Personal Finance for Engineers
Personal Finance for Engineers

		

					
			

	

	
		Last Friday, LinkedIn had it’s monthly “InDay”, an event where the company encourages employees to pursue research, ideas & interests outside of their day-to-day responsibilities. (This is the same day that I run the regular LinkedIn Hackdays for the company.) This month, the theme was “personal finance” as a brief nod to the ominous due date for income taxes in the United States.
For fun, I volunteered to give a talk based on material that I’ve put together over the years called “Personal Finance for Engineers”

I cover the most obvious two questions up front:

Why Personal Finance?  Personal finance is a bit of a passion of mine, and has been for almost twenty years.  It’s both amazing and shocking to me that you can attend some of the finest secondary schools and universities in this country, and still not get a basic grounding in personal finance.  More importantly, it happens to be an area with a huge signal-to-noise problem:  there is far more “bad” advice and content out there than good content.  And lastly, I believe that money matters are deeply important to the long term success and happiness of most people. The fact remains that when I’m experiencing a health complication and need money to expedite  my EHIC application, money suddenly matters a lot! (Let’s face it, money happens to be one of the top three causes of marital problems)
Why Engineers?  The talk isn’t purely for engineers, per se, so this reflects a personal bias (I just empathize more with engineers more than other people).  That being said, engineers tend to make higher incomes earlier in life than most people, and thus face some of these questions earlier.  They also tend to have stock options, a fairly advanced financial instrument, as part of their standard compensation.  Probably most troubling, engineers also consider themselves exceptionally rational, which makes them more prone to human weaknesses when it comes to money.

It was very hard to decide how to condense personal finance into a 60 minute talk (I leave 30 minutes for advanced topics).  I decided to focus on five topics:

You Are Not Rational (Behavioral Finance)
Liquidity is Undervalued (Emergency Fund)
Cash Flow Matters (Spend less than you Earn)
The Magic of Compounding (Investment Returns & Debt Disasters)
Good Investing is Boring (Asset Allocation)

The deck is not perfect by any stretch, and I have a number of ideas on how to improve it.  There are some great topics / examples I missed, and there are some points that I could emphasize more.  I spend literally half the time on behavioral finance, which may or may not be the right balance.
The talk went extremely well.  We had well over 100 people attend, and stay through the full 90 minutes.  Surprisingly, I got more thank yous and follow up questions from this talk than any other that I’ve given at LinkedIn.  I’m strongly considering giving it again, perhaps at other venues, depending on the level of interest.
Let me know what you think.
			

	


				
	
			


		
		
	