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Financial Literacy 101 for Engineers

If you keep these habits as an engineer, you will never get rich. Not ever.

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The financial literacy of engineers vary from person to person. One engineer can be good at it, another can have zero idea how to manage financial resources and get rich.

If you are one who is like the latter, there is no reason to fret. You will be bad at it forever. The ability to acquire wealth can be learned, you only have to be willing to get knowledge and make the necessary changes.

But first, why is this important for engineers?

For one, being financially literate allows you to make responsible decisions when it comes to money, which are decision you make in everyday lives. Understanding basic money management skills is a key to financial stability.

Now we share 9 things which are basics in financial literacy. These are signs that you will never be rich if you continue to make these choices:

Putting too much emphasis on saving rather than earning

Rich people find ways to make more money rather than saving what they earn. For engineers, this means taking sideline work and finding ways to have multiple streams of income.

Haven’t started investing

The more you set aside for investments, the better. It also pays that you start investing early. In the book “I Will Teach You to Be Rich,” Ramit Sethi wrote, “On average, millionaires invest 20% of their household income each year. Their wealth isn’t measured by the amount they make each year, but by how they’ve saved and invested over time.”

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GIFs via Giphy

Being content with a steady paycheck

Similar to the first sign, millionaires see to it that they rely more on just a steady salary of hourly rate. But this also means that they choose to get paid based on results, which is why they are typically self-employed. “The great ones know self-employment is the fastest road to wealth,” says self-made millionaire Steve Siebold.

Buying things you cannot afford

Engineers are not usually luxurious. But if you are, then most likely you will not get rich. Living above your means greatly suffers your finances. Another self-made millionaire Grand Cardone best exemplifies this, as he was still driving a Toyota Camry when he became a millionaire. “Be known for your work ethic, not the trinkets that you buy,” he said.

Pursuing someone else’s dream

If you are not passionate about being an engineer and only doing it for other people – like your parents, your chances of becoming a millionaire is slim. It’s a mistake to chase after someone else’s dream, you should pursue your passion and love what you do.

Rarely stepping outside of your comfort zone

Taking risks is part of life, same with money. It requires you to get used to uncertainty or discomfort. But rich people find comfort in uncertainty. “World class thinkers learn early on that becoming a millionaire isn’t easy and the need for comfort can be devastating. They learn to be comfortable while operating in a state of ongoing uncertainty,” Siebold said.

Lack of money goals

It takes focus, courage, knowledge and effort to be able to get rich as an engineer. Of course this is paired with precise goals and a clear vision. “The number one reason most people don’t get what they want is that they don’t know what they want. Rich people are totally clear that they want wealth,” said self-made millionaire T. Harv Eker.

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Spending first and saving what’s left over

What’s wrong with some engineers is that they prioritize paying everyone else first before themselves. That is wrong, if you ask self-made millionaire David Bach. He believes that rich people set aside a percent of their gross income and make the process automatic. This allows them to live with whatever amount left and stay with it.

Thinking about not lucky enough to get rich

Sometimes, it’s just about the mindset. When you can’t think big, you are bound not to perform big. That’s what separates rich people from an average person – they set their expectations high and convince themselves that they could meet those expectations.

Source: Business Insider

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