypto option.
I've tried gambling on some of the up-and-coming crypto currencies but to date I have not chosen a winner. Luckily I'm only down a few hundred bucks. I honestly think crypto will be a thing in the future but it's going to be a wild ride for a while. 
If you do happen to invest in crypto, I'd diversify just like I would for traditional investing. Choose a "stable" coin, volatile coin, and foreign coin.

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Nicolai Oliden P.E., M.ASCE
Roadway Team Leader
ETHOS Engineers
Tempe AZ
------------------------------

Original Message:
Sent: 05-11-2021 04:20 PM
From: Jaffer Almosawy
Subject: "Ask Me Anything" - Personal Finances for Civil Engineers

Thoughts on investing in crypto vs traditional investing (i.e. stocks, mutual funds, ETFs, etc)?

Jaffer Almosawy

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Jaffer Almosawy P.E., ENV SP, M.ASCE
Project Engineer
Las Vegas NV
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Agree with @Nicolai Oliden's response. Diversifying your investments is a good way to mitigate risk. However, if one of those investments is REALLY high risk and volatile, I would just make sure that any funds I put into it, I am completely fine with losing 100% of them.​

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Salvador Bentolila P.E., ENV SP, M.ASCE
AECOM
New York NY
------------------------------

Original Message:
Sent: 05-11-2021 05:35 PM
From: Nicolai Oliden
Subject: "Ask Me Anything" - Personal Finances for Civil Engineers

I have 2 main thoughts on this
1) don't invest in anything you dont understand
2) I would invest 10-15% in traditional investing first. then if you happen to have any extra money that you dont mind gambling with, I'm not against the crypto option.
I've tried gambling on some of the up-and-coming crypto currencies but to date I have not chosen a winner. Luckily I'm only down a few hundred bucks. I honestly think crypto will be a thing in the future but it's going to be a wild ride for a while.
If you do happen to invest in crypto, I'd diversify just like I would for traditional investing. Choose a "stable" coin, volatile coin, and foreign coin.

------------------------------
Nicolai Oliden P.E., M.ASCE
Roadway Team Leader
ETHOS Engineers
Tempe AZ
------------------------------


Original Message:
Sent: 05-11-2021 04:20 PM
From: Jaffer Almosawy
Subject: "Ask Me Anything" - Personal Finances for Civil Engineers

Thoughts on investing in crypto vs traditional investing (i.e. stocks, mutual funds, ETFs, etc)?

Jaffer Almosawy

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Jaffer Almosawy P.E., ENV SP, M.ASCE
Project Engineer
Las Vegas NV

To summarize the co-founder and CIO of Meb Faber from Cambria Investment Management, "If you want to yolo 1% of your total investment assets, or light it on fire, do whatever you want." 

For me when I was a few years younger, I yolo'd on Tesla. It worked out. Now I'm doing 3 things. 
1 pulling the initial investment
2 putting half the earnings in something more traditional
3 yoloing half the earnings in something else. 

The key takeaway here is to simply not let any high risk investment start to have a statistically significant impact on your portfolio.

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Christopher Seigel P.E., M.ASCE
Civil Engineer
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Original Message:
Sent: 05-11-2021 04:20 PM
From: Jaffer Almosawy
Subject: "Ask Me Anything" - Personal Finances for Civil Engineers

Thoughts on investing in crypto vs traditional investing (i.e. stocks, mutual funds, ETFs, etc)?

Jaffer Almosawy

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Jaffer Almosawy P.E., ENV SP, M.ASCE
Project Engineer
Las Vegas NV
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This is a great topic! My question is what are the biggest mistakes that you have seen people made on managing personal finances? Thanks!

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Tung Nguyen, PhD
Water Resources Engineer
Sacramento, CA
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Hello Tung,

Some common behaviors that I've heard people doing with managing their personal finances and that should be changed are:
-Getting into credit card debt and only paying minimum payments
-Not "Paying Themselves First", meaning, setting aside a portion of their income for savings/investments before they spend it
-Not having an Emergency Fund to cover unexpected expenses
-Not having a budget or a defined idea of how much their expenses are on a monthly basis

The above may sound trivial and basic, but I believe they can still be considered "biggest" as they can pretty quickly lead to more troubles in one's own finances.

Hope the above helps!
Salvador

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Salvador Bentolila P.E., ENV SP, M.ASCE
AECOM
New York NY
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Original Message:
Sent: 05-13-2021 10:45 AM
From: Tung Nguyen
Subject: "Ask Me Anything" - Personal Finances for Civil Engineers

This is a great topic! My question is what are the biggest mistakes that you have seen people made on managing personal finances? Thanks!

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Tung Nguyen, PhD
Water Resources Engineer
Sacramento, CA
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Original Message:
Sent: 5/13/2021 1:49:00 PM
From: Salvador Bentolila
Subject: RE: "Ask Me Anything" - Personal Finances for Civil Engineers

Hello Tung,

Some common behaviors that I've heard people doing with managing their personal finances and that should be changed are:
-Getting into credit card debt and only paying minimum payments
-Not "Paying Themselves First", meaning, setting aside a portion of their income for savings/investments before they spend it
-Not having an Emergency Fund to cover unexpected expenses
-Not having a budget or a defined idea of how much their expenses are on a monthly basis

The above may sound trivial and basic, but I believe they can still be considered "biggest" as they can pretty quickly lead to more troubles in one's own finances.

Hope the above helps!
Salvador

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Salvador Bentolila P.E., ENV SP, M.ASCE
AECOM
New York NY
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Tung,
Great question and Salvador brings up a lot of great points. Here is what I'd like to add.
People try to overthink and take shortcuts too often. They also dont get educated so they just follow the example set in front of them which unfortunately is their broke friends and family. Personal finance is more about behavior than it is about math. I've coached so many people struggling to make ends meet making $150k+ and I've worked with tons of people completely killing it only making $60k.
Get educated. Learn to budget and actually do one! Ive been doing a monthly budget for 7 years now and have no plans in stopping. Don't try to keep up with your friends and family who are making mistake after mistake and only put your money into things that YOU actually value. You get these behaviors right in addition to what Salvador mentioned and you'll be better off than most Americans.

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Nicolai Oliden P.E., M.ASCE
Roadway Team Leader
ETHOS Engineers
Tempe AZ
------------------------------

Original Message:
Sent: 05-13-2021 10:45 AM
From: Tung Nguyen
Subject: "Ask Me Anything" - Personal Finances for Civil Engineers

This is a great topic! My question is what are the biggest mistakes that you have seen people made on managing personal finances? Thanks!

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Tung Nguyen, PhD
Water Resources Engineer
Sacramento, CA
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Great thread so far, I'm looking forward to learning a lot here. As far as my question, I am interested in what the situation might be for those who seek employment overseas. Take, for example, someone working for an American company based in Europe. What are the financial implications of a situation like this, in terms of salary, things like 401k, double taxation, etc?

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Luis Balmori S.M.ASCE
Engineering Student
Strongsville OH
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Hello Luis,

Great question to ask. I will try to break down your question to facilitate an answer:
-Salary: From my experience, companies tend to adjust salaries depending on the location where the employee lives to match the cost of living. I do have heard of situation where a company maintains the salary when moving to a city with a lower cost of living, but I would say this is more the exception than the rule.
-"Things like 401k": When I lived and worked abroad, my company had a retirement plan as well. It was obviously called different and had different rules, but it was there. In fact, it even had better terms than here in the US! In your situation, I would try to find out about these type of accounts or retirement plans as soon as able to be ready from day 1.
-Double Taxation: This one seems to be more for an accountant as it goes above my knowledge. I believe there is a 'Foreign-Earned Income Exemption' which avoids double taxation as long as you qualify. I would definitely check with an accountant and make sure to have these implications crystal clear before making the move.

For everything else related to personal finances, I would say that the concepts are pretty universal and stay the same: Build your emergency fund, pay down your debt and avoid the bad one, have a budget, invest and diversify.

Hope this helps and good luck!
Salvador

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Salvador Bentolila P.E., ENV SP, M.ASCE
AECOM
New York NY
------------------------------

Original Message:
Sent: 05-13-2021 04:21 PM
From: Luis Balmori
Subject: "Ask Me Anything" - Personal Finances for Civil Engineers

Great thread so far, I'm looking forward to learning a lot here. As far as my question, I am interested in what the situation might be for those who seek employment overseas. Take, for example, someone working for an American company based in Europe. What are the financial implications of a situation like this, in terms of salary, things like 401k, double taxation, etc?

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Luis Balmori S.M.ASCE
Engineering Student
Strongsville OH
------------------------------

Thank you to everyone who participated in this discussion! Special thank you to @Nicolai Oliden and @Salvador Bentolila for great answers to some difficult questions. This thread is now closed and any questions submitted will not be published or answered. Any outstanding questions will be answered in the thread on or before Monday, May 17. Thank you all again for your participation in the AMA. ​​

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Tirza Austin
Manager, Online Community
American Society of Civil Engineers
1801 Alexander Bell Drive
Reston, VA 20191
------------------------------