csprof2000

To the OP: if you think PhDs in other subjects should make more than engineers with BS degrees, then start your own company and pay PhDs more than BS engineers. Sheesh.

uaprophet

I am currently in my 2nd year of chemical engineering undergrad. I am seriously considering changing majors. First to answer VT's questions (if he is still around), I think that if anything engineers don't get paid enough. I believe the consensus that engineers have the highest starting salaries for BS degrees is true. I know a few who started at 80K (working with oil companies, b/c they pay the most) and others who after a few years at work proved themselves and are earning 100K (through several performance raises). I think it really depends on who you work for. But I digress. To echo a few others' posts...ENGINEERING IS HARD AS HELL! You really have to love it or find it interesting which I steadily am not. My friends in every other major (besides the heavy science/math/grad) are amazed at how much my classmates and I have to study.
I realize after working a couple internships that salaries tend to cap out early on and you must get an MBA or other type of advanced degree to get the $$$$$.

roroAutomAtic

Power of Compounding - Finance Kampung - Why Invest? | Finance Kampung

One of the reasons why you should invest young is the power of compounding. When you put capital into an investment, the capital would generate a return year after year. But thats not all! The returns that you get after the first year, also generate a return for the next year onwards, and so forth.

Looking at it another way, lets compare 2 people and their lifetime savings habit. Peter does a lot of part time work and likes to read up on investments. Starting at 15 years old, he started to save $1000 a year in an investment that gives him 12% per year. After 10 years, he decides to enjoy life. Not putting a single cent into his investment account, he spends all his money travelling, partying and slacking. He did keep his investment account and swears not to ever touch it.

Bob is a good friend of Peter. Having been caught up with fashion trends and consumerism, he spends all the money he earns on toys, gadgets and parties. When he reached 40, he woke up. Both his parents are retiring and they barely have any money in their retirement account. He panics and then starts to save $10,000 every year for the next 25 years of his life.

Guess who has more when they are both 65 years old? Peter, after putting away $1000 a year for 10 years, has $1.6million by the age of 65, whereas Bob who scrimped and saved $10,000 per year for 25 years only has just under a $1million. While both of them aren't exactly going to struggle through retirement, but its obvious how the 50 years of compounding has helped Peter with his money.

Having an engineer salary early in life is not a bad thing to have.

In a pefcet world:

You have saved $100,000 by age 30.
You invest it in a high interest fund/stocks, 30% is realistic for top funds.
At age 45 you will have $5,118,589

sakky

Uh, 30% is realistic? Really? If you really believe that, then I think you you clearly chose the wrong profession, and you should be taking a job on Wall Street.

I'll put it to you this way. David Swensen is widely regarded as a master investor as the head of the Yale Endowment. Yet in even the best year, which was last year, the Yale Endowment realized "only" 28% returns, and over Swensen's entire tenure, the endowment has realized "only" 16% annual returns (which are by far the best returns of any college endowment in the world). Yet Swensen has been regarded as being so successful that his methodology has been dubbed the "Yale Model".

Yale Finance Guru Out Front Of Rocketing Endowment Growth, - CBS News
David F. Swensen - Wikipedia, the free encyclopedia

Now, if you say that it is reasonable for somebody to earn 30% annual returns, maybe you ought to tell guys like Swensen. Heck, maybe you should replace Swensen because he is clearly doing a terrible job, even though everybody apparently thinks he's a genius.

Lacero

Granted these are all on 3 year averages, in a perfect world they would be 10 year averages.

High Performance - Barrons.com

sakky

Yeah, well, clearly the biggest problem with that is then identifying these funds ex-ante. Sure, we can always look back at old data and identify some funds that are doing well, because there are always some funds that do well. But how do you know which ones beforehand? It's like walking into a casino and deciding which slot machine to put my money in. I know that one of them is due to give me the jackpot. But how do I know which one?

I believe several academic studies have shown that hedge funds in aggregate do not actually produce above-market returns, especially after subtracting out fees. The funds that do very well are cancelled out by the ones who do very poorly (i.e. consider the 2 Bear Stearns funds that went in the tank after years of good performance). In fact, I strongly suspect that the "Highland CDO Opportunity" (or, heck, any fund that has the term "CDO" in its name) probably hasn't done well recently, given the severe troubles in the structured finance market in the last year.